Two years ago the television shows were all about 'flipping' houses, building fast equity with improvements, and expecting multiple offers within hours of your first open house. With the overextension of the purchase loan market coupled with aggressive adjustable mortgages coming due, the recipe was complete for today's answer to those 'flipping' shows: How to buy something cheap and 'steal' a deal.

How do you 'steal' a deal, though, in today's local market?

FIRST... Know how deep a discount the bank has already taken so you can strategize your approach. For example, many properties have defaulted on a first and second mortgage plus an equity line.  The bank may be owed on paper $500,000 and marketing a house for $250,000 to sell it. A bank that is already discounted to half of its debt is not going to cut it another fifty percent and jump at your offer of $125,000. Most banks will counter offers less than 20% under list price and automatically reject anything with a greater spread. Don't waste your time or, at best, have high hopes. Be realistic.

SECOND... Realize that properties are sold AS-IS and WHERE-IS with all their faults. Of course, no one knows about any 'faults' because the bank is not an owner occupant and has no first-hand knowledge of anything to be disclosed -- plus the bank is exempt from most disclosure laws in California. You must be willing to buy what you see, and be willing to accept the bank's terms as advertised. If the bank advertises a property AS-IS it means no pest inspection, no repairs, no credits or allowances, and very little wiggle-room. Some banks will negotiate after the fact, but there will usually be a cap on the repairs total. Be prepared to have a home inspection as soon as possible so you can cancel safely, if your contract allows for it. Otherwise be sure to have a budget for repairs for both visible and unseeable damages.

THIRD... Fight for your deal. The banks don't want to be in the real estate sales business, nor do they want to be landlords. Many banks are pricing their inventory extremely low in the hopes of unloading quickly. This will result in multiple offers, mostly from savvy investors. If you are considering a property that generates multiple offers, decide if you're going to give your 'highest and best' or if you're going to walk away. Only you can decide which action to take. If you do make your 'highest and best' understand it literally must be the highest and best, as the bank will not counter everyone but rather accept the highest and best or counter offer the highest and best. 

FOURTH... Have your financing in line. Don't get prequalified, get pre-approved, and keep your pre-approval current within 60 days or less. Solid money speaks louder than an offer that asks for buyer's closing costs, prepaid recurring closing costs, the seller's contribution to a down payment, and also asking for bonuses such as a home warranty.

FIFTH... Be patient, and keep emotion out of it. This market isn't about white picket fences and a dog in the back yard. It's about four walls and a roof, and there are a lot of properties available. Unless you're looking at a custom, one of a kind property, there's no reason to get irrational and go beyond 'good investment' to 'emotional purchase'.

NOW YOU'RE READY TO DEAL! When you create your offer on your chosen property, the bottom line to the bank is usually how much, and how fast? Most banks cannot perform faster than 20 days depending on how many outstanding mortgages were against the property, which results in delays for getting corporate approval or MI approval, signed off HUD-1's, etc. However, they also don't want to go past 45 days usually. The banks also look at how much you will finance, how large your deposit is, and whether or not you're asking for concessions. With your offer you should submit all paperwork required by the bank, usually a copy of your pre-approval letter (or proof of funds if you're purchasing with cash) and a copy of your earnest money deposit. Allow 3 business days for the bank's response as many require that amount of time to run the numbers and get approval, but don't be surprised by a faster response. 

WHAT ABOUT AUCTIONS? Auctions can be a roll of the dice. The auction properties are sold for cash, or with approved financing, and once you're in escrow it is extremely difficult to get out without losing your deposit. You can get a property for fifty cents on the dollar, but if you haven't done your homework and inspections prior to the auction date you really can't have a solid idea of what you're buying into. These property auctions are usually for houses with long market time that for one reason or another did not sell on the conventional market. Was it price? Was it condition? Was it the time of year and weather interfered with marketing? 

If you approach your 'steal'  with a cool head and full knowledge of the house you're offering for, you can get a rock-bottom deal.  Good luck!

LOCATION: 9,215 acres in the San Bernardino National Forest located high above and overlooking San Bernardino, California which is the nearest big city and is only 20 miles South. The Lake Arrowhead area is conveniently close to the major metropolitan areas of Los Angeles, Orange and Riverside Counties. The high desert (Victorville/Barstow) is only 45 minutes North. The ocean (Huntington Beach, Newport Beach, etc.) is 90 minutes Southwest. Los Angeles is 90 minutes West. The low desert (Palm Springs) is 60 minutes East. Ontario International Airport and Ontario Mills Mall is only 60 minutes West. Our location is ideal for commuters! Enjoy the full range and adventure of the Southern California lifestyle while living in a clean-air, peaceful, small-town environment nestles in a towering pine, cedar, oak and dogwood tree forest!

Lake Arrowhead is the closest thing to heaven in Southern California.

 

LAKE SURFACE ALTITUDE:

 

SIZE: 784 surface acres; 14 miles of shoreline.

 

WATER TEMPERATURE RANGE: 24-72 degrees

LENGTH: 2.2 miles.                 WIDTH: 1.5 miles

 

MAXIMUM DEPTH: 185 feet   AVERAGE DEPTH: 100 feet
 

NOTE: Lake Arrowhead is a private lake reserved for the use of qualified local property owners only!WEATHER: Four seasons (normally with mild winters). 310 average days of sunshine. 42.57 inches average annual rainfall. 145 inches annual snowfall.

 

 POPULATION: (1997) 11,000 full-time residents.

 HOUSING: (2000) 4,285 full-time dwellings. 6,425 part-time homes. Median cost of $191,740. Average cost of $234,500.

 PROPERTY TAX RATE: 1.30% of assessed value or sales price. Local sales tax rate is 7.75%.

 SCHOOLS: (Lake Arrowhead area) One high school; one junior high school; two elementary schools; one private religious school.

 MEDICAL: Mountains Community Hospital, a full service 24-hour medical facility. Numerous physicians, dentists, surgeons, chiropractors, optometrists, pediatricians and other medical practices.

 ANNUAL VISITORS: (estimated) 1,160,000. Estimated visitor spending in 2006: $96,000,000.

 

RECREATIONAL OPTIONS:   Alpine and cross-country skiing Sledding Hiking Boating Swimming Fishing Mountain biking Water skiing Camping Hunting Hang-gliding Off-roading Dining Shopping Photography Astronomy Bowling Antiques

Motion Pictures Ice skating Gardening Local historical studies Senior activities Wildlife preservation Bird watching Nature studies Horseback riding Nature tours Geocaching ...and much, much more!

 

City: Lake Arrowhead County: San Bernardino County State: CA / California Elevation: 5191 feet City Type: Place Category as used for US Census purposes Latitude: 34.256290 Longitude: -117.191326 Land Area: 29649368 square meters / 11.447685 square miles Water Area: 3173457 square meters / 1.225279 square miles Within city boundaries as defined for US Census purposes
Lake Arrowhead Age and Gender Demographics Total Population: 8934 Male: 4484 Female: 4450 Median Age: 39.1    Lake Arrowhead Relationships and Households No. of Housing Units: 8857 No. of Owned Units: 2458 No. of Rented Units: 785 Average Household Size: 2.75 Average Family Size: 3.17
Household Relationships for Lake Arrowhead, California Population in Households: 8934 - Householder: 3243 - Spouse: 2031 - Child: 2901 -- Own Child under 18: 2392 - Other Relative: 374 -- Under 18: 145 - Not Related: 385 - Unmarried Partner: 165 Average Household Size: 2.75 Average Family Size: 3.17   Household Types for Lake Arrowhead, California Total Households: 3243 - Family Household: 2445 -- Own Children under 18: 1209 - Married Couple Family: 2031 -- Own Children under 18: 931 - Female Householder: 290 -- Own Children under 18: 196 - Nonfamily Household: 798 -- Householder Living Alone: 606 --- Householder Over 65: 195
Children and Elderly in Households Total Households: 3243 Households with Under 18's: 1298 Households with Over 65's: 712 Percentage with Under 18's: 40% Percentage with Over 65's: 21.9%
Household Occupancy Occupied Housing Units: 3243 Vacant Housing Units: 5614 - Occasionally Occupied: 5267 Percentage of Units Occupied: 36.7% Percentage of Units Vacant: 63.3%
Housing Tenure Occupied Housing Units: 3243 Owner-occupied Units: 2458 Renter-occupied Units: 785 Percentage of Units Owner-occupied: 75.8% Percentage of Units Renter-occupied: 24.2% Average Household Size (Owned): 2.68 Average Household Size (Rented): 2.98