Karen Parsons-Fiddler Broker/Realtor

This is the most mis-understood aspect of the purchase. It doesn't make sense that a buyer is expected to know everything about a property in the 20 minutes they see it on a visit. Yes, they might write an offer after that 20 minutes, and hopefully have that offer accepted.....but then the time frame begins when they can really decide if it's the right house.

Certainly after the visit....they know that they like the layout and backyard, that it goes to the right schools and has a neighborhood pool...but there are many other items which goes into a satisfactory home ownership. Now is the time to gather the information to make the final decision.

First and foremost.....you have a loan contingency. To me that means we have final loan approval on a loan that works for them. Along with this aspect is the appraisal. If you read the blogs and articles out there you know that many appraisals are coming in very low in value. We never want to pay more than is fair market value for a home. So we need to make sure the appraisal comes through at our offer price. But during this time frame, we get all the data we need for the financial cost of the home. Taxes, insurance, mortgage insurance (if any), by the time you release the loan contingency, all the guess work has been removed and you will know the exact cost of the home....loan and closing costs.

Home condition is also a very important part of the contingency period. This can take many forms. First you should have a licensed home inspector do a thorough home inspection. This should include plumbing, electrical, gas, appliance, windows and doors, sprinklers....etc. Sometimes it also includes a mold inspection or structural survey. Whatever seems needed, we will investigate to determine the exact condition of the home....and that we are comfortable moving forward with this result. This might also be a time to get estimates for upgrades and improvements....if you find that adding that new room is out of budget, then this might not be the right home after all.

Other contingencies to our purchase offers are insurability and disclosures. If there has been a large water claim, you might not be able to get reasonable insurance, so we can back out of the deal for that. If the disclosures should a reoccuring plumbing leak....we need to get more information to determine if we want to go forward. Also if there is a Home Owner's Association, we need to read the Rules and Regulations thoroughly and make sure the conditions are acceptable. Noone wants to get rid of the family dog because an HOA only allows dogs under 15 pounds. An extreme example? not really....many condominium associations put a limit on the number and type of pet.

The main point is that the contingency time frame is there for buyer protection. We will have ample time to investigate the home and terms. Then we can make an informed decision. The offer is merely the first step in the purchase. And depending on what we do find out during the contingency period, we might need to renegotiate the price or terms. There is time for this. One very important thing to note.....in California, all contingencies are removed in writing, not automatically on the nth day. Never agree to any contract that allows for contingencies to "passively expire."

The holidays are here....and like many communities around the country, Mission Viejo has celebrations and holiday events our families. There are also opportunities to give to those less fortunate.

November 21, Saturday from 8am-5pm, 39th Annual Gift and Goodies Boutique:

The Boutique takes place at the Norman P Murray Community and Senior Center near Newhart Middle School off La Paz. 830-7066. I love this start to the holidays every year. I have found great food gifts and crafts. It's a good way to kick off your holiday shopping.

While you are at the center.....pick up an Angel Tag and purchase a gift for a senior who may be feeling alone this holiday season. We always remember the unfortunate children, but seniors are often isolated during this time as well.

Mission Viejo will also be beginning it's 37th Annual Holiday Home Lighting Contest shortly. Get your home ready for the holidays and you can drop off your entry at the Senior Center (while you shop) 830-7066. You must have your home decorated and entry turned in by December 4th and the final judging is the 9th. If you are just interested in enjoying these beautiful homes, you can pick up a map at the Senior Center beginning December 12th. Get your entry forms at www.mvactivities.com

Mission Viejo has many great activities....I will be posting them as the season progresses...my favorite time of year!

Happy Holidays!

I live and work in Mission Viejo, California. We are in the heart of Orange County and I see a healthy recovery in process for our real estate. In fact we are in a multiple-offer market with home selling very fast...often before we can even get out to see them. I am now getting phone calls and emails from buyers asking me to write the offer BEFORE we go see it. We will go out and see it once we get an acceptance.

Backwards!

Now, don't get me wrong.....I am happy to write an offer for someone I've never met who has driven by the home on their own, now if I can only get them to do all the paperwork while I lay on a beach in Hawaii...it will be perfect! :)

But I see loss in this situation. I see desperation in this situation. I see frustration in this situation.

As a Realtor...I now see a responsibility to help these buyers understand the communities they are offering in. The flurry of activity has taken the exploration out of home buying. I no longer get questions about parks and schools...but about timing and the number of offers, that's my job. The buyers should explore the neighborhood they could be living in....but often they don't.

In Southern California....we have some wonderful communities. Each is unique and tailored to specific lifestyles. We have family cities...like Mission Viejo, Aliso Viejo, Rancho Santa Margarita....these cities have great schools and sports programs, parks and pools. Then there are cities which are more adult oriented..like Dana Point and parts of San Clemente.

The point is.....I used to take buyers driving. We would see these ammenities while we look at homes. They would have the opportunity to see the lakes, and clubhouses and beaches. Now? They are so frantic to get into escrow, I'm not sure they even care where it is.

It took me a while to realize that this was the trend.....but last week we got an acceptance on a home where the husband had never even seen the house. We are in escrow and he asked if he could see it? Wow! When did this happen?

I know it's not my responsibility to educate buyers on the cities...but I'm going to take it on. I want my buyers happy in their new homes, I want to make sure this is a personal decision and it's treated personally. So......while we still might need to write offers before we see the homes, I'm going to include clubhouses and beaches in the home inspection timeframes.....at least on my checklist.

I'm going to start and end this blog post with this thought.....if you don't trust your Realtor, find a new one! Ok, that being said, let's go on.

This is an odd market. I can't remember a time when the news and information was so available, and conflicting. Buyers are hearing that it's a "buyer's market" and then being outbid on every offer. Sellers are hearing that there are "multiple offers on everything" and then sitting for weeks or months without a single offer. What is going on?

The truth is that EVERYTHING IS GOING ON.....ALL AT ONCE!

Home prices are historically low, interest rates are fluctuating moment by moment, and there are many people in the market buying and selling. It seems that the inactivity we've seen over the last 2 years is suddenly resulting in panic offering. At least on Short Sales and Foreclosures. Those are priced so ridiculously low that if any of them actually sell for about asking price.....they are a tremendous bargain. So when your agent tells you to bid higher than asking....do you? Do you trust your agent?

Sellers...why are you selling? Are you looking to use the accumulated equity to make a move? Ok, good! Then don't fire-sale your home. Will your home sell right now for a fair price? Maybe, maybe not. Are you willing to take a smaller profit on your current home to pay less on your future home? Maybe....the point? Talk to your agent and trust the advice. Resist the urge to get caught up in the fury, you are making a big decision and it's important to do it wisely and with thought.

The best advice I can give right now? Try not to be swayed by the media and the activity. Find an agent who isn't afraid to tell you a house is over-priced, under-priced or just a bad idea. As-is.....this is everywere! Is it a bargain to buy a house sliding down a hill? Of course not......trust your agent! Do your inspections....think this through.

Trust your agent, or find a new one!

Short Sales are so frustrating for everyone, but none so much as for the buyers.

When a home buyer writes an offer on the home, they often spend a sleepless night wondering, hoping, praying...."Will we get this home"? Normally the wait time is about 1-2 days and then they can relax and start planning for the move. Not with Short Sales......the "wondering, hoping, praying" can take months. How can we as agents make this any easier for our buyers?

I'm not sure I know!

The first thing is to know exactly where we stand with the listing agent and the Short Sale Negotiator. Are we the only accepted offer sent to the bank? Are we one of many? Do we have an open escrow? We need to be in touch with the listing agent to be aware of our standing. Based on the listing agent's approach, we can prepare our buyers.

If we are the only accepted offer, and there is an open escrow with a deposit.....we can be very comfortable that the bank is going to act on our offer and not see multiple offers. This is how I proceed with my listings and what I push for with my buyers. To me this just makes sense. The bank does not own the home, the seller does and it's up to the seller to find the best offer and then send a package to the bank for approval. But this is not the way many agents work. This approach provides some level of confidence for both buyers and sellers. The buyers know that no one is going to outbid them at the last minute, and the seller knows the buyer is committed and they can put the home in back-up and make some decisions.

A variation of this is when the listing agent only sends our offer to the bank and puts all others in back-up, but without an open escrow or deposit. I have a couple of Short Sales in this situation. The disadvantage is my buyers often ask if I BELIEVE the listing agent.....that we are the only offer they are working. It's tough, I am honest and find most agents are honest too.....but it's often hard to reassure the buyer who has waited several months. Over time, I do get emails asking what if the agent is "lying" to us.

In this situation we have to do more hounding of the listing agent for information and more reassuring to the buyer. It creates more anxiety! In preparing the buyer for this type of situation, we have to be honest and clear. The process takes a long time. The good news is that we are most likely the first, or close to first offer they have. That's why we are lucky enough to be the ONE accepted offer....but since the process is just beginning, we will also be in for a long wait. It can easily be 2+ months.

Helping our buyers understand what happens during this time is critical. The misconception is that a completed file sits on an overworked and under-interested bank representative who has no urgency to act on the case. Overworked? Probably....but certainly motivated to make decisions.

The Short Sale process is time intensive and it seems all the steps take 1-2 weeks. At least that's what we hear when we call to get status. Other posts are available to discuss these steps in detail....but the short is:

1) Short Sale package assembled and submitted

2) File is assigned to a lender negotiator

3) Lender negotiator orders the internal appraisal

4) Appraisal received and lender negotiator approves the offer

5) Package goes to higher levels for approval

6) If there is PMI (Private Mortgage Insurance), file goes to PMI investor to approve

7) If there is a second loan on the property, file goes to the second to approve

If one assumes 1-2 weeks for each step? One can see how this can drag on. As agents, we need to explain this in detail....and over-and-over again! Often!! Our buyers need to hear from us that we are still thinking about them and checking in. I think the black hole of waiting can be brightened by constant communication.

Set the right expectations....and then check in and let our buyers know we are monitoring the process and are still there for them.