Israel Barden

Like most other professions, in real estate, experience makes a world of difference. Lately I have come across several potential deal killing situations that I have been able to turn into windfalls for my clients. If the same situations had occurred at the beginning of my career, the outcomes may have been much different. The experience I have gained over the years has given me the ability to find solutions to problems that would have been insurmountable for an inexperienced Realtor. In the next section, I will provide a few examples.

1. Faulty Construction – Recently I had a property in escrow that had several major issues turn up during the home inspection. The most serious of which was the fireplace in the master bedroom seemed not to be properly supported in the subarea of the home. Due to my suspicions, I went to the building department and viewed the original plans for the house. As I suspected, the plans showed the fireplace was supposed to be built in the north east corner of the room and instead had been built against the far south wall. How this slipped by the County Inspector, I’ll never know, but the floor was not properly engineered to support the weight of the fireplace the way it was situated in the room. With this information I was able to get the seller to come down $100,000.00 off of the agreed purchase price. It cost my client far less to have the work done to properly support the floor. In short, he saved many thousands of dollars because I was able to ascertain there was an issue and then was able to properly negotiate a satisfactory amount off the price to make the deal go through.

2. Low Appraisal – Due to the Home Valuation Code of Conduct we have experienced a rash of bad appraisals up here in Big Bear Lake California due to incompetent appraisers taking assignments in areas they have no business working in. In many cases a low appraisal will destroy a deal faster than anything else. However, in the right situation, a low appraisal can be of great benefit to your client. I remember the first low appraisal I was confronted with back in the day. I and my buyer were both panicked over it and I went to work right away requesting a reappraisal to try to get the value closer to what it was worth. One thing you learn very quickly is appraisal companies almost never admit they got an appraisal wrong. It makes them appear incompetent, especially if it occurs in an area they have no business being in. The last time it happened, I went to work right away finding comps that supported the lower value on the property. Once I found them, I packaged them together along with an addendum lowering the purchase price to the price the appraiser came up with. In many instances a seller will lower the asking price to the appraised value due to the fact that the next buyer will, in all likelihood, run into the exact same appraisal issues as your buyer. The last time this happened, my buyer ended up getting $20,000.00 off the agreed upon purchase price.

3. Short Sale Success – Dealing with short sales is definitely one of the most trying issues facing new agents in the business. They are very tricky and filled with pitfalls for the inexperienced Realtor. I have come to realize that the most important thing for a seller in this situation is to get a warm buyer to start the process. Many times the bank won’t even talk to you unless you have an offer to present. As the Realtor, it is your job to price the property at a price that will bring in a great deal of attention from buyer’s and still have a good chance of being accepted by the bank. Even if the first offer is rejected by the bank, you will have started the process and know exactly what amount it will take to get the deal closed. If you are representing a buyer, the most important thing is to counsel patience and let them know to be prepared for the bank to ask for more money and to reject things like termite work and home warranties.

These are just a few examples of the ways an experienced Realtor can be a great boon to buyers and sellers engaging in real estate transactions. As a consumer, it only takes a little time to google a potential Realtors name and find out what other people have to say about them. Don’t be afraid to ask for references and never use somebody attempting to work outside their area of expertise, especially in an area like Big Bear Lake. If you do decide to use somebody new to business, make sure they have great broker support and work for a reputable firm.

Originally Posted At www.mypropertysolution.com

It is a well-known fact that it is a buyer's market. Due to high inventory and low prices, buyers can usually count on being in the driver's seat. But this is not always the case. There are many situations in which a seller will be difficult to work with or actually be in control of the transaction. If you are a buyer and run into any of the following scenarios, be warned that control may have shifted.

•1. The home you are interested in is new to the market. If a home has only been listed for less than a month and it is priced well, the seller may not be inclined to consider anything that is not close to full price. In many instances, the seller will feel like they need to give their price enough time to see if it works. It can be very frustrating if the home is overpriced but a perfect fit for the buyer. As a buyer you never want to over pay but it can be very stressful waiting for a price reduction, all the while hoping somebody else doesn't come along willing to pay the high price.

•2. The home has been on the market for a long time without any price reductions. This is a sure sign that the seller is convinced his property is priced right and he is willing to sit on it as long as it takes to get it sold. This is common in instances where the seller owns the property outright and is not burdened with monthly mortgage payments. In some cases, the seller is simply delusional and refuses to see what his home is really worth. These sellers are very difficult to deal with for both the buyer and the sellers Realtor.

•3. Your first offer is met with either no counter or a very low counter. If you make a bid on a property and the seller refuses to even respond, chances are they are not ready to come down very much off the price. Of course, if your first offer was ridiculously low, the blame lies with you. I am talking about an offer that is not less than 15% off of the asking price. If you make an offer within 10% of the listing price and they don't respond or only come down a very small amount, you can be sure you are dealing with a seller prepared to drive a hard bargain. It is up to you whether you want to continue or start looking elsewhere.

•4. Bank Owned listings are very difficult to lowball. You would think it would be the opposite, but it's not. In many cases, the banks price the properties to sell and because they are already priced low, they will not come down very much off the price. Even if an REO property is overpriced, the banks would rather just wait a month or two and then lower the price than take anything much below 5% of the asking price. I have had personal experience where I presented the same offer every month, for four months in a row, before the bank finally accepted it. Since Bank Owned properties are usually priced fairly well, you can get a great deal most of the time.

•5. Keep in mind, if you manage to get into escrow in any of these situations, the seller will most likely be very uncooperative when it comes to making repairs. In almost every instance I have been involved in, the seller will not want to make any repairs or help out in any way. They usually feel like they are giving the property away and refuse to pay anything to get the home in better shape. This is not always the case, but it something as a buyer you need to be aware of.

One strategy I have seen be fairly successful in these situations is to make a good offer and then walk away if the seller is not willing to bend. In many cases I have had the listing agent call after a week or so to see if my buyers were still interested. Oftentimes, the seller will not get another offer right away and will start to second guess themselves and start to think that maybe they should have not been so hasty in rejecting the offer. In many cases, the first offer is the best offer and the longer a home remains on the market, the staler it becomes. The most important thing for a buyer looking for a good deal is to be able to walk away from something that does not benefit them. If you are too eager, you will play right into the seller's hands.

Originally published at www.mypropertysolution.com

Believe it or not, the real estate market in Big Bear is very competitive at this time. Like every market, there are good deals and there are bad deals. If you are in the majority of buyers who are looking for a great deal, you need to have all your ducks in a row before you will have any chance of success. If you take the time to make sure you have everything in order you will have an excellent chance of beating out anybody else who has not done the same.

•1. Make sure you are preapproved before you start seriously looking. When you make an offer, having a preapproval letter gives you instant credibility and a definite advantage over a buyer who doesn't have one. Most banks won't even look at an offer on a bank owned listing if the buyer is not preapproved. Most importantly, it lets you know exactly how much you can spend and what that credit will cost you.

•2. Find a good local Realtor you trust. This one is right up there with the preapproval letter. A local Realtor who knows and watches the market is an invaluable asset in your search for the right property. There are many out of area agents who will try to tell you that they can do just as good of a job as a local Realtor. If anybody tells you that, turn around and walk away because they are not being truthful. I study this market every day, all day long and it is all I can do to keep on top of things. There is no possible way somebody who does not service this area can even do half of good as a job as somebody who is a local expert. A local Realtor watches the market and can let you know the second a property that matches your needs becomes available.

•3. Time is of the essence. When a great deal hits the market, it is imperative that you are ready to snatch it up ASAP. Sun Tsu said "The acme of skill is to win a battle without fighting." This is especially true in real estate. If you can make a great offer and get it accepted before another buyer has a chance, you have just saved yourself a great deal of money. Nobody wins in a price war.

•4. Do your homework! 90% of buyers start their search on the internet, and you should too. Going on line and studying the listings in the area you want to buy is a great idea. It not only gives you an idea of what is available, it also allows the ability to get a good grasp of the local market. Once you see what things are selling for and what is actually selling, you will become an informed buyer and better able to make a good decision.

There are always stories about how somebody, somewhere, got lucky and landed the deal of the century. I am a big believer in making your own luck. By being prepared and doing your homework, you will be amazed at how lucky you can get. I would love the opportunity to earn your business and put my local knowledge to work for you. I can be reached at izzy.barden@gmail.com or 909-273-8980.

When it comes time to negotiate, most folks are conditioned to believe that there are immutable rules that must be followed. What immediately comes to mind is a merchant's stall in Morocco where the buyer and seller smoke a hookah together and banter back and forth until an agreement is made. The seller always starts high and the buyer always counters low. Then the seller comes down a little and the buyer comes up a little until they reach an amiable agreement that benefits both sides. The buyer leaves with his new rug feeling like he got the deal of the century, while the seller chuckles to himself about the rube that overspent on a rug he bought at wholesale. In today's real estate market, it is not that simple.

As a matter of fact, this kind of thinking can have very negative consequences in today's market. It seems like almost every buyer I work with starts out with this mentality and it is very hard to get them to change their way of thinking. Even when a property is priced perfectly, most clients have this idea that they need to start low or they won't be giving themselves the opportunity to make the best deal. They don't want to beak the sacred laws governing the whole process of coming to an agreement. In many cases, this is the wrong approach entirely. You have to take into account the consequences of not acting quickly to wrap up a property you really want to buy. By coming in too low, you will actually cost yourself money. By not putting your best foot forward, you are giving another buyer the opportunity to put in an offer and force a best and final situation. Even worse, if your initial offer was weak and your competitors offer is strong, they may just discount your offer entirely and choose to deal directly with the other buyer. Even though you are willing to go higher, you might not get another shot.

In order to be sure you will get a fighting chance, you need to write an offer knowing that your first offer may be your only shot at buying the property. I always tell my clients to make sure their first offer is something that has a chance of being accepted. If the house you want to buy is priced correctly and is a good deal, a full price offer is always a great way to go. You can wrap the house up right away and take any other buyers out of the equation. I can't begin to tell you how many times I have had buyer's try to cut a couple of grand off a house they really wanted to buy, only to end up having to spend thousands of dollars over the list price because they didn't listen to me. It is even worse when they lose the house entirely to another buyer because the other buyer came in strong and didn't try to nickel and dime the seller. If you want to buy a house that nobody else is remotely interested in, forget everything you have just read. If you want to buy a property that is well priced and will probably garner a great deal of interest, remember that, sometimes, your first offer should be your best offer.

I just wanted to take a minute to tell everybody out there about how great Homepath lending really is. I have sold six properties this year with the Homepath program, and they have all been very easy transactions. For those of you who have never heard of it, Homepath lending is a program offered by Fannie Mae on select bank owned homes in their portfolio. With the utter lack of programs designed to help buyers get into homes with a low down payment, this can be a godsend to buyers.

One of the main benefits of the program is a low down payment. Qualified first time or primary home buyers can get in with as little as 3% down. Second home buyers can get in for only 10% down. Another huge advantage is the fact that Homepath does not require an appraisal on the subject property. With the huge amount of incompetent appraisers blowing deals in our area, this is fantastic. Since appraisals can range anywhere from $300 to $600 dollars, this is a big savings right off the bat.

Homepath borrowers also are not required to pay PMI insurance. If you don't know what that is, it's a monthly insurance premium that mortgage holders force homeowners to pay if they put less than 20% down at the time of purchase. This also is a big savings. Which is usually around $100.00 a month. Homepath also will usually contribute towards the buyers closing costs. If the offer is written correctly, that is.

To find out what properties in your area qualify, go to www. homepath.com and type in your information. A list of all the Fannie Mae properties will appear, as well as information as to which ones qualify for the program. For help with Big Bear properties I recommend Martha McKinley at Guild Mortgage (909) 866-6856 to get you preapproved with a homepath loan. After that, contact Joe or me to get an experienced Realtor in your corner. We both have a great deal of experience with these properties and would love the opportunity to use it for you.