This is a continuation of last week’s discussion with real estate and luxury home legend Bob Dyson, who has a radical proposal that is being quickly embraced by Realtors, lenders and local Real Estate Boards.

Why resort to radical resolutions?

Because, says Dyson “This is a real estate depression–a serious, serious issue.”

He sees an immediate need to stabilize real estate markets and neighborhood values. He also believes the motgage lending industry needs to get out of the “asset management” business, and instead focus attention on new loan originations.

So what to do with all those defaulted loans and pre-foreclosures?

That’s where Dyson’s proposed “American Incentive Resolution” saves the day.

How would it work?

1. The American Incentive Resolution Corporation (as a government entity) would buy defaulted loans from lenders at 50 percent of face value.

2. Re-market these homes through Realtors at retail market value.

3. Offer these homes to first time buyers and those whose credit and FICO scores have been damaged by short sales and foreclosures the last couple of years. The initial terms would be a 12-month lease-purchase, with all payments accruing to a down payment as long as payments are made on time. Lease payments would equal what loan principle, interest, taxes and insurance would be under normal loan terms at 5 percent interest. Initial move-in would entail first and last months’ payments.

4. At the end of 12 months, the lease would become a purchase with all payments made under terms of the lease being applied to the full down payment.

The first video below details Bob Dyson’s assessment of the real estate market bottom, while the second deals with the American Incentive Resolution:

HT: http://www.SanDiegoPreviews.com

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by Roberta Murphy

Last Thursday, I had the opportunity to sit across from Bob Dyson at his office in Del Mar and listen to this real estate legend discuss today’s real estate market. We were also fortunate to have Chris Dyson videotaping much of the discussion, which we have divided into four segments.

At the start of our interview, Bob Dyson said these are the worst conditions he has seen during his 40 years in the real estate business–citing symptoms such as lack of buyer confidence and the drastic deflation in certain real estate markets–including California, Nevada, Arizona and Florida.

The causes stem from irresponsible mortgage lending practices from 2003 to 2007 and the resultant and reactionary tightening of mortgage funds. Dyson simply calls it a “lending debacle.”

At the same time,he says, there is a large and growing backlog of buyers who want to buy–and are just waiting for reassurance that the real estate market has really bottomed, or is at least close to that point.

See below (and stay tuned for a radical solution):

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by Roberta Murphy

Ed McMahon may wonder what else in new in defaulted real estate, but yesterday, Standard & Poor’s Ratings Service reported that even prime jumbo loans are starting to buckle.

Over a period of just one month–from June to July, 2008–jumbo loans originated in 2006 saw mortgage delinquencies rise 13.2 percent, while 2007 delinquencies rose 7.3 percent. Overall, mortgage delinquencies in the luxury real estate market are relatively low, with prime jumbos originating in 2006 reporting a serious delinquency rate of just 2.48 percent.

(For a more detailed report, go to: Prime Jumbos Showing Strain: S&P : Housing Wire)

It also appears that originations in the luxury market may be tightening. Thursday evening, Billy Taylor with Villa Sotheby’s International Realty in Del Mar, whispered that Chase Mortgage is pulling out of jumbo loan originations (at least at the broker level).

My prediction? There will be much more discussion about creative and seller financing in the months ahead. If financing is required for the purchase of a luxury home, it may be the seller who provides it.

Finally, stay tuned for Bob Dyson’s radical mortgage rescue program that could stabilize the real estate market very quickly–and that is quickly gaining prominent political support….

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by Roberta Murphy

Yes, there are plenty of luxury home foreclosures in California–and you can now search them whenever you wish.

When in San Francisco last month for the Inman Connect conference, I was at last able to meet the foreclosure wizards at Foreclosure Radar–and make a decision to go with them.

We have long been searching for a comprehensive foreclosure search tool to offer the readers of our San Diego real estate blog. I had been to the Foreclosure Radar site, was impressed with its features, but wondered how they could be integrated for our readers searching for foreclosure information.

The problem was solved in San Francisco. We can now offer the most comprehensive pre-foreclosure, auction sale, foreclosure and REO search available–at least for the state of California. Now you can see available foreclosures in Beverly Hills, Brentwood, Palo Alto, Rancho Santa Fe, La Jolla, Coronado, Bel Air, Newport Beach, Carmel, Atherton, Ross, Belvedere (perhaps)…..

Finally, you can search for uber luxury homes, estates and mansions in foreclosure. Nothing is held back:-)

Enjoy your search!

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by Roberta Murphy

If this is the worst real estate market (for sellers) in recent history, then surely it creates some of the best buying opportunities of a lifetime as well.

We are seeing smart money aggressively buying in our San Diego real estate market, and hear reports of the same elsewhere. The properties are being bought as fix-and-flippers or are being held as longer term rentals.

We receive inquiries about these homes almost daily; but more recently, we are being consulted about strategies for buying luxury homes at bargain prices. These buyers may not have to sell their existing home to buy another, or are open to exchange possibilities.

Below are 7 strategies we use to help our luxury home buyers (and others) get some of the best luxury bargains on the market.

1. Study Market Time: Luxury homes in general may take longer to sell because of pricing, custom features and a more limited pool of buyers. But that doesn’t mean sellers are any less motivated to move on with their lives. At one time, we thought little of $million-plus homes sitting on the market for 90 days or more. These days, we seek buying opportunities if a home has been on the market over 60 days and are seeing some heavy price discounting if days on market goes over 90 days.
2. Check Tax Records and other Sources: Is there more debt on the home than what it is worth? Has a Notice of Default been filed that would indicate a looming foreclosure? If so and if this is a home of interest for our buyer, we submit an offer contingent on the successful negotiation of a short sale (where the lender sells the property for less than what is owed). In this case, either we or professional negotiators deal with the lender(s) to reach the best possible price for our buyer.
3. Did Owners Pay Cash or Have They Owned Their Home for Longer than 10 Years? These sellers may be in a position to sell at a discount or may be motivated to do so due to life transitions or other investment opportunities. They may also be open to owner-financing for all or part of the home mortgage.
4. Are You Open to Remodeling? Homes sold in as-is condition are more likely than others to sell at a substantial discount. Owners, especially when the home has been on the market for some time, are often overwhelmed with the thought of remodeling and updating–and fearful that their decor choices will not suit potential buyers. Especially in the uber luxury home market, older or outdated homes are sometimes sold at land value.
5. Foreclosoure Sales: The f-word (foreclosure) is occurring even in the luxury home market. Highly leveraged homes purchased in the last few years are more frequently ending up on the courthouse steps. Foreclosure purchases, which require cash and carry no disclosures or guarantees, offer both great potential for profit–and dire dangers for the uninformed. Bidding should be non-emotional and it is best to have a professional bidding for you–but only after thorough-as-possible research has been done regarding the home’s condition, its history and resale potential. Cracked slabs, structural defects and boundary line encroachments are unwelcome surprises.
6. Home Exchanges: This is a rather novel strategy for those trying to sell their luxury home in a bloody market. Life transitions encourage luxury homeowners to make moves. Empty-nesters may wish to relocate from their large estate to something equally posh but far less demanding in upkeep. Others may have expanding families that crave acreage, pools, tennis courts or equestrian facilities. In the Southern California market, Owner-Broker Bob Dyson and Villa Sotheby’s International Realty have set up a property exchange platform that allows homeowners to directly exchange properties and ownership. It is a tactic that helps to support neighborhood values and removes many of the pressures involved in having a home on the market for an extended period of time.
7. If the property you want is listed, have your agent check the other real estate agent’s listing history. If that agent tends to have listings on the market for a long time, you may wish to lower your offer. On the other hand, if the agent prices properties aggressively and has short “days on market,” you may consider coming in near to or at list price. You will likely find the listing is already priced at or below market to attract multiple offers.

A combination of patience, perseverance and the ability to move quickly will serve all astute buyers of real estate these days, but the greatest potential of all may lie in the luxury real estate market where replacement value could far exceed the purchase price.

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