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Posts Tagged ‘listings’

Multiple Offers

09 Nov

I sort of skipped over the multiple offer situation but would like to talk about it now.

For most of my career in real estate in the Inland Empire I have been more of a Buyer’s agent. During these years what I have experienced is multiple offers on most homes for sale.

There is a huge demand for homes and the proof is the fact that every time, and maybe you think I’m exaggerating but it is true, every time I write an offer there are other offers on the same house. It doesn’t matter the price of the home, it can be $125,000 or $950,000 and there are more than one offer that my Buyer has to compete with. So that is the word I want you to remember – compete.

Because the number of homes for sale is low, the demand is high, there is no place for low-ball offers. If the house proves to be well priced, then offer your best. Especially when you are dealing with a bank owned home. The bank will always come back to the listing agent and ask for “Highest and Best”.

Yes, I know you say you don’t want to get in a “bidding war” but if you want to buy a home in this area, you will be competing. Read some of my earlier posts and you will find that competing is not only about price but the terms of your offer.

 
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Posted in Homes For Sale, Real Estate Update

 

Acceptance of Your Offer

24 Oct

Step 10

After negotiating the details of the offer, you have what is referred to as Acceptance. The date of acceptance is the key to escrow. The date of acceptance will be used and referred back to throughout escrow.

For example, 17 days after the date of acceptance, is the time allowed for in the contract(California contract) for you as the Buyer to conduct all inspections of the property. This is very important because at the end of the 17 day period the Seller will ask you to remove this contingency.

Let’s talk about contingencies, there are 3. You have the inspection contingency, the appraisal contingency and the loan contingency. This means that the house needs to pass inspection, the appraisal has to come in at the agreed upon value and the loan must be in place and ready to “fund” by your lender of choice. If any one of these contingencies do not happen, then the escrow “falls out” – no sale. Now you know what it means when you hear that a house has “fallen out of escrow”!

 
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The Counter Offer

17 Oct

Step 9

Expect to receive a counter offer from the Seller. In 15 years of writing offers for Buyers, I have only had maybe a dozen original offers accepted as written.

The most common thing that is countered by the Seller is the price.

Some of the other terms of the contract that can be countered is the amount of time for escrow. 30 days is the most common escrow length but sometimes the Seller wants to close escrow on a specific date. The Seller will also counter the escrow and title company that they will want to use. It is customary in this area for Sellers to use the escrow and title company of the listing agent.

If you have written an offer on a bank owned home – REO – then the bank will send you a counter offer that looks like an offer and can be 15-20 pages long. Don’t be alarmed, this is the way they do things. If you have written an offer for a short sale then be prepared to wait as the bank will want to do an appraisal before issuing a counter offer. If you have written an offer on a standard sale home then the Seller will most likely respond within the 3 day time limit that is stated in the contract.

Something that has been happening in the last year or more with REO’s and short sales is that they will counter back that they do not want to pay for any termite work or home warranty. Again, the banks are trying to increase their bottom line any way they can. So buying a bank owned home or short sale places more responsibility on the Buyer because the Buyer will need to pick up these fees.

Next blog post: Multiple Offers

 
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Posted in FHA, Homes For Sale, Real Estate Update

 

Making an Offer on a House

04 Oct

Step 8

It’s not all about price.

The terms of the contract are very important. The main term of the contract that all listing agent’s eyes go directly to is the type of financing. Financing is the type of loan you are using. Are you an FHA Buyer? A conventional Buyer with 20% of your own money to put towards the purchase? A VA Buyer who can use the Veteran benefit that has been awarded to you by being a Veteran? Or a cash Buyer?

At this moment in the San Bernardino/Riverside areas, the conventional Buyer and cash Buyer are King! Sorry to break this to you. Yes, the bottom line is all the Seller is looking at. No, it is not fair. The American Dream of home ownership is being beat to pieces! The investor/buyer that has all cash or the conventional buyer have a definite advantage. An FHA buyer most times is hoping that the seller won’t “mind” paying some of the closing costs but the truth is – they do “mind”. The VA Buyer is at the bottom of the heap and it breaks my heart to say this. The Veteran should have first “dibs” but in this still extremely greedy society, sellers don’t care. Whether the seller is the owner or the dreaded “bank”, they want all the money they can drag out of a buyer.

For a while now, the banks have started saying they will not supply a buyer with a termite inspection or termite repairs, so don’t ask. The banks also will not pay for a one year home warranty which is about $350. So what do you do? You as the buyer pay for these items. Yes, this is a messy time to buy a home but if you get lucky and get your offer accepted, then it is the best of times to buy a home!

 
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House Hunting – REO’s

20 Sep

Step 5

I would like to discuss bank owned homes with you. At this time about 13% of the homes on the market are bank owned. You’ve seen REO (real estate owned) on many homes in the last couple of years. These homes have been repossessed from the owner by the bank. Sometimes these homes were on the market previously as a short sale but didn’t sell for whatever reason. So now the bank owns the home.

Many banks will go thru an extensive renovation of a home before putting it on the market. Because of either bad treatment by the previous owners or vandalism while the home sits vacant for months, the bank needs to “fix it up”. Please remember, no one from the bank has ever lived in this home. The bank is relying most times on the REO listing agent to be in charge of the rehab work. Tip #1 – always hire the best home inspector you can find to inspect this home. Sometimes you will need to hire other service providers to inspect things like the roof, plumbing and air conditioner. This can be very costly. Once you are in escrow and you are conducting these inspections, you must understand these inspections are for your knowledge only. The bank has already done all the improvements they intend to do. You are buying the house “as-is” so unless there is something majorly wrong with the house – the bank won’t take care of it. In fact, many times you won’t even get a termite report from the bank. Oh and by the way, some of these REO homes do not have stoves, dishwashers and other appliances – that’s for you to buy.

Another thing to keep in mind, and I’m focusing on the Inland Empire when I say this. In almost all cases of bank owned homes, the bank has lost money, somewhere in the range of 50-60% of the amount of the loan. Well I’m sure you don’t feel sorry for them but it does affect you if you want to buy a bank owned home. Let’s say a 3 bedroom home is foreclosed on in Rancho Cucamonga. The loan on it was $450,000. In today’s market the house is now worth $250,000. That’s a $200,000 loss for the bank. And for this case we aren’t going to figure how much money it takes to fix up the house for sale. So one night you can’t sleep and you stay up watching TV. There is a show on how to buy bank foreclosures at 20% off the list price. Can it be true? No. Maybe you can do this in Barstow but not in Rancho Cucamonga. There are way too many Buyers in today’s market and many are cash buyers. This bank owned home will sell for market value.

I can’t finish this post until I talk about my all time favorite Buyer, the Flipper. Lately busloads of “Flippers” have been roaming the streets of the IE looking at REO and foreclosed homes to buy, fix up and sell – Flip! The only people making money here are the ones conducting the tours and the bus drivers. If you want to “flip” a house, go buy one for all cash on the courthouse steps and rehab it, then sell it. If you buy a bank owned home at market value and expect to fix it up and sell it, well my advice is forget about it…. It sounds like a fun way to make money but in the long run this is not an amateur sport. There are large corporations out there buying up homes in bulk on the court house steps and flipping them, this is their business not a weekend project.

 
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Posted in FHA, Homes For Sale, Real Estate Update, Uncategorized

 

House Hunting – Standard Sales

16 Sep

Step 4

You know the area you want to buy and the price and size of home that is comfortable for you but now the big question.

Do you want to buy a standard sale home, short sale or bank owned home?

The standard sale home seems like the easy route. However, a large majority of the standard sellers in today’s market think they are “losing money” by selling their home. They could have sold for much more years ago but they didn’t and now life changes are prompting them to sell. Be careful because sometimes these sellers over price a home just to see if they will get a bite. Have your agent “run the comps” which is Realtor talk for – what is the home worth according to recent sales? If you find that the house is overpriced but you want to make an offer then write a good clean offer at market value. All houses sell for market value so the Sellers will need to come to grips with that at some point. Be prepared for a counter offer, 99% of all offers will get a counter offer. If the Sellers are reasonable, you will have bought a house. Don’t feel bad if they don’t take your offer. Many Sellers reject the first offer and then their homes sit on the market and at the time I am writing this, it’s almost guaranteed that their house will go down in value by waiting. Move on to another house for sale.
In the Inland Empire there is a “Perfect Storm” at this moment. Interest rates are amazingly low, you can buy a house and make mortgage payments that are close to what you are paying for rent. And there are many homes for sale. Inventory is good in this area and more homes are coming on the market all the time so don’t worry, your dream home could be just around the corner!

 
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I Want to buy a House with the Listing Agent.

16 Aug

Really?? Really! Are you sure?

I hear this statement several times a week, as I’m sure most Buyer’s agents do. Do you know what you are giving up?

The Seller has already signed a contract with the Listing Agent to have exclusive representation by the Listing Agent. If a Buyer wants to buy a home with the Listing Agent, then a conflict of interests arises. This is called Dual Agency and it must be disclosed. Dual agency is such a bad idea that it has been outlawed in other states, yet it is still legal in California. Some of the information you may want to know would be illegal or unethical for a dual agent to disclose because of their fiduciary responsibility to the Seller. Just because the seller “has” to use their Cousin George as their agent, doesn’t mean YOU have to.

A fiduciary responsibility requires that every action the agent performs must be in the best interest of their client. This is above and beyond “Honest and Fair”. This responsibility goes so far as to require that even if a particular course of action is NOT the most advantageous action for the agent, but IS in the best interests of the client, the agent must act for the benefit of the client.

In every real estate transaction I have been involved in, I have found at least a dozen things the other agent wanted to do, but were not the best path for my client. Dual Agency is just as crazy as having the same lawyer represent both sides in the same lawsuit.

Wow, buying a home is a “Big Deal”. Why would you want a conflict of interest?

Call me if you want to work with a Buyer’s Agent!

 
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Not All Homes Listed For Sale Are For Sale?

23 Jul

Say what?  That sounds ridiculous!

You’ve stayed up late looking online for your Dream Home.  The next morning you call your Real Estate Agent and tell her/him about this wonderful home that you want to see and possibly make an offer on.  But you find out the home has multiple offers and one offer has been submitted to the bank.  It is a short sale…

Why is it still listed for sale online?  It’s not available but yet it comes up every time you do more searching for homes.  This can’t be, maybe your agent doesn’t know what she/he is talking about!  So you make a call to the listing agent direct to get to the bottom of this, yes it is in escrow but you can place a back up offer.

Some Listing agents are not doing their jobs well.  This home that has an offer submitted to the bank for negotiation of the short sale should NOT be online as an active listing for sale.

So all I”m saying, don’t fall in love with that short sale home.

 
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What’s the right price for my Home?

14 Jul

Most Standard Sellers in today’s market are still California Dreaming of 2006.  Five years ago you could price your house $10,000 more than the last home on the block sold for, and it would sell at that price!   Sorry to say,  that was then, this is now and that time will not come back – EVER!

You could have sold your home in 2006 for $200,000 more than today, so why didn’t you?  Well, you had to have a place to live.  And if you had sold in 2006, you most likely would have turned around and bought another home at the top of the market and lost the $200,000 gain anyway.

What’s the right price for your Home?  Market Value.  I guarantee your home will sell for Market Value.  We are back to the good old fashion, American way of selling a home.   You put your Home on the market for Market Value – NOT higher than Market Value because “we want to have some wiggle room”.  You get a lot of showings by Real Estate Agents with qualified Buyers.  You get one or more offers, you open escrow and pack, the appraisal comes in at Market Value and Viola – You have sold your Home!

 
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April Stats

05 Apr

Wow, the first 3 months of the year are over!  This month  I want to add in Sales in the last 30 days.

How are the local cities doing as we enter the second quarter?

Upland has 183 listings, 47 are short sales and 14 are bank owned.  March sales 59

Rancho Cucamonga has 363 listings, 175 are short sales and 53 are bank owned.  March Sales 171

Ontario has 312 listings, 151 are short sales and 69 are bank owned.  March sales 139

Claremont has 96 listings, 10 are short sales and 11 are bank owned.  March sales 25

Fontana has 498 listings, 289 are short sales and 84 are bank owned.  March sales 278

Let’s start looking at Montclair – 56 listings, 29 are short sales and 7 are bank owned.  March sales 20

With all the First-time Buyers rushing to meet the April 30 tax credit deadline, it’s good to see that we have more listings to choose from!

My take on these stats are that we look at the ratio of listed homes to sold homes to see how many months of inventory we have available thus showing us if the market is a buyer’s or seller’s market.  Overall, we have 2-3 months inventory in the 6 cities highlighted.  That my friends, is a Seller’s Market!  More demand for homes than homes available on the market.

 
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Posted in Real Estate Update, Uncategorized

 
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