Home Buying in Simi Valley>Question Details

wendy, Both Buyer and Seller in Simi Valley, CA

Not a lot of inventory in our area but really want to move. Sell first or find a home first?

Asked by wendy, Simi Valley, CA Fri May 14, 2010

There aren't a lot of homes in our area that are for sale in the price range we can afford and the ones that have come on the market are not what we would want (we've been looking with a broker for 4 months) We are afraid to put our house on the market (broker says our home will sell quickly) and therefore have no where to go. We'd have to rent & put all of our stuff in storage in hopes of finding something in the near future. It doesn't seem like a good idea to put our house on the market without finding something that we're interested in purchasing first. Any thoughts or advise? Thanks.

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Yes, We can subscribe to a service that alerts us of which properties have NODs filed against them. The tough part is that some people are playing chicken with the bank to try and force Loan modifications.
0 votes Thank Flag Link Fri Jun 11, 2010
This is a general question to any broker that knows the answer. Is there a way to know if a home is in distress before the property actually goes on the market as a short sale or foreclosure?
0 votes Thank Flag Link Fri Jun 11, 2010
Wendy - one will show up it's a tough market and a tough economy, it's only a matter of time when someone gets a job transfer, a issue with their current loan or just wants to move.
0 votes Thank Flag Link Fri Jun 11, 2010
Hi Ted, no problem and thank you for your response. I appreciate your follow-up. I read your Silverthorne blog and found it very interesting and informative. We are very leery about buying in Wild Horse due to the pending litigation & fire zone issues but our first choice is to move to SIlverthorne - just wish there were more homes in that area for sale :)
0 votes Thank Flag Link Fri Jun 11, 2010
Hi Wendy, Sorry for not getting back, I went out of town later that day and I have Trulia set up to email me when there are questions or answers for Simi Valley, I must have missed the alert.

Bonnie has a home in escrow in Silverthorne. I sold my brother a house up there in 2003 and he is still there. I live a very short walk (Knob Hill tract) from Wildhorse and my wife and I walk up there for exercise. I love both areas. I like being up on that end of Simi Valley in general. 1986 I bought my first home in Simi Valley I was in the Sinaloa Villas on the west end and then in 1994 I bought in central Simi Valley in the Kingsparks off Sycamore and Heywood.

My brother has really enjoyed Silverthorne an his only gripe is he would have rather bought a house with a pool. HOA is good about not letting residents leave garbage cans out and things like that.

The whole litigation thing at Wildhorse is an issue to be concerned with, unless you can get someone to guarantee that future liability will be limited to an assessment that low I would be careful. That issue on the flood control is not going to be a one time event. Make sure you get information that covers past, present and future liability on the issue up there so you can make an informed decision.

As far as fire insurance. There is a reason why companies like State Farm will write in those areas and the other carriers wont, which could be a whole topic in itself. Independent Insurance agents can save you a bundle on rates, but when it comes to difficult areas like wildfire zones or dog breeds - State Farm seems to be able to write those policies when others will not.

The link below is a market study I did on Silverthorne last fall.
0 votes Thank Flag Link Fri Jun 11, 2010
I would say the best thing to do is wait until you find a home you're interested in and then put your home on the market. That is probably the safest way to go if you do not want to possibly live in a hotel or rent.
0 votes Thank Flag Link Fri Jun 11, 2010
I would say the best thing to do is wait until you find a home you're interested in and then put your home on the market. That is probably the safest way to go if you do not want to possibly live in a hotel or rent.
0 votes Thank Flag Link Fri Jun 11, 2010
Hi Bonnie, thank you for your follow-up. Ted never answered my question regarding his thoughts on Silverthorne or Wild Horse Canyon, so I found no need to reach out to him any further. I am aware of the pending litigation in the Wild Horse Canyon area as well as the $297 HOA monthly fee and the possible $8k-$10k fee assessment to homeowners depending on the outcome of the litigation. I also found out through my insurance agent that our carrier might not be carrying fire insurance for that area come July due to the past wildfires but if we could find the "right" house at the "right" price in that area it might not make all of the negatives seem so bad. :) There are hardly any homes in that area for sale (we prefer the hillside Westwood area more than the lower area, although we did see a single story home on the lower side months ago that sold within hours that we loved. Our first choice is the Silverthorne area (single story plan is our first love but also like the 2 story plans) and there is nothing currently on the market and makes it so frustrating to know where you want to live but can't do anything about it!
0 votes Thank Flag Link Fri Jun 11, 2010
Hi Wendy, I wondered, as a follow up, what you determined to do in the end. I dont know if you got in touch with Ted personally but I have some thoughts for you about the neighborhoods that you asked about. Ted has a great posting on his web site about Silverthorne and I currently have buyers in escrow on a home there. I think it is one of the best east end neighborhoods, both in a lifestyle choice and an investment. The floorplans are good the layouts of the homes are nice too. Wild Horse Canyon has some great floorplans and a number of the homes have lots of outdoor living space to enjoy or for all the toys. However, the HOA fees in this tract are very high and at last I heard, they still had some litigation going on. To oversimplify, there is some open space maintenance that the HOA believes is the City of Simi Valleys obligation and the City of Simi says that it is the HOA's obligation. The clean up cost is I believe in the millions. My understanding is that if the HOA is found responsible, it will increase the HOA fee with a special assessment that will not be so much more, on top of the nearly 400 per month, but it will be over many, many, years. If you would like more information, please let me know. I have a whole write up that I can send to you.
Web Reference: http://www.SimiLiving.com
0 votes Thank Flag Link Thu Jun 10, 2010

What are your thoughts about SIlverthorne and Wild Horse Canyon homes?
0 votes Thank Flag Link Fri May 14, 2010

I had a client that had very specific needs for horse property and I made a bullet point list and mailed out to the Bridal Path tract. They needed a certain width on the RV access and the Simi Valley Bridal Path builders really did a poor job when they parceled out the project with the side yard setbacks for RV. So that made for a very realistic request for specific property.

The problem with these mailing or even door knocking is there are many agents who use this as a "lost leader" meaning they really don't have a buyer. So I think the letters and the contacts many times are looked at with a healthy dose of skepticism.

At least twice a year I get letters at my home that state "I have a buyer looking for home in your area.......",
Web Reference: http://www.HomeBuysBlog.com
0 votes Thank Flag Link Fri May 14, 2010
This is a really stupid question but I'm going to ask anyway: is it uncommon for broker's to go from house to house knocking on doors of homes that we would be interested in buying?

There are a couple of areas/neighborhoods in SImi of interest that we ultimately want to move to. We are not looking to flip a house or stay in one for a few years and then move. We are looking for this next house as the house we want to grow old in.
0 votes Thank Flag Link Fri May 14, 2010

I had a listing in Woodland Hills Last year which closed the end of April 2009. My client moved to Pasadena, she rented - 4 offers and 3 escrows later she will be closing on her purchase mid June 2010. Not a fun process.

I would not completely rule out all short sales. Right now Wachovia has a program for World Saving and Wachovia Mortgages, that pretty much streamlines the process down to a 45-60 day time frame.

A short sale listing I took last Halloween 2009 in Simi Valley; we obtained approval with a 1st and 2nd (both with HBSC), the day before Thanksgiving and closed just before the end of the year.

I wrote about short sales here:

Web Reference: http://www.HomeBuysBlog.com
0 votes Thank Flag Link Fri May 14, 2010
Thank you for your answers.

This is to Ted Mackel. We do live in Simi Valley although I grew up in Encino/Sherman Oaks area. We were already informed that a short sale property would not be the route for us to go even if there were no contingencies on our part. We don't have time to sit around and wait for a bank to respond.

We have impeccable credit and even without having to sell our current house have the ability to put over 20% down on a future house. I completely understand that our offer wouldn't be as "strong" as someone who didn't have the contingency of selling their property first but again with that said, we have been looking for over 4 months and haven't found anything that we would consider buying and are afraid that we will be stuck for a long time renting which is just not a good financial option for us.
0 votes Thank Flag Link Fri May 14, 2010

Since this was posted in the Simi Valley section, I assume you plan to move to Simi Valley. If I'm correct in my assumption, I would like to run down a few scenarios so you can come up with some better planning.

Currently there are 327 homes active for sale in Simi Valley. Detached homes number approximately 259 with 24% being short sales and 9% bank owned. That means that one out of every three detached homes for sale in Simi Valley is distressed property.

Attached homes number approximately 68 with 30% being short sales and 13% bank owned. This is close to half of every town home and condo available being a distressed property.

Now add that 60% to 70% of all the sales in Simi Valley are going out with 20% down conventional financing and very few of those contingent offers, you can see the kind of competition your contingent offer is going to have.

Real estate markets are very very local and I can't emphasize "local" enough. What's happening in Encino is far different than Glendale or Northridge or Santa Monica or Compton or Anaheim or Simi Valley.

Your very real concern is trying to coordinate a contingent sale and purchase. With the number of distressed properties on the market these contingent purchases become very tricky and you have to plan for the worst if you move forward.

I represent a regional bank with their foreclosed properties in the West San Fernando Valley and Simi Valley. I can tell you right now my asset managers will put a contingent offer down at the bottom of the stack. They probably take the VA or FHA non-contingent offer first.

Short sales are very unpredictable. If the house you like happens to be a short sale you are now asking the buyer of your property to hang around and stay interested for months while you wait for the short sale approval on your purchase. While this is not impossible, it just makes it very much more likely that in order to keep your buyer on your property that you'll have to move forward with your sale and end up in temporary housing until you can complete your purchase. Yes, this means renting and putting your things in storage or you rent back from your buyers typically at their mortgage payment schedule.

Finding a replacement property in this market is not a bad move. Interest rates are low, prices are at the highest affordability levels in decades and I believe we're at a prolonged bumpy bottom that will have its ups and downs over the course of next couple years. What many of us are concerned with is that interest rates probably cannot hover around 5% range forever. So if you can make a move that puts you in a property with all the things you wanted, this is a good time. However because of the amount of distressed properties that are on the market you need to hope for the best and plan for the worst - Which means a possible rent and storage situation or rent back situation. Remember, though a rent back while you wait for a short sale completion is not any guarantee that you may not have to eventually move out and rent elsewhere and use storage if that short sale is prolonged or fails.

I grew up in the Valley, lived in Woodland Hills, went to high school in Sherman Oaks and one thing that is always constant, the closer you get to Ventura Boulevard prices go up and the closer you move down towards the Sherman Oaks area prices go up. So on the other hand, if you're planning to stay in the Valley, you might end up moving west of Encino.
Web Reference: http://www.HomeBuysBlog.com
0 votes Thank Flag Link Fri May 14, 2010
Hello Wendy,

This is an excellent question. In California, we use a Form COP (Contingency for Sale or Purchase of other Property). Item B, if checked, will make the agrrement between you and your buyer contingent on you entering into a contract to acquire a replacement property. It specifies the amount of time you would have after acceptance (you can choose even one year ? if that would make you fell more comfortable). Alternatively, if it's a shorter amount of time, say 60 days, you would just cancel your contract before the 60th day elapsed. Time frames for inspections, contingencies, and other obligations are also spelled out in this form. If your Broker did not know about this form, and inform you of it's benefits, I would be concerned moving forward in protecting your interests. Also, you will need to have a flexible BUYER for your current home.
Also, depending your financial status, you may need to close escrow on property "A" (your home) before you can BUY property "B" (replacement) -- as your lender will not qualify you to pay 2 mortgages (if that's the case).
0 votes Thank Flag Link Fri May 14, 2010
Wendy, let's reverse the roles...
Let's say you were to find the perfect home and wanted to move forward with the purchase. You entered an escrow contingent upon the sale of your property. You found 2 buyers at the same purchase price for your house. The only difference between these prospective buyers is that one does not have a contingency for the sale of another property, and the other must sell THEIR home before they can purchase yours. Which one do you choose?? The answer is obvious. It is nothing personal, it is good business sense to let the transaction flow without these types of contingencies. YOU need to understand that your offers will not compete as strongly (even at the same offer price of other prospective buyers) on the homes that you want for yourself. Take this advice from an expert negotiator- If you REALLY want to move, sell your home, rent month to month, and find the home of your dreams. Your offers will be that much stronger, your lending underwriter will give you a better rate, and you will be positioned VERY strongly in the long run. If you don't really want to move and just test the waters, you can wait 12 years for the next recession and give it a try then. Remember- reverse the roles and see what decisions you would make yourself. If you have any more questions, you can give me a call at 818-528-4410. Good luck. Paul Aragon
Web Reference: http://www.PaulAragon.com
0 votes Thank Flag Link Fri May 14, 2010
Hi Wendy,
It's tricky if you have to find a home before you move,would you be able to stay for a period of time in a hotel or perhaps lease back you home in case you have trouble? As you have stated, you have already looked for 4 months, which is a long time to spend in a hotel with your belongings in storage. My advice is to keep looking until you find the right property...then..put your home on the market. It does take time to find the right home believe it or not 4 months is no uncommon in this market because of all the short sale and foreclosure property. A tip for you, look at normal sale property in nice areas, you will likely find a home you love.
0 votes Thank Flag Link Fri May 14, 2010
Regarding your agent's advice, I'd borrow the line from Ronald Reagan: Trust but verify. That is, your agent should be in the best position to determine, for instance, that your home will sell quickly. But ask for verification. Ask your agent to provide you a list of all properties similar to yours (really, comps, but a bit looser than the strict definition of comps) that have been listed within the past 6 months.

How many have sold? At what price? In what time frame? So--basically--what's been the average days on market, and where were they priced?

But go beyond that. Of all those similar to yours that were listed in the past 6 months, how many of those listings expired? How many were withdrawn? Reason: The sales figures can look pretty good . . . especially if you exclude the ones that didn't sell. So you need the full picture.

Recognize, too, that any offer you make that would be contingent on the sale of your current home will weaken your offer. So you may stand less of a chance of your offer being accepted. Again, your agent can advise you on that.

One other suggestion: Have your agent run a list of rentals that match your criteria. Take a look at them. Then make an offer on any you like. It may be that there are some owners who are renting because they're afraid the market is too soft; maybe they'd really like to sell, but are waiting for the market to strengthen. Look especially at homes that have been on the rental market for awhile, and those that are vacant. One additional advantage you'll have by doing that is that you won't have any competition from other buyers. They aren't even looking at rentals. An extra suggestion: Have your agent also look for rentals that match your criteria that aren't even on the MLS. Lots of owners rent out their properties themselves--ads on Craigslist, signs in the front yard, that sort of thing.

Hope that helps.
0 votes Thank Flag Link Fri May 14, 2010
Don Tepper, Real Estate Pro in Burke, VA
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