Thursday, January 12, 2012
On average, male real estate agents list more homes than women do, while the homes women list have higher asking prices, according to a study by real estate search and marketing site Trulia.
In a one-day snapshot last autumn, the site examined the total number of male agents compared to female agents, and which gender had listed more homes for sale and which listed more expensive homes, on average, since joining Trulia.
They used a "Name Genderizer" tool to categorize whether the names are most likely male or female. (What would they have thought of Bobbie?)
I was especially interested in those studies because of the large percentage of successful female agents in the Bay area, and in my office, particularly, but we've always known that national real estate statistics have little bearing on those of Silicon Valley.
Monday, November 28, 2011
The year is almost over, and sellers should be thinking ahead if they are planning a springtime sale.
One question many home sellers confront is what repairs, if any, to make before beginning to market and sell a home. My clients have their property inspected before placing it on the market in order to have time to make any needed repairs. If time for repairs is not factored in, home sellers may find themselves forced to lower the price to account for damage.
According to Inman News, failing to plan ahead this way may force a home seller to push back the marketing timetable while repair work is done, thus slowing the pace of the home selling process. While some may have the time, home sellers who need to move into their new home, or who are dealing with a new job, may find the complications difficult.
One expert recommended to Inman that home sellers who need repair work done consult multiple contractors to get competing bids, and look for those who guarantee work for buyers and are willing to complete any additional work discovered in the course of repairs at no additional charge.
According to the Federal Trade Commission (FTC), the best way to find a good contractor is to ask friends, family and co-workers who have had work done about the expense and quality of work they received. One way to check on a contractor's work is to ask not only for references, but to see jobs currently in progress.
Contacting current and past customers can provide a clear sense of whether previous clients are happy with the contractor's work.
Another way to ensure professionalism is to ask what permits the work being discussed might require, and to check that the contractor has any licenses required.
Saturday, November 19, 2011
The negotiator from the bank came back to us with an inflated appraisal that was $50,000 higher than the listed price. Fortunately, my client is "hanging in there" while we submit new comparables, and collect estimates on the work required in our professional property inspection. The big question is what position the bank would be in if they allow this all-cash transaction to fail. If the property goes into foreclosure, the condo could easily sell for less than we are offering, and it would take many more months to achieve that result. Frustration for the seller, the buyer, the agents...and a loss to the bank. Meanwhile, we wait.
Friday, October 28, 2011
While my client and I were waiting to hear from the bank,in response to our short sale offer, I received the following useful pointers for Short Sale buyers and their agents, provided by Trulia.
Roughly forty percent of the homes for sale on today's market are short sales and foreclosures! Distressed properties are well known for their value (a reputation which is sometimes accurate, and sometimes not), but they also have a reputation for causing buyers to become distressed too. Transactional snafus, last-minute surprises and long, drawn-out escrows that never close seem to be par for the course.
Instead of avoiding these properties altogether, get educated about the most common dramas that go down in these deals, and how you can avoid falling victim.
When you’re buying a home (or selling one, for that matter), time is absolutely of the essence, but banks don’t have the same sense of urgency individual home sellers do, and while a standard sale from an individual seller to an individual buyer might take 45 days from contract to closing, a short sale can take anywhere from 45 days to 6 or 8 months after the seller has accepted the contract to get the deal closed.
Most Common Complaints of Short Sale & REO Buyers
Run-on (and on, and on) escrows
Avoid the drama by expecting your escrow to run long, and being pleasantly surprised if it doesn’t. Expectation management is everything. Make sure you take these extended timelines into account when you’re working with your mortgage broker on the issue of when to lock your interest rate, and how long your rate locks will last. You might even need to plan on and/or set aside an allowance for the cost
of extending your low interest rate if rates are rising rapidly during the time you’re waiting for the deal to be done.
Banks owe their shareholders and investors a duty to get as much as they can for these properties. Just because you see it’s on the market and listed as a short sale or a foreclosure doesn’t mean they’re going to give it to you for a fraction of its worth. The bank’s goal is to get a purchase price as close as possible to the home’s fair market value, as determined by the recent sales prices of similar, nearby homes, with some adjustments made for the property’s condition. Fact is, many banks
would rather see the listing agent reduce the price by a moderate amount, and wait to see what offers come in, than to accept an offer 30 percent below the asking price just because there are no other offers on the table.
Avoid the drama by working with your agent to make a realistic offer, based on recent comparable sales in the neighborhood, not just on what you think you can get away with.
These transactions have an uncanny way of being delayed at the last minute - or never going through at all, through no fault of the prospective buyer. If you’re in contract on a short sale, you should take the point of view that you don't have a firm deal until you get the bank’s approval of the transaction. Make an offer on a normal home and you’re likely to know what the outcome will be within a few
hours or a few days, at the outside. If things take longer because the seller is out of town, the listing agent tells you that, and you at least know what’s going on.
Make an offer on a bank-owned property or a short sale? It could be days, but could also, easily, be weeks or months before you know what’s going on. No amount of calling, pleading, prodding or nudging is likely to get you much information on how your offer or the seller’s short sale application is being handled or what (if any) progress is being made. That “black box” into which your offer disappears at the bank level can be very frustrating.
Realize that working with the bank on the bank’s terms is unavoidable when you buy a
distressed property. Then, go into the deal with realistic expectations - including the expectation that the bank will drag its feet, despite expecting you to keep every deadline - and you’ll be less frustrated, and less likely to make poor decisions out of frustration. Also, make sure you do respond in a timely manner to the bank’s requests and your obligations under the contract.
Sunday, October 16, 2011
Potential clients called this week asking about the value of a double lot on a busy street in Sunnyvale. The house on one of the two plots is quite run down, and the other is vacant. The magic comes from the school district...being located near some of the top Cupertino Schools will make this property valuable to a contractor who wants to tear down the existing house and build a large new home.
Coincidentally, my son Dave sent this photo of the autumn view from his patio in Michigan today. Earlier this year, they bought this lakefront property consisting of 10 acres and a huge older home for under $400,000. With their extensive remodeling, the value would be about a million dollars. In the Bay area, it would be priceless...if such land existed. Well, at least we don't have snow.
Sunday, October 2, 2011
Funny that I had written my last entry about problems in short sales, and here I am, handling one. Fortunately, this sale should be simpler. Most of my business at this point of my career is from client referrals, but an all-cash buyer had contacted me this summer from my website, looking for an investment property. I saw a good deal in a Sunnyvale townhouse, listed as a short sale, but before we could write an offer, the property was in contract.
Around a week ago, the listing agent called me. We knew each other from way back, and she asked if my client might still be interested. The first sale had fallen through when the offer reached the bank's negotiator. Typical for short sales, it had taken two months to reach that point.
My buyer and I went through the townhouse, and re-read the disclosures, and quickly wrote an offer. The package is on its way to the to the bank, and I have scheduled a property inspection to eliminate any surprises down the road.
Saturday, September 17, 2011
In the world of real estate, there's always something new under the sun. There also seem to be new types of fraud and scams developed with each change in the market. Now the scam artists have discovered short sales and foreclosures.
If you’re thinking about working with a financially distressed seller and the house he wants to sell is trashed, make sure he didn’t trash it himself. One of the types of short sale fraud that Fannie Mae is seeing these days is “reverse staged” houses. In these cases, owners trash their house to knock down the property value. There are photographs on broker price opinions that actually show cupboard doors missing, appliances pulled out, and graffiti or trash on the counter tops. Because there are actually websites where you can get repair bids, they can submit false repair bids for the work that needs to be done. A buyer with whom the owner is colluding then comes in with a low-ball offer, buys it and fixes it back up, then flips it for its real market value. That seems like a brazen scheme, but mortgage fraud by its nature is a brazen activity.
Kim Ellison is a Fannie Mae senior industry relations manager for the mortgage fraud program. She also sees a lot of illegal flipping and non-arm’s-length transactions. The non-arm’s-length space is a smaller percentage, roughly 9 percent. Usually the delinquent home owner is selling the property to a family member or a business partner without disclosing the relationship. It’s really an effort for the owner to stay in the home. Instead of making payments to the mortgage company they’re making payments to the family member, as rent. They’re hoping to clean up their credit and reapply for a mortgage down the road.
Selling to a related party isn’t illegal. It’s just the lack of disclosure. The loan servicer may waive the non-arm’s-length requirement, but there have to be compensating factors, and story has to make sense.
These are just a couple of the fraudulent schemes out there. No wonder Fannie Mae is in trouble.