Harvey Blankfeld

Last week we closed a short sale for client. That is not all that unusual anymore, but what is unusual is the way the bank let us do the short sale. Our client had to move to another city for her work. She has great credit and didn't want to destroy it. Upon having discussions with the bank we were able to convince them that it was in their best interest to allow her to sell her home and let her keep making her payments until it closed. The bank agreed.

We sold her home quickly and even had to adjust the price due to appraisal. The bank stuck with us and we closed the deal without a hitch. Our clients credit will not reflect any late payments and her FICO score will only be mildly blemished. She won't be able to buy a home for 2 years, but everything else in her life will be normal. No foreclosure, no bankruptcy and very little disruption.

As the banks adjust to our dramatically reduced markets, they are beginning to understand that short sales will be one of the elements that get us back to a more normal market. I don't believe that short sale is the right answer for everyone, but it will be the correct method for a lot of homeowners. As a homeowner you will have to demonstrate NEED. You can't just say that I want to sell this home because I overpaid. You must have a reason to NEED to sell your home. If that is the case, then the bank should work with you to get that accomplished.

The bank's punishing homeowners for their need to move in a down market will not serve anyone, but a homeowner saying I want out of this home because my neighbor paid less than me will not serve anyone either. We must all recognize that the market will eventually become more seller friendly, but until it does we need to be able to get people out of the homes when they NEED to get out.

I applaud the bank that took this approach and I am hearing that other agents are having similar successes. I hope that we see this trend continue.

I really have a genuine empathy for appraisers. I know that there job is difficult and tedious. I also know that they are currently faced with great challenges.

The currently downward market presents a challenge that seems to be insurmountable. When given the task of appraising a home that is currently occupied and in good or great condition, appraisers have a difficult time giving value to that home's improvements and it's condition. They must pull comparables and the vast majority of comparables are REOs. Those homes are in dis-repair and vacant and have lost significant value. Appraisers must also pull available properties in the market. Those homes also are mostly REOs and are also vacant and often in disrepair.

If a seller needs to sell in this market, they are faced with the fact that they must not only compete with foreclosures, but they must endure the indignity of dealing with an appraisal that won't give them enough credit for maintaining or improving their home. Appraisers are forced to perpetuate this downward market by not allowing sellers to have reasonable value given to their upgrades. I'm not talking about retail value for those improvements, I'm talking about a home with a pool, patio cover, new carpet, freshly painted, new air conditioner, new hot water heater, new stone counters, well maintained, and pridefully lived in only getting appraised at $12,000 more than a model match that was gutted and had none of those improvements. It had no appliances, no pool, no landscaping, etc.

The appraiser explained that his hands were tied. He had to use comparables that were deficient and couldn't give sufficient value to the improvements. The seller, that understands the market is down strongly, has no choice but to accept this appraisal, because the seller needs to move. The appraisal really can't be challenged, because of the strict new guidelines limiting access to them.

I believe that appraisers need to be kept independant of Realtor and lender influence, but I also believe that they need to be given the ability to think logically and utilize the skills they have learned over the years. If appraisers can't give appropriate value to condition or improvements, our market will be perpetually forced downward. That must end.

My clients have been asking me a lot of questions about writing offers on Bank Owned Homes. I want you to know that there is not just one way to do this. Banks, just like people are different. They each have there own methods and they each treat buyers differently. They all do have some similarities.

The similarities are as follows:

1. They have shorter time lines for diligence (you need to complete your inspections and your loan quicker).
2. They won't repair minor issues. This is a generality and they usually will repair the major items.
3. There is no contact with them over the weekend. Again there are exceptions.
4. They like simple deals. The more twists you ask for, the less likely they are to accept your offer.
5. They never take your offer as it is written. Every bank has their own forms. Your offer is translated to their form (addendum). This is why a lot of buyers will write on several bank properties simultaneously without fear of getting more than one accepted.
6. The listing agents have to translate your offer into a "portal". The "portal" is an internet site designed by the bank to simplify your offer into their terms.
7. They take different time lines to respond and often the response is not written. The banks ask the buyers to initiate their diligence without a formal written agreement. Here in Nevada that presents challenges to buyers and their agents. I haven't had any problems doing this yet, but as a buyer, you need to know that your costs of inspection and appraisal could be at risk if you don't get written approval. This can also work against the bank as until they give you written acceptance, you can back out of the deal.

Happy Hunting...There are great deals out there now, you just need to know how to find them and how to structure the offer to GET them.