New Trend in Short Sales?

Money
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What is this trend?  Asking a buyer to pay money toward the seller’s 2nd loan. I am seeing more and more in the private remarks on the MLS “buyer to contribute $**K toward the 2nd loan”.  I saw one last week that asked the buyer to pay $26K to the seller’s 2nd loan.  I confirmed with the listing agent that is what they meant to say.  It was! Continue reading

Buyer decides more eyes are better…

magnifying glass showing aberration
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I met a buyer at a bank-owned property. He invited a trusted friend/co-worker that was knowledgeable about construction to attend the showing.

I loved it! We were able to comb over the home and felt we knew quite a bit more than the standard previewing of the home. We determined what inspections were needed to be completed. That left the buyer time to also recognize other things regarding the neighborhood that he wanted to check out  further.

I love informed and engaged buyers.

Pat Chadwell, Broker
Realty World – Residential Specialists
www.patchadwell.com

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Pitfalls for the Sellers of Short Sales

MIAMI - DECEMBER 22:  Real estate agents Izzy ...
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You need to sell short sale. You are about to interview agents but how do you know who is right for the job?

I would submit the following things to look for –
1. You want a Realtor that is honest with what it takes to get through the process.
2. A Realtor that can do good pricing – pricing that will bring in the offers yet will also be in the ball park for the short sale lender. Have you ever seen an agent price a home way below the market – obscenely low? Those sales do not complete. They lose the buyer when the short sale lender objects to the offer price and counters it way higher. That agent is leading the seller toward the 78% of failed short sales in Santa Clara County.
3. Is the Realtor good with paperwork and have systems in place to get all that is needed and submit it in a good readable format to the lender?
4. Does the Realtor coach you into the best presentation of the home? Sure you don’t have extra funds to repair the property but you can make the home marketable – You still need to compete with other homes on the market and want a thoroughly committed buyer that will continue to want the home over the many months that they need to wait patiently.

You’ve gone through the grueling ordeal of getting a Realtor, getting the home prepped and on the market now the offer(s) arrive. Next to consider –
1. Who is the buyer?
2. Is he truly lender qualified?
3. Is he running all over the place writing offers on other homes?
4. Is he experienced enough to know things come up that need overcoming? Will he just bolt at the first hurdle or the 2nd or 3rd?
5. Has the buyer been counseled on the time it takes to complete a short sale? Can he be patient?

I cannot emphasize enough that you want a knowledgeable Realtor that will help guide you through this challenging process and look forward to try to avoid the pitfalls and land mines that present themselves along the ways.

Care to comment?

Pat Chadwell
Broker, Certified Distressed Property Expert
www.patchadwell.com

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Tale of two bank owned properties in Almaden Valley

Almaden Valley, the area that has the best schools that San Jose has to offer.   While out previewing properties recently a fellow Realtor and I stumbled upon two properties that were bank owned in this quiet community.

 The curb appeal of both was okay.  Anticipating that both were going to be equally as “okay” we were surprised by what we saw. 

 The first one was priced at one of the lowest list prices for the area so I was excited to see it.  The prior owners had removed doors, faucets, etc.  While this did not strike me as odd what did strike me as not very smart was the home was not even really cleaned up or prepped for sale.  Mound of dogs hairs were in the corners of the floor for instance. There was no spit-n-shine applied to this home.  I look to the real estate agents that list such a home as owing a responsibility not only to the lender/owner they represent but also to the community to try to prep it to garner a higher sales price.  That sales price will have an impact on the neighborhood. 

We arrive at home #2 – listed in the high $800K range.  Nice younger home from the exterior, nice location on a cul-de-sac BUT… The first thing we see is a gross dirty carpet in the living room and in the attached dining room were animal feces on the carpet. YIKES! Now that was pretty disgusting.  How much would it have cost to clean up the droppings and do a deep cleaning of the carpet?  A couple of hundred dollars?  Instead the neighborhood will be a proud recipient of low sale for the area. 

Tale of two bank owned properties in Almaden Valley – What do you think?

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Successful Short Sale right before auction

My client was told in July they were going to foreclosure auction in days. They moved out of the house. The home did not go to auction and they called me in October about doing a short sale. We got into contact in 5 days and had 3 offers – the highest was $20K above list. There were 2 Wells Fargo loans. After losing over a month going the HAFA route and being denied we were up against the wall time wise.

The foreclosure sale date was set for Jan. 2nd. Over the holidays we finally got 30 days to close and the foreclosure was stalled to Feb 2 (with no more extensions allowed).  Wells Fargo was truly better than any other lender on a short sale that I have worked with.  When it looked like we needed 1 more day on the 2nd approval (just in case) we did not close Wells Fargo Home Equity gave us another month.

The buyer on the other hand was out of control. Asking for $30K repairs, switching lenders mid-stream (and buyers agent chose not to tell me) and taking their time with new lender disclosure requirements. I can’t stress enough how the buyer needs to be willing to take coaching from advisors – namely the Realtors and not from “friends”.

We were lucky to have a title company (Old Republic) that did everything to pull off a miracle. Also the lender the buyers went to thanks goodness knew his job and helped too.  He got the funder to suggest the loan package be deliver on the weekend to her house so we could fund Monday AM and record in the later afternoon. Even though all deadlines were off we still closed on Monday January 31.  Today, February 2nd would have been the auction date.

Seller now only has a short sale on his credit but not a foreclosure. YAHOO!!!

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Not all REO listing agents are equal

pulling my hair out
Image by Heliotrop3 via Flickr

Having just completed two sales involving bank-owned property sales in the last week, from the buyer’s agent side the two transactions could not have been more different.

The first sale involved 2X the paperwork, threats by the listing agent such as “perform on time or else”, also reminders on each page do not ask for an extension they will not be granted,  if you are late it will cost you $100 per diem (per the original documentation), however, when we got the final addendum it read you will be charged the per diem rate by the week or $700!

Our problem was the gas was shut off at the property due to the listing office missing this point. It slowed up our inspections and ultimately slowed up the closing as the appraiser had to come out AGAIN to check the gas was on. Add to that the new borrower disclosure timelines are slowing down loan approval times. You’d think since the seller is a bank they would take that into consideration. I realize I am ranting at this point but has common sense gone out the window?

Somewhere along the line I recognized it was not necessarily the seller but the listing agent “team” pushing the militant ways. “Do it by this time or else no deal – We don’t care what your buyer has spent on inspections and appraisal.” This point became crystal clear when I asked for an few more days for PMI (private mortgage insurance) approval and the “team” person said NO way and then cut and pasted something from a week before that the seller/bank had sent. I could not believe the seller/bank would throw away our contract 2 days before we got formal loan approval and 10 days before close just to go back on the market in this crappy sales environment.

I doubted they presented my formal request (with full details for the reasons for the delay and why it was in their interest to stick with us) to the seller/bank. The listing agent “team” said “send over the cancellation”. I decided to add a sentence to my cancellation form stating – buyer is 2 days away from PMI approval and the seller refused to extend the contingency. What do you know the next day the seller/bank was willing to remain in contract and let us close. My suspicions were correct – the listing agent team was the militant stopper of the transaction.

The other bank-owned transaction was just about the same as a regular sale. We needed an extension and it was granted. Of course, I was always on the ball, quick to supply any requested documents and I kept in close communication with the listing agent. No problems here!

But I ask you WHY all the stress? Getting a sale complete is a team effort. We all want the same outcome.  I will consider long and hard before I forward any future offer to this listing agent “team”.

If you want good client representation give me a call.

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