Interesting times we are in. Yes, there are a ton of properties for sale right now. However, in my market, the homes that are priced right are selling rapidly and getting multiple offers. Especially in the first time buyer category, the competition from other buyers is fierce. Just ask poor Jake. I finally got a great home tied up for him but he made 8 offers before he got one..... and 6 of his offers were full price. I would spot a new listing in the morning. We would look at it over his lunch hour and write an offer. By the time the seller got home from work so I could present his offer, we had competition.
Maybe we should take that story to our sellers. The market is not bad. It is competitive. Be priced right and you will sell. You don't need to give away your home to sell it. Just price it competitively ( by today's prices not 3 years ago) and they will come. The importance of what we do is greater than ever now. We need to be honest to our sellers even when the messsage is hard.
Lets face it, a lot of people are losing their homes. Some through foreclosure, others through short sales. Sometimes the human element gets lost in the sheer numbers that are staggering to say the least. I look at each case individually and remind myself daily that these are not just sellers, they are people who are hurting. It is my job to help them through this difficult time with as little stress and trauma as possible. The following is some information I've gained through the many short sales and foreclosures I have worked on.
Why would I mess with a short sale versus just being foreclosed on?
If you are in a bad spot and behind on your payments, you probably qualify to sell your home in a short sale. By missing one or more mortgage payments, you have done damage to your credit score. However, if you get foreclosed on, the damage will be much worse. The goal is to minimize the damage to your long term situation which you do by participating in a short sale vs. being part of a foreclosure.
As a seller, what selling strategies should I consider if I am losing my home?
There are several things to take into consideration if you find yourself in this position. Many people choose to try and live for free as long as possible because that is the only economic benefit they will get out of their home. The key is to time things so that you don't sell too early, so you can live "rent free" for as long as possible and yet not wait so long that it ends up going into foreclosure. In this scenario, we usually price the home a bit high at first and then slowly reduce the price to a number that the bank will accept as the short sale value.
If you don't care about living in the home for free because you have another place to live, then we try to price the home so that we attract a buyer, but not so low that the short sale bank won't accept the offer. There is a fine balance between the two and an experienced Realtor can help you to choose the best option for your situation.
What pitfalls do I need to avoid?
It is very important that you understand that your credit will be damaged when you miss mortgage payments. This means that you may have a hard time finding a place to rent with your newly ruined credit score. In that case, sometimes you are better off finding a place to move to before you miss a payment while your credit is still good. You won't be able to take advantage of living free, but are assured a good place to live after the dust settles.
Pricing is also a very touchy subject. Too many people make the mistake of pricing their home too low. It may get you a quick offer but it usually means that after months of waiting for the short sale bank to respond, they reject your buyer's offer because it is too low. You could then find yourself out of time and will miss the chance to avoid foreclosure.
The most common mistake we see, is when someone hires a real estate agent that is not an experienced short sale negotiator. Though your friend or relative that sold you the home may be competent in many aspects of real estate, this is a highly developed specialty. Hiring the right agent is the difference between getting it done and ending up in foreclosure which has a devastating effect on your credit vs. the effect of a successful short sale.
I first got my real estate license in 1978 and am usually in the top 2% of agents in Clark County, Washington. I have a full time short sale negotiator on my team to make sure everything gets done right and on YOUR time schedule. Please call me for a personalized and confidential interview to decide the best strategy to help you through a difficult time. Because of the many people I have worked with through this process I have great empathy for you and your situation.
WHEN YOU NEED A GREAT REALTOR.....
WHAT ABOUT BOB???
Bob Bloom, Partner
Keller Williams Realty in Vancouver, Washington
360-607-5829
Everyone is talking about foreclosures and short sales! I can't tell you how often I get a call from someone who wants a "steal of a deal" and would like to look at foreclosure and short sale homes. In talking to them I find that they don't always understand the difference between the two. So, here's some information on short sales to help clarify.
What is a short sale?
When a seller owes more than his/her home is worth, it is considered a short sale because at closing they are "short" the amount needed to pay off their bank.
How can it close if there isn't enough money to pay off the bank?
The seller can accept an offer to sell "subject to the bank agreeing" to accept less than they are owed at closing.
Why would a bank do this?
If the seller is behind in payments and foreclosure is imminent, the bank may choose to get rid of the property at a loss. This saves the bank the expense and time of going through a legal foreclosure process. If they choose to foreclose, they still have to sell at current market value eventually.
Why would a buyer choose to buy a short sale property?
A lot of the homes currently for sale in the Vancouver/Clark County. Washington market are short sales, so being willing to consider them, opens up a lot more homes to choose from.
What is the downside to buying a short sale?
Just because the seller accepts your offer doesn't mean the bank will. It usually takes 30 to 60 days for the bank to respond to your "short sale" offer. After waiting for a long time there is no guarantee that your offer will be accepted and there is no way of telling ahead of time how long it will take before they will respond. It can be very frustrating.
What strategies should a buyer employ when considering buying a home that is a short sale?
The listing agent has 2 approaches he may use in trying to sell the home. Some agents believe that they need to represent the interests of the bank that is losing money. These agents leave the home for sale during the lengthy bank response time, thereby hoping to have multiple offers and create a "bidding war." If you choose a home in this category, cross your fingers and keep looking. If you find another home you like just as well and can get an offer accepted, you can rescind you offer on the short sale home.
Some agents believe they need to help the home owner who is in a bad spot and losing their home. In order to encourage the bank to respond quicker, these agents only submit one offer to the bank and accept any additional offers as a backup only if the first offer does not get accepted. In order to feel comfortable removing the home from the market, the offer needs to be one that they reasonably feel the bank might accept. In this scenario, buyers usually are willing to wait and see if the short sale offer they made is accepted because they know they are the only offer being considered.
How do I know how much to offer?
The bank is going to get 3 broker price opinions before they respond. If your offer is quite a bit lower than they could sell the home for if they took it back in foreclosure, they will reject the offer. If it is close to what they will get anyway and you can save them the hassle of foreclosure proceedings, they will accept the offer.
You will see homes for sale that are a much better deal than the others you have seen. If that home is a short sale, don't bother making a full price offer. Just because some idiot Realtor prices a home very low (below market) doesn't mean the bank will accept your offer. If you want the home, you should offer a price that is close to what the bank could sell it for after foreclosure or else don't go through the frustration of waiting and waiting for an answer. The bank will not sell it stupidly low if they could wait a couple months and sell it for quite a bit more.
Why would I want to hire you as my agent when I am looking to buy a short sale home?
As your partner in this process, we need to decide which strategy we will use. Many of my clients only make offers on short sale homes that the listing agent agrees to only accept one offer to submit to the bank. In that case, it is my job to weed out the 75% of short sale listing that don't fit this criteria. I call each listing Realtor and find out their approach so that we don't waste soooo much time messing with properties that will have multiple offers. Quite frankly, my clients never win the bidding war. It is a buyers market and you are supposed to get a good buy. You never get a great buy if you are the dumbest guy and bid the highest price out of 10 - 15 buyers who have submitted offers. In the local Vancouver/Clark County, Washington market, it usually makes better sense to not waste our time on properties that will have multiple offers and just zero in on those that we can get a good value on by having the seller only submit one offer to the bank. Of course that means we have to be first!
In addition and in order to be the first to make an offer, I search the new listings and those with a price reduction daily, looking for those that fit your perameters. You may hear it is a slow market, but the market is very fast for the homes that are priced right. You need to get the information daily and be willing to move fast to get the home off the market when you see a good one.
Since I have successfully negotiated a lot of short sales for my clients, I have learned some negotiation strategies that makes your offer look more desirable to the bank. Some of these include: size of the earnest money, preferable wording used in the "pre-approval" letter. time frames for certain trigger events, how to approach net vs. gross price, rescindable vs. non-rescindable offers, verbiage used in the inspection clause and more.
I first got my real estate license in 1978 and am typically in the top 2% of Clark County agents. I answer my phone and understand the need to be responsive when we spot a good one as well as during the long closing process. References are available. You can also check out my website for more information www.whenyouneedagreatrealtor.com
WHEN YOU NEED A GREAT REALTOR...
WHAT ABOUT BOB???
Bob Bloom, Partner
Keller Williams Realty in Vancouver, Washington
360-607-5829
www.whenyouneedagreatrealtor.com
I get questions all the time about buying foreclosures here in Clark County and thought it might be a good idea to address them here. There are a lot of missunderstandings about what they are and how easy it is to purchase them. I hope this information allows for some clarification.
What's the difference between a foreclosure (bank owned home) and a short sale?
A short sale is a home owned by an individual where they owe more than the home can sell for. In that case they may only sell with the short sale bank's approval to lose money. It usually take 45-60 days to get an answer from the bank to do that. Sometimes they agree. Sometimes they don't.
A foreclosure is a home that has been foreclosed on and the bank already has taken ownership. The response time for a foreclosure is usually 2-3 days and the list price is an amount that you know the bank will accept. Foreclosures are usually priced well because the bank wants to get the home off their books and get it sold as quick as possible.
How do I find a cheap foreclosure to buy?
A few agents specialize in foreclosures and it is important to find a good one to represent you. Because they typically sell fast, it is important to be one of the first people to be aware of the newly available foreclosure homes. There are also HUD foreclosures that require you to make your offer online. You need an agent to bid and because they have a lot of specific rules it is important to hire a realtor that has experience with these.
What are the disadvantages of a foreclosure?
Though the bank owned homes can be a good value, the foreclosure bank seldom will do any repairs. The home is sold "as is." That means you need to have someone advise you who has a keen eye for potential problems. Though you will still get an inspection, you try to avoid that cost if you can spot the issues ahead of time. Either way, when you find a problem, it is very rare that the bank will negotiate with you to fix it.
What do I do if the foreclosure (bank owned home) that I like needs some repairs?
Because people that are getting forclosed on are often very frustrated, it is not unsusual that they have done some damage to the home before they leave. Sometimes there are missing items such as appliances, fixtures or doors. There are 2 strategies in dealing with this:
1) If you can structure your offer such that you haven't used all your cash to purchase the home, you will have enough money after closing to pay for the repairs. It is a myth that there are no zero down loans available anymore in the Vancouver/Clark County Washington market. If you have the right realtor, he/she will direct you to this financing option. That way you can reserve your cash to do the repairs.
2) There are loans available that reserve aside in escrow the repair dollars needed. The bank just rolls those funds into your loan. If the price you pay for the home plus the cost of the repairs is an amount that is still a good value, you buy the house.
Most buyers don't know how to effectively implement these fix-up strategies. Therefore, you have less competition and can get a better buy if you are willing to deal with a foreclosure (bank owned home) that needs some work.
What are some of the tricks that will help me beat out the competition with my bid on a foreclosure or bank owned home?
There is a lot to the negotiation process with one of these homes. You would probably not use the same agent that might normally be referred to you by your friend. This is a real specialty and the knowledge only comes through experience. You need to make sure you deal with someone who has done this many times before. Since there are often multiple offers, it is very important to position yourself correctly. Some of the tricks include the verbage of the pre-approval letter, the words you use to alter the inspection addendum, the amount of the earnest money, time frames on certain trigger events, gross vs. net pricing, the timing of presenting the offer, as well as other little things that make the difference between making an offer and getting your offer accepted on a foreclosure.
I first got my real estate license in 1978 and have seen many changes through the years. If you are in the market to buy a home, whether you are a first time buyer or an experienced buyer, today's market offers you some fantastic deals. I am usually in the top 2% of all realtors in Vancouver, Washington and have a full time negotiator on my team that only deals with short sale banks and homes that are foreclosures (bank owned homes). Through experience I have learned several strategies that work. If you have more questions, feel free to contact me and I can offer the appropriate strategy for you to employ.
WHEN YOU NEED A GREAT REALTOR....
WHAT ABOUT BOB???
Bob Bloom, Partner
Keller Williams in Vancouver, WA
360-607-5829
I am absolutely committed to you and your real estate transaction. My role as your real estate agent is to guide you through the buying or selling process with the highest level of professionalism, expertise and service.
I first got my real estate license in 1978. I’ve seen the market grow and change and through it all the most important lesson I have learned is that people do business with those they trust. I would like to EARN your trust!
I pride myself on being knowledgeable and staying current with changes in the industry so that I can insure the success of your transaction. I utilize the latest technologies, market research and business strategies to meet your expectations. Equally important, I listen and that means I find solutions that are tailored specifically to you. You have worked hard to be able to purchase the home of your dreams. I feel the responsibility to make those dreams come true.
Please explore my website ( www.whenyouneedagreatrealtor.com ) and utilize the tools that have been put there just for you. Feel free to contact me so that I can find out how I can be of help to you.
I appreciate the opportunity to earn your trust.
Over the many years that I have been a Real Estate Agent I have "done it all." But in today's complicated real estate market I have focused my energies on first time home buyers, foreclosures and short sales. Let me explain why:
FIRST TIME HOME BUYERS: For many people, buying their first home can be highly stressful and even downright scary. Especially when they've seen the doom and gloom reported on the nightly news. However, THIS IS A GREAT TIME TO BUY! We are experiencing record low interest rates and the lowest housing prices in years. Plus, President Obama has made a Tax Credit of up to $8,000.00 available to qualified first time home buyers purchasing a principal residence before 2009. This year I have seen a lot of competition for entry level homes. In this competitive market, first time buyers need an experienced agent like me who is knowledgable about short sales and foreclosures. Someone who has strong negotiating skills and who has the patience to help educate clients on todays home market and the process of purchasing a new home. I have helped many clients purchase their first home and have greatly enjoyed the excitement they feel at the opportunity to learn and realize their goal of owning a home.
FORECLOSURES: Negotiating with the bank to purchase a foreclosed home can be a frustrating and confusing process. Buyers need an agent who understands the process and can get them their best deal. I have worked closely with banks and agents to ensure that my clients get the home of their dreams.
SHORTSALES: Sellers who are hurting need an agent who understands the pain and worry of losing their home. They also need an agent who can help them get the best price quickly, before housing prices fall further. Having an agent who understands the current values of local homes is crucial. You don't want to "follow the market down" and get less than you could have if you had priced it right in the first place. I do extensive research in order to help you price right and market your property to get it sold quickly. The worst thing someone who needs to sell can do in a real estate market where prices are going down is to follow the market down.
"I am a mortgage broker that does a lot of business with a lot of realtors. When it was time for me to sell, I chose Bob. I had him put "undisclosed" in mls under the owner's name so I wouldn't catch heat from all of my peers. Bob is the best."
"Our son is a realtor, but after much thought, we decided to work with an old pro. It worked out great to have Mr. Bloom as our agent."
"We felt Bob was honest, hard-working and did everything he said he would. We referred him to my mother, so I guess that means we were happy."
"As a mortgage broker, I know many realtors, but I chose Bob Bloom to list my house. He was great."
"I listed my previous home with Bob. I bought my current home from Bob. I've told him that when I buy again, he will still be my realtor."
"We bought a new construction home through a different agent which Bob had listed. By the end of the transaction, we felt as if Bob was our realtor. Next time he will be. We talked to him direct almost every day for three months. He was very helpful and made the process easy."
"Bob was great. One night after I moved into my new home, I panicked when there was water all over the floor in my laundry room. Bob was at my house in about fifteen minutes and found that the drain hose had just popped out. OOPS!! He didn't make me feel stupid and even seemed glad to help."
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
Powered by the ActiveRain Real Estate Network
© 2009 ActiveRain Corp. All Rights Reserved
