Archive for the ‘Selling Process’ Category
Friday, July 13th, 2012
J
ust met with a fairly new agent who was frustrated. Since so many of our homes are vacant, we require our agents to do some serious pre-qualifying prior to agreeing to show a home. Some potential buyers/tenants take offense to this. I hate to disclose this but some of our clients think we should just, at any request, show up to a property and show it to whoever asks. I am getting tired of the ignorance that comes with this expectation. Our agent had just been spoken to in a rough fashion by a prospective buyer who expected to be shown a home without being willing to share any information about themselves. Well, we don’t do that. We want to know who you are, why you are looking, contact information, and some other things such as if you are pre-qualified or willing to go through a tenant screening.
Why are we this way? Well lets start with why would anybody expect us to do business any other way? First, the obvious. The time invested in situations that clearly will not work out. When you only get paid by a client when you accomplish a goal, we should all agree wasting time on things that will not produce the desired result is a waste for both parties. It is also actually a waste for the third party involved- the prospect. Unless they have a viable chance to accomplish a transaction. When you think about it, a lot of prospects don’t know if they qualify and we provide a service just getting them on the right path to accomplishing their goals. Anybody who is a prospect who is offended by our trying to actually help them also causes me some alarm.
The reasons for alarm involve the dirty secret of this industry. Agent safety. Much more important than making clients or prospects happy is our agents own safety. Being expected to meet strangers in vacant houses is not something many people would consider a great career opportunity. Real estate agents love their careers and the opportunity to help people achieve their goals. Sometimes, they love it too much. Even the best screening methods don’t always identify every nut case that thinks calling agents to look for a way to hurt somebody is a great way to channel their anger or whatever sets them off. It does not take long to complete a quick search to find news about the dangers our agents face.
Bottom line..we take every measure possible to not put ourselves in a situation that is uncomfortable. If the prospect does not like it…fine..play along. Understand why. Just don’t expect us to be able to help you if you refuse.
Tags: Buyers, buyers agents, qualifying, safety
Posted in Buyers, Buyers Agents, Safety, Selling Process, Showing, Viewing Property | No Comments »
Monday, December 19th, 2011
Last week, a new system originated for submitting offers for Fannie Mae HomePath properties for Florida, California and Wayne County Michigan ONLY. Now, all offers for HomePath properties must be made at the HomePath.com website!
Online Offers System Benefits The Online Offer system simplifies the offer submission process with the following features:
- An easy to use, self-service system.
- A transparent offer process that keeps Selling Agents informed of the status of their clients’ offers on HomePath properties listed on HomePath.com.
- Improved communication between the Selling Agent and the Listing Broker regarding offers on HomePath properties listed on the HomePath web site.
The following instructions are being added in the Agent Only Remarks in the MLS listing, unless prohibited by MLS: “The seller has directed that all offers on this listing must be made online in HomePath.com. Go to HomePath.com, search for the property details, and click the ‘Make Offer’ button to submit an offer.”
To prepare a complete offer for the system, refer to the worksheet posted at HomePath or available at our website. A complete offer is one which the buyer has signed the local or state contract, the Real Estate Purchase Addendum, and the Owner Occupant certification (if the buyer is an owner occupant).
To learn more about the program and how to manage your offers online, view the HomePath Online Offers Resources Page for training materials, frequently asked questions, webinars and other resources. The Online Offer Fact Sheet provides step by step instructions for using this new system.
“We have just started to see offers made on the system and believe this will help Fannie Mae to achieve their objectives and provide selling agents with a more transparent experience” stated Jennifer Wilmoth, co-owner of the Wilmoth Group.
Tags: Fannie Mae, Home Path, Offers, Wilmoth, Wilmoth Group
Posted in Buyers Agents, HomePath Sales Procedures, Selling Process | 1 Comment »
Wednesday, September 14th, 2011
Yesterday we covered a few of the more significant mistakes I have seen buyers and their agents making that end up costing time and money. There are some additional items that can cause problems that may not be as obvious. Today I will share with you this list and some ways to make sure you avoid them.
John bought a foreclosed property based on the representations of the bank, listing agency, and his title policy. Except nobody really reviewed the legal description on the title work closely enough to question why the lot width was only 60 feet when the structure he was buying was 80 feet. John actually waived his option to obtain a survey with the bank. John ended up with a house that the master bedroom (an addition) was on another lot owned by the foreclosed owner. Except nobody had yet foreclosed on the second parcel because even the lender did not know to make the loan on both parcels when refinancing a few years back! A survey would have revealed this issue very early in the process. Don’t skip a survey! This is an extreme example but I can tell you it is not unusual to find fences and driveways someplace where they are not suppose to be!
I have written several posts about the importance of a home inspection. That is still the case. It is your most important step to ensure you can negotiate a solution to a problem that may not otherwise be discovered.
What happens to a buyer who goes to closing and does not stop and inspect the property before the closing? There are plenty of horror stories when it comes to buying vacant homes. How about the couple who rushed in from out of town to the closing of their investment property, signed all the papers and handed over their check, then went to their new investment. Shocked is the best word to describe their reaction to the fact all the drywall was destroyed because thieves had pulled every stitch of copper plumbing from the home the week before closing. That investment became a huge loss. In fact, the couple ruined their credit because they could not afford the repairs and never made a single payment on the loan they had obtained! Don’t go to closing without a final walk through inspection.
Make sure that the buyer knows what their out of pocket costs will be before negotiating an offer. Confirm that the purchase agreement has the seller paying all taxes, association charges, and assessments through the date of the closing. If you are buying a bank owned home, do not assume anything is “standard” that the bank will pay. I still receive phone calls the day before closing of a HUD home sale where the buyers agent is screaming that the settlement statement is incorrect as the buyer is being made to pay for an owner’s title policy. Agents assume that the seller will pay this and it is a very costly assumption. HUD does not, but you have to review their policy to know that. Usually when this costly mistake occurs the agent ends up paying for it and at a cost that is most of the average HUD home buyer agent fee!
Finally, as much as possible before closing get a copy of the settlement sheet, known as a HUD-1. Review it and make sure all the charges make sense and are as agreed. Settlement entities are left to interpret the purchase documents on many issues and they do make the occasional mistake. It is better to get them corrected before closing than to try and fix them at the table.
Now that you know my list, in your experience, what other buying mistakes exist?
Tags: Buyers, buyers agents, Inspections, Wilmoth, Wilmoth Group
Posted in Buyers, Buyers Agents, Closings, HUD Sales Procedures, Selling Process | No Comments »
Monday, August 29th, 2011
Anybody who f0llows baseball understands how a great at-bat can wear on the pitcher and even the defense. A typical at-bat might consist of 4 to 7 pitches. An at-bat where the batter starts fouling off balls, can extend the at-bat until the batter gets a base on balls or hit by a pitch, strikes out, or puts the ball in play. The more pitches, the more the batter eats into the pitchers total pitch count. Eventually the pitcher’s day is over, even when having a great game, when the pitch count gets around 100. So, an extended at bat can wear on a pitcher, as the batter keeps in the game, but is not actually moving the game forward other than wearing out the pitcher.
Unfortunately, today’s home buyers and Realtors are finding that trying to buy a home for their family is a little like a 10 pitch strike out. In record numbers, contracted home purchases are not closing due to issues related to financing. Whether it is the buyer’s credit, or objections of the lender to the condition of the home, what we call “pended” transactions are not making it to the closing table. According to the National Association of Realtors (NAR) is reporting in July that one in six Realtors had contracts cancelled, in contrast to the previous 16 month average of 8 to 10%. Essentially doubling the failure rate over the average!
When interviewed, the agents are saying the biggest factor causing these cancellations are not the well documented struggles with financing approval but actual concern about the economy and fear that now is not a good time to make a commitment as significant as housing. This fear has caused many of these recent cancellations to be based on minor problems that could have easily been resolved, but also were used to cancel the contracts. This usually occurs in the inspection phase where almost any home will have some issues, but due to inspection contingencies, buyers can utilize one of these problems to demand a repair from an unwilling seller, or simply state that they do not wish to proceed. To a lesser extent, the difficulty in closing short sales-something I have written about several times-also is causing problems with buyers who eventually give up. This problem has been a part of the housing market though for the last three years. I am not sure buyers are any less patient with short sales today. Appraisal values also present challenges as appraisers find less and less comparable sales other than distressed sales to provide values. The argument remains if those values are the new norm or just an aberration. I think one has to be aware in their market tract, what percentage of sales are distressed or bank owned, and understand that may seriously impact value.
Realtors representing buyers though really have to become a part of the solution instead of just blaming the buyers. It is very unfortunate for sellers to pull their property off the market to any other buyer, and then incur the 10 pitch strike-out! With each new pitch, the seller finds a way to foul it off and stay in the game. The buyer slowly wearing down their total pitch count. I hear far to many agents blame the buyers when transactions cancel, but often later find that the buyer was not properly prepared to be making offers on homes. Here are some simple steps agents and buyers can take to make sure they are ready and not experience a strike out!
- Pre-qualification for a mortgage is not enough! Get a pre-approval and have it in hand with each offer. Make sure it is no more than 30 days old.
- Complete a fair opinion of value to assist the buyer when considering a home. Make offers on homes that seem to be valued realistically.
- Approach home inspections with an understanding of who the seller is. Bank owned or distressed properties are rarely going to be able or willing to make repairs. The inspection is a tool for the buyer to make sure there is nothing major that the eye could not discover, and to prepare their checklist for after they close.
- Finally, interview your buyers enough to understand their level of motivation. Is this a need or a game? The buyers agents really should not have time for a 10 pitch strike out either!
Tags: Buyers, buyers agents, closings, Offers, short sales, Wilmoth, Wilmoth Group
Posted in Buyers, Buyers Agents, Closings, Economy, mortgage, Offers, Selling Process, Viewing Property | No Comments »
Wednesday, June 29th, 2011
A new article at bankrate.com tackles the question from a buyers perspective. Both short sales and foreclosures make up over 40% of the market sales so if you are trying to buy a home for occupation or investment, you are likely going to run into one of these types of sellers.
Foreclosures offer faster closings, and more negotiation opportunities. They also have been vacant for a period of time that might exceed a year or more. The effects of being vacant this long are often combined with a poor condition left by the last owner, making the foreclosure a project with possible hidden surprises.
Short sales are often still occupied and the occupant is still trying to maintain the property. If a buyer is not wanting a potential project, short sales are the better alternative. Yet, short sales have many more hurdles to the sale process. Making an offer, and receiving a response can offer a different level of frustration and delay. Negotiations may be very limited. Approvals and closings can drag on.
Every day I see agents showing foreclosures to buyers who probably have no business purchasing a foreclosure. Similarly, I witness the buyer who needs a home in 30 days being shown short sales by their agents. Short sales and foreclosures are so much a part of the real estate world today that buyers believe they need to get in on the opportunity in order to save the most money. It is really important agents help buyers understand the challenges and benefits of both types of properties. This article is a good piece to hand out to buyers before starting the process of showing homes.
Tags: Buyers, buyers agents, Foreclosures, short sales, Wilmoth, Wilmoth Group
Posted in Buyers, Buyers Agents, Foreclosure, Selling Process, Short sales | 1 Comment »
Friday, May 27th, 2011
Ah, the famous NAID. Not the “Native American Indian Dog”, or the “North American International Demoparty” or even the “Non-Anemic Iron Deficiency.” No the NAID I refer to is nothing more than HUD’s “Name Address Identifier.” Most importantly, you have no business showing HUD homes unless your broker has one!
Yep, that is what I said. I run into this on average twice a day. Agents showing HUD homes with no access to an NAID number. So, the buyer decides they really like the house and the agent says, “Great! Well now I just have to find somebody who will submit an offer for you.” Really professional and adds to the shining reputation of the real estate industry.
Yes, I have heard all the arguments. “”Why does HUD require you to register with them?” “Why is it so hard to get one?” ” Why does it take so long to get one?” Look I do not make the rules…but why do we have to complete a lot of paperwork to get a real estate license or join a Board? Licensees do those things with very little complaint. But, get registered to sell HUD homes? Oh, and did I mention it is FREE!
The facts are this. HUD homes are only available for bid at HUDHomestore.com. Brokers, followed by their agents, must be registered at HUDHomestore.com. To be registered the Broker must have a NAID. To get a new NAID it can take 6-8 weeks. The steps to the process along with a way to check the status of a NAID are here. NAID’s have to be renewed annually.
Every agent who discovers that they made a mistake and showed a HUD home to a buyer who now wants to make an offer, with no access to a NAID, contacts our company and requests we submit the offer for them. Simply, when we do that we become your buyer’s agent..with all attached responsibilities and liabilities. We will pay you a referral fee for assisting us in the transaction. That is the best offer I have for you.
One other tip…use to be brokers would get a renewal letter, from the local HUD contractor who administered the NAID program, that their NAID needed to be renewed. This is a annual process. It is now handled through HUD. I am not aware of anybody receiving letters. Your broker’s existing NAID will expire and you will not be able to make offers on HUD homes. It takes about two weeks to get a renewal. Tell your broker (or if you are the broker make a note) that the existing NAID package needs to be reviewed and determined when last approved. Then mark on a calendar somewhere at least 30 days prior to that annual renewal date to complete an updated package for submittal as per these instructions.
HUD homes make up a significant portion of the housing inventory today. If you claim to be a full service agent, then don’t spend another day showing HUD homes without a NAID.
Tags: buyers agents, HUD, Wilmoth Group
Posted in Buyers Agents, HUD, HUDHomeStore.com, NAID, Selling Process, Uncategorized | No Comments »
Tuesday, March 1st, 2011
Recently we have seen buyers opting out of the expense of a survey prior to closing on a bank owned foreclosure. While a survey may seem like a necessity in rural areas, even in suburban areas it is a good idea. Some kind of survey (staked or at minimum an improvement location report) will help identify potential issues. Always remember that you are likely waiving a number of your remedies for solving survey issues when you sign the bank documents. Title companies will argue that they only insure the property that was foreclosed on when no survey is obtained. At minimum a boundary dispute will cost you many hours of frustration. It might actually cost you much more if you find the boundary lines of the property you have acquired run through your three car garage!
In discussing this particular issue with a title company last week I was told this is the single biggest issue they are finding with cash buyers of foreclosed homes (if you are getting a mortgage-no worries. The lender won’t extend your loan without a survey!). In order to save a little money they waive their right to a survey. Later they discover they did not actually buy as much land as was advertised or the barn in the back does not really belong to them. Foreclosed homes come with no representations or warranties. Tax records are the basis for the representations made in a listing. It is all we have to work from. Tax records often just describe a parcel in terms of acreage. Not boundaries. And believe it or not, improvements get built without permits and anybody paying attention to boundary lines.
Or, as we saw in Florida, a builder created an agreement with neighbors to allow for him to cross their properties to access the city water and septic. This was important because the property he was building on was to small for permits to be issued to dig a well or have a septic system. Unfortunately, the builder went bankrupt and lost the property to foreclosure. The neighbors contended the agreement no longer applied as it was with the builder and not the bank. A survey might have helped to discover this issue. Fortunately, we were made aware of the issue and combined an agreement with the neighbors so the property could be sold with access. These things happen.
Don’t be penny wise and pound foolish. Discover all you can prior to closing by having a complete survey of the parcel you are acquiring. For good measure make sure the title company is presented with the results.
Tags: Bank Owned, Buyers, Foreclosure, REO, Wilmoth
Posted in Buyers, Buyers Agents, Selling Process | No Comments »
Wednesday, January 12th, 2011
I want to give kudos to Randy Surette of Cornerstone Inspection Services who has announced a plan to differentiate his company while providing home buyers an extra layer of comfort. One of the biggest concerns buyers seem to have when purchasing is the possibility piggy bank draining repairs that raise their heads right after closing. As of the beginning of this year, the Indianapolis home inspector provides free of charge a 90 day limited structural and mechanical buyer’s warranty.
The warranty covers items such as: plumbing lines (supply and drain), faucets, water heaters, Electrical issues including the main panel, appliances (less than 10 yrs old), and the HVAC system (less than 10yrs old). The structural side of this warranty covers poured concrete and concrete block foundations, floor joist, framing members in the wall, roof leaks, load bearing walls, & garage doors. Click on the lik to see the complete coverage and limitations.
The warranty period begins the day of the inspection and runs for 90 days or within 22 days of closing whichever comes later. All claims have to be received in writing prior to the expiration which is considered noon on the 91st day after the inspection.
Part of creating a recovery in housing will be to better understand the market and the forces holding the market back. A simple offer like this should help alleviate one very common source of delay for potential home buyers. What other creative ideas are out there that will lower the hurdles for sellers and buyers to make home buying and selling decisions in 2011?
Tags: home inspections, Wilmoth
Posted in Buyers Agents, Selling Process | No Comments »
Thursday, December 9th, 2010
For lots of reasons, foreclosure properties have gotten a bum rap with owner-occupant buyers and their agents. Much of the problem stems from the non-traditional sales process. Some of the issue is related to property condition. It is also fair to state that buyers agents have contributed to the problem by refusing to work in the parameters of the industry while cursing the process and the properties to their clients.
The times are changing and rather significantly. Agents who trash working with a bank owned property may be doing their owner-occupant client a disservice. Granted, the robo-signing fiasco added more fuel to the fire of these agents and buyers while setting back the confidence of potential purchasers. I think all of that aside, 2011 is going to be the best year ever for owner-occupant buyers who chose to buy a foreclosure.
Here are some of the reasons why:
Preferences. The three major servicers of foreclosed properties are HUD, Fannie Mae and Freddie Mac. All three are government owned and all three have placed sales to owner-occupants front and center. HUD provides a 30 day bidding preference for owner-occupants under their new program for foreclosure sales. Additionally, there is much needed transparency available to agents and buyers at the new site HUDHomeStore.com to assess a property’s condition before deciding to physically inspect it . Fannie Mae’s HomePath program offers the best financing in the industry through participating lenders. This very aggressive program offers 3% down payments, no mortgage insurance, no appraisal requirement, and frequent incentives for buyers and agents. Freddie Mac through its HomeStepsprogram is offering a SmartBuy Purchase Program that offers 2-year home warranty protection and other incentives for owner-occupant purchasers.
Condition: You have to have a history working with foreclosed homes to realize how far the industry has come in regard to what shape these homes are shown in. It was only a few years ago when we had clients that actually tried to sell homes without a trash out having occurred. Overgrown lawns, broken windows, the list of community eyesores was lengthy. There is no doubt that the entire industry seemed focused on keeping losses at a minimum with total disregard to how properties would likely only appeal to the investor buyer. In hindsight we can now see how all of that spun out of control and actually caused more foreclosures. Today, homes are cleaned out and secure. Regular property inspections by the brokers and field service companies are mandated. There is also a healthy discussion within the industry as to how much rehabilitation and staging should be invested by the servicer/owner to make the home more appealing.
Offer Process: This process scared many agents away. It was very time consuming and little status information could be obtained. Selling agents would look to the listing agents and we had no news and no way to really provide a timeline when a response might occur. A couple of things are happening to change this and make it more friendly to the selling agents. First, more and more the selling agents are going to be able to enter their offers on-line and have them directly submitted to the lender. The HUD system is what I would consider the template for others. An agent registers at HUDHomeStore.com, enters an offer while affirming an actual Purchase Offer signed by the buyer exists. Then an email is sent if their offer is accepted or they can log into their account and see that an offer was rejected. Fannie Mae is also testing an on-line offer system in select markets. I project in 2011 these systems will become much more common as they eliminate one of the ongoing concerns expressed by agents…”did my offer really get presented?”
So, as you consider purchasing a home, or representing an owner-occupant buyer, consider giving the foreclosed property market a new try. It is evolving and the changes, while brought on due to necessity, will allow us to leave the questions caused by the fall’s “robo-signing” fiasco in the long ago forgotten memory.
Tags: buyers agents, Fannie Mae, Freddie Mac, HUD, owner occupants
Posted in Buyers, Buyers Agents, Foreclosure, HomePath, HUD, HUDHomeStore.com, Offers, Selling Process | 1 Comment »
