Greg Nino Houston Texas

My last post was about our current trip here to Galveston Island. Many of the Island's landmarks, famous hot spots & historical buildings are still damaged or in complete ruins. Above is the once famous Flagship Hotel. Stretching out 1000 feet with over 300 rooms it's better known as the USS Flagship. A passerby told us the owner and leasholder have been having legal issues which has prevented any restorations. It's scheduled to reopen in 2010. I for one hope they completely redo the hotel from the pier up. Galveston needs all the uplifting & improvements it can get.

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One of several very popular fishing piers dismantled from Ike. I remember fishing off of this one as a kid and later in High School. You can see the obvious break between..

Here's the beginning of the same pier. Notice the leaning concrete pillars & hanging wires.

This pier is also scheduled to be rebuilt in 2010.

YIKES! Check out that truck! We suspect this truck was lifted up & over the actual fencing on either side.

Not all was disappointing. Preston bought a pet snake and got to see the beach for the first time in his little life.

Last but not least... Mommy & baby Alyssa.

Our Toy Poodle - Ginger has almost overnight grown this on her back. The brown color is really strange considering her hair is an off white and always has been. Cara & I joke, referring to her as our Jesus Poodle.

You be the judge:

 

 

Recently I received an offer from a buyer's agent who presented it with a contingency document. They don't teach you much about Contingencies in Texas Real Estate School. Unfortunately for the public, its simple understanding comes with experience and usage.

Imagine listing your home for sale, then getting an offer which is then executed (all parties have signed). After negotiating inspections you are faced with the challenge of moving out and finding a new home while you still haven't closed on the house you currently own. How do you do this?

A single document known as a contingency or it's actual name: Addendum For Sale Of Other Property By Buyer, If executed correctly, prevents you from owning 2 houses at once.

1. It informs the seller (the home you want to buy) that you have to sell your home BEFORE you close and fund on their home.
2. You must obtain proceeds from the home you are selling BEFORE you will buy the sellers home.

This should be a simple document to understand, but for some agents, sellers and buyers it is not. The other two components involved in this document are:

1. Date
2. Additional Earnest Money Amount.

It is always possible for the SELLER to receive another offer in addition to the one they just executed with the buyer. Ordinarily (not in a contingency situation) this new offer, once executed would be identified as a BACK-UP contract and only used if the original contract did not close or if the buyer lost it's financing. In a contingency situation the seller has the opportunity to negotiate a new offer and potentially accept it. The seller must give you - THE CONTINGENT BUYER the opportunity to WAIVE THE CONTINGENCY first, however.

What does this mean? It means that your contingent contract is now being asked to no longer be contingent. On anything. If you as a buyer are VERY CERTAIN that your home that you are selling will close, than you have the option to DROP/WAIVE the contingency. If you do this, you are EXPECTED to deposit ADDITIONAL EARNEST MONEY. Imagine being the SELLER. If you as the seller are going to kick another offer to the curb you surely would DEMAND the original buyer put MORE money into the game. Right? I always ask for at LEAST $2,500.00 as a Listing Agent.

The additional earnest money + the original earnest money now gives the seller added financial compensation & security if the buyer does not perform/close.

Let's now discuss the date portion. Simple question: As a buyer who had to sell their home first before they bought a home, how much time would you need to decide if wanted to move forward or not? 1/2 day, 2 days? As a listing agent representing a seller I never provide more than 24 hours. Remember the seller has a pending offer! They don't have 5-7 days to wait!! The pending offers buyer(s) may just decide to move on.

As a buyers agent you would love to hold a seller hostage for say 7 days without depositing additional money. I always try. Does your agent understand a contingency offer?

And you thought Real Estate was so easy a cave man could do it.

Incompetent, Lazy & 1/2 Baked Realtors:

1. Don't make flyers. When they do, they print them in black & white on cheap paper and roll them up in an Info Tube. Usually the flyer is riddled with errors and words like "Nice Listing & Big Rooms." These flyers make better fireplace starters or barnyard torches than they do marketing tools.

2. Nothing makes a seller cringe more than to find out that their listing agent is always unavailable. When they do get a hold of their agent they answer the phone.. "Thank you for calling Wackenhut Lumber, this is Debbie." Ahhhhh, the sensational feeling of the part-time agent trying to survive is like a beautiful symphony with shouts of ahhhhhh, so annoying, ahhhhhh so irritating!

3. What about the buyer's agent whose been licensed for 9 years but has closed 10 transactions? These types love to trick prospects into believing that they have "years of experience." I love pulling their stats and sinking their battleship when competing, especially listings.

4. The "I don't work weekends Realtor" is probably my favorite. They treat our business as if it's a "hobby" instead a profession. I love these guys!

5. Then of course we have the one stop shop team of so called professionals. They salivate at the opportunity to originate your loan, find you a home, inspect it, and then close it at their title company. If they're lucky, you'll use their insurance company as they also have an Insurance license. Need a an A/C? No problem, they do that too. Just hand them the inspection report after they inspect it.

6. BAM! let's not forget about the super Realtor who promises to buy your home if they don't sell it. These guys really have devised a clever way to make more money off of ROPING in the listing leads! Let's think about this for a second....

A Listing Agent's NUMBER ONE JOB is to represent YOUR best interest - AT ALL TIMES! Not just "some" of the time.

Most, if not all of the time this tactic is by design created to reel you in and provide a FALSE sense of security. When you sit down with the listing agent to divulge your payoff, financial snapshot and personal goals it should be done with the understanding that it is CONFIDENTIAL INFORMATION THAT NO BUYER SHOULD BE AWARE OF! Lots of times these sneaky Listing Agents use this information AGAINST YOU if you consent to letting them buy your home. Furthermore, they conduct an appraisal (usually by somebody they know) that provides a "sales price." Often the Liting Agent has you agree to sell your home for 90% of this value. Don't forget about the 6% commission you get to pay. What about inspections you say? You likely will agree "in advance" to pay for ALL repairs as the listing agent will suggest that he or she cannot sell the home otherwise. In the end the only person that usually loses IS THE SELLER! The sad part is that it is 100% legal. Many greedy agents will use this tactic to obtain more listings over their competitors. The truth is that they rarely buy the listing. Often "you don't qualify" for one reason or another.

7. Discount Firms will always, always be here. Some of these agents that work for these companies are an interesting and fascinating breed to say the least. Many of them will sing that full time agents are not worth the money they're paid. Those that preach this, in my opinion, were not able to survive as a "full-service" Realtor. Instead of getting out of the business, they unite with other bottom feeders to trash those who have worked for years and years expanding their knowledge, experience and expertise. ANYONE can stab your yard with a sign, then disappear afterwards. Do it right, or don't do it at all. They don't care if they make $4.00 per listing as they work VOLUME, sort of like Fried Chicken and french fries.

8. Aunt Griselda who has a license, but rarely uses it is not worth splitting her commission with. The money you'll "get at closing" most likely will fail in comparison by the service, knowledge, experience that you DESERVE when buying or selling a home. Tell Aunt Griselda that you LOVE her cookies & pies, but you are about to make the LARGEST investment decision of your natural born life and you don't want to make any FINANCIAL MISTAKES THAT MIGHT RUIN YOUR RELATIONSHIP WITH HER.

9. AHHHHHHH The 61 year old agent who just retired from AT&T. This guy is pretty slick if you ask me. If he plays his cards right, you just might "ASSUME" he's been in business for a LONG, LONG time. In reality, he's got his IPHONE on his lap while your talking. (He's googling..... "HOW TO GET THE SELLER TO SIGN AGREEMENT") as you are talking about your home. You assume, he assumes, everybody assumes. YIPPEE!!

10. I really love the agents that over glamorize themselves. They advertise in "look at me" places like grocery stores & mall bathrooms. The results from these efforts is so tiny that it's considered nothing more than branding. The thing you should know is that these tactics are designed to GET LISTINGS, not buyers. Who do you want to hire as your listing agent again?

As an industry we have to appreciate these types, we really do. They're so easy to spot & point out. They make me, you and other worthy agents simply ... look better. All we have to do is ....not do what they do.

I hate to say that I am biased about any aspect of our business, but I am. I despise Bank Of America. In my opinion, they are the walking, talking shinning example of corporate greed and disgust. So why am I talking about the Bank of North America today?

When I receive an offer I always heavily screen the preapproval letter. It's my duty & responsibility to my seller, and I won't apologize to anyone for being tough about it.

You have to call the lender to:

1. Ensure you have an open line of communication. A working phone number, extension, email address and even a physical address. ->FULL mail boxes, P.O. BOX's for an address, & kids answering the lenders home phone don't signal SUCCESSFUL TRANSACTION COMING.

2. I always ask: "Has credit been pulled, have you looked at DTI? {Debt to income ratios}?" For those of you reading this that are not in Real Estate know that it's not terribly uncommon to receive a BOGUS pre approval letter!

3. I want to make sure the lender is competent, aware of the buyer's expectations and interest rate. An incompetent loan officer says things like: "I'm pretty sure everything will be fine, let me let you talk to my shift manager when she gets back from lunch."

4. If it is a VA loan or self employed borrower I probe even deeper. Many lenders will take on a challenge (just like anyone else) with hopes of winging it. I don't want ANYONE winging my seller. This is why they hire me, to shield them from these type of scenarios.

5. If Realtor and buyer have NO PREVIOUS relationship with the loan officer then I proceed with even more caution.

The problem with BANK OF AMERICA is that when you call the number on the preapproval letter it's to customer service. I have NEVER been able to actually get a hold of any one person who is working the loan. I always get passed from one extension to another! They NEVER want to verify, talk or even acknowledge that the buyer on the preapproval letter is their customer. {my experience}

In one transaction I worked & closed, neither the borrower OR the Realtor representing the buyer had a ANY idea who the actual loan officer was at Bank Of America. Originally, the buyer wanted to go FHA. 1 day prior to closing he finds out he's got a CONVENTIONAL ADJUSTABLE RATE MORTGAGE! The loan DID NOT close on time, his lock expired and my seller was FURIOUS. To make up for their error, poor customer service and pathetic excuse for efficiency BOA paid ALL of the buyer's closing costs and made an apology to the buyer. I learned the hard way that as a listing agent you HAVE to get working phone numbers and email addresses.

If a financial institution is TOO big to treat you like their favorite client then perhaps you're working with the wrong people. I always suggest to a buyer to consider working with the lender that the Realtor has a previous relationship with. My loan officer always answers his phone and never plays games with me, my clients, the title company or anyone else. Our relationship is strong and expectation isn't vague.

Lastly, you can get an approval letter on Bank Of America's website without ever TALKING TO A SOUL! THIS is in my opinion ABSURD!

Moral of the story? Be smart about who you work with. Never assume that because you have a checking account with some large financial institution that you are going to "be treated special." Just remember that the CEO of BOA allegedly bought himself a nice $35,000 TOILET after receiving federal bail out money - OUR TAX DOLLARS!