Business » Realty Check http://abcnews.go.com/blogs/business The latest Business news and blog posts from ABC News contributors and bloggers. Mon, 14 Jul 2014 13:14:26 +0000 en hourly 1 http://wordpress.org/?v=3.2.1 Behind the Billions: 8 Things You Never Knew About Warren Buffett http://abcnews.go.com/blogs/business/2014/04/behind-the-billions-8-things-you-never-knew-about-warren-buffett/ http://abcnews.go.com/blogs/business/2014/04/behind-the-billions-8-things-you-never-knew-about-warren-buffett/#comments Thu, 24 Apr 2014 17:08:24 +0000 Nicole Sawyer http://abcnews.go.com/blogs/business/?p=119544

Warren Buffett, a self-made billionaire known as the “Oracle of Omaha,” was practically born a businessman in 1930 in Omaha, Neb. With money earned from his paper route, he made his first investment at age 11, dabbling in stocks and buying acres of land in Nebraska to rent to merchant farmers for a profit.

That was the beginning of the financial machine. He has now amassed a fortune exceeding $65 billion, making him No. 3 on Forbes’ most recent list of the world’s billionaires.

Some of Buffett’s top holdings include Wells Fargo and Coca-Cola. His strategy: to hold well-managed, undervalued companies for life.

Buffett might be one of the richest men in the world and one of most respected investors, but behind the billions, he also has the biggest heart. He teamed up with Bill Gates in 2012 to pledge to give away most of his wealth to philanthropic causes.

ABC News’ chief business and economics correspondent Rebecca Jarvis, who also hosts the hit digital show “Real Biz,” met up with Buffett, 83, at one of his charitable events. His annual “Power Lunch” at Smith & Wollensky in New York City to benefit San Francisco’s glide foundation. Since 2000 he’s raised more than 16 million dollars to help hungry displaced families.

The New York Times reported this week that America’s middle class is no longer the richest in the world. So Javis asked him how he can still be bullish on the United States. Buffett admitted the news wasn’t good, but stuck by his bullish stance, saying, “We are a very, very, very rich country and its [national GDP] has gone up in my lifetime, one person’s lifetime six for one in real terms, not inflation, but real terms.”

When Jarvis pressed him about wealth inequality, Buffett admitted the rich are getting richer and the middle-class gap is widening.

“It is really true that particularly the ultra-rich have gotten far, far wealthier and more and more the national pie has moved to them and away from the middle class,” he added.

He went on to explain that the disparity in the United States is a “natural consequence of a market system” that will encourage people to go into the right jobs and develop more skills so they don’t get left behind.

But Jarvis also wanted to have a little fun with Warren so she did a little “Real Biz Rapid Fire,” asking him about his smartphone; maybe not so smart, and who he’d like to have lunch with in Omaha.

Check out his never-before heard answers below.

ABC warren buffett rebecca jarvis sk 140424 16x9 608 Behind the Billions: 8 Things You Never Knew About Warren Buffett

What did Warren Buffett tell Rebecca Jarvis? (Photo Credit: Nicole Sawyer/ABC News)

1. Are you an Apple or a Samsung man?

Buffett whipped out an old flip phone that was falling apart and joked, “Alexander Graham Bell gave me this phone”

2. Do you tweet?

Buffett doesn’t tweet. “I’ve had five tweets, and another person did them for me.”

3. What does Buffett buy on Amazon?

Buffett loves books and he has his assistant buy books for him. He says he has so many books in his library, “It’s too much trouble to try to find it in my library so I just buy another copy.”

4. Which industry that we rely on today is going to be gone by the time our grandchildren grow up? For example, will cars still rely on gas?

Buffett thinks we should say goodbye to gas as we know it. “Over time that will diminish dramatically.”

5. What are we going to be surprised has barely changed 50 years from now?

“Human nature. People will be doing exactly the same foolish things they do now.”

6. What’s in Warren’s wallet?

Cash. Five $100 bills.

7. Are we going to be a cash society in five years?

Yes, cash is not going away.  “We’ll use cash. We’ll have loads of credit cards and lots of systems of payment, but we’ll have a lot of cash.”

8. Whom would you rather lunch with at Piccolo’s Italian steakhouse in your hometown of Omaha? Mark Zuckerberg (Facebook founder) or Mark Cuban (NBA’s Dallas Mavericks owner)?

“Probably Mark Cuban because I would understand more of what he was saying. We would talk basketball and probably gambling, a few things like that.”

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8 Things You Need to Know Before Moving http://abcnews.go.com/blogs/business/2014/03/8-things-you-need-to-know-before-moving/ http://abcnews.go.com/blogs/business/2014/03/8-things-you-need-to-know-before-moving/#comments Wed, 05 Mar 2014 15:16:47 +0000 ABC News http://abcnews.go.com/blogs/business/?p=117036 GTY moving boxes jef 131120 16x9 608 8 Things You Need to Know Before Moving

                               (Photo Credit: Getty Images)

By JIM DUBREUIL and JONATHAN BALTHASER

Moving in might be one of life’s most stressful experiences. The process can be a minefield of potential rip-offs. Linda Bauer Darr, president and CEO of the American Moving & Storage Association, recently shared with ABC News’ “20/20″ some of her moving tips.

Check out Darr’s top eight tips for making the move a smooth and reasonably priced experience.

1) Hire a mover with an established track record, not the one that just pops up first on your Google search.

As consumers are buying more moving services online, the rogues have figured out a way to scam the system. The rogues are investing all their money in the technology it takes for them to have priority placement in the online environment, whether it’s search engine optimization or some other set of tools they’re using.

But, ultimately, they are using their dollars for those marketing purposes, and they’re not necessarily using those dollars to invest in things like safe drivers and maintaining their vehicles. Those are the costs of compliance that professional movers take on in their everyday business.

2) Get that estimate in person.

It’s important that the mover is invited into the home and is able to evaluate everything that needs to be moved.  Is there a playground set that needs to be moved?  Is there special equipment or a plasma TV that needs to be disassembled and taken off the wall that’s going to have to be packed in special crating?  Those kinds of things add to the cost. If that kind of an estimate is provided online or over the phone, chances are the movers aren’t really going to be able to give you a sound estimate if they haven’t been in the house and had a chance to eyeball it.

3) Make sure your estimate is binding.  Then, by law, a mover can’t charge more than 10 percent beyond the estimate.

If a mover shows up at your house and you have a binding estimate, you should expect to pay the price that was listed in the binding estimate unless there are special unforeseen circumstances.  For example, with something that requires extra shuttle services or things that were unanticipated in the move initially, the mover can charge 10 percent beyond that binding estimate.  But anything beyond that 10 percent would have to be negotiated.

4)  Know who you’re dealing with: movers vs. brokers

It’s important that when you choose your mover, you understand who you’re dealing with.  Is the company that you’re working with the actual mover?  Are they the people who are going to load your goods and move them, or are they front men for a series of companies that do that? There are a lot of middle men involved in the business, and when you have middle men involved, there’s often an additional charge.  There’s also another layer of distance between you and the ultimate service provider, so that can get a little bit tricky. I would recommend that you go direct to the mover. Make sure that you know who you’re doing business with.

5) Weigh that sucker. 

In order to make sure that you are being charged correctly and  in accordance with how much the load actually weighs, you should ask for the receipt that the mover receives at the weigh station that says exactly how much that load weighs.

6)  Be clear when you want stuff delivered, but be flexible, too.

If you’re within a 24-hour window of the goods being delivered to your destination, I think it’s very important that you arrange to be flexible. You don’t know for sure when that truck is going to pull into town. I think you need to clear your schedule and make sure that you’re available to the mover. You don’t want a mover to be waiting with a loaded truck on a city street or in your community.  You’re upsetting your neighbors, and you’re wasting his time and probably yours.

7) One burly dude alone cannot move your stuff.

If a mover shows up at the destination by himself and he is the only person available to unload that truck, that’s not a good sign.  As a consumer, I think that I would call the company immediately and ask for reinforcements.  That’s a big job, and you don’t want to leave it to one individual person.

8)  What to do in the worst-case scenario of hostage loading.

If the mover is refusing to remove your goods from the loaded tractor and requiring you to pay more money than you believe is reasonable, you’re in a hostage-goods situation.  When that situation comes up, it really is a civil issue and not at that point a criminal issue.  You might want to call local law enforcement just for the presence because I think that is going to put additional heat on the rogue during the operation. You can also call the American Moving & Storage Association, because we can help to negotiate between the mover and the consumer and make sure that we and the consumer really understand what’s going on, what the consumer’s rights are and what the proper actions are to take. You can also report rogue activity on this website.

Finally, there is actually an industry-lead program called Move Rescue that employs 5,253 moving-industry experts and legal experts who can be called upon at a moment’s notice in real time when a hostage situation is taking place so that someone can come to the scene and help negotiate through what’s taking place.
For more tips from the American Moving & Storage Association, go to www.moving.org

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How to Sell Your House to Chinese Buyers http://abcnews.go.com/blogs/business/2013/12/how-to-sell-your-house-to-the-chinese/ http://abcnews.go.com/blogs/business/2013/12/how-to-sell-your-house-to-the-chinese/#comments Thu, 19 Dec 2013 08:25:41 +0000 Alan Farnham http://abcnews.go.com/blogs/business/?p=117558 ht Chinese Plaza Penthouse ll 131217 16x9 608 How to Sell Your House to Chinese Buyers

(Credit: Courtesy Dolly Lenz)

The Chinese make up the fastest-growing market of foreign buyers of U.S. homes, according to Juwai.com, a Chinese website for global luxury real estate.

“We’re huge believers in China,” says Mauricio Umansky, CEO of TheAgencyRE.com, a Los Angeles real estate company that caters to foreign buyers. “Anybody not reaching out to the Chinese is losing out on an amazing opportunity.”

Umansky tells ABC News that in the Los Angeles area alone he closed 40 sales with Chinese buyers in the past year, up from 15 the year before.

See slideshow of celebrity homes.

The Chinese, he says, prefer brand new (or like-new) amenity-rich residences in a short list of U.S. cities that include New York, Los Angeles and Philadelphia. Maybe you could sell an old fixer-upper with “charm” to a European buyer — the Norma Desmond estate, for example, says Umansky, but not to a Chinese buyer.

If your home is new,  located in one of these top 10 cities (see the full list below), or if it’s near a high-ranked college or university, that’s a plus.

Umansky says his Chinese customers also understand brands and the value of names such as Ritz Carlton, Beverly Hills and the University of Southern California. He says he’s had great success selling residences in a new Ritz Carlton development right next door to USC.

But even if your home is not so favorably situated, say experts, there are still things you can do to make it attractive to a Chinese buyer.

Read about the 10 priciest streets on the planet.

Dolly Lenz, founder of Dolly Lenz Real Estate in New York, has spent 25 years traveling to Asia to build up a Chinese clientele.

“The Chinese are the most knowledgeable and intuitive buyers I have,” she tells ABC News. “You can’t sell to them, because they do their homework and come to you with a knowledge base that will amaze you. You have to gain their trust by adding value, meaning you have to tell them what they don’t already know. The more you can tell them in terms of financial issues, tax issues, the more they will respect you.”

Lenz says she has a number of properties in Manhattan that have garnered favor with Chinese clients, including a four-bedroom penthouse in what used to be the Plaza Hotel (now a condominium residence) with views of Central Park.

“The Chinese are not short-term, get-rich-quick investors,” she says. “They’re strategic buyers, looking for long-term plays in properties that represent a store of value for their money.”

Data compiled by the National Association of Realtors shows that Chinese purchasers in recent years have bought an even mix of detached single-family and multifamily houses, with a median price of $425,000. About 69 percent of purchases have been all-cash, while 31 percent have been mortgage-financed.

Brendan DeSimone, a real estate expert with Zillow, has sold properties in New York City and the San Francisco Bay Area  to Chinese buyers. He offers the following tips:

Pay attention to lucky and unlucky numbers. In Chinese culture, 4s signify death. When quoting a date or price, stay away from them, but 8s are lucky and desirable. So, don’t schedule an open house for Jan. 4. Schedule it on Jan. 8.

Similarly, work 8s into your asking price. Don’t list your home for $7,900,000. List it for $8,000,000.

Read how a home listing that mentioned a Rolls Royce drew super-wealthy buyers.

Consider hiring a feng shui consultant: A home whose furnishings and grounds have been arranged according feng shui principles becomes more salable.

Finally, treat the Chinese buyer with respect. If an initial offer is laughably low, don’t laugh.

“Don’t be insulted, don’t blow it off,” says DeSimone. Respond respectfully and stick with it. Negotiations with a Chinese client, he says, may take longer than with other buyers. Be courteous, honest and patient, and you may get your asking price.

Here’s Juwai.com’s list of the top to U.S. cities for Chinese buyers:

1. New York

2. Los Angeles

3. Philadelphia

4. Detroit

5. Houston

6. Chicago

7. Las Vegas

8. Atlanta

9. San Diego

10. Memphis, Tenn.

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The Richest Real Estate in the World http://abcnews.go.com/blogs/business/2013/11/the-richest-real-estate-in-the-world/ http://abcnews.go.com/blogs/business/2013/11/the-richest-real-estate-in-the-world/#comments Thu, 07 Nov 2013 11:00:46 +0000 Lana Zak http://abcnews.go.com/blogs/business/?p=116850 GTY Jwaneng diamond mine nt 131106 16x9 608 The Richest Real Estate in the World

(Credit: Chris Ratcliffe/Bloomberg/Getty Images)

The title “world’s richest piece of real estate” may conjure up images of Rodeo Drive, the French Riviera or New York City’s Fifth Avenue, but it may actually be located in … Botswana.

According to Debswana, a mining conglomerate jointly owned by De Beers and the Botswana government, the richest piece of land on the planet may very well be the Jwaneng diamond mine, one of the world’s five super pits.

“Jwaneng mine is the most valuable diamond mine in the world by value,” says Esther Kanaimba-Senai, the head of corporate affairs for Debswana in Botswana. “Each carat that we mine fetches a lot more money. … In addition the volume that we produce lends itself to be the most valuable mine in the world.”

The Jwaneng mine produces about 10-million carats a year, and now they’re about to embark in a super project to go even deeper into the earth to increase output.

The mine currently runs 1,150 feet below the earth’s surface and is already in the process of Cut 8, a $3.4-billion dollar operation to push back one edge of the pit to expand mining.

The new massive earth-moving operation — called Cut 9 — if approved, could drive the mine 28 hundred feet below the earth’s surface and require moving 1 billion tons of rock.

Kanaimba-Senai hesitates to give specifics on what Cut 9 may accomplish, as they are currently doing a land survey and approval for any plan is still several months away, but the most valuable piece of land on earth may prove to be even more valuable than in years past.

“I can’t tell you how many of them are there, all I know is that it will be sufficient to be able to propel the economy of this country.”

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US Home Price Rise Accelerated in July http://abcnews.go.com/blogs/business/2013/09/us-home-price-rise-accelerated-in-july/ http://abcnews.go.com/blogs/business/2013/09/us-home-price-rise-accelerated-in-july/#comments Tue, 24 Sep 2013 14:52:44 +0000 Richard Davies http://abcnews.go.com/blogs/business/?p=116250 gty home sold ll 130725 16x9 608 US Home Price Rise Accelerated in July

(Credit: Justin Sullivan/Getty Images)

Home prices jumped in all of America’s 20 largest cities in July for the fourth month in a row, despite the recent rise in mortgage rates.

The latest Standard & Poor’s Case Shiller Index out today found that average US home prices rose 12.4 percent in July compared with a year ago, the most since February 2006.

“It’s probably rising about as fast as we’re likely to do,” says S&P economist David Blitzer. “This is the fastest rate of gain we’ve seen really since the boom.”

Rates have risen a percentage point on the 30-year fixed mortgage since mid-summer amid concern that the Federal Reserve will curtail its bond-buying that has kept rates low to stimulate the economy.

“Rising interest rates don’t seem to have much impact on home prices yet or on home sales at this point,” Blitzer told ABC News.

Read More: Economists Say Homebuyers Still Flocking to 30-Year Fixed-Rate Mortgage

Still, the month-over-month price gains shrank in 15 cities in July compared with the previous month, indicating prices may be peaking.

Home prices soared 27.5 percent in Las Vegas from a year earlier, the largest gain. San Francisco’s 24.8 percent rise was the second-largest and the biggest yearly gain for the Bay Area since March 2001.

“We’re at the peak speed and the speed will gradually slow down over the next several months, which is a good thing,” says Blitzer. Home price inflation has increased over the past year as more buyers entered the market.

“If we’re still going at 12 percent annual rate a year from now we’re going to be worried about a new bubble.

According to the Case Shiller index, average home prices are about half-way between the peak reached in 2006 and the bottom of the market in 2008.

Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesnow

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Before Closing on a Home, See These Tips on Avoiding High Fees http://abcnews.go.com/blogs/business/2013/08/before-closing-on-a-home-see-these-tips-on-avoiding-high-fees/ http://abcnews.go.com/blogs/business/2013/08/before-closing-on-a-home-see-these-tips-on-avoiding-high-fees/#comments Tue, 13 Aug 2013 22:48:03 +0000 ABC News http://abcnews.go.com/blogs/business/?p=115632
ABC News’ Paula Faris reports:

The Cureton family of West Orange, N.J., say that while they are excited about buying their first home, they’re not too thrilled about the mountain of paperwork — and fees — that awaits them.

Are you selling? Four tips to follow before you put your home up for sale

The couple made an offer this week on a home with a spacious backyard that would give their two kids plenty of space to roam.

“We pretty much knew right away we wanted to make an offer,” Jackie Cureton said. “We wanted that house.”

And while they hadn’t closed on the house yet, husband Jeff Cureton said the term “closing costs” had him at a loss.

“I don’t even know what that means,” he told ABC News. “There’s a lot of stuff for us to go through.”

While there may be thousands of dollars of fees in the paperwork involved in buying a house, Erin Lantz, a mortgage business director at Zillow.com, an online real estate database, says getting your first home doesn’t mean you have to settle for high fees.

abc cureton family first home ll 130813 16x9 608 Before Closing on a Home, See These Tips on Avoiding High Fees

Credit: ABC News

She shared the following three tips with the Curetons and they were able to save more than $6,000.

Find out how below:

1. Be prepared and go to sites like Zillow, Trulia and Redfin to get a range of what you should be paying in fees.

“[The site] will detail out all of the closing costs, everything associated with that particular quote,” Lantz said.

2. Negotiate service fees — don’t be afraid. ABC News’ “Real Money” team poured over the fine print line-by-line with Lantz, who found these top three fees you could push back on: “origination charge,” “credit report check” and “appraisal fee.”

Lantz said the origination charge — $899 for the Curetons — was a fancy way of saying “processing fees.” The credit report check totaled $23.54 and the appraisal fee, $485.

Lantz said fees like these were not mandatory charges and the bank had the ability to remove them.

Also, in the Curetons’ case, the bank had added a $5,000 insurance fee, which other banks don’t charge.

3. Shop around. All lenders have different fees and different fee structures. Lantz found the Curetons another lender, saving the family more than $6,000 in fees.

Read More: States With Highest Closing Costs

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Richmond, Calif. Eminent Domain Proponents, Critics: Q&A http://abcnews.go.com/blogs/business/2013/08/richmond-calif-eminent-domain-proponents-critics-qa/ http://abcnews.go.com/blogs/business/2013/08/richmond-calif-eminent-domain-proponents-critics-qa/#comments Fri, 02 Aug 2013 19:21:30 +0000 Susanna Kim http://abcnews.go.com/blogs/business/?p=115402

Proponents of a plan in Richmond, Calif. to purchase foreclosed homes using the legal process of eminent domain — the power of the government to seize private property for public use — say critics are grasping at straws to stop the proposal.

Graham Williams, CEO of Mortgage Resolution Partners, a firm in San Francisco advising the mayor of Richmond, said, “Opponents are raising false issues.”

Gayle McLaughlin, mayor of the City of Richmond, said, “We call on these banks to do the right thing and sell us the loans at fair market value, so that we can do what they have not: fix these troubled loans so that more of our families here in Richmond can stay in their homes and our neighborhoods and local economy can recover.”

Critics of Richmond’s plan include the Securities Industry and Financial Markets Association (SIFMA).

SIFMA CEO Judd Gregg, former senator and governor of New Hampshire, warns that Richmond’s actions will “hurt many more homeowners both within the city and around the country than it is alleged to help.”

Greg warns that seizing mortgage loans through eminent domain will increase borrowing costs for home buyers and could restrict credit availability.

“The practical effect of this proposal will be that individual investors, who put their money into pension funds and other investment vehicles, making mortgage money available to homebuyers, will see their assets and savings arbitrarily, and we believe unconstitutionally, taken.  This will not help expand mortgage credit availability in this country,” Gregg said. “Programs exist, though they are often underutilized, that can better help homeowners in a more positive way than using eminent domain.”

Here are five questions and answers about Richmond’s plans:

1. What is the city of Richmond proposing to buy?

This week, Mayor McLaughlin sent letters to trustees of 626 underwater mortgage loans. The city had the loans appraised by Mortgage Industry Advisory Corporation on June 30 to determine their fair market value and offered to purchase the loans. She asked the owners and servicers of these loans to respond by Aug. 13.

An example in the New York Times provides a hypothetical example in which a home mortgaged for $400,000 is now worth $200,000:

The city plans to buy the loan for $160,000, or about 80 percent of the value of the home, a discount that factors in the risk of default.

Then, the city would write down the debt to $190,000 and allow the homeowner to refinance at the new amount, probably through a government program. The $30,000 difference goes to the city, the investors who put up the money to buy the loan, closing costs and M.R.P. The homeowner would go from owing twice what the home is worth to having $10,000 in equity.

Williams said the city is buying a loan, not any part of a security.

“The city is buying the loan from the trust, not anything from any holder of securities,” he told ABC News.  ”The trust holds a diversified portfolio of loans, and the sale of one loan, such as a loan in Richmond, does not in any way degrade the value of any other loan that the trust holds, such as a loan to a borrower in Chicago.”

2. Has this been done before? 

While Richmond is the first city to move forward with this plan, it’s not the first municipality to consider it. About 400 miles south of Richmond, San Bernardino County and two of its cities had previously considered using eminent domain to seize foreclosed properties on behalf of homeowners, but ultimately rejected the idea in January.

In 2004, the U.S. Supreme Court upheld the condemnation of private property in Connecticut for purposes of economic development in the case of Kelo v. City of New London.

A handful of other cities, like Newark, Seattle and North Las Vegas, are considering plans similar to that of Richmond, the New York Times reports.

3. How will the valuation of the homes work? 

Richmond’s plan is “likely to be permissible” after the Kelo case, says Illya Somin of George Mason University Law School, but under-compensation will be a “possible constitutional problem.”

In eminent domain situations, the fifth amendment requires “just compensation,” which the Supreme Court has interpreted as “fair market value.”

The first problem, says Gideon Kanner, an expert in eminent domain and professor emeritus with Loyola Law School in Los Angeles, is “just compensation” has to be “first” paid in full, and up front.

If a condemner tries to low-ball too much and makes an unreasonable pre-trial offer, “it may have to pay the condemnees’ attorneys’ and appraiser’s fees, plus other litigation expenses, on top of the ‘just compensation,” Kanner says.

Second, by state statute, the condemner has to pay “fair market value”, Kanner explains in his blog, defined by statute as “the highest price” that a willing but unpressured buyer would voluntarily pay and be accepted by a willing but unpressured seller.

Dan Schechter, law professor at Loyola Law school, questions whether a financially troubled city can afford to make such payouts.

gty bank owned home richmond ll 130801 16x9 608 Richmond, Calif. Eminent Domain Proponents, Critics: Q&A

(Credit: Justin Sullivan/Getty Images)

4. What kinds of recourse do the banks have?

One concern Kanner raises about Richmond’s plan is whether bondholders would have to be paid “severance damages” if the remainder of a mortgage security loses its value after, say, some of it is taken by eminent domain.

In a case involving the NFL’s Oakland Raiders,  the California Supreme Court held that all species of property, including professional football franchises are subject to the power of eminent domain. Kanner says “in just about every eminent domain case” where the title to a property is taken, the lenders’ interests are also taken, and they are entitled to just compensation, “which includes severance damages when the taking is partial.”

Williams said, “the cities are happy to enter into negotiations with the trusts in order to reach an agreeable price, even if that means considering factors that the law does not require, such as the trusts’ view of severance.”

Williams adds that “even if the cities have to pay for the loss of diversification, the incremental payment would be negligible given the diversification and distressed nature of the loans in each pool.” But Kanner said a jury will have to decide what that payment would be.

“However, if the trusts refuse to negotiate and the city decides to condemn then severance will not apply and the trusts will receive exactly the fair value of the loans – thus giving up, by their refusal to negotiate, the opportunity to receive more than fair value in a settlement,” Williams said.

Kanner says a trustee holding a deed of trust has no authority to haggle over the value of the trust.

5. Why are people in the financial sector upset about this?

Schechter said Richmond’s plan sets a “terrible precedent” for bond obligations.

“The idea in general is that bonds are not risky investments. The big asterisk here is generally true but folks at the C-level knew what they were doing,” Schechter said. “High interest rates are the riskiest slice of residential mortgage backed securities.”

“It’s hard to feel sorry for them. They took a risk and it didn’t pan out,” Schechter said. “It explains why the industry is so up in arms about this.”

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Home Prices Up 12 Percent, San Fran and Vegas Hottest Markets http://abcnews.go.com/blogs/business/2013/07/home-prices-up-12-percent-san-fran-and-vegas-hottest-markets/ http://abcnews.go.com/blogs/business/2013/07/home-prices-up-12-percent-san-fran-and-vegas-hottest-markets/#comments Tue, 30 Jul 2013 15:09:23 +0000 Richard Davies http://abcnews.go.com/blogs/business/?p=115308 GTY san francisco ml 130730 16x9 608 Home Prices Up 12 Percent, San Fran and Vegas Hottest Markets

(Credit: Getty Images)

For the first time since the housing bust five years ago prices in two U.S. cities have recovered all of their losses – and then some.

“Denver and Dallas are back up to their peak levels,” says Craig Lazarra of Standard & Poor’s.

The firm’s Case-Shiller 20-city home price index for May rose 12.2 percent compared with the year before, the biggest price jump since the spring of 2006.

“The hottest markets were San Francisco, Las Vegas, they were almost tied. Phoenix after that. Los Angeles was also a very strong market,” Lazarra told ABC News.

Average monthly prices rose 2.4 percent in May from April. Increases were widespread with all 20 cities showing gains in May from April and compared with a year ago.

What $600,000 Buys: Homes Across America In Photos

Few housing experts believe the recent price rises will continue at this pace.

“Three straight months of national home value appreciation above 10 percent is not normal,” says Zillow senior economist Svenja Gudell.  “As the overall housing market continues to improve, the impact of foreclosure re-sales on the Case-Shiller indices continues to be pronounced.”

Despite the recent price rises both new and existing home sales are well below normal.

“The real issue in my opinion is that there’s a lack of inventory out there in many U.S. markets,” Kathy Fettke, CEO of Real Wealth Network tells ABC News.

The share of cash sales is still well above normal.

“A lot of the sales are being driven by investors, not your traditional move-up, trade-up buyers or first time homebuyers,” says economist Sam Khater of CoreLogic.

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Speculators, who are often criticized for their activities, played a key role in the housing recovery in many markets, especially where prices had declined the most in the housing bust. “They really helped stabilize the housing market in 2010 and 2011,” says Khater.

What’s ahead for the housing market? The experts are divided. “A combination of rising mortgage interest rates, flagging investor demand and more inventory entering the market will all help to moderate the pace of home value appreciation and stabilize the market, ” says Zillow’s Gudell.

But Khater believes the decline in re-financing will lead to more mortgage lending by banks, which could lead to more competition for homes among buyers. “With rates going up and re-fis going down, the lenders have to look to the purchase market for business.”

Read More: What $400,000 Will Get You: Homes Across America

Richard Davies Business Correspondent ABC News Radio

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Itching to Flip a House? First Check These Moneymaking Tips http://abcnews.go.com/blogs/business/2013/07/itching-to-flip-a-house-first-check-these-moneymaking-tips/ http://abcnews.go.com/blogs/business/2013/07/itching-to-flip-a-house-first-check-these-moneymaking-tips/#comments Thu, 25 Jul 2013 21:56:20 +0000 ABC News http://abcnews.go.com/blogs/business/?p=115233 abc house flipping ll 130725 16x9 608 Itching to Flip a House? First Check These Moneymaking Tips

ABC News

ABC News’ Rebecca Jarvis reports:

Dave Seymour of the A&E reality show “Flipping Boston” has become famous for buying homes, renovating them and selling them within months for a pretty profit.

“What I do for a living, it’s an economic stimulator in and of itself because it’s properties that move our economy,” he told ABC News. “Real estate is what moves our economy, so we’re proud of that.”

Seymour, a former firefighter, fell on hard times in 2007 and started flipping homes in Boston at the exact moment when home values were tanking. Now, his company, CityLight Homes, which he runs with business partner Peter Souhleris, has a dozen homes in the process of being flipped.

Click Here for Tips on Raising Your Home Appraisal

According to RealtyTrac, flipping is making a comeback in this housing market. The market is currently on track to hit record highs this year, up almost 20 percent from last year.

Nationally, flippers are making an average of nearly $18,391 a sale. Seymour said he shot for a 20 percent profit on each house and generally spent about four months on each home, from acquisition to sale.

Seymour cautioned prospective flippers to educate themselves, first.

“If you’re just doing [one or two homes] a year – and you’re playing at this thing – you can get seriously hurt,” he said. “There are always, always surprises. Sometimes, I do a little bit better. Sometimes, I don’t do quite as good.”

He said the biggest money pit he’d gotten himself into included a septic system that cost $45,000 to repair.

“You got to know what you’re doing,” Seymour said. “You don’t do this on a whim.”

He shared these four tips to increase the value of a home being flipped:

1. Crown molding, for about $200, can dramatically improve the look of a room.

2. A new garage door, for about $2,000, can increase the sale price by $8,000 to $20,000.

3. Try a new front door as an inexpensive way to up curb appeal. Seymour said he liked to always do his in red.

4. Always list properties Tuesday night. By the open house on the weekend, there’s already some buzz – and more people at an open house creates competition.

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Fort Worth Couple’s Home Mistakenly Demolished http://abcnews.go.com/blogs/business/2013/07/fort-worth-couples-home-mistakenly-demolished/ http://abcnews.go.com/blogs/business/2013/07/fort-worth-couples-home-mistakenly-demolished/#comments Thu, 18 Jul 2013 18:21:17 +0000 Susanna Kim http://abcnews.go.com/blogs/business/?p=115013

A Fort Worth, Texas, man went home to find an empty lot where his family’s house of decades had stood. Local officials still don’t know how it came to be mistakenly demolished by a crew last weekend.

David Underwood and his wife returned from out of town on Saturday and decided to stop by their house, which had belonged to his late grandmother and where they had planned to move eventually.

“We rounded the corner and my wife, Valerie says, ‘The house is gone David,’” he told the Dallas Observer blog Unfair Park. “I’m looking at the yard, so I looked and I’m like, ‘Wow, OK.’”

All that was left of their three-bedroom, one-bathroom ranch-style home was its foundation slab.

kdfw WRONG HOUSE2 16x9 608 Fort Worth Couples Home Mistakenly Demolished

(Credit: KDFW)

A passing city marshal informed them that the home was demolished, the Dallas Observer reported. The Underwoods eventually learned that the demolition crew contracted by the city had mistakenly cleared their home instead of a nearby one that was condemned months ago.

Read More: Wells Fargo Mistakenly Cleans Out Retired Couples’ Home Twice, Mistakes It For Foreclosed House

The Underwoods’ home is on 9716 Watercress Drive while the condemned home, which is still standing, is on 9708 Watercress Drive.

Bill Begley, a spokesman for the City of Fort Worth provided a statement to ABC News.

“On July 12, 2013, contractors demolished the wrong property on Watercress Drive,” the city’s statement read. “The property to be demolished should have been 9708 Watercress Dr.  The property that was demolished was a vacant structure located at 9716 Watercress Dr.  City staff currently is investigating to determine what happened.”

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“A mistake was made,” Fort Worth’s code compliance director, Brandon Bennett, told The Dallas Morning News. “We have to identify where the weak link was and fix that so it doesn’t happen again. We need to look at all of our upcoming demolitions, and double- and triple-check these things to make sure everybody has dotted the I’s and crossed the T’s.”

It wasn’t clear who whether the city or the demolition contractor would compensate the owners for the house. A call to the Underwoods wasn’t immediately returned.

Read More: Mortgage Rates Fall to 4.37 Percent

 

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