Pacita's Quick Bytes of Real Estate: April 2008

I submitted an offer on a short sale listing last week. When I followed up with the agent on the seller response, she told me that she received four offers and that she sent them directly to the lender for approval. No written response (acceptance, counter or rejection) from the seller.

Is this right? Seems like she skipped a step and that is to have the seller formally respond to the offer(s). 

Regardless of which offer is in first and back up positions, and knowing that the lender will make the final decision, the seller still owns the property and still has a role in the process.

I was posting my newest listing on my website powered by Point2Agent, and couldn't figure out why every time I try to save and exit, it stops responding. I restarted at least a couple of times, and thought perhaps it's my computer (again!).

After several tries, I checked the Help info, and lo and behold, point2 suggested disabling the whole Norton 360 package in order to load my pictures. The same thing happened when I tried to network with the printers at the office. Our MIS guy said to disable Norton 360. He said that I could get enough PC protection from free programs like AVG, Cache Cleaner, Windows Defender, RegCleaner, etc.

Are there any other functionalities that Norton 360 conflicts with? Is anyone else having the same experience?

As of today, in our local MLS. there are 12,041 active listings of which 2636 are REO (bank-owned) or 22%, and 2852 are short sales or 24%.

Siince January 1, 2008, 1151 REOs closed, compared to 102 short sales.

Because of the painfully slow process of getting an acceptance, rejection or counteroffer to a short sale offer, I am more inclined to look for REOs for my clients who are interested in such properties. However, seeing that there are more properties that are on the short sale list, I don't want them to miss out on these either. As long as we set expectations that this type of transaction will involve a long waiting period, and that other buyers may submit offers that are better than ours, my clients are fine with continuing to look while they wait.

Along the way, I consulted with the California Associate of Realtors legal department about back up positions, etc. According to her, even if my client is the first accepted offer on a short sale and other offers are in back up positions, the rankings don't matter to the lender. The lender will make the selection and final decision on the best financial outcome for them regardless of whose offer was accepted first.

So the advice when writing an offer on a short sale property is to give it your best shot...unless you want to keep playing the waiting game or risk being out of the game entirely.

We are having such a lively discussion at our office, and there were very strong opinions expressed.

One of the scenarios: there is an accepted offer on your short sale listing, but the lender hasn't accepted yet. Then more offers come in. You can take one or two in back up position, and you can/may present these other offers to the lender.

But do/should you?

We consulted a short sale specialist who told us that your fiduciary responsibility as the listing agent is to your seller. If you have a solid accepted offer, and the goal is to complete the transaction as quickly as possible and still meet the lender's requirements, then you don't have to send to the lender the other offers that come in after you have an accepted offer.

Do you agree? What would you do?

To get a sense of the ongoing debate between buyers and renters, how the public sees realtors, where people think the market is going....

Check out the discussion forums on real estate. Sometimes, the posts are really quite educational and entertaining. Other times, it can get real ugly. The realtors who get right in the thick of things are to be commended for providing good information and for sticking up for the industry.

Keep an open mind when reading these no-holds barred posts. If it gets too ugly, some entries may be flagged. But for the most part, it's like being a fly on the wall.

Check it out!

There seems to be a disagreement about when to deposit the buyer's initial deposit check.

Some say within three days after the contract is signed and accepted by the seller since that is when the contract is considered ratified. Some MLS rules also will state that within 24 hours of acceptance by the Seller, the listing agent should post the listing as Pending (or pending show for backups).

Some say you can't deposit the check  or open escrow if the lender hasn't accepted the offer, especially if the lender will continue to entertain other offers.

Others also ask, what if lender rejects offer after the buyer has waited 30 days or so for an answer? The initial deposit would have been needlessly tied up in escrow if that happens. It may also take just as long for the lender to approve the cancellation request.

And what if the lender counters and insist on an escrow company different from the one where the buyer opened escrow? Do you then issue a cancellation of escrow and have it transferred to another title company? Seems like more needless work.

What are the rules where you are?

Often asked questions by agents about short sales

As more and more of us are finding ourselves challenged by listing and writing offers on short sales, my broker says he is asked three questions the most. I'd like to share what he said because I thought he gave very good advice. 

• "How come I'm spending so much time writing offers on short sales with no success?"

Yes, it is absolutely worth the time to work with buyers who want to buy a short sale property. But it is smart to clarify "Are you looking to buy a short sale or just get a good deal?" Most are just looking to get a good deal and there are plenty of those around now which are not short sales.

• "Can I write more than one offer at a time for my buyer?"

Can you write more than one offer at a time for the same buyer? My understanding of our Realtor code of ethics prevents us from doing this unless the previous offer is withdrawn while a second offer is being submitted.

• "Should I continue to write offers for buyers that want to ONLY buy short sales?"

We are all spending more time working with short sale buyers and sellers as we learn the ins and outs. On the buyer side, with so many competing and attractively priced properties, buyers seem really confused and their offers unfortunately reflect that. I recommend having your buyer rank their list of prospective properties and start by writing on the best property first. When negotiations or progress is seriously stalled, then maybe it is time to move on to property #2. In this way, both you and the buyer are giving it your all on one property at a time.

Hope this info helps someone.

Alameda truly is a beautiful island city. It's our slice of paradise on the San Francisco Bay between San Francisoc and Oakland. Close enough to the City hubs, but far enough from the hubbub.

Having lived in so many cities in New York, New Jersey, Florida, Texas and California, I consider it a blessing that I am now happily enconsced in this beautiful, peaceful, picturesque and historic island that offers so much.

For starters, here are some photos that may give you a sense of island living in Alameda. Enjoy!

I'm always one to embrace new things and new technology. Although not an "early adaptor", nonetheless I keep my eye on things that intrigue me, and eventually I dip a toe in before I plunge right in. Seeing so many realtors who are successful in desigining their websites and blogs in a way that catches the eye, I certainly wanted to try, too.

So I looked for Brad Carroll's post on blog design and thought I copied/pasted the html the way he said it so that my post would look halfway presentable.

Hmmm...I must have done something wrong. No, I KNOW I did something wrong, because after I previewed it, it looked exactly like the html gibberish that I copied pasted. So I guess I'll have to do a search of all of his posts --- copy paste those posts into WORD documents so that I can read them during a slow time (such as during floor times or slow open houses) and see if I get it. I don't want to bug him with all kinds of questions, so the work is ahead of me in terrms of research.

There was an earlier post from someone who gave a really detailed step-by-step way to do this. She said it took her 6 hours to "get it". But when I tried to retrieve that post, it was removed or was no longer visible. Oh well. It will take me 6 hours just to locate all this good info!

Perhaps someone else has figured out a faster way to get all this info from a few posts instead of years' worth of blogging?

HELP!

Always on the lookout for free software and productivity tools.

So it was fortuitous that as I was waiting at a doctor's office, there was the latest issue of Colmputer Shopper with a headline that features one of my favorite words: "FREE!"

The cover article is titled "25 Free Downloads You Need Now". It says "Try these great apps to help you speed up your system, clean up your hard drive, and more----all without spending a single penny.  All of these, plus thousands of other freebies, are always available at computershopper.com/downloads."

Featured are these downloands

Start Me Up
Tweak Tools
File Under: Essential
Doing It All
Drive Time
Productivity Boosters

And more. You'll surely find something you'd like to try.

Good luck!

There's an active discussion and differing opinions on when a REALTOR should amend the status of the MLS posting of a short sale.

• When the Sellers accept the offer OR
• When the Lenders accept?

When is the contract officially ratified? When is it binding?

The California Association of REALTORs  defers to the local MLS. The local MLS said to change listing to pending when the Sellers accept. What if the Lenders reject or counter the offer?

Obviously, from the Buyer's agent's point of view, it will be great if the property is posted as pending so that other agents will be less inclined to submit an offer on that property.

Conversely, from the Listing Agent would want to keep it active and encourage other Buyers to submit their offers and may the best offer win.

It seems to me that it is pending and binding only after the lenders accept. With the time it takes to get a short sale approved, many buyers will lose interest and find something else. Their initial deposits haven't been cashed, they haven't cleared their contingencies, so what is their motivation to wait besides getting a good deal which they may be able to find anyway in this market?

What do YOUR respective organizations say?

Real estate is an ever evolving industry where there is always something new to think about.

Here's a listing that was offered for sale the usual way for just over a month, with the original price right at market, or so the agent thought. There was no interest until the price was reduced $50K. At the new price, however, the homeowner is in a severe financial predicament in that she cannot cover the costs of selling and pay off her mortgage.

Seller applied to have the property sold as a short sale. But before the property was approved as a short sale, she received an offer for $90K less than what she paid for the house, and below the list price.

If she accepts the offer, she wants to make it subject to the short sale which hasn't been approved yet. At the same time, the listing agent wants to revise the listing agreement to show a higher commission rate since before the short sale scenario came about, the listing agent agreed to a greatly reduced commission rate to help out the client who was waging an uphill financial battle. If it is sold as a short sale, the bank would pay the commissions (or negotiate the rate --- so why negotiate at the very low end?). And we all know the work involved in a short sale....it's a lengthy, time-consuming, nerve-wracking process.

How would you address this situation?

Maybe one of you has had someone present you with a proposition.

Here's how someone told me she invests:

• Find properties that are short sales
• Write offer
• Upon acceptance by the Lender, and before the escrow closes, she begins advertising the property for sale at a higher price knowing that she has time
• If/when she gets a buyer, she handles the sale and transfer of funds with simultaneous escrows

Has anyone heard of this before,? I don't know how she would or could sell a property she doesn't own yet, but she seems to have done this several times.

No matter how many times you try to explain what a short sale is and what is involved, it is always a good idea to set expectations at the very beginning. Then follow up with a written explanation -- be it an outline, an email, a question and answer ---- anything that the Buyer can refer to because invariably, there will be some confusion as a result of short-term memory and impatience.

It is so frustrating to get calls repeatedly from the buyer, asking the same questions. It is just as frustrating to keep following up with the lender's loan services to get an answer. If I'm lucky, I get a human being on the other line; but for the most part, it's a vicious cyle of going through the menu, re-dialing, waiting, and being put on hold.

I learned this the hard way, but jiminy cricket, I learned! This time, BEFORE showing a short sale, much less write an offer, I make sure the buyer is fully on board on what to expect. They have to understand that this will be a long process, and that waiting to hear back from the Lender for a response to their offer will take weeks.  I give them a primer on short sale. And I am refining that so that it looks like a flow chart.

This is what I am giving my prospective buyers who are planning to write an offer on a short sale. If someone has developed a better list or an easy to understand flow chart, please share!

SHORT SALE PRIMER

Before writing an offer:

• Has the Lender approved the short sale?
• Has a BPO (Broker's Price Opinion) and/or appraisal already been done
• How long has it been since the short sale was approved
• How long has the property been on the market as a short sale
• Are there any other offers on the table
• Has the seller already accepted an offer

Writing an offer

• Are buyers preapproved
• Are buyers; finances in order
• How much are they willing to give as an initial deposit (preferably 1-3% of offer)
• How much is the downpayment (at least 10% to make the offer strong)
• How soon do they need to buy a home and move in?
• Are they willing to wait for 2, maybe 3 months?
• Do they understand that this may likely be an AS IS sale and that there is very little room for negotiations?
• Would they consider looking at other properties while waiting for lender approval?

Sellers accept the offer

• Offer is forwrarded to Lender or loan services for final approval
• Sellera may accept offer, but they do not have the final say; lenders make final decision
• Other offers may come in after offer is submitted
• There is no accepted offer until Lender accepts
• This is not first come first served basis
• It will involve constant follow ups to get through to the right party

Timeline

• If we're lucky, 3-4 weeks after offer is submitted to Lender, we may get an answer: the Lender could accept, reject or counter the offer
• 30 days just to get the offer accepted
• Another 30 days or longer to process the escrow
• Figure on 60-90 days from beginning to end.....

Options

• If buyer can't wait, we can withdraw short sale offer
• While waiting, we can continue looking for other properties if necessary

IS IT WORTH IT TO WAIT?  Or shall we look for something less contentious -- like a foreclosure?

My company has a brown bag lunch once a month during which we brainstorm (and sometimes bitch) about the current market and what we can do about it.

It is during these sessions that we bring up new ideas to try out, and also to comment on what we think would work. I remember that when I  became a realtor 5 years ago, I was the only one in my company regularly posting on craigslist my open houses and listings for sale, and one of the first to buy my own domains and manage my own website (Thank you, GoDaddy and Point2!). I even bought the combination GPS/PDA  ique3600 by Garmin. Then came along postlets. Electronic flyers/email blasts. VisualTours. Pocket MLS. Vflyers. Each time, I was brimming with enthusiasm for these wonderful tools we can use to reach out and touch our clients.

However, many times I felt like being thumped on the head by some of the realtors who pooh-poohed my enhusiasm for these new stuff. They are so used to doing things the way they know how and point to the fact that they've been successful at it. Think door knocking and farming. Others are still computer newbies but won't take classes on how to use basic software. And the rest are not too keen on change. Unfortunately, as in a focus group, the voices of the nay sayers seem to resonate louder among those who prefer to sit back and watch.

Slowly but surely, we get the others to come to the light and to begin using some of the tools at our disposal. It's actually quite amusing when they have that "AHA!" moment when they get to the point that they successsfully complete a postlet or a vflyer.

In a rapidly changing market where over 84% of buyers start searching for their homes via the internet, it seems like a given that we should make it easy for them to find us.

So...how do we get our co-realtors to go towards the light?

Every summer, for three consecutive months of June, July and August, we have a free outdoor concert each month at Crab Cove,

It's a scene that every Chamber of Commerce would die for, and event that residents and their guests thoroughly enjoy.

This venue features live performances by different musical groups ranging from rock and roll to jazz to hot latin numbers.

Starting at 5:30 pm, people arrive using different modes of transportation. The local Bike Alameda organization even offers bike valet parking. Some do drive and never have any problems parking at the Crown Beach Memorial Park by the beach adjacent to the two dog parks and Crab Cove.

There are several picnic areas, but folks seem to prefer spreading out their picnic blankets and packing their choice of snacks. For people who don't bring their own food, there's a lot to choose from among the different food, wine and beer booths.

It's a merry mix of people from all ages and all walks of like. While listening to the music, turn your head to the side and you'll see an active game of soccer. Turn the other way and you'll see families and children wading in the water. Dogs who come with their owners are all well behaved and seem to revel in the festive air.  There's a constant chorus of children laughing. How can one not enjoy such moments?

It's such a joy to attend these concerts --- just one of the many benefits of living in sunny Alameda.

There's a group of women who meet once a month for presentations and discussions. The series is called "Wine Women and Wealth." I was asked to make a presentation--- which I turned into a round table discussion --- and share this info with them.

I prefaced it by talking about interest rates, and how low the current rates are, historically speaking. It was somewhat amusing to comment to this fairly young group of women that when I bought my first house in 1973, we assumed a loan at 6 3/4 % interest, and that rates have fluctuated, to a high of 22% in the 80's (and people were camping out in front of banks to be in line to get a mortgage at a time when money for home loans was tight). I thought that gave them a bit of perspective when people whiine about interest rates rising a tad above 6%

Our First American Title rep shares with us the Market Watch by Carole Rodoni, a dynamo of a woman who has a resume that will fill a book. We count on her to jolt us to move forward. I'm sure they'd like us to sit up and take notice.

Colonial Revival home combines classic and vintage styling with fabulous upgrades and modern amenities.

Lots of things to love about this home. Newly refinished wood floors. Open planfor formal rooms. Wood-burning fireplace. HUGE basement  and tall attic (yes, you guessed it, more expansion). Landscaped and fenced yard with sprinkler system; Hot tub in the Japanese tea house.

May be larger than what public records show. Several improvements, remodels and expansion. Located on a street of other vintage homes. Easy access to downtown, Alameda Town Center, Park Street Shopping District.

What's not to love about this home in picturesque, charming Alameda, a jewel of an island city in the Bay Area?

For more pictures and details, please CLICK HERE,

Or call me at 510 205 2992 cell.

My friend bought a house in a different city and put up her condo for sale. But she couldn't handle two mortgages after her husband left her shortly after moving into the new house. So she decided to rent out the condo for six months. Unfortunately, the condo rent wasn't enough to pay the mortgage. We listed the condo for sale, but the tenants were so uncooperative and they killed every chance we had to show, much less sell the place.

After a while, the property was in default and we offered the condo as a short sale. The challenge of showing the property continued...and when the tenants found out that it was pre-foreclosure, they stopped paying rent. The owner tried to give them notice to vacate, and then get them evicted for non-payment, but the tenants refused, and said they're not moving until the bank forecloses.  

The owner tried to go into the condo to recover some of her personal property, specifically her washer and dryer, but the tenants refused access. The tenants purportedly produced a letter from a lawyer saying that the owner cannot enter the premises because it's going to be sold at auction.

Technically, the house still belongs to the owner until the foreclosure is official, isn't it?

Then after the bank foreclosed, the tenants wanted the bank to pay THEM to move out, and also to give their security deposit back!

The owner consulted her own lawyer who told her to prepare a letter to document the tenant's non-payment of rent and their refusal to allow the owner to recover her property,  to itemizing the damage they have done to the unit, then add up the costs of replacement, etc. that comes to nearly or over the amount of the security deposit.

Do you have other horror stories like this? And how did you resolve it?