To Speed Recovery, California Must Let Markets Work
A week doesn’t go by that I don’t get at least one unsolicited offer for my property, typically from investors who don’t use a company name or last name. They often claim to have driven by the house and want this particular one. On occasion, a legitimate real estate agent will contact me with a potential buyer, but I assume most of these are fishing expeditions from low-ballers and scammers.
It’s annoying, but people have every right to offer to buy stuff. They get the information from public records, but the value of having public records outweighs the annoyance of dealing with aggressive property seekers. I ignore and block them. I remember when the government claimed to protect Americans from unsolicited calls via the Do Not Call Registry. Since then, I get more calls from “Potential Spam” than anyone else.
In the wake of the devastating Los Angeles area wildfires, Gov. Gavin Newsom signed an executive order vowing to protect devastated owners in affected ZIP codes from unsolicited offers for their burned-out properties. This is the governor’s latest act of performative policymaking. It will offer no real protections and might even harm homeowners who are looking to cash out rather than go through years of rebuilding.
“As families mourn, the last thing they need is greedy speculators taking advantage of their pain,” the governor said in a statement. “We will not allow greedy developers to rip off these working-class communities at a time when they need more support than ever before.” Specifically, the order bans for three months “unsolicited undervalued offers” and directs the Department of Real Estate (DRE) and other agencies to inform owners of their rights.
It’s easy enough to understand “unsolicited,” but how does one define “undervalued”? What is the value of a destroyed property that will require demolition, remediation, permitting reviews, and total rebuilding? It’s whatever the market will bear. In many cases, property owners will take their insurance settlement and be thrilled to sell the distressed property to a developer. Such offers might even speed up the rebuilding process.
Anyone who thinks state regulatory agencies will help them doesn’t understand how these agencies actually operate. I once filed a complaint with an agency and eventually received a form letter telling me that there was nothing it could do. The best advice usually is to find a good attorney. Newsom is offering phony protections that provide the patina of “doing something.”
The news coverage plays on this. “Rea
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