Questions and Answers

Fun Facts About Short Sales

5 Things You Should Know About Short Sales

It can be awfully tempting to get excited about “amazing,” “smokin” or “crazy” deals. There are certainly enough people out there blabbering on and on about them, especially in the real estate world. In particular, the hype surrounding short-sales and foreclosed, bank-owned homes has reached a fever pitch over the past 18 months. It seems almost impossible these days to walk 10 feet or listen to the radio (for those of you who still do that) for 10 minutes without seeing or hearing somebody expounding on the fabulous virtues of investing in “troubled assets”.

What is a Short Sale?

A short sale is, essentially, an agreement between a bank and a troubled homeowner to sell their home for less than the amount of the loan, in lieu of a foreclosure. This is becoming more common as market prices are falling below the current mortgages held by these struggling owners. The bank, rather than dealing with the expense and hassle of actually throwing somebody out on the street, decides to be “nice” and let them off the hook for a reduced amount, assuming a buyer can be found who is willing to pay a price deemed acceptable by the bank. Hypothetically, this is a good deal for all parties:

• The Seller can get out from under the financial burden of a sinking ship and, hopefully, begin the road to economic recovery. The credit stain of a short-sale is far less severe than that of a foreclosure. I’ve heard of people qualifying for new home loans in as little as two years after a short sale, rather than the 7-10 years following a foreclosure.
• The Buyer can get themselves a new home with a discount of anywhere from 10%-50% off of what the Seller originally paid.
• The Bank can dispense with a troubled asset and put some much needed capital back into its coffers.

All of this can and does happen, though it is not nearly as simple as you would like to think. In fact, most of the time it is a ridiculous quagmire of pointless red tape, mixed signals, and limitless frustration. Here are a few fun facts that I thought should be shared.

1. Short sales are anything but short… The average short sale purchase takes anywhere from 60-120 days from the date of “mutual acceptance”. The Seller has to agree to the initial offer (mutual acceptance), but it is the Bank who really calls the shots, and they can be…difficult* to get answers from. They will commonly take weeks or months to even acknowledge the Buyer’s existence, much less respond to an offer. If they don’t like an offer, they’ll probably just ignore it. If they do like it, it may still take weeks to negotiate inspections, closing details, etc.
* pretty much impossible

2. There is no guarantee… It is entirely common for Buyers to wait for weeks and weeks with no response whatsoever, only to find out that the Bank either A) never saw their offer, or B) got a better one and took it. This puts buyers in the unfortunate position of simply hoping that their offer gets accepted…especially those buyers who are buying a place to live, rather than as an investment. I commonly find myself having to explain this reality to prospective clients…”If you need a place to actually live and have any kind of set timeline in place, you should really just forget about a short sale. There are other factors to consider besides the price…”

3. Banks aren’t as motivated as you think… Between tax write-offs for losses, Private Mortgage Insurance (PMI) covering those losses, and Government cash being delivered in vault-sized briefcases, the Banks aren’t in any particular hurry to change their behavior or do any favors. Sure, to the outsider it would make sense for the Banks to cut whatever deals they could with struggling homeowners. It seems like common sense…stop the bleeding, put some money back into circulation, slow the accelerating depreciation of home values, etc. Good for everybody, right? Unfortunately, many of the banks are being rewarded for their greed and failure, rather than common sense and good business practices.

4. You don’t really know what you’re getting… Though this one tends to apply more to foreclosed, Real Estate Owned (REO) properties, it is pretty common with short sales. Unsurprisingly, people who are about to be kicked out of their homes tend to be a little disgruntled. They are not always inclined to leave the place looking clean and nice, the way it looked in the pictures the listing agent took 6 months earlier when they still thought they could cover their losses. (That one might be a little inside, but if you’ve ever looked at a short sale listing online, then in-person, you’ll know what I mean.) Generally speaking, the condition of the house will depend largely on whether or not it is still occupied. If the Sellers are still living there, it will probably be in pretty good condition, or, at the very least, in whatever condition they are accustomed to keeping it. If the home has already been vacated, watch out! It is quite common for the vacating Sellers to take whatever isn’t nailed down…and sometimes the nails themselves. If you’ve ever seen the History Channel show “Life After People” you’ll know that it doesn’t take long for a structure to deteriorate in the absence of maintenance. Plumbing and wiring problems, leaks and pest issues are all very common. With an ordinary listing, the sellers will continue to maintain the property, even after vacating. Sellers of short sales usually have much bigger problems…

5. The sellers are real people… This is one that is very significant to me, personally, but is one of those things that buyers would prefer not to think about, like how many people have died in that cute 100-year old craftsman they’re so excited about. Oh, how ironic. I opened up a section on sympathy and sensitivity with a joke about dead people… Welcome to the complicated world of Rob LeRoy. But I digress… When considering the purchase of a short sale, it is important to be mindful of the fact that your “great deal” is someone else’s lost dream. Sellers of distressed properties are usually normal, kind and productive people who have fallen on hard times via job-loss, divorce, or illness…sometimes all three. Remember that these are commonly desperate people who just want to move on with their lives with what little remaining dignity they can salvage. Please don’t take advantage of that. If it’s a short sale, sure, you might be able to haggle down the price a little. At that point it is the bank’s money, after all. Often, though, a homeowner will try to sell before they are totally underwater. In these cases, they have little-to-no room to negotiate much of anything. I would urge prospective buyers to be as sympathetic as possible. Sure, I know…it’s just business. I guess…but that’s just not the way I want to live my life or treat the people in it.

Whew! Sorry to end on such a downer. To make up for it, I invite you to watch this fantastic video that highlights the fun that can be had buying foreclosed, bank-owned homes and short sales.

Thanks for reading! For questions about this article or to hire me as your agent, you can reach me at 206.883.6668 or rob.leroy@exprealty.com

Also, please take a look at my website, www.TheRealEstateNovelist.com, or find me on Facebook!

Please forward this to anyone you think might be interested. I’m always excited to expand my readership!

Bellingham Real Estate Market Report for October, 2009

The following is a quick analysis of the Residential Bellingham real estate market.

• Currently Active Listings: 468
• Price range of active listings - $124,900 – $4,500,000
• Average List Price $506,950 Days on the Market: 118
• Median List Price: $379,450 Days on the Market: 85
• Sold in October: 76
• Average List Price: $339,339
• Average Sales Price: $329,072 Days on the Market: 98
• Ratio of List to Price: 97.0%
• Median List Price: $273,450
• Median Sales Price: $273,750 Days on the Market: 50
• Ratio of List to Price: 100%
• Pending Sales Last Week: 19 Total pending sales: 169

• Average Sales Price October 2008: $305,045
• Median Sales Price October 2008: $292,000
• Number Sold in October 2008: 66

What are my closing costs?

Another common question from buyers as well as sellers is, “what are my closing costs?”  Some typical closing costs in real estate transaction are

Title search fees – is the assurance of clear title to the property and title insurance to defend against any future claims made on the title by circumstances that were not picked up at the time of the title search.  This fee is based on the price of the transaction.  It will vary from one company to another but they usually pretty close to each other.  Traditionally the seller will buy the title insurance policy to protect the buyer, and the buyer will buy a title insurance policy to protect the lender that is providing the loan for the transaction.

The appraisal fee — this fee is paid by the buyer to have a professional appraiser give their value of the property.  The appraisal is based on recent comparable sales.

Prorated property taxes, utilities, and association fees — these fees are based on the percentage of the year, or month in terms of utilities such as water and sewer, that you own a home.

Insurance fee — you can usually expect to prepay the first year of your insurance premium

Recording fees – these are fees charged to record the change in ownership usually by the county.

Document fees — these can be fees for drawing up different documents involved in the transaction.

Escrow fees — this fee is usually shared by both buyer and seller and pays for the escrow company that is handling the transaction.

Credit report fee — this fee is for the lender to render buyers credit report.

Other miscellaneous fees — these can include courier fees, electronic transfer fees, flood determination fees, digital storage fees, retrieval fees, underwriting fees, wire transfer fees, tax service fees, e-mail document fees. You won’t necessarily be paying all of these, but you will pay some of them.is

Loan origination fees and discount points — the loan origination fee can vary from 0.5 % to about 2% of the loan amount pays for the cost of providing loans.  Discount points are percentage of the loan amount paid to buying down the loan rate, resulting in a lower monthly payment.

Sellers additional fees — the seller will also pay a percentage of the sales price in excise tax to the county, and commissions to real estate agents.

You real estate agent can usually give you a pretty close estimate of what most of these fees will be.

Here is another of those Cheesy videos that Rob introduced us to yesterday, simple drawings and talk about closing costs.

Top 5 Reasons Buyers Fail with Fixers

These days, it is all too easy for  inexperienced buyers to become obsessed with getting the “best deal”.   I’m talking about  the “weekend warrior” buyer- the one who watches countless hours of HGTV shows that make it seem plausible that someone could seek out, purchase, remodel and flip a home for 25% profit in 30 minutes, or less. The “Hey, I bet I could do that, too!” type of buyer…

There are lots of ways to cut costs when house-hunting. Buying fixers, frontier homes or former meth-labs has always been popular for those hoping to save money, and these days, short-sales and foreclosed (REO) homes are whetting the appetites of aspiring “investors” all across the country.  Certainly, there are good deals out there to be found, and there are smart ways a savvy buyer can save money. The seemingly-endless series of books, seminars, and TV shows based on that premise can attest to that.  However, in my experience as a real estate professional I have witnessed, first-hand, more than a few common mistakes that I think are worth pointing out. This is for those buyers AND their agents, to whom they should be paying more attention!

#1   You don’t actually know how to fix stuff:

Do you know how to re-wire a circuit breaker? Have you actually done it, or just seen it on TV?  If water starts shooting across the floor after you smash the old toilet with a sledgehammer, do you know how to turn it off? Do you know how to pull up the carpet and lay down that fancy tile flooring your wife picked out at Home Depot last weekend? No? Then…

#2  You don’t have the money to get things fixed:

You don’t have to be a handy-man to buy a fixer. However, you definitely need deep pockets with plenty of cash in them. Fixing up a house can cost a lot of money. I mean a LOT of money. Do you know how much a toilet costs? How about a window…or a new heating system? Do you know how much it costs to pay the people who do know how to do that stuff? I’ve met electricians who charged by the second,  roofers that actually preferred to be paid in kidneys, and  plumbers whose invoices technically qualified as Crimes Against Humanity…

#3  You don’t have the time to get things fixed:

So, let’s say you have the knowledge, the money, or some combination thereof that you determine will make this a workable scenario. Do you have the time?  I was talking with a friend of mine recently about this. He’s a professional home inspector, so he definitely has the knowledge and the money required. However, he was complaining about how he’d been working on a bathroom remodel for an entire year. A YEAR!  His intentions were pure and his plan was solid…but time just kept getting away from him.  Think about that for a minute.  A whole year of planning, anxiety, struggling to find the time…NOT being able to use the bathroom… Now think about trying to fix up a whole house.  Make no mistake, any rehab project is a serious time-suck, but a whole house is a full-time job, and then some!

#4  You can’t get the bank to actually give you the loan:

These days, banks are getting increasingly antsy about loans, especially for fixers. Remember, the house has to appraise for the amount you’re paying for it, or at  least the amount you’re financing.  If the house is falling apart, the appraisal will reflect that. If the bank determines that the house is a potential liability, you’d better be prepared to provide solid answers to the above questions. If you can’t, the bank is likely to reject your application on the grounds that you’ll be too likely to get in there and find yourself over your head.  The last thing they want is to encourage somebody to default on a loan because they end up overwhelmed by the staggering realities of fixing up a crack-house.

#5  Your work  prices you above the market:

If you think you can manage the cost, effort, and time required for repairs, be careful not to price your new Valhalla out of the local market! Some clients of mine bought a house in Seattle back in early 2005. It was a nice, older home, in a pretty good area. They spent the next 6 months transforming it into a modern masterpiece, replete with stainless appliances, additional bedrooms and bathrooms, heated floors and dormer windows in the master bedroom.  They’d turned a $400k house into a $750k house. The problem was that the home was on a busy street, and the surrounding homes topped out in the mid-$600 range.  This home, in any number of other locations, could easily have sold for the $750 they wanted…but the present location brought the value down. They ended up selling it after several months for much less than their original asking price, simply because they had spent too much money in the first place. A couple of years later, I later sold a similar fixer just a few blocks up the same street. Having seen this movie before, I went out of my way to warn my client about the dangers of pricing herself out of the market by over-doing the remodel. However, she knew a lot more than I did about flipping houses in Seattle. She was from the East Coast, after all. Yada-yada-yada…same beer, different bar. She lost money…

Thanks for reading. Please post your comments or feedback below. It’s always appreciated. You can also call me at 206.883.6668…

This post simultaneously published by Rob LeRoy at theRealEstateNovelist.com

What is the $8000 Tax Credit?

My two cents:

The tax credit has it’s pros, cons, and far-reaching economic consequences that are unknown and hotly contested. However, there is little doubt that it is of great benefit to the individual buyers to whom it is offered.  My #1 job as a Realtor is representing prospective buyers and getting them into homes they will be happy with. I don’t get involved in their finances, except to the extent that I need to in order to help them through the transaction. However, it is tremendously important to me to make sure that buyers are as educated as possible before they begin the process.

• Update: Congress has voted to extend the tax credit to include transactions written by April 30th and closed by June 30th, 2010. They credit applies to individuals who make up to $150k/year and couples who make up to $250k.  The maximum purchase price is $800k. They’ve also added a $6500 tax credit for those buyers who’ve owned and lived in a home for at least 5 out of the past 7 years.

This post simultaneously published by Rob LeRoy at theRealEstateNovelist.com

Can I get my earnest money back?

This is a question this often on the minds of buyers.  Buyer’s want to be sure they are to not going to lose their earnest money.

What is earnest money anyway?  It’s like a deposit to show the seller that you really interested (earnestly) in buying their property. It’s usually in the form of check made out to the escrow company and held in trust accounts until the transaction closes.  It can be in the form of promissory note or anything else the seller is willing to accept.  The full amount of the earnest money is credited toward the purchase price of the property at closing.  There is no standard amount of earnest money, it’s commonly about 1 percent of the purchase price.  If the buyer really wants to impress the seller they will make it a lot higher to show them that they are really earnest about purchasing their property.  Or make it nonrefundable after certain conditions are met.

As far as getting the earnest money back goes, as long as the buyer is careful about meeting contract deadlines the earnest money is usually safe or refundable.  As a buyer you must be aware that you need to apply for financing (if there’s a financing contingency) within five days of mutual acceptance (that’s the date all timelines run from.) You to have your home inspection and response to the seller within ten days.  Usually the the first ten days is the easiest time to get your earnest money back because of that inspection contingency.  The contingency is subjective and you don’t like something in the inspection report or even the color of the front door, you can check the box on the inspection response that says “Buyer’ s inspection of Property is disapproved and the Agreement is terminated.  The Earnest Money shall be refunded to the buyer.” As you can see you don’t even have to give a reason.
After this ten days of buyers earnest money is usually in jeopardy of  being forfeited to the seller.
There are other circumstances where a buyer can get their earnest money back.  If there is a financing contingency and within 30 days the lender turns the buyer down for a loan they can get their earnest money back.  If the appraisal doesn’t meet the purchase price and the seller is not willing to reduce the price or the buyer and seller can’t come to some new agreement based on appraisal the buyer can get the earnest money back.
If the contract runs until closing and the buyer decides to walk away at  the last-minute and go to Costa Rica instead of purchasing the property, the seller is surely going to keep the earnest money.

If you have any other questions about earnest money or anything else to do with real estate feel free to give me call at 360-739-6981

Be a Better Buyer

So you’ve been driving around looking at houses, that’s usually how it starts.  Go to this neighborhood or that one, Fairhaven, Columbia, Sunnyland (we all want to be within walking distance to Trader Joes!).  We love the craftsman, or so I think! or maybe new construction fits you better.  Whatever your style or budget ,  be you a first time home buyer or a homeowner looking to upgrade or downsize for that matter,  here are just a few tips on how to find that home that you’ve always wanted in a reasonable amount of time without having to look at close to a hundred homes.

SPEAK TO YOUR LENDER, very important.  VERY IMPORTANT.   The first step when considering buying a home or any property for that matter is knowing what your will budget allow.  This will make the entire process much easier, less stressful for you, productive; it will narrow down all the possibilities and keep the house hunting realistic.

For the couples out there,  decide what it is you BOTH want before heading out the door and putting many miles on the car and investing many hours chasing after every property out there.  It’s also not a good idea to have those power struggles whilst traveling between showings, for  your Realtor nor the sellers selling their homes need to hear your debates.  It’s one thing to debate about what style, size, color of home you both want, it’s quite another to not know which type of property you want , i.e.   investment, residential, or commercial.   I guess the easiest resolve for this is to ask yourselves…what do we need more, rental income or a roof over our heads.  But then again, maybe you can afford both.

Know what your needs are. Notice I stressed needs over wants because we all have basic needs;  running water, indoor plumbing, electricity for the refrigerator oh, and ok,  I guess lighting is convenient, power for heating is also nice especially with our chilly nights. 
Below are just a few other needs that you may have:

• Home Office – Do you work out of your home, have a home based business that would require a home office or possibly a shop?
• Children/Pets- If you have children or pets, maybe a fenced yard is high on your list.  Another thought if you have children, schools.  Do your homework and find which district you would like your children to be educated in.  For example, Columbia elementary, or the Sehome school district are high on parents list.
• Health – Health issues can play a part as well, say if you have allergies, you may not want carpeting. Or if you have a physical disability or knee problems, stairs may be out.
• Commute – Distance to your job -  maybe you’ve gone green so you’d rather bike or bus it to work.  So finding a home in close proximity to your work is essential.
• Noise, are you bothered by it or not too big on your list?  Airplanes flying overhead, the freeway running behind your backyard.  The sound of a trains whistle ( I love that sound, actually).
• Garage - Our autos play such a big part in our life so do you want coverage for it? Or maybe room for the car plus storage??

These are just a few items to consider when thinking about what you will need from your home.

Wants.  We all have them, but are they realistic for you right now?  Again, the first thing to think about is budget.

• Maybe you love to cook but is that gourmet kitchen with marble countertops and Wolf Range in the budget?  or the luxury bath with a rainshower and jacuzzi tub and heated towel bar??
• You have a passion for older Victorian or  Craftsman homes… keep in mind that these are highly detailed homes that require a lot of upkeep.  They have wood flooring, gingerbread trim,  a lot of wood paneling and crown molding that requires refinishing and staining.  What about the electrical and plumbing and sewer lines in older homes?  Has it all been upgraded?   You want to be sure that #1 it is safe and #2 that it is functional.  Believe me, they are wonderful pieces of art and architecture to be cherished and also well taken care of, but that comes at a cost which is both financial and time-consuming.
• You want to have your home built-  Things to consider are the land ( raw or improved), cost of materials, contractors or building yourself, distance to town or maybe you want to be as far away as possible.  Lots to think about here.
• Woodstove -  Speaking of chilly nights a second source of heat is a good idea in our community with the North Easterly winds ablowin’.  If you can find a home with a  woodstove or fireplace, it’s great to have for those occasions when the power goes out, a  back-up heat source, not to mention the aroma and sound of the cracklin’ wood. Very romantic!   I know there is a lot of controversy over wood fireplaces because of the build up of creosote, so be sure to have the chimney inspected by a Certified Chimney Sweep and cleaned on a regular basis.

Keep in mind that no home is perfect.  From new construction to an older home in need of upgrades or repairs,  it will lack something but, if it has almost everything that you are looking for, location, size, price, floor plan, you can always add to the house and put your signature on it.

Buyer Representation – Find a REALTOR® who will represent you and your best interests.  There was a time not too long ago when Realtors were hired specifically to help the seller. The seller benefited from all the representation and the buyer was really on his own.  That is why we now have seller disclosures and buyer agency agreements.  I suppose that is also where the words  “Buyer Beware” come into play.  You want and need to be fully represented by someone  who can think objectively and to repeat myself, has your best interest at heart.

I hope you find this helpful and beneficial.    My point to you as a buyer is to think about the process and what is and is not important to you, in hopes of making this an easy purchase.  Obviously, there are many things to consider when purchasing property and it is a good idea to make a checklist for yourself with your needs and wants.   Once you have this, you are ready to get an outside opinion or service from a Professional who knows and understands the real estate market.  If you are considering selling or purchasing and are tired of driving around in circles, please contact me, Roberta Soares, REALTOR® at EXP Realty, 360-303-3898.

A behind the scenes look at a Bellingham Real Estate Agent’s Day

Got a great call from my mom.  It’s at 1:55 on a Tuesday afternoon, the kind where she asks what I’m up to, forgetting the time difference between Rhode Island and here. In her defense, and playing to my role as a good Irish son, my mom is not at fault here.  She has no idea what I do all day, from day to day, and it’s nearly impossible to chart my hours.

The kicker? She worked in Real Estate for a while, but in what seems like a complelety different eon (not agism) with all the leaps and bounds technology has made in the last 20 years. 10 years. 5 years even.

If I were a doctor (she wishes), lawyer (ditto), or Indian chief (absent from Career Day), a call at 1:55 on a Tuesday would mean I’m knee deep in an operation, a court case, or negotiation for Cape Cod.  But who knows what a real estate agent does, minus the few hours you spend in his or her car? Your answer can be as different as your Starbucks order, depending on the over-caffeinated gal or guy you’re working with.

So I thought a real, and I mean REAL look behind the scenes, here’s what I do during the week to prepare for the time I get up, to when I fall asleep watching I, Robot for the 10,000th time at 11:30.

Client: Registers interest in the ether that is the Internet, in real estate in some shape or form.  Their info is sent to me via e-mail, phone call, or reference from someone who thinks I might be a good fit.

Me? Wake up, to the office at 8:00 to see what’s happened during the course of the night in the way of A) homes on the market that are new, and B) have gone pending, pending inspection, or sold. If I were a listing-centric agent, I’d also check the expired and cancelled listings, in hopes of inviting the seller to a new conversation about their next move.

Then I’m checking stats; what have homes sold for in the past 6 months? Anything else is a different season, equating longer to checking the salmon season regs when it’s deer season. Completely different animal. Unless you’re in a higher price range, in which there’s a longer period these homes are seasoning on the market. If I, haven’t been checking the stats on a weekly, daily basis, there’s no way to know this.

We’re about at 8:30, at which point, as I’m human, I’ve already checked Twitter 400 times, Facebook on my phone to see what folks are up to, and Mint.com to see if I’m still financially in business.

From here? Taking a look at my East Coast clientele, and their folders of favorite homes they’ve saved in the last 12 hours, and planning my phone calls appropriately. Planning phone calls? Yup. I need to have updates, new possibles for you, so the call has actual value to you, and I’m not beamed back to 8th grade, where I call and say,”so, uh, what are you up to?” Then I’m making those calls, leaving messages, and setting new times to call. I’m calling so you don’t have to remember to. It’s to keep me in your mind, so when you DO decide this might be a move you want to make, I’m the guy who’s been helping you, and I’m front of mind.

In between calls, I’m checking e-mail, and answering other calls from the previous day, because every home I visit, the listing agent and seller want to know what I think.  It’s a good system of checks and balances, and beats the hell out of the impersonal e-mail where I fill out a survey.  E-mails can range from changes in banking programs, home warranty stuff so when your “new to you” dryer breaks, you’re not cursing my name at Home Depot as they load in another $500 incidental you didn’t plan for when you moved.

Then I’m out the door. Walking through homes clients have chosen as favorites, new listings on the market that have caught my personal eye, and property in hot spots in our area.  I’m more inclined to preview Fairhaven condos than Vacant Land in Maple Falls, because that’s not where the lion’s share of business resides. I’m taking photos of the interiors of some to keep them straight in my head, giving my clients a better idea of the layout, and sometimes because the photos online? Not so good. They’ve either been touched up more than Mickey Rourke’s Glamour Shots, or just haven’t given an accurate depiction of the property as it sits today. Anybody with a home on Alabama Hill who listed their home in August, and has a green lawn in the photos, knows what Willis is talking about.

This takes me to lunch. Where I sleep a good 4-5 hours. Martinis do that.

The reality? I work through lunch, because my clients don’t. This may be that time where they’re at work browsing for homes, and if I can talk to you while you have real estate on the mind, I jump back into the circle of people trying to help, rather than get you to sign up for Quickstar.

I’m also sending out info on school systems, neighborhood info, recent political news, like land grabs off the Guide, how to correctly navigate roundabouts in Cordata without indirectly paying for someone’s four years at WCC, whatever it takes.  I’m a concierge for Bellingham and Whatcom County, and love that part of my job, as it keeps it dynamic.

Now I’ve got a showing. Just get in the car with my list and unlock the homes. Nope. I’m making appointments, ensuring your 45 pound dog is allowed in the building should you love this place, checking that the house feeds into the high school you want. And putting this together as sweetly as possible without the aid of a Trapper Keeper so it doesn’t look like the cluster it could be. Because two homes into the tour, we might find out that your needs are completely different that we originally talked about. But I’ve spent the morning previewing other possiblities, so we re-adjust the flight pattern, and keep on keeping on.

Right about now, my mom has called twice. And texted. Because my brother thought it was a good idea to open that Pandora’s box to a string of “Lerve you.whts the 411?” messages. Yet my concentration is on the client. Because this might be the only chance I get. I’ve gotten an e-mail during our tour letting me know the loan program we’re using is expiring soon, so if today’s a bust, we’re going back to formula.

Back to the office after the tour to debrief what we liked, disliked, and I’m keeping notes to make sure one home doesn’t blend into another. The contracts here can be up to about 4,000 pages long, depending on the situation, which is great, because it protects the parties involved. But we’re going through it line by line, because this is the largest financial purchase you’re going to make in the next 5 years;  you had better know it back to front. I’ve memorized these forms, and broken it down so it’s understandable in a previous morning, so I’m not bumbling through this meeting like Mr. Furley at Spacecamp Orientation.

Putting the offer together, and coordinating the delivery, then back to the office to catch up on calls and e-mails that have come in during the last 4 hours or so. And rest.

Plan out tomorrow in my head so I can sleep. Then carry on with the rest of my life. This day would be ideal.  But much like all things planned, I’ll reschedule in the middle of the day at a moment’s notice to make sure my client’s needs get met. That’s my job. That’s my day.

And during all this, I’m taking care of my marketing department, my accounting department, fun department, and generally working on staying a good guy. Because no one wants to work with a tool, save Bob Vila.

The point?  You’re going to see a calm and collected person, excited to find your next place or property, in an organized fashion, because you need to know that throughout all the mess that’s going on in the world, you’ve got someone who’s going to make it okay.

What Buyers Should Know About Appraisals

Just about everybody has heard of an appraisal and knows what it is- an assessment of a home’s value based on empirical evidence like recent sales, replacement costs, and the subjective opinions of underpaid appraisers hurrying from one gig to the next.  What many Buyers don’t know is that, even though they get to pay for it,  the appraisal isn’t for them, it’s for their bank.  While it’s true that the bank wants you to know you’re getting your money’s worth, they are really much more concerned about whether they are getting their money’s worth.  See, most of the time, banks are the ones who are really buying the home, even though you get to have your name on the title.

The true purpose of the appraisal is to assess the dollar-figure at which the bank could reasonably expect to sell your house in the event of a foreclosure.  They have to take the worst-case scenario into account to make sure they don’t get stuck losing any of their money if they have to take your house back.  This makes the appraisal a tricky piece of the buying process, because banks won’t lend you more than the amount of the appraised value. That means that if your appraisal comes back lower than the agreed-upon purchase price, you’ll end up having to cover the difference or re-negotiate with the Seller, either of which could potentially cause the deal to fall apart. Appraisals are especially critical and unpredictable these days, with regulations on appraisers and loans tightening daily as a result of the loose standards of the past several years that contributed significantly to the recent market slump. It is no longer a foregone conclusion that the appraisal amount will be high enough to cover the spread.

I am not suggesting  that appraisals aren’t accurate or useful. They most certainly have their value.   I just think it’s important to let Buyers know up front what some of the potential hurdles and complications might be. That way, there won’t be quite so much flop sweat to clean up the week before closing when we all huddle together gnawing our collective fingernails, waiting to find out if the appraiser’s thumb will point up….or down.

Thanks for reading! You can read more of my articles here.

Report Finds That Real Estate Agents are Normal People

According to a recent report by a highly reputable investigative entity, most… several…that is, some real estate agents out there are actual people, just like you- with hearts, minds, maybe even a personality!  I can tell you how to spot them.

I know the drill- you’re up late one night, semi-casually considering the possibility of maybe buying Bellingham real estate but don’t know which website is the best, so you sign up to a few, then over the next few days or weeks you get bombarded with phone calls and e-mails from all kinds of people asking you about your potential plans to buy or sell or move or invest… It’s annoying. Some of them stammer, others talk too fast. They leave awkward, rambling messages on your voice-mail and always seem a little bit jittery and caught off-guard if you actually pick up one of their phone calls. I know, I know, it’s all just so uncomfortable…like talking to your mother late on a Sunday afternoon when she’s been out golfing* with “the girls”.  Just remember though, they’re more afraid of you than you are of them. Just be gentle and let them speak.  Who knows, you might get lucky and find one that actually knows what he’s talking about.  That’s especially likely to happen if you dial 360.510.2230 and ask for Rob LeRoy.  He’s one of the best. If you don’t believe me, read this article (#5) written by an industry insider who’s “in the know.”

*drinking Bloody Marys

And another thing- it’s important to keep in mind that this is what we do for a living.  All day, every day…losing sleep, missing birthdays, missing weddings (sometimes our own), ignoring medical check-ups and Happy Hours…wait, we actually never miss those…but, still, you see what I’m getting at. This is our job, our career, so don’t be so surprised when we call and remind you that we exist. It is not our intent to irritate or harass, but rather to educate and provide you with a service, whether that service involves an actual transaction somewhere down the road, or simply some casual, professional advice or instruction on the fascinating world of real estate.  If you’re truly interested, let us know.  If not, don’t be afraid to say you’re just browsing.  We can take rejection, believe me.  Only about 1 -to- 2 out of every 20 people who sign up to a real estate website  actually buys something.  The rest are just browsing, researching, or laughing out loud as they read an exceptionally humorous article written by a gifted young real estate agent.

Good agents are happy to help either way, but it certainly saves everybody a lot of time if you just let us know up front which side you’re on.

Thanks for reading!  Please leave comments below, if you have any. If you’d like to read more of my posts click here.

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