Pacita's Quick Bytes of Real Estate: October 2008

Typically, when we encounter problems with an escrow, it's because there is a problem with the loan for different reasons. It's like running a gauntlet.

SHOCKING NEWS ABOUT A LOAN

My clients are buying a duplex, contingent on selling their current house. At that time, they were preapproved by their lender for a 5% downpayment. So they moved heaven and earth to get their house ready, and I did the same in preparing all the marketing materials. We all moved in warp speed.

Yesterday, we received full price offer on their house --- and we whooped it up. So we started getting their loan ready. Then BOOM! A few days ago, their lender said that the conditions changed, and that they will now need 10% downpayment to get their loan because they're buying a duplex. Then this morning, when I called, he said they will need 20%!

Although my clients are planning to convert the duplex into a house for their own use alone, the lender said he can't get a loan approved, and that we probably should look for a single family property instead. After all the time we spent looking, and their desire to own this specific property, that isn't an option we relish.

TALK TO OTHER LENDERS

So I suggested they speak to three lenders I have worked with, who are very responsive and resourceful. All three scrambled to help, and it looks like they may be able to find a program that will allow them to put down 10% or less instead of the 20% their other lender said.

My clients are impressed and thrilled that we're all working on their behalf. We're keeping our fingers crossed that we will have a positive outcome.

MORAL OF THE STORY

Make sure you have lenders with proven record and experience, who will partner with you in your challenges, and respond when you call for help. They are worth their weight in gold!

The number of foreclosures is increasing. And so are the REO agents. Concurrently, the lack of professionalism among some REO agents is galling.

Yesterday, Sunday, I called an REO agent to let him know I'm submitting an offer. Today, I sent the offer, again checking to make sure the property was still available (yes it was). I saw that my email was received. But lo and behold, later this afternoon, the MLS posting was changed  to "pending" as of yesterday!?

BUSY BUYER AGENT   I have written so many offers for many of my clients who are not giving up on buying properties to meet their needs, in spite of being outbid. But what I'm finding is that many (with a few exceptions) of the REO agents have forgotten how to be good listing agents.

What's with the attitude? And please, Include material info in the MLS

REO LISTINGS COMMON PROBLEMS    Time and time again, I'm running into the same problems that include:

• No return call or email, in spite of repeated calls and follow ups
• No picture of the property
• No info on remarks, or material facts are missing (like the house is next to another house that slid down the hill?)
• No key in the combination lockbox
• Wrong combination code for the lockbox
• No acknowledgement that they received our offer which I send via email and fax
• No courtesy call to tell us another offer was accepted --- instead, we have to keep checking on the MLS to see if the status has changed
• If we do get through, we receive erroneous information
  • One assistant said there were several offers on a property, and that it was on the verge of being accepted...but when I called back later, another person said only my offer was received.
  • Weeks after I submitted an offer, there was not a single response fo my follow ups. So we moved on to another property. Then I get an email telling me my offer was accepted.

HAVE YOUR PEOPLE CALL MY PEOPLE    Many of the REO agents have hired assistants to take care of details. Surely, they should be able to give us even a short call or email. We wouldn't be calling so often if we at least get ONE callback or email with an update!

When I represent my buyers, I spend an inordinate amount of time researching and showing properties, strategizing with my clients on writing then submitting an offer. The least REO agents and their assistants can do is acknowledge us.

Yes, I know...you've got a lot of work on your hands. Well, so do we. If you can't handle the load well enough to call us back with info we need, then why are you in the REO business?

While browsing through REO listings in Oakland CA, I came across a duplex that is listed at $37,500. Yes, you read that right. The MLS confidential remarks said "Go see 1st, then call."

Before taking my clients to see the property, I checked the history, and saw how many times it was listed until the bank finally foreclosed at $338,960.  So I thought perhaps they left off a digit --- and maybe the REO agent meant $338,500.

HUFFY REO AGENT       

I called the agent asking if the price is right. He called back, he said the price is right. He huffed that he specifically said see the property first before calling, and that if we had gone there first, that we would notice the house next door has slid down the hill. He said if agents did what he instructed, then he wouldn't have to return so many phone calls. (So, it's HIS time that's being wasted calling us back!)

But  what if the buyers and their agents have a long drive?  Couldn't the agent gone ahead and provided that info in the confidential remarks? It would be in the disclosures anyway --- and he would have entered his observations on the Agent Visual Inspection disclosure.

HOMES SLIDING DOWN THE HILL

After further research, I came across news articles that mentioned problems of houses falling down the hill on this street in Oakland and that the cause of the problems are unknown.

A Redfin blogger said: "Three homes on Wallace St. in Oakland's San Antonio District are cracked and sliding off the hill. Uninhabited for a number of years now, the three homes had to be abandoned by their owners due to foundations damaged by moving down the slope.

However, according to an inside source, though several investigations were done to determine the cause of the houses' movement, engineers have not been able to figure out just what has caused this unfortunate (and heartbreaking for the owners and neighbors) situation. From what I hear, the city is finally agreeing to pick up the tab to demolish the homes (since the homeowners' insurance has not covered it).

This $37,500 house is on this street.

How often does it happen, and how true is it that the first offer is almost always the best offer?

Last week  I activated on the MLS a fixer. The family and I have been talking since June about listing it. In August, I mentioned the fixer to one of my contractor clients who offered a decent price for it. The family didn't want to even look at the offer.

The next couple of months, I tried to explain that we are losing ground in terms of how much we can get for the house. So they agreed to let me list it last week. I proposed a lower price since prices of homes in general are trending downwards, but they wanted to list it at a higher price. It was all I could do to get approval to put up a yard sign and a lockbox.

Then 2 days after I activated it on the MLS, we received three offers, and one of them was the first buyer who then re-submitted his offer at $15K less than his original offer. The seller's reaction? Because they received three offers so quickly, they think they can get more and better offers if they wait awhile. They wanted to counter at $20K more. All three buyers said no.

A week passed. No other offers came in. Nada.Zilch.

UPDATE. The mother then said she will accept the highest offer. Although the offer has expired, the buyer was still interested, but wanted to reduce his price by $15K. Otherwise, he is no longer interested.

The seller's older son contends that since his mother is accepting the offer, the buyer is bound by it. Tried to explain that it doesn't work that way, that the offer expired, and even if his mother accepted, it needs mutual agreement to be binding. Also tried to explain contingencies, that if buyer does not clear contingencies, buyer can still back out of the agreement and get his deposit back.

He asked if I told his mother that the offers expired --- I couldn't make it any clearer to both his mother and his brother about the expiration. But they wanted to wait after the weekend to see what else comes up.

Another UPDATE: Three weeks....not a single offer!

>SIGH<

There was a realtor who sniffed that buyers and their agents looking for bank-owned and short sale properties are bottom feeders.

American Heritage dictionary defines "bottom feeder" as 1. A fish or other animal that feeds on the bottom of a body of water. 2. One that feeds low on the food chain; a scavenger. 3. Slang a. An opportunist who profits from the misfortunes of others: b. A low or despicable person.

But if the properties have already been foreclosed, and an investor or buyer comes along who wants to buy the property, does that make him a bottom feeder?

Seems to me that folks like them are keeping the real estate market active and helping to stimulate the economy.

INVESTORS

I met a couple who built up a business buying and selling real estate. They called me on one of my short sale listings, and promptly made an offer.And now we wait to hear back from the lender.

In the meantime, I probed to determine what they are looking for. It turns out that they are doing a 1031 exchange. They want  (and need) to buy properties, and like most investors, they want a good deal. So I recommended that we look at REO properties. We ended up identifying 6 REO properties, and they decided to write offers on all of them. Along the way, I offered advice on how to write REO offers

ALL CASH OFFERS

I asked what if all offers were accepted. They answered "So we'll buy all of them". Did I mention that these are all CASH offers?

Then tomorrow, I'm going to show them three more properties in a very upscale neighborhood where no one would have ever dreamed homes would become REOs.

BOTTOM OF THE MARKET

If the market is hitting bottom, I am thankful for these "bottom feeders" to help clean up the mess.

Someone shared this with me, and I laughed so hard, that I thought perhaps I should share it too. We all need a break.

A little boy goes to his dad and asks, 'What is Politics?'

Dad says, 'Well son, let me try to explain it this way:

I am the head of the family, so call me The President.

Your mother is the administrator of the money, so we call her the Government.

We are here to take care of your needs, so we will call you the People.

The nanny, we will consider her the Working Class

And your baby brother, we will call him the Future."

"Now think about that and see if it makes sense." So the little boy goes off to bed thinking about what his dad has said.

Later that night, he hears his baby brother crying, so he gets up to check on him. He finds that the baby has soiled his diaper. So the little boy goes to his parent's room and finds his mother asleep. Not wanting to wake her, he goes to the nanny's room. Finding the door locked, he peeks in the keyhole and sees his father in bed with the nanny. He gives up and goes back to bed.

The next morning, the little boy says to his father, "Dad, I think I understand the concept of politics now."

The father says, "Good, Son, tell me in your own words what you think politics is all about."

The little boy replies, "The President is screwing the Working Class while the Government is sound asleep. The People are being ignored and the Future is in deep shit."

Today, I posted my newest listings, and can't help but be amazed at the wide disparity between these properties. Nearly the same size house and lot, they can't be any more different than they are today. And their prices reflect that. Both located in the beautiful and picturesque city of  Alameda.

Encinal house 

The owners have upgraded and remodeled this home that they bought 4 years ago. They painstakingly developed a xeriscape-inspired landscape for their beautiful gardens, added three fountains and a medititation nook as a tribute to feng shui principles of harmony with the elements.

Along the way, they put a new wood shingle roof to conform with the Cape Cod architecture, remodeled and upgraded the kitchen with granite counter tops and stainless steel appliances, put in motorized and retractable awning over the spacious deck that overlooks the garden, refinished the plank wood floors.

This home is simply brimming with curb appeal and charm, and is listed at $525,000.

Schiller house  

On the opposite end of the spectrum is a once-nice Spanish bungalow that time forgot. The elderly widow just couldn't afford the upkeep on her own. Over a period of time, the property suffered, and the condition of the house shows it. There's no heat, no cooling. The roof leaks. There are peeling paper and cracked plaster throughout the house. There are holes in the ceiling, walls and floors. The rear stairs are rickety. It's chockfull of stuff including abandoned cars. The basement and garged are piled high with boxes of books, old clothes, and unusable appliances.

This is a home waiting for a contractor since the repairs are beyond what a handyman can do. It is listed at $350,000.

One day, I wanted to just take a break , so I decided to write my parents a personal note.  It's just a short note to thank them for being such wonderful parents and how proud and happy they're MY parents. I simply said they've given me so much love and support, and that here I am, approaching my own golden years, and they're STILL doing it. How lucky can I be?

Two days later, I get a call from my Dad. He is choked up. He said my mom is crying and can't talk, but that she wanted him to call me. I thought something was terribly wrong and I began to panic.

Then he said..."We just received your card...and it made us so happy that we can't stop crying. We love you so very much."

If there was ever an Omigosh moment, this was one of the best. I was so dumbfounded that a personal note I wrote, that took less than 5 minutes to write and mail, had brought about this wave of emotion.

Mom and Dad....this is for you. I love you!

I am thrilled to have as many buyers as sellers. And I am doubly thrilled that the buyers I am working with are serious buyers.

Where do I find buyers? How do they find me?

Craigslist Calls on my listings    

• Today, I received a call from someone who found my post on craigslist for a waterfront and largest model 3 bedrooms/2.5 baths condo at the Alameda/Oakland Estuary. So I showed the condo to him and his friends --- and in the course of fact-finding, I found out that all three of them are interested in buying homes in Alameda. That one call turned into viewings of other properties. We are scheduling more viewings next week. Oh...and they need help marketing their current condos for lease-purchase.
  • This is a good time to mention the 10 things you can do when posting on craigslist
• A few weeks before that, I showed a couple my listing of a Victorian duplex. They also saw it on craigslist. Since then I have shown them several other properties. They are serious buyers and want to buy something before the end of the year.She

Open house    A young couple stopped at one of my open houses just as I was closing. That turned into a lengthy conversation, and later, turned into a serious search for a detached single family home, which symbolizes a move up from their condo. After several viewings and offers, we got an offer accepted on a very nice and clean home. They're thrilled!

• In one of my open houses , I generated 70-80 groups to come through. Here's what I did.

Staging a fixer   (Should you stage a fixer? I did, and the result? Multiple offers!) While I was working on making a Tudor fixer listing presentable for an open house, two guys driving their electric car stopped in front of the house and seemed to be really interested. So I waved at them and invited them to take a look.

They need to sell their house before they can buy. A little more conversation resulted in my showing several properties and writing offers on their behalf.  In the meantime, they're furiously getting their house ready to be put on sale. Guess who's listing it?

Stay in touch.   The buyer of one of my listings liked how I handled our escrow nearly three years ago and said she wished I had represented her. Since then she would call me each time she had a real estate question. She is now on my database for monthly mailings.  Last week, she said she wants to buy a triplex and sell her current home. She told me she can't think of anyone else to represent her but me!

• I'm a subscriber to Brian Buffini's basic principles for Working by Referral, starting with writing personal notes, making phone calls, sending monthly items of value. Go to wwww.BuffiniAndCompany.com or to see what it's all about, visit the group on Active Rain called "Buffini and Company: Coaching the Good Life!"

Pan for gold in these rivers of opportunities!

Essentially, a blog is a log of posts on the web. And the web is forever. Even if you delete your post, someone could have made a screen shot of it --- and it becomes part of your history. Haven't you already heard potential employers telling young people to be careful about what they post on Facebook?

If you want to present a positive image, be careful how and what you post -- not just on your own blogs, but your comments as well.

Thus, if you respond not just with passion, but with a lot of anger, and if you resort to name calling, either outright or nuanced, your comments are a window to your personality.

So if you come across as angry, irrational, intolerant, uninformed, illogical....what will your clients and associates  think about you? And don't fool yourself for a moment that answers  and blogs you post won't be visible to anyone but the community of Active Rain (last count: 112,738 members).

Think twice before you respond in anger to a poster whose views are contrary to yours. Learn to disagree without being disagreeable. State facts. Or include links to fact-based stories, and not merely commentaries. 

The old adage still applies: "Think before you leap." Everyone has opinions. The difference is in presentation.

Take a look in the mirror. Do you like what you see? How will your clients and associates perceive you if they read your comments and blogs? Will they respect you in the morning?

Out of curiousity, I googled these questions:

How many governors became U.S. President?

• 16 state governors became US President that includes Territorial Governors
• 10 became 'true' two term US Presidents
• 9 state governors to US Presidents were in the period since 1896
• 5 'True' Two Term Presidents with gubernatorial background occurred since 1896
• 4 state governors to US Presidents have occurred in the last 32 years
• 3 'True' Two-term Presidents with gubernatorial background occurred in the last 32 years

 How many senators became U.S. President?

• 15, including (most recently) Kennedy, Lyndon Johnson, and Nixon.
• Two senators, Warren G. Harding and John F. Kennedy, moved directly from the U.S. Senate to the White House.  

Oldest

At the end of his presidency in 1988, Ronald Reagan (born February 6, 1911) was the oldest man ever to hold the office of the President of the United States. He was the oldest man elected, at the age of 69 when he was elected to his first term, and ended his presidency a few months before his 78th birthday.

Ronald Reagan is also the only divorced person to have been ellected.

Youngest

John F Kennedy was the youngest elected president. However, Theodore Roosevelt was 42 when he took over from Mckinley. He was 46 when he was elected into office in 1904.

Who would make a better president, a governor or senator?

Along the way, I kept clicking on other stories, and this one from National Review Online by S.T.Karrick, written August 2007 was particularly intriguing. The headline was Governors Win. He writes

"So, when we think about whom any party should nominate for president, it's always best to go after a governor.

The reasons governors beat national politicians are probably fairly simple. They have accomplishments they can cite, have served as CEO of a large government organization (as the U.S. presidency is), and, most importantly, they don't have a voting record on important and controversial national issues.

Senators, by contrast, don't have the individual political-administrative accomplishments to which to point, have records dotted with controversial and polarizing votes, and typically have made a lot of enemies on the national level."

Another sign of the times....

Last Christmas season, we were shocked when title companies were were working with closed their doors in our area, and consolidated offices, followed by several reorganizations.

This afternoon, I just got the news that one escrow officer with whom I have active escrows (and there are others from my office working with her, too) was just laid off. This was totally unexpected, and she just got the note.

It's very disconcerting...although last year was tough, this year is showing promise. But with this recent economic turmoil, it looks like a lot of companies are getting ready to cut back where they can.

I am reminded of an adage, "When business is bad, it pays to advertise. When business is bad, you've got to advertise." So I have not pulled back --- yet --- on some of the things I do to stimulate business. But with credit card balances not getting paid off, this is making me nervous.