Pacita's Quick Bytes of Real Estate: July 2009

Whether or not you believe the media's hype or stories of doom and gloom, there are factors that  you should consider in the decision to buy....or to sell.

In one of my escrows that crashed, my seller said she thought I was working for the buyer; while on the other side, the buyer's agent said his buyers accused him of working for the seller. When all the other agent and I were trying to do is to find a common ground and  mutually acceptable compromise.

I have a long list of Do's and Don'ts....but here are some that I just have to share.

BUYERS:

When looking at REOs and Short Sales

• Don't automatically assume that a foreclosure wlll sell for less than list price. Depending on your market, you may have to bid higher. Iin some cases, MUCH HIGHER!
• Have your realtor give you comps of properties in the area(s) you want to buy so that you have a realistic view of the current market condition, and when she does give you the info...
• LISTEN TO YOUR REALTOR!
• Be realistic:
  • REOs may be trashed and may require repairs. Don't ask for repairs or credits. Most REOs are sold AS IS.
  • Short Sales will take a longer time. Generally speaking, it may take 45 days or longer from the time you submit an offer to the time the bank responds with an acceptance, rejection or counteroffer. Don't keep calling your realtor for an answer. She will tell you as soon as she hears something. Trust that she is already following up on her own.

When lookng at regular sales

• Be reasonable when asking for repairs or credits. Carpets can be shampooed or replaced. Rooms can be repainted. These are the least expensive repairs you can do on your own.
• Don't nickel and dime the deal. Concentrate on the major issues, if any. Don't squander your negotiation position on small stuff.

SELLERS:

• The Comparative Market Analysis (CMA) is your first guide. Ask your realtor to give you more details about the properties and why she selected them for the comparison.
• If you don't believe the comps, get an independent appraisal from a local appraiser who knows the market. The appraiser will look at it from a lender's point of view as well, so whatever he comes up with will be a prelude to what the lender's appraisal will look like
• Be realistic. Price your property according to market value, not how much you want to get out of it. Overprice, and it will languish.
• LISTEN TO YOUR REALTOR!
• Divorce yourself from your emotional attachment to the property. It doesn't matter how much you spent to remodel the kitchen, to relandscape, to repaint, etc. The property's value is based on current market values and what the buyer is willing to pay.
• Quit comparing your house to another bigger, better and more expensive house
• Quit thinking of what your house was worth when the market favored the seller. Think of whom the market favors today.
• If the lender's appraisal is lower than your contract price, find room to negotiate if you really want to sell.

Listen to your REALTOR! We have our eyes and ears glued to the market. We do this day in and day out. We will count on you for your expertise in your profession. By the same token, if you hired us to be your REALTOR, hopefully you will extend to us the same courtesy.

The issue is: if inspection reports are available, these inspections are material fact. They're relevant to the property. And if they are available, disclose them. 

So why won't the REO agent mention this in the MLS, or offer them to prospective buyers?

My clients finally got accepted on an REO on which they overbid against other buyers. Because we had only 7 days to do our inspections, the buyers ordered the following inspections: home, pest, roof, chimney.

During the inspections, we were told that the much-needed repairs are more severe and more extensive than what the buyers were willing to undertake. So although it cost them $750 for all the inspections, they thought it was money well spent in the sense that it prevented them from falling into a "Money Pit". 

So they backed out.

Since the inspections are no longer of use to them, they agreed to release the inspection to the listing agent and the REO bank for them to include in their disclosure.

Imagine my surprise when the existence of these disclosures aren't mentioned at all in the MLS. Not a word!

The only document they wanted to share is the offer instructions.

Since these inspections are available, and since we gave them to the listing agent, it seemed to us that they would be happy to share these reports with prospective buyers. I know that if I were submitting an offer on an REO, that this would be a huge help.

Granted they want to sell and they don't want to discourage any buyers...nonetheless, making these inspections available from the beginning means no surprises, and the less chance that a buyer would back out later.

Special note: this post was precipitated by Cathy McAlister's post

http://activerain.com/blogsview/1169997/reo-disclosures-are-banks-really-exempt-

Several months ago, I ranted about REO agents not giving us buyers agent some respect, or not being responsive enough.

Lately, though....on several offers I've written on behalf of different clients, I was quite surprised to find the following improvements:

• Supra lockboxes --- maybe it's because it is now required by our local MLS boards to have EVERY listing posted on our MLS that specify a lockbox to use SUPRA lockboxes instead of combination locks). I hate it when the combination is wrong, the key is missing. Such a waste of time.
• Updated MLS remarks --- some specify that MLS are "correct" or "current". If there are multiple offers, or if they have a deadline, they specify it. Some specify that they are not accepting any more offers because the bank has already accepted an offer and just waiting for ratification
• Recorded message --- some agents provide a voice mail message providing ongoing updates on what's active, adding that if the property is not mentioned in the list, then that property is no longer available
• Text response --- even a one word response is better than no response. Someone texted me back with a simple "pending". If agents are still not using smart phones with text capability, you are missing out on wonderful time-saving tool.
• Timely email and call back responses. They respond to emails, or they call back (SHOCK!)
• Offer instructions - they provide this as associated document on the MLS, or they refer you to a site where one can download the instructions. Very helpful if the bank requires using their own form. And, they leave copies of the instruction at the property itself
• Flyers at the property. Even black and white is better than nothing at all. At least it shows that the REO agent cares enough about his listing like it was a regular listing.
• Emergency instructions posted outside -- such as an emergency number. Very helpful if the buyer's agents notice evidence of a break-in, etc. and need to notify the listing agent
• Lights on --- Very helpful. As for the water...guess what they have to do is tape the toilet lid to prevent people from using the facilities --- it stinks, STINKS! if left alone.
• Cleaned out ---- no remnants of stinking foods, stinky clothes and other personal property left by the previous owner

Agents who do these stand out and make a favorable impression. I already know which agents are easy to deal with, and who won't waste time. It helps that the professionals are making a difference in how they are perceived. Of course, that applies to ANY and ALL professions.

Related posts

REO Agents: PLEASE give us buyers' agents some respect! (Rant)

To the REO Agents: What's with the attitude?

Two appraisals, same REO property. Significant difference!

Include material info in the MLS

This is not the first time, nor will it be the last time. In the last two months, I've had four escrows fall out for different reasons. And it surely hasn't been easy. I need to pull myself up, and say "NEXT!"

But maybe it will help if I.....>DEEP SIGH<....vent.

Escrow #1 on a triplex. Our agreement said the seller WARRANTS that this is a triplex. Problem is, city's permit history show they inspected 3 units; but county recognizes only one house. Seller insists it's a triplex. But unless this is the case in both city and county, this is not acceptable. So we back out.

Escrow #2 on an REO. Buyer hired property, chimney, roof and termite inspectors. Extensive damage found that would require a lot more work and expense than the buyer is willing to undertake. So we back out.

Escrow #3. Difficult case from the get go. Buyer had made offer that seller rejected. Weeks and no offer later, I chase down the buyer who still loves the house. Seller finally agreed to accept offer a bit higher than what buyer originally proposed, and lower than what he seller originally countered with. Several inspections later. Buyer asks for help with furnace, etc. Seller refuses Both buyer agent and I agree to come up with some funds to cover expense of furnace. Then the loan appraisal comes up $35K LOWER than agreed price.

Buyer still wants the house, and agrees to take on $15K over the appraised value, but $20K less than the offer price. Seller refuses to budge, cancels escrow.

Escrow #4 contingent offer. Buyer's offer is contingent on her selling her own house. When her escrow falls through, she had to back out of the escrow on buying my client's property. Now, she has another buyer....and she's submitting a second, but lower offer. My seller doesn't want to change from last offer price. Buyer's agent and I are trying to find a mutually acceptable solution.

>SIGH<

>DEEP SIGH<

Keep telling folks to WATCH OUT for scammers who say they are out-of-town/out-of-country landlords who want to rent their homes.

This is an ongoing problem. For the last two years, unscrupulous scammers and thieves my listings as for rent on craigslist and yahoo. People have called me to tell me they've applied to rent the place, but are confused as to whether the properties are indeed for rent, or are they for sale?

And I am not the only one who have run into this problem.

Potential renters looking for a "good deal" respond to an ad. They communicate via email with the "landlord" who sends them an "application form" which looks almost official.

Renters drive by the property, see a FOR SALE sign. They call listing agent who confirms the property is for sale, not for rent. But by this time, the renters have provided personal information on their "application".

I have reported each case to craigslist and yahoo. I even posted a RENTER BEWARE post on craigslist but it was flagged and deleted. Craiglist, to their credit, do have a link on scams. They even provided samples of scams. And they did try to warn people on what to look out for, to wit:

• DEAL LOCALLY WITH FOLKS YOU CAN MEET IN PERSON - follow this one simple rule and you will avoid 99% of the scam attempts on craigslist.
• NEVER WIRE FUNDS VIA WESTERN UNION, MONEYGRAM or any other wire service - anyone who asks you to do so is a scammer.
• FAKE CASHIER CHECKS & MONEY ORDERS ARE COMMON, and BANKS WILL CASH THEM AND THEN HOLD YOU RESPONSIBLE when the fake is discovered weeks later.
• CRAIGSLIST IS NOT INVOLVED IN ANY TRANSACTION, and does not handle payments, guarantee transactions, provide escrow services, or offer "buyer protection" or "seller certification"
• NEVER GIVE OUT FINANCIAL INFORMATION (bank account number, social security number, eBay/PayPal info, etc.)
• AVOID DEALS INVOLVING SHIPPING OR ESCROW SERVICES and know that ONLY A SCAMMER WILL "GUARANTEE" YOUR TRANSACTION.

Spread the word!

A very good friend who knows Gary and I love and foster dogs sent us this link to a truly delightful video. When you click on this link http://www.imtiredonline.com/smile/

Turn up the volume

and SMILE!

And then hop on to YouTube and see the wonderful work that some volunteer organizations do to contribute to the welfare of our animals.

And it's so amazing to watch animals rescue other animals in trouble

Dog rescues man being gored by bull or http://www.youtube.com/watch?v=iA9pw53WaKQ&feature=related

Dog rescues another dog hit on a busy highway or http://www.youtube.com/watch?v=m2qSakxWt54

Dog rescues struggling dog in the pool or http://www.youtube.com/watch?v=ztZE9o6kMn0&feature=related

It's an adage: "The first offer is almost always the best offer." Many REALTORS attest to this, and many of us have experienced it.

LEAPING LIZARDS! WHY dont/won't more people believe it?

CONVINCE ME!

I haven't been a REALTOR as long as some of you have been, but very recently, I've experienced this first hand. It's mind-boggling that it's a challenge to convincingly validate to sellers why there is a lot of truth in this.

Today, I am thinking about this adage again because I just submitted an offer a day after the listing came on the market. My seller has been looking for a while. He knows what he wants. And we don't want to waste time. We wrote for over list price with aggressive terms: no buyer inspections, 40% down payment, 3% initial deposit, AS IS. Sellers decided to wait until next week before they look at our offer.

WHY?

Isn't this house for sale? I brought a ready, willing and able buyer. If they weren't ready to look at offers, they shouldn't have activated it for sale on the MLS.

Why are we back to setting offer dates again?

RECENT EXPERIENCES (in less than a year)

• Early this year, I listed a bungalow. The same day I also told my buyers about the property. One couple instantly liked it and wrote an all cash offer. My seller accepted. Although more offers came in later in the week, the one we picked as a back-up had to withdraw because of job loss. My seller was thrilled he went with the all cash offer.
• My buyers submitted an offer on a 4-plex. But we were told the seller wanted to wait a few more days. They generated 5 offers, and picked one. They didn't even counter ours. Later, when it closed, I found out that the property sold for $20K less than what we offered. So I asked how come our offer wasn't accepted although we had aggressive terms --- 20% down, AS IS --- and our offer was higher. Turns out that after the buyers did inspections, they requested for a lot of credits and repairs. At that time, the sellers were so tired of the back-and-forth negotiation that they gave in and settled for a lower price.
• I listed a fixer. It immediately generated an offer. The owner's son thought they may get more offers if they waited a couple more days. It did generate offers, but for less. By the time they thought they should have accepted the first offer, the buyer had moved on. The property sat unsold while the siblings argued among themselves. They finally took it off the market.
• On another listing, we received a really good offer, but it was less than what the seller wanted. She turned it down. Another offer came in. She turned that down. Finally, we got into contract --- for the same price as the first offer. Had she accepted the first offer, we would have closed escrow two months ago!

RELATED POST

First offer is almost always the best offer ---- how true is this?

Why, oh why can't or won't agents take pictures of their own listings? Not even ONE?

With so many inexpensive point-and-shoot cameras today, and with many phones equipped with cameras (and some with video), it's an absolute disservice to the seller if the agent won't even post at least ONE picture of the property.

And those out-of-MLS area listing agents can certainly get a reciprocal agreement to post their listings AND picture on the local MLS.

We are not supposed to be using someone else's photos without getting permission (geez...something about copyright....that's all). This is not the first time this has happened. But this most recent occasion is just galling.

Today, I made an appointment to show a condo at a complex where I have listed and sold some units, and where I still have a listing pending short sale approval. 

I was intrigued when I saw the pictures. Hmmm....they look familiar. Then it dawned on me: those are pictures I took! Obviously, the out-of-town listing agent copied my pictures and posted them as his own!

Here are just two of the four that he copied.

               MY PICTURES                                                           COPIED PICTURES

Taken in 2008

Taken in 2009

Ballsy!

Bad timing (I still have a condo listed here...)

Bad judgment

Bad morals, ethics...

Bad practice

Bad, bad, bad agent!

Alameda CA has always enchanted me. And now that I live here, I continue to enjoy the small-town charm. I've never lived in a place (besides San Francisco) where there are so many delightful Victorians.

Yesterday, I needed cheering up....so I drove around, snapping pictures (from my car) of some of the homes and architectural details that caught my eye. Thought I'd share a few.

After taking these pictures (and a few others) I felt better ---- immediately! I will keep my camera handy and take more HAPPY pictures. Geez, I LOVE THIS ISLAND CITY!

We've heard and read about cyber or virtual staging for at least two years now when the concept was introduced. San Francisco Chronicle featured this story today (geez --- what took them so long?)

And we've also heard that staged properties sell faster, and at higher prices than non-staged homes.

We also know that recent National Association of REALTORS studies show that 87% or more of buyers and sellers go on line to look at homes for sale.

So it seems natural to blend cyber staging with online marketing.

For agents and their sellers who are strapped for funds and can't afford the cost of traditional staging, the next best thing is cyber or virtual staging. The agent provides photos of vacant rooms. The designer digitally furnishes and stages the rooms, provides the images to the REALTOR who then uploads the photos on the MLS and other websites.

But....but...but.,,buyers expect the rooms to look like they do onlne when they come!

First, be thankful they came. You got them through that door.

Simple enough solution: the designer can provide photos of the rooms that the REALTOR can display on the wall, on an easel. The point is, this gives the prospective buyers ideas on how to furnish a vacant room.

AND download the staged photos into a CD you can hand out to prospective buyers. Naturally, the CD will have your name, number, website, etc. Get the picture?

But...but...but...it's gonna cost money.

Well geez, yeah....but not as much as traditional staging. For an average sized home (not McMansions), it could cost $2,000 - 3,000 for initial set up, and then monthly fees of $500-1000 until the house sells.

Compare that to cost of $200-300 to digitally stage a room. Economies of scale may apply: the more rooms staged, the less incremental cost per room.

But...but....no one I know is doing this.  

Just watch. It's going to happen more often as people overcome their initial resistance, and as the next generation of SimCity  aficionados start buying real homes.

HGTV'S HIDDEN POTENTIAL

If you've ever seen this show on TV, you'll get the idea. Check this out for full episodes of HGTV's "Hidden Potential"

Oh, such fun!

RESOURCES: Here are some virtual stagers. Check them out!

• Michelle Molinari provided a video on how this works in her blog
• Dennis Miller at http://virtualstagingsolutions.com/
• www.Staged4More.com
• www.VirtualEnrichingHomes.com
• www.VirtuallyStagingProperties.com
• www.HomesDesignedToSell.com
• www.george.aguilar.com/metaverse.htm

My seller is out of sorts due to the number of inspectors that the buyers want done to the property, following the pest inspection and the home inspection. This is not the first seller who has complained to me about this, but the question begs to be asked: when do inspections get to be too much and become invasive?

Certain things were tagged by the property inspectors that triggered a series of other inspectors who specialize in different things.

In one house, my seller works at home. So he had to vacate his home office multiple times to allow the inspectors to poke around the house. He sat in the car, working on his laptop, getting his wireless signals from his router --- and during his busy periods, it was quite a challenge.

In the other, I've had to get the dog out of the house so that he is not traumatized by the march of inspectors.

Thus far, we've had these inspectors and specialists:

• Pest inspector
• Home inspector
• Roof inspector
• Foundation/structural engineer
• HVAC specialist
• Plumber
• Electrician
• Roofer
• Window installer
• Chimney sweep
• Contractor
• City inspector (to finalize the work)
• Sewer lateral tester
• Irrigation specialist (sprinkler system and onsite well)

Because these folks are all specialists with their own work schedules, it was impossible to get them all to come at a mutually convenient time. The seller is tired of all the interruption, and feels that the inspections have become too invasive.

Tried to explain that the buyers are doing their due diligence in getting as much information as possible in what it would take to do some repairs based on what the inspectors recommend. But it does seem to be a bit much. I recommended that perhaps the buyer should have selected a contractor that can do all if not most of the work. That would have been preferable to many different inspectors.

And yes...the more inspections, the fewer if any surprises. The more the buyer invests in inspections, the more he is committed.

Open house: a waste of time? This goes for folks who say doing open houses is a waste of time. I like doing open houses: 15% of my business last year was a result of clients whom I impressed during open house.It's the battle of the old versus the new way of farming, or generating business. 

Some folks prefer to do it the way they've always done it --- walking their farm areas, door hanging, mailing Just sold/listed postcards, etc. And some of them are really good at it and do get a lot of new business that way.

But others, like me, prefer to do find business in other ways. Some ways are tried and true, like writing personal notes, calling your client base, mailing monthly items of value, popping by --- basic principles of Brian Buffini's Working by Referral. 

What works for you doesn't work for me

For folks who like to do it the old-fashioned way, go for it. But don't hate me because I like to do it another way.

Don't call me foolish because I invest time in coaching, or that I spend a lot of time blogging and doing other things online.

Don't tell me I'm wasting my time (what, spending days walking around neighborhoods is more efficient?) working online.

Don't tell me I'm wasting my money on a smart phone (putting your schedule on a blackboard or a paper calendar is better than having it on my phone that I carry with me at all times, everywhere?)

Open house: a waste of time? This goes for folks who say doing open houses is a waste of time. I like doing open houses: 15% of my business last year was a result of clients whom I impressed during open house. I once held an open house where there must have been 70-groups who came. I picked up a seller whose house I sold, and who bought a house I listed for a total of three sides.

Don't tell me that creating visual tours doesn't add value to a simple post on the MLS (I'm sure virtual tour companies can produce all kinds of data to support why virtual tours are attention-grabbers, etc).

Guess you don't believe in posting the tours on youtube either.

VisualTour.com makes it so easy to convert the tour to youtube, and to put a link on Facebook.

New business tools

Not one method is the absolute best. It helps to augment your current marketing with other tools that are in tune with how our target audience behave. And those tools include blogging on Active Rain, participating in social and business networks like Twitter, Facebook and Linkedin, adding your thoughts on Trulia Voices and Zillow.

Going to where my target audience is: ONLINE

In a previous post, I said that 30% of my business last year was from leads I generated via the internet.

With more than 86% of buyers and sellers going online to search for real estate properties and agents, then wherever they are, that's where I'm going to be.

During the Survival Guide 2009 seminar offered by REALTOR.com as part of heir Marketing and Technology Real Estate Series, Max Pigman (VP, REALTOR.com), he gave offered the following thoughts:

• Outwit: Use the power of free "viral" marketing tools, such as social networking and video podcasting, to connect with prospects and spread the word about your listings. Sites like Facebook, MySpace, and LinkedIn have been skyrocketing popularity, particularly among the 35-44 age group.
• Outsell: Embrace technology. Be sure you have an excellent online presence and are using the latest methods to promote your online listings-slide shows, video and virtual tours, and interactive advertising.
• Outlast: Your marketing can't be stagnant. It must mold to the current market conditions and consumer concerns. Tell buyers about price decreases and attractive interest rates. Educate buyers about the new $8,000 first-time homebuyer tax credit.  

So...those folks who aren't going to change with the times...stay true to what  you do. As for me, I'm hitching my wagon to the stars.

RELATED POSTS:

• Convert VisualTour to Video and post on YouTube
• 10 Things to do when posting on craigslist
• What I did to get 70-80 groups to come to my open house
  

Sometimes, it feels like I've just crawled out from under a rock. Where have I been?

At a REALTOR.com seminar yesterday, I won the raffle for the wide-angle lens attachment for my point-and-shoot digital camera. That was my introduction to Magnetic Lenses. Go to www.MagneticLenses.com.

Although their website is woefully devoid of any before and after pictures comparing a non-wide angle shot to one with wide-angle, I saw enough comparisons during a seminar that I am sold on this product. And I can't believe it's so inexpensive! $39.95 for a wide-angle lens? For a digital camera? Wow!

Simple to use lenses for use on multiple cameras

Set adhesive ring.

Place Magnetic Lens.

Point, Shoot, Repeat.

Remove lens.

I have a 3-year old Panasonic Lumix DMC-FX 01 (its LEICA twin costs a lot more) that uses LEICA lens with a bit of wide-angle capability. Thus far, I've been satisfied. But enhancing that capability is going to be wonderful!

Since my trusty camera still works beautifully, I have no reason to trade especially knowing that I now have a truly economical enhancement. It feels great (and my pocketbook appreciates it, too!). As an FYI, without the external wide angle lens, the Lumix DMC-FX 01 with its built-in 28 mm lens still rocks!

But now, with this new attachment --- it's gonna be better!

According to  Bloomberg.com...

We need more news like this! According to this article

• "Housing starts in the U.S. unexpectedly rose in June as construction of single-family dwellings jumped by the most since 2004, signaling the market is stabilizing even as unemployment worsens.

  The 3.6 percent increase brought starts to an annual rate of 582,000, the highest level since November and followed a 562,000 pace in May that was higher than previously estimated, the Commerce Department said today in Washington."

• "The construction figures are the latest evidence that the meltdown in the housing market that triggered the financial crisis is nearing an end."

When you see news that are on the positive as it relates to our economic recovery and our industry, post them! We need all the good news we can get!

My co-worker was showing a foreclosure that was just listed in Alameda. It was priced aggressively, in a very desirable neighborhood. When she and her clients arrived at the property, there were literally throngs of people going in and out of the house. It was so busy they thought there was an open house. NOT!

Turns out that another realtor arrived to show the property to her clients, but that folks came to the property and wanted to see it, too. That realtor made the mistake of leaving the door open, so folks came in. And they came. And they came.

That realtor couldn't leave without locking the house, but because there were so many people there, she couldn't get them all out. She called out for help: "IS THERE A REALTOR IN THE HOUSE?" To which my co-worked responded, and said she would lock up. Big mistake!

By the time my co-worker and her clients were through and ready to lock up, she had the same dilemma: how to get the other folks out of the house. So she called out, "IS THERE A REALTOR IN THE HOUSE?" and when the third realtor responded in the affirmative, she left.

This situation opened up some interesting discussions:

• Foreclosures hunters are all over the place
• Some buyers are looking on their own, without their agents
• Should the realtor let others come into the property while she was showing it to her clients?
• Did she do it in the hopes she'd pick up new unrepresented buyers?
• How did her own clients feel about other folks viewing the property at the same time?
• Would you just hand over the keys to the house to another realtor whom you don't know?

Having been lulled into thinking that perhaps our lovely island city is not only holding its value but also somewhat insulated from the sweeping wave of short sales and foreclosures, it is interesting to see where we're going.

And are we there yet?

In 2008, short sales and foreclosures represented barely 6 % of total sales the first half of 2008. During the same period in 2009, that increased to 25%. This is somewhat sobering (and humbling).

At the same time, median price dropped from $619,674 to $549,481 or 11.5% decrease in market value.

What is encouraging is that the number of days to sell property has pretty much stayed the same --- and that we are still averaging 44-60 days on market.

It's important to share this information with sellers in particular to get them to see clearly what the current market conditions are, compared to where they were a year ago. Although we are again encountering multiple offers, it's on properties that are priced aggressively.

Are we there yet?

Yes, there are buyers. And they, too, are keeping a close watch on market values. We can't use the oft-repeated phrase that Alameda "holds its value" because they have dropped. We can hope that based on the slight increase in the second quarter, that perhaps we're slowly on our way back up.

This question gets asked over and over again. And the answer is, "It depends."  This seems like the right time to reiterate that real estate is local.

GENERAL INFO

• Buyers have to qualify for that tax credit that equals 10% of purchase price, or UP TO $8,000.
• On FHA loans, the tax credit can be be PART of, but not THE down payment. See: Who/Where/How/What/When to use the $8,000 first time buyer tax credit with an FHA loan

EXCEPTIONS

But.....but.....yes, there are exceptions ... some state housing finance agencies have developed their own tax credit bridge loan programs, so buyers in states whose HFAs offer such programs can monetize the tax credit upfront to cover all or part of their downpayment.

The reference to the state finance agencies may have been what got folks thinking that the tax credit can be used as the ENTIRE down payment

So what states have already instituted some type of bridge loan?

From this link, it appears that the following states already have something in place:

• Colorado
• Delaware
• Idaho
• Kentucky
• Missouri
• Nebraska
• New Jersey
• New Mexico
• Ohio
• Pennsylvania
• Tennessee
• Virginia

Supposedly, Florida has also passed this bill, but this information hasn't been formalized on NCSHA's site. This may also be in discussion in Califonia where we already capitalize on other programs namely:

WHEN IN DOUBT....

It seems that the only logical thing to do is to go to the main sources of information, especially the IRS.

Next month, friends of mine are relocating to Hawaii for a job promotion and also to be closer to their family who are still in Hawaii.

They asked me to list their house for sale. But upon learning that 

1. they got their loans modified
   
2. the value of their home is less than what they paid for and therefore can't be listed a the price they want
3. there are two different lenders, which would make a short sale difficult

....they decided to rent the house for a year while they try to get their loans consolidated and perhaps in a year, sell it. This would have cost tham $1500/month more than what they could get in rent. But they felt they have no choice because short sale is not do-able in the time period they need.

Oh...but there is another choice! Lease-purchase option!

This can be the best of both worlds for both buyer and seller, and is certainly an option to explore.

There areseveral links to lease-purchase option. Here are some that I thought are quite informative and useful to anyone considering this.

• Kudos to Elizabeth Weintraub for her article on How to do a lease purchase
• What is a lease purchase contract?
• Lease purchase features and benefits
• How does a Lease-to-own work?

In this sea of REOS and short sales, where it is extremely competitive in specific price brackets and locations.  it is not unusual to write several offers for a client although we are discouraged from the practice of writing multiple offers.

Back in February, I had written an offer on a short sale with two lenders....as of mid-July, the second lender is still in negotiations. It is looking very unlikely that this short sale will ever be approved. At the time we wrote the offer, the listing agent said the property was under contract before but the buyer backed out. She was so sure she'd get a response right away.

So we waited...and waited...and waited.

Finally, we decided to keep looking. Because of the waiting periods for short sale, we also looked at REOS. Several offers later, after being outbid numerous times, we finally got an offer accepted on an REO (aggressive price, aggressive terms).

Interestingly enough, on the same day, we heard from an agent that our offer on a short sale was selected to be submitted to the lenders.

As a courtesy to the short sale listing agent, and to give the other buyer a fighting chance, we withdrew our offer on this short sale.

The question is: should we have kept the short sale offer in play until after we remove our contingencies on the accepted REO? My buyers are so sure and so happy about moving forward on the REO after months of looking. It seemed like withdrawing the short sale offer was the right thing to do.

Also... I remembered Broker Bryant had something to say about writing multiple offers (on REOs). Seems like a good place to post that link here, too.

This woman buys a condo for her brother and sister who unexpectedly die within a year of each other. Later, the woman tries to rent the condo, where the rents barely cover the monthly mortgage and HOA fees.

The HOA slaps her with a hefty fine because under their rules, the quota for rentals is filled, and she can;t rent out the condo to non-family members.

She appeals.

Deaf ears. Closed minds. No compromise. 

Since she can't rent it out, she doesn't have any money to pay for the condo and the HOA fees. So she tries to sell the condo as a short sale.

In the meantime, the HOA fees accrue. The HOA attorney sends threatening letters, adds a hefty fine (for previous transgression of renting the condo for a short period of time), and attorney fees.

Condo now has offer, subject to lender approval.

HOA records Notice of Default. Is now threatening Notice of Trustee Sale.

Even if bank approves short sale, bank may not pay for HOA delinquent fees, fines and lawyer charges.

So if HOA forecloses, and after the paying off taxes, who becomes the Owner of Record? The HOA? Does HOA trump the bank? Who gets paid next out of the proceeds from the sale?

Is this a case of letting the house burn>