REALTOR Jeero

A Wall Street Journal article echoes our resent experience in our market area with entry level homes. We are seeing more competition from buyers, multiple offers, and disappointment when buyers don’t get their offer accepted.

Click the link below to read The Wall Street Journal article.

Borrowers with hybrid adjustable-rate mortgages - loans that carry a fixed-interest rate for a certain number of years and then reset annually to rates tied to market benchmarks - are questioning if they should refinance to lock in a low rate for the long term, or if they should keep their adjustable-rate mortgages, currently at interest rates lower than their initial fixed rates.

Some mortgage experts say it's best to refinance out of adjustable-rate mortgages if the borrower plans to live in the home for more than two years. Adjustable-rate mortgages are tied to myriad indices, and today's low rate could jump as the economy recovers and inflation kicks in. The increase would result in borrowers paying more in the long term for an adjustable-rate mortgage than they would if they refinanced into a fixed-rate mortgage.

California Association of REALTORS

I am beginning to see an ugly side of the real estate turnaround. There's an epidemic tainting real estate sales. Listing agents are cheating sellers and buyers by manipulating offers. Agents across the country are complaining about their unethical counterparts' practices!

A couple of our buyer clients, both families, have to buy ASAP and we have been seeing houses and submitting offers as fast as possible. Multiple offers are again the norm. "This is good and bad," said a local mega agent colleague when I asked him about the seemingly overnight turnaround. The good is obvious, and I ALWAYS write about the good. That's my nature! However, because it is imperative that consumers are aware of what is happening, this blog is about the bad! Please allow me to re-create one of our resent experiences.

We submit an offer on a property that, per the agent, has been approved by the bank for a short sale. Understanding the market, the buyers agree to offer more than the bank's approved short sale price. The agent prefers e-mail offers and we submit ours on a Friday. I call to ask if offer has been received and agent says "I'm sure I have. I will call you if not." Monday afternoon I follow up and agent says they never got our e-mail and have accepted another offer. I say this is unacceptable and the buyers want an explanation. Agent begrudgingly agrees to present our offer to the seller, and then e-mails back to say that the seller accepts the other offer. I ask why? Agent says the seller nets more with the other offer. I ask who submitted the other offer, and agent asks "Why do you need to know that."

I need to know that because the bank, the seller, and our buyers have a vested interest. If you were the bank and the seller, wouldn't you counter all parties soliciting a best and final offer? Can you imagine a bank or the investor leaving money on the table when they are already taking a $200,000 hit? The agent either did not submit our offer, or steered the seller towards another that is in agent's best interest!

A second breed of corrupt agents work another way; they are invisible! They place a property in the Multiple Listing Service, and if possible, not the one in the area of the property listed. They often don't provide photos of homes, and they offer a telephone number with a voice mail box that is usually full. You are more likely to get a call from the International Space Station. This just in...Now some of these agents refuse to give you a phone number. E-Mail only please, and then they don't reply to e-mails!

So, sellers and buyers, I ask you: Do you want these agents representing your interests?

CA Civil Code Section 1102.3 states that "the general laws of agency require a real estate agent to disclose to his or her principal any material fact the agent knows (or should know) which will affect the principal's decisions in a transaction. In this regard, a good policy is: when in doubt, disclose.

Further, California Department of Real Estate law requires MLS regulations to define presentation of offers. These regulations state that unless Instructed Not To by a seller, a listing agent must continue to submit all offers to a seller until transfer of title and the close of escrow.

Here is what I would do a Seller or Buyer:

Interview REALTORS® and work with one that promises to work for you. Obvious? It is the law, but so is the 65 MPH speed limit. Ask for testimonials and contact them. Be engaged and involved in the transaction. Sellers: Demand to see all offers. Agents are required to present all offers to you until escrow close or you instruct them not to. Remember if something goes wrong, you are liable!

If you suspect misconduct from a real estate agent, click on the link below and file a complaint with the CA Department of Real Estate.

CA DRE Complaint

Dear Real Estate colleagues:

I responded to a post today and used language that may have been misconstrued. Although the subject matter was unethical real estate practitioners, the post was inappropriate. The original post used the word ‘maggots' to describe the unethical and predatory lenders, and although some people in our industry deserve the title, it is inappropriate for the rest of our colleagues that are lenders.

Like I said earlier, each of us must uphold the highest possible standards to protect and serve our clients. The best way to run the unethicals out of town is to report illegal activity and to not work with them. Be Well!

What do we make of the resent mixed optimism of the real estate housing market? During the last two years, you could not blink without seeing a media blitz of bad news about the housing market. Not so this month! For the first time in a while, both the media and some consumers are being cautiously optimistic...cautiously!

Yes, there are huge challenges with the economy, and the recovery will take a while, but how can we be anything but optimistic? Should we put our heads in the hole and wait? Those who do, will miss likely the greatest opportunity of our lifetime to buy real estate. When real estate values were going up faster than we can measure, buyers were lined up overpaying for properties. Now, when deals are available and we have historic low interest rates, some buyers are still on the fence. My message to those buyers is simple: It is impossible to time the bottom! We will not know when bottom was until the market has turned the corner. When that happens, you will compete with more buyers, pay more for homes, and likely pay higher interest rates.

Am I an optimist? Bet your farm on that! There is no fun, joy, or opportunity in pessimism!

Read the article in Business Week that has some good information and data about cautious optimism. Click this link: Business Week: Signs of Life From the Real Estate Market