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Category Archives: client protection

Flashback Friday… Angry Yanks…

Reo Speed-Wagon (the truck)
Image via Wikipedia

Last year I was waist deep in dealing with buyers involved in REO properties (bank owned).  Oddly, I have been waist deep in the same process lately.

As mentioned in the older post, some buyers have to go through 6, 8 or 10 (or more) offers in order to land some of these properties.  And when the listing agent, or the seller, requires a pre-qualification from THEIR specific lender in order to offer on the property, that can add up to a lot of credit pulls for the potential buyer… possibly even enough to damage their credit.

The situation seems a little better… but only a little.  We are still running into a lot of bank owned properties that are requiring buyers submit to specific pre-quals from lenders that are either specified to by the seller, or friends/partners of the listing agent.

We have had a little better luck resisting this year, though.  Perhaps the banks are getting the message that this isn’t their best idea…

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So, You Have An Accepted Offer… All Is Good, Right?

Clear sailing at sunset
Image by Alan Miles NYC via Flickr

Not so fast there, Mr and Mrs Homeseller…

A lot of sellers think that the sailing is going to be smooth after they go “Under Contract”.  After all, the hard part is getting an offer, right?

Maybe…  Maybe not…

Actually, I have dealt with a rash of buyers falling out of contract lately.  Inspections haven’t been good to a couple of sellers.  The specific issues aren’t as important as the concept here.  The home isn’t sold until you clear the closing table.

Homes fall out of contract for a variety of reasons.

  • Inspection issues
  • Buyer financial problems
  • Buyer’s remorse
  • Appraisal comes in too low
  • Seller can’t produce title
  • Lender changes standards

And of course there are always strange and unique ways for sales to fail.

What can a seller do?

One of the things I always recommend is for a seller to get an inspection… just like the buyer would.  This gives the seller the opportunity to look at the property through the eyes of a buyer.  And then act on the results.  The BEST time to take care of inspection issues is BEFORE the buyer has them.

While, as a seller, you usually don’t have the ability to derail financial problems on the buyer side, or buyer’s remorse… and certainly not things like changes in lending standards… and even title issues (the closing attorney will find them), YOU CAN often figure out if there will be appraisal issues.

Appraisers are VERY conservative in the current environment.  While I wouldn’t tell every seller to run out and drop another $300 on an appraisal, it wouldn’t be a terrible idea to get your agent to check with one of their lenders to see what the AVMs (Automated Valuation Models) say.  Check Zillow, too.  It isn’t the last word, but it gets you in the realm.  Most homes are fairly easy to value.  There are similar comparables in the same neighborhood, so an appraiser can grab those, make a few adjustments and come out with a value.

But, in addition to your real estate agent’s CMA (Comparable Market Analysis), getting a real appraisal may be a good idea for an unusual home.  Remember, though, appraisers issue an opinion, so while one might assign an agreeable value, another may not.

The best tactics are to go into the process aware of the pitfalls, and do what you can to minimize the poor outcomes.  Keep your property clean and neat and in good repair.  And be flexible with the buyer…  Sometimes the next offer is just as good as the first one, but we often see the best offer is the first one to hit the table.

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Wayback Wednesday… Set the Hook…

Group of tour buses sponsored by real estate d...
Image via Wikipedia

Two years ago there were worries among sellers that buyers couldn’t obtain financing.  Those worries are back… but, then as now, money was available.

Of course, in the middle there were issues with getting loans funded.  But now, the loans are available.  Of course the credit restrictions are tighter and there are fewer loans available for those with weak credit.  But, many would be buyers think that getting a loan is all but impossible… that may be what they heard on TV or saw in the paper.

So, a great opportunity for sellers (and their agents) is to make sure that would be buyers KNOW that they can get a loan.  When I take listings, I call up one of my best mortgage guys and have him build out a few financing scenarios.  This lets prospective buyers know up front what their payment options might be… and if the property might be within their budget.

When I am working with buyers, if they haven’t already, I get them to get a pre-approval.  This allows them to deal with issues with which they might not have been aware, PRIOR to putting an offer in on a property.

Here are a couple of links for Ken Cook, one of my mortgage guys.  He has access to a LOT of programs for buyers (there is audio on this link) that might be on the edge, as well as tools to help those that might have credit challenges to overcome.

Let’s not forget the post from two years ago

When selecting a listing agent, it helps to have one that also works with buyers.  A balanced agent has the resources and relationships to make it easier for a buyer to get your home.

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Wayback Wednesday… Median Price Comparison… Ouch!

Midtown and Downtown Atlanta as seen from Vini...
Image via Wikipedia

A couple of years ago I was looking at median house prices in the Atlanta area, via a map that the NAR (National Association of REALTORS®).  My friend Jay Thompson unearthed it… I think before the NAR was quite ready to release it.

The map is a fun little interactive tool, but the information is the real story here.  A couple of years ago, I noted that the Median Home Price in the Atlanta area was $158,300 for the 2nd Quarter of 2008, down 9.8% from the 1st Quarter of that year.

For the 2nd Quarter of 2010, we are sitting at $122,700… up 1.1% from last year.

If you were wondering how values have fared over the last couple of years, this was a pretty telling indicator… and it wasn’t good.  I honestly didn’t expect that the Atlanta market would go down by this much.  I expected a 10-15% decrease in values, but not something closer to 20% as we have seen.

Here is the link back to the original post… with the map.

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Flashback Friday… Mortgage Thoughts…

Ken Marrero and Ken Cook (right)

Ken is on the right Image by The Ken Cook via Flickr

Over the last few weeks I have worked with a few buyers that have had questions about mortgages, pre-approvals and “the process”…  Oddly, as I was looking for a post from last year, I stumbled onto a collection of Ken Cook (the mortgage dude, not the weather dude) posts I had highlighted about those very things.

I assembled a few quotes from 3 of Ken’s (then) recent posts and linked back to them for more info.  He puts out a LOT of great info about the mortgage side of real estate, and he is my “GoTo Guy” for financing.

So, wander back and see a few “Mortgage Thoughts from Ken…“.  Let me know what you think.

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