Mother & Daughter Blog

Here is some of the buz talk that is still going on and probably will be around for a long while.  What do you think?  Illusion, Mirage, Common Sense or Just Talk?

Add to the list. .... 

Rosemary Brooks, Short Sale / REO Specialist - the Mother and Daughter Realtly Team

In order to work with buyers, I believe that it is wise to decide right upfront that there is a strong possibility that you are not a mind reader and cannot figure out when a buyer is really serious about buyer now, later or never.  Sometimes it appears the person you are talking to, sharing information, driving around, numerous phone calls and emails is just wasting your time.  But you being in the business to make money don't want to assume this person is just gathering information and is not serious about buyer a home now or ever.

You do not want to waste your time or spend time on someone that you could have been spending time with another that was actually serious about buying.

So after you make sure this person is qualified to purchase a home and for how much... I suggest you not assume this person is not serious --> even if they seem to taking way too long to find a home that they are ready to put an offer on.  You must sharpen your patience skills.  Learn how to work with this person as well as do other tasks in order to get other clients - so it will not seem to be a waste of time.

Treat your leads, phone calls, and those that seem to be just site seerers" as read possinbilities. So get your car all gased up, put together the information this client has asked for, study your neighborhood data, put on your smile and get a going....!  You may turn out to be pleasantly surprised!

To the question of how do you know if a buyer is serious?  Answer is:  You don't. Not until the transaction closes.  And always keep in mind... your timeline is not what matters, its that potential buyer's timeline that you should be working with.

Sellers are attracted to the good looking offers.  The good looking offers get accepted.  Take a good look at your offer before you submit it -- try to make it look good to the seller if you want the property.  Get that thumbs up!!!!!!!!!!

1. Large down payments

2. Conventional loans look better with those large down payments

3.  Cash offers - that are reasonable, (hint: low balls are ULGY to a seller...just so you know)!  ALso, cash offers that can do a quick close... but be reasonable and ask for at least 21 days (you don't have to use it, but it better than extension requests).

4.  30 day close (but be careful not just say 30 day and then take 45)! 

5.  Those full figured Earnest Money Deposits (2% and higher)

6.  Contingencies that less than 17 days

7.  Inspection 10 days or less - I mean get in there and get it inspected and keep the transaction moving!

8.  Back away from asking Seller to pay for inspections fees. This is something you need and want to do, why not pay for them yourself?

9.  OK and you should ask the seller to provide the Natural Hazard Report (NHD) that's $99 bucks or less.

10. OK to expect the seller to make the property; smoke detector and hot water heater compliance (strapped and installed).

11. Back away from asking the seller to pay for repairs (especially those that are not in the catagory of safety concerns).  Especially when the sale is an "as is" sale.

12.  Let the seller chose the escrow company

There are other attractives to the seller but this is a good start.  Get those 2 thumbs up!

Agent completed the hard part of the short sale: getting the property listed and aggressive marketing to obtain offers.  Submitted the offer to the homeowner/seller, did your report and included all the information and documents required plus your own twist to the presentation.  Now you fax it in or fed exp it or both... now what do you do?

The worst thing you can do is nothing but sit and wait for the bank to contact you.  here is what I suggest:

YOU HAVE PHONE USE IT!

1.  Call and make sure your request made it to the Short Sale department.  If it is did not - don't be shy... resend it!

2.  Give it about 1 week and then call to check again. 

3.  Once you get confirmation that they have the full packet.  You still do not get to just sit on it.

4.  Time it right and call back to get an update.  Don't be insulted if you do not get to talk to the short negotiator -- just speak with the customer service rep and ask them what is the status.  Ask if the negotiator has been assigned, if yes - get the name and try for email and direct line.  Get as much as you. Ask them to put a note in the file that you called and asked for status and confirmed that all documents were received.

5.  Can you sit now?  Nope, not for long.... call back and get another status and you keep doing this until you either get to talk to the negotiator or get an email or phone number and then follow up direct with that negotiator.

6.  Keep your eye on the trustee sale date ----> don't let it get by you!  Call and ask for a postpond date.  Be sure the customer service rep email the negotiator and ask for this date. It is not the negotiator's job to have your back on the sales date .... and they won't!

7.  Call back to be sure they have a new sale date set.

This is simple communication and basically it is as much as you can do until the bank is ready to talk or email converse with you.  But for the record, you have followed up.

Remember there are numerous pre-foreclosure properties with short sale requests -- so the banks have numerous files to deal with.

Short Sale Communication 101 - Communicate often!

Nothing new about getting low ball offers.  After all that is the nature of beast -- to get a deal - right?  But the big question here is what is right for the agent to do?  Should the agent treat this offer as an insult and not present it to the owner/seller and definitely not to the bank/lender?

Ethically speaking and procedure is to the present all offers.  Agents, we are not the judge and jury here... our job is obtain an offer and present it to the seller.  In the case of a short sale the seller is the owner.  If that owner decides they do not want to present that offer, that is their decision -- isn't it?

However, if that owner/seller signs the offer..... agent you are to present it.  Do it the same detail as you would of a higher offer.  After all it could turn out to help you know the following:

1.  where the bank is coming from as far as what they are looking for -- who knows they may just counter back - countering back has always helped me to see where the bank stands on approving the request.  So if it is still time, you go out and aggressively get another offer for the amount the bank has countered.  If you run out of time, well that is not good especially if you took the property off the market for this low ball offer.

** Make sure you keep up with the sales date and keep on accepting other offers.  If you get one that is higher than the low ball ------> send it in!  You may just get an acceptance.

In summary: Let the bank be the decider of what is too low for them to approve.  In my opinion, agent do not have the right to put offers in the round file!  Not your job.

This is for buyer agents - please tell your buyers how short sale are.  Ask them if they have the time to wait on the bank to decide if they are going to either approve, counter or deny a short sale request.  If they tell you they are looking for something with the next 30-60 days, advise them that a short sale just might be a little longer than that.  Now if it turns out that this bank works faster --- all should be happy. But do not assume this will be the case. 

Banks are taking and will tell you if you ask they are not getting to their short sale for 45 - 60 and sometimes over days.  Do not leave this information out and have the buyers waiting until they get tired and walk!  This is a set up for all invovled: the buyer, the agents and most of all the owners.

And that buyer should not assume that they can get extensions on a short sale!  Banks/sellers do not like extensions at any rate, but a short sale agreement will usually come with a clause that says they want their funds within 5 days of the scheduled close date.  Those 5 days are not free.... buyers will be charged!  And if the agreement does not close on schedule after those 5 days the agreement will be null and void.  Plus the bank will charge the buyer a per diem on the those 5 days!

Buyers stand a chance of losing their deposit if the transaction does not close.  Agents go over that short sale agreement with all parties involved.

(if this is not in Short Sale 101...... it should be!)

PMI is Private Mortgage Insurance.  The one thing that I noticed back during the 2004-2006 mad rush of purchases is that a huge amount of the loans had so much in common - - PMI!  But why?

1. 100% financing - remember how popular this type of financing was?  Interest Only..
2. No down payment
3. PMI fees were up to about $200 per month
4. Borrowers were saying they were told that they would only have to pay the PMI for a short period of time -à until the loan was paid down to 80% loan to value. 

But isn't that a good thing that you have PMI to pay/cover the bank should you default on the loan or God forbid foreclosure? 

ANSWER and NEWS ALERT:  No it is not helping, it could really be hurting borrowers that are finding themselves in default, bout to lose their home, having to do a short sale.

Well guess what?  It did not work out to be such a good idea after all.

Why didn't it work?  Well, folks it was mainly due to:

• Loss of jobs, reduced income, severe family situation changes
• The market shifted, to a downward roll (kind of like being on roller skates doing a steep hill)

But doing all of this and still today, PMI is still getting paid.  The 80% loan to value is not happening and probably won't happen for still a long while.  And PMI is full of tricks... they are asking the homeowner to pay for a number of years on an Insurance plan that should be paying the bank out of the money they have already collected!  Not new money....

Why and how is it hurting?  PMI has forgotten what their purpose is.  Which is to pay for the default... not let the bank suffer the loss - make up for it by paying and they should be using the money they already collected.  NOT ASK the homeowner to pay MORE!

I just lost a short sale approval because PMI demanded an upfront amount of $7500 or for the borrower to sign a promissory note for $15,000!  Now mind you this is a homeowner that is in proven hardship and yes.... Was paying PMI for protection.

So the way I see it... PMI is a

• Ripe off
• Liar
• Of no benefit
• Catch 22
• Let down
• Or have a bad case of "we forgot our purpose"
• And so on.....

Although this is not a new problem, it is a real problem that still needs to be given the highest attention. Its summer, children are out of school and they love to swim.

So maybe you do not have a swimming pool in your yard but what about the property that is either on the other side of the fence or right down the street, where the gate is not locked or the fence is not too high to climb.

The property is vacant, the pool is full or yuky dirty water, with polluted water and possible it is a mosquito den or worst. Make sure you know where you children are and that they are not over in the foreclosed home’s yard planning on using that pool to take a swim or just playing around the pool and accidently fall in. With the high number of foreclosed homes in any given neighborhood, there are plenty out there with swimming pools. It is a fact that most do have water in the pool and some do not.

If the pool is emptied:

• it will cause structure damage to the pool – especially in this heat.
• If the pool is empty it can pop up and break open.  

If the pool has water in it -->>

• is it clean or is it infested?
• it can breed mosquitoes which can bring on virus.

Although it is not clear who is at fault if a pool is left in the polluted and unsafe manner: That can end up getting sued for any death or health issues.

• it can be the Bank (owner)
• The previous homeowner
• The real estate agent
• Or all the above

So it just makes sense for the real estate agent

• to let the bank know about the pool and its condition and
• to request approval for pool service,
• lock the gates to the pool and
• make sure it is safe.

Of course, this alone does not keep the children from going over the fence and getting to the pool and that becomes the parents responsibility.

Check out our website and find tips for BUYERS and SELLERS - Find some valuable information on ( Short Sales, Bank Owned Properties, Latest Loan Modification programs - including Foreclosure Alternatives Program to help prevent Foreclosure). I work with my daughter (D'Adrea Davie) as the Mother and Daughter Real Estate Realty Team at Family Realty Group and we have the latest information for the Loan Modification program & FAS (Foreclosure Alternatives Program).

Our aggressive marketing plan includes on-line listing advertising.

• Mother and Daughter Realty Team Website
• Mother and Daughter Blog

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If you are thinking of Avoiding Foreclosure, Short Sale or Buying a home in Northern California's Central Valley (San Joaquin, Alameda, Contra Costa and Stanislaus Counties - includes Stockton, Manteca, Tracy, Lathrop., Salida, Ripon, Modesto, Lodi, Hayward, Castro Valley, Union City, Fremont, Newark, Livermore, Pleasanton, Dublin and all surrounding cities). Call us at 866-543-0461 or email US (go to our website and email us).

I don't think this is new - News- but it is true.  If you are in mortgage trouble or foresee that you will be in mortgage trouble, you will need to bite the bullet and contact your mortgage lender as soon as possible.  Just know that they are a debt collector.  If you didn't know that or had some idea that they are your friend.... Remove that kind thought and just go on and call them, answer their questions and see what options they have for you in order to help get your mortgage payment reduced or tell you what other options they have to offer you.

Yesterday, I called one of my clients' mortgage lender and the customer service rep actually answered the phone,        " Good afternoon, this is Maria.... I am a debt collector!" so there is no doubt this is what they are.  She was polite, but believe me she asked me the questions that indicated that she was indeed trying to get more information on the homeowner so they could proceed with collecting on the debt they owned the bank!

I always tell them I do not have the homeowner's phone number just because I feel that is something the homeowner should give out.  Why? Because once they get your (say cell phone number), they have a routine recorded caller that will call you 2 or more times a day!

So homeowners should give their home number instead of their cell phone number --- especially if they are on limited minutes on the cell phone.

So keep this in mind.... Your bank is not your friend - they are a debt collector and they are good at it.

Check out our website and find tips for BUYERS and SELLERS - Find some valuable information on ( Short Sales, Bank Owned Properties, Latest Loan Modification programs - including Foreclosure Alternatives Program to help prevent Foreclosure). I work with my daughter (D'Adrea Davie) as the Mother and Daughter Real Estate Realty Team at Family Realty Group and we have the latest information for the Loan Modification program & FAS (Foreclosure Alternatives Program).

Our aggressive marketing plan includes on-line listing advertising.

• Mother and Daughter Realty Team Website
• Mother and Daughter Blog

↑ Grab this Headline Animator

If you are thinking of Avoiding Foreclosure, Short Sale or Buying a home in Northern California's Central Valley (San Joaquin, Alameda, Contra Costa and Stanislaus Counties - includes Stockton, Manteca, Tracy, Lathrop., Salida, Ripon, Modesto, Lodi, Hayward, Castro Valley, Union City, Fremont, Newark, Livermore, Pleasanton, Dublin and all surrounding cities). Call us at 866-543-0461 or email US (go to our website and email us).

HUD is changing the guidelines for condo projects and existing condo owners who want to get approved for FHA financing.  When the condo is approved - that means the buyers can purchase with a FHA loan.  Right now if the condo is not FHA approved the lenders are doing what they call a Spot Approval and being able to use the FHA loans.  Effective October 2009, the guidelines are changing - Major Guideline changes.  The major change is the Elimination of the Spot Approval Process

What does this mean to the buyers - to find out, while in escrow, that the condo is not FHA approved?

• This can delay or stop the closing.
• FHA will not loan the money if the property is not FHA approved

What types of condominium developments does it affect?

• Proposed/Under Construction;
• Existing Construction; or
• Conversions.

How can you find out if a condo is FHA approved?  (go to: https://entp.hud.gov/idapp/html/condlook.cfm) or click here

Here are the guidelines:

FHA loans have historically allowed lower income Americans to borrow money for the purchase of a home that they would not otherwise be able to afford.  FHA loan is a federal assistance mortgage loan in the United States insured by the Federal Housing Administration. The loan may be issued by federally qualified lenders.

Effective this coming October 1, 2009, this Spot Approval is being eliminated. But the ramifications are going to start being felt right away. The details are outlined in the Mortgagee Letter 2009-19 that was issued on June 12th by HUD. In this latest Mortgagee Letter FHA is announcing dramatic changes to their Condo Approval Process and the ELIMINATION of the Spot Approval Process. While these changes reduce the documentation and requirements for Full Condo Approval, it will place a lot more work and responsibility on Lenders.

Agents get ahead of the game for your buyers and do some research to see if the condo is FHA approved.  Also, doing this prior to listing would really help and then put it on MLS.   

After this change is into effect - The Lender will have 2 options:

1. HUD Review and Approval Process (HRAP).
2. Direct Endorsement Lender Review and Approval Process (DELRAP), outlined in this Mortgagee Letter. This option is only available to lenders who have unconditional Direct Endorsement authority and staff with knowledge and expertise in reviewing and approving condominium projects.

This should be checked out early on in the transaction to allow time to get it approved or to advise the buyer that their FHA loan is not going to work.

Stockton: here is the list of condos that are FHA approved:  https://entp.hud.gov/idapp/html/condo1.cfm