A while ago I penned a post Should I add Burglar to my Business Card after a round of issues with gaining access to a property. This week I discovered that other agents just leave the breaking and entering to their clients.
So here is the scenario. What would you have done?
My clients and I attempted to view a house that was #1 on our must see list. There were keys in the combination lockbox that worked one lock but not the other. Then I spied an electronic lockbox and discovered a different key inside. That key fit the backdoor locks but didn’t open the door. After all three of us tried to open the door with no success I put in a call to the agent (got VM) and we decided to head on to view other properties. When we didn’t get a return call from the agent we decided to call it a day and hopefully be able to see the property the following day.
On a whim, after grabbing a bite to eat my clients drove back by the property and saw someone coming out the front door. They stopped and said they had been by earlier with their agent but couldn’t get in. The agent said they couldn’t get in either with the keys but her client found an unlocked window, crawled in and came around and unlocked the door. The agent then handed my clients the keys and LEFT! Drove away, gone, bye-bye.
My clients called me and said “guess what we are in the house.” When they explained how they had gained entry I told them to leave. We figured out how they could lock the house for us to get back in and arranged to meet back at the property in an hour.
I don’t know if the other agent had tried the electronic lockbox so there might be a record of who it was but I’m shocked that an agent would just casually drop the keys to a property into two stranger’s hands and walk away without any concern whatsoever.
No matter how much my clients want to see a house I’m never going to resort to breaking and entering. I’m will never hand over keys to someone without an agent who just shows up at the door of a house no matter what their story. This agent can count themselves lucky that my clients did the right thing.
Combination lockboxes with the code in the MLS provide no way of tracking who has been in the property. This is eventually going to lead to a serious incident. Hopefully our local boards and the lenders who suggest the use of them will wise up and put a stop to the practice before it does.
| Discussion: 2 Comments »
How Did the Banks Get Agents to Shoulder the Load?
July 6th, 2008 Categories: Auctions & Foreclosures, Real Estate Ramblings
In Virginia when you sign a listing agreement with a seller it states that the “seller retains full responsibility for the property, including all utilities, maintenance, physical security and liability until title of the property is transferred to purchaser.” Seems simple enough or is it in today’s market?
When an agent goes to meet with a prospective seller to talk about listing their home it would never cross the sellers or our minds to suggest that we will have all of the utilities transferred to our name to make it easier for the owner. Nor would we agree to take on the responsibility for cleaning their home or keeping the yard mowed. However, every day lenders are asking agents to do this and agents are saying YES.
Why? We don’t own the property or have any financial interest in it and still agents are willingly taking on the financial burden just because the banks ask them to. Many agents I’ve talked to who handle a large numbers of foreclosures are shelling out thousands of dollars in expenses to maintain a property. In some cases reimbursements are slow and if work needs to be done they are required to call the lenders “preferred” contractor. If an emergency repair is needed and the preferred contractor isn’t available they risk not being reimbursed by the lender unless they can verify the gravity of the emergency.
On top of the out of pocket expenses, the listing agent often has to wait until the end of the transaction to find out if the lender is going to ask them to reduce their commission to help the lender meet their NET. How did this trend start? Was it one agent who said yes and then the banks began to play the other agents one against another for a cut of the business? Was it an entire brokerage that agreed to it and then everyone else had to follow suit?
If lenders require that the utilities be on (at minimum electricity should be on for safety reasons) then why don’t they set up corporate accounts with the major utility companies in the area where they have large pockets of foreclosures? Why don’t they have a direct 30 day billing cycle with their approved contractors? Why are they relying on agents to take on the accounting and financial burden of selling their properties for them?
The practice is contradictory to our own listing agreements and yet hundreds of agents across our area are willingly taking on the burden. It shouldn’t be a Realtors® responsibility to go into debt in order to sell a foreclosure listing. Wouldn’t it be better if ONE MILLION plus Realtors® would stand up and say “we’re mad as hell and aren’t going to take it anymore” and let the lenders take the responsibility of paying the bills on the properties they own?
| Discussion: 8 Comments »
Condo Special Assessments-A New Twist in Today’s Market
July 3rd, 2008 Categories: Auctions & Foreclosures, Buyers Corner
When most people think of special assessments for condos they think major common area improvements. In the Northern Virginia area condo owners often see them when it is time to repair the balconies, upgrade the amenities or redo the lobbies but in today’s real estate market we also see special assessments for another reason.
Delinquencies and foreclosures are sapping associations of much needed income to keep current on the everyday bills. A few years ago condos in Arlington and Alexandria were flying off the market faster than they could be built. Unfortunately among the buyers who were excited about a new home close to the metro there was a large group of investors out to make a few dollars with a quick flip.
When the market made its dramatic turn the first properties to be hit were condos. Hundreds of flippers suddenly found themselves with units worth less than the paid for them even at pre-construction prices. So what is the first thing they stop paying? They stopped paying the condo dues resulting in large deficits for the associations. Associations in desperation to try and collect some of the dues hire attorneys to put liens on the condo in hopes of collecting some of the past due funds.
However this just adds to the money worries by larger legal bills. Putting a lien on the property isn’t going to do the association any good. When the property goes to foreclosure there isn’t any money to pay the back dues and the lender isn’t responsible for any past dues. When the property is sold the lender will pay the dues from when they owned the property but while it sits on the market the debt continues to rise.
For a buyer today looking at a condo purchase they need to pay careful attention to the association budget. They need to make sure that the see the latest budget that shows the real numbers. Most lenders will not pay a special assessment and a buyer could get a surprise after closing to find themselves with fees to be paid that they weren’t expecting. Today’s market is full of twists and turns. A special assessment because your neighbors aren’t paying their bills is a new one to watch out for.
| Discussion: 2 Comments »
This post strays from my usual posts geared to buyers and sellers in Northern Virginia. The information may be of interest to you as well but it is geared to other agents who may think that they have found a new niche in today’s market
I just finished reading the umpteenth blog on how real estate agents should be marketing themselves as short sale specialists in order to generate more business. As an agent who has successfully completed a few short sales and have a few more in the works it seemed this might be a good time for a reality check.
Going back over the call logs on my current short sale listings started me thinking of all of the other components connected to a short sale that an agent stepping into their first short sale may not consider.
Time spent gathering and reviewing the short sale package
Time on hold with the loss mitigation department
Time on the phone with the loss mitigation department
Time spent of the phone with the negotiator
Time spent of the phone with the appraiser/BPO agent
Time on the spent with agents answering questions
Time on the phone with buyers explaining a short sale
Time spent talking to buyer’s lenders
Time spent gathering HUD-1’s to go with offers
Time spent processing offers
Notice the list doesn’t include the normal tasks associated with a listing which are required in order to attract buyers. Those tasks need to be added on top of the time spent specifically on short sale tasks. Add on top of this the fact that lenders are notorious for slashing commissions at the end of the negotiations process and an agent working with a short sale may find that instead of making X commission they are only getting Y for all of the extra hours of work.
Considering the National Association of Realtors® shows that the average agent earns $35,000 per year, deciding to be a short sale specialist means an agent seriously needs to consider the old adage time is money. Agents, especially newer agents, who might be considering advertising themselves as a short sale specialists might first want to get out their calculators and figure out the value of their time. You may be surprised that the time it takes to finish a short sale transaction only leaves you enough to fill your car with gas and not much more.
| Discussion: 11 Comments »
It’s New, It’s Huge and It’s Extraordinary
June 18th, 2008 Categories: Focus on Prince William, Out and About
Our stomachs were rumbling and when we opened the refrigerator door all we found was a bottle of ketchup and a can of tuna fish. We were desperate and knew that the time had come; we had to make a trip to the grocery store. Our mailbox had been filling with coupons and store specials from some new comer to the area and we decided oh what the heck lets check them out.
So off we went for what we thought would be a simple run to the grocery store. As soon as we pulled into the parking lot I was ready to run the other way. But I was outvoted and in we went. It was HUGE. I’m talking MEGA. And it was crowded. I can’t remember the last time I saw that many people at the grocery store at one time. Especially on at noon in the middle of the week. Don’t these folks have jobs somewhere?
Could I find goat cheese? Yes about 10 varieties. Could I find seafood? Absolutely and some of it was not anything I had ever seen in this part of the world before. Vegetables including the “dreaded” tomatoes, with “it’s okay to eat these signs”, were front and center. The list of what you could find or not because the store is so big is incredible.
Despite my protests we managed to spent time checking out what we might want to eat should we want to get a bit more exotic than our easy and light summer cooking. The thought did cross our minds to pull up a chair at the seafood bar and have some oysters but we grew up with the mindset that you don’t eat oysters in a month without an “r” in it so we passed. Plenty of other folks were filling up the chairs both at the seafood bar and at the outside patio with prepared sandwiches.
So what is this new and extraordinary addition to Prince William County? It is Wegmans. Part of the new and upscale stores planned for the Shops at Stonewall situated between Route 1 and I-95 off of Nebesco Road. If the crowds at Wegmans are any indication of how long the residents of Prince William County have waited for the store to open, then the county planners have made the right decision.
It might take me a little while to get up the courage to fight the crowds again. In the meantime we have enough food to keep us happy for awhile.
| Discussion: No Comments »
What is Hot in Northern Virginia Besides the Weather?
June 13th, 2008 Categories: Auctions & Foreclosures, Buyers Corner, Focus on Prince William, Local Market Updates
Sales in Prince William County would be the answer. Sales may be stagnant in other parts of Northern Virginia but buyers are flocking south to Prince William to take advantage of the lower prices and great bargains in the area.
Check out the total sales comparisons between 2007 and 2008 in two zip codes in Prince William County.
So why the sudden interest in Prince William County? Obviously it is due to the significant price drop which has happened over the past year.
Neighborhoods in 22191 include both the newer subdivisions of Port Potomac, Belmont Bay, Rippon Landing and River Oaks. Older neighborhoods such as Georgetown Village, Marumsco Woods and Newport have been some of the hardest hit with foreclosures. Neighborhoods in 22193 include Dale City, Lake Terrapin, Winding Creek Estates and Pearsons Landing.
Does this mean that Prince William County is out of the woods yet? No as there are still a significant number of properties for sale and there is anticipation that more foreclosures will be coming on the market through the summer. However as new properties are listed the expectation is that we will see additional price reductions in certain neighborhoods in Prince William County creating even more values for savvy home buyers.
For investors, who are looking to buy and hold for a few years, and particularly buyers who are looking for a new home that falls well within the limits of a FHA or VA loan there are terrific homes and neighborhoods to explore. From the starter home in Lake Ridge to the luxury mansion in Haymarket you can find a deal in Prince William County.
If you are interested in exploring your options in Northern Virginia give me a call. I’ll travel the highways and back roads of Prince William County looking for a deal for you.
| Discussion: 5 Comments »
Another Get Rich Quick Real Estate Scheme
June 10th, 2008 Categories: Auctions & Foreclosures, Buyers Corner
This morning in one of those can’t sleep moments I turned on the TV and the latest infomercial on how to make a fortunate buying foreclosures was running. It was one of the many that the unsuspecting public hears everyday. The premise in all of them is the same. Approach a homeowner facing foreclosure and save them by buying their home for what they owe. To make them feel better about their financial situation tell them “you aren’t in foreclosure your house is.” Then you can turn around and sell the home and pocket an enormous sum of money in 30 days.
Anyone who has worked with a “pre-foreclosure” knows what is owed on the property is often more than the current market value of the property. So the idea that you can walk away a short time later with a profit is simply ludicrous. Second if the home is in “pre-foreclosure” in order to buy it at less than owed is called a short sale and it requires lender approval. The property is not being sold for pennies on the dollar but at today’s market value. There is no huge profit waiting for you when you lock up the property and there isn’t another buyer you can assign the contract to, the bank won’t allow it.
Now I’m all for anyone who wants to make money in this market. I’m an investor and am on the lookout for properties that would bring positive cash flow as an investment and a positive return on my money in the long term. In today’s market this is the strategy that is going to make buyers millionaires. It won’t happen overnight and it won’t happen in a year. It happens one property at the time over period of time. It is a strategy that involves finding a good value in an area where you want to live in or where you can see a positive cash flow as a rental property.The infomercial gurus aren’t getting rich flipping properties in today’s market. They are getting rich selling books and workshops. Don’t be misled about how to make money in buying foreclosures. Talk to an agent who is in the trenches in your area. Talk to a financial advisor or an accountant. Don’t buy into the infomercial hype. You could end up being the next homeowner facing foreclosure and when your house is in foreclosure you are too!
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One Bad Apple Doesn’t Spoil the Whole Bunch-Or Does It?
May 21st, 2008 Categories: Auctions & Foreclosures, Buyers Corner, Focus on Prince William
On a regular basis the local press focuses on the negative aspects of the current market in Prince William County. Buyers call to ask about the area and say we have heard the Prince William County is a “bad place to live.” It is an assumption that keeps many people from making an exploration through the great neighborhoods and communities that stretch across the entire county.
For those that aren’t familiar with Prince William County, the first thing to realize is how big the county is. It stretches from the Potomac River at the eastern border and to the west the start of the Blue Ridge Mountains. That is a total of 348 square miles. To put this in perspective Prince William County is about ¼ the size of the entire state of Rhode Island. To try and say that the entire county is a bad place to live would be a stretch of grandiose proportions.
So how do you put a “bad market” in perspective in a county as large as Prince William is? You break it down into small and manageable sections and then you start to decide if the market is really bad or is it a great opportunity for a smart buyer to find a nice home at a reasonable price? Every buyer has a choice to make. They can wait for the market to “hit bottom” not knowing where the bottom is, they can stay closer to town and pay more for smaller space or they can decide that a deal is a deal and look past the press.
In the past few weeks my buyers have found great deals in Prince William County, in neighborhoods that have been overlooked by other agents because of the “stigma” attached to the county. Buyers are not only buying foreclosures but they are also buying new construction and waterfront condos too. It isn’t an all or nothing proposition when it comes to what you can find.
So in the case of Prince William County the bad press makes potential buyers relocating to the county think that the entire 348 square mile area should be avoided. This is as far from the truth as still believing that the world is flat. With its rich history, diverse neighborhoods and substantial commuting options buyers need to consider whether they may be shorting changing themselves by not taking a look around. Don’t let the press scare you away. It might not be the place you decide you want to live but you might be surprised by what you find.
| Discussion: 2 Comments »
Over the last month my buyers have seen the rejection stamp from more than one seller. In fact it seems they are collecting them in larger numbers than they did in 2003. Of course then it was because the offer didn’t escalate enough to be the highest bidder. Now the rejection stamp is coming because the offers are deemed to be to low to be a fair price for the property.
Last July when the market showed that it was going to slide downward and the first indications of lowering values really became apparent I penned a post entitled “You Want to Offer me What?” At the time it seemed like good advice to sellers who had their homes listed at “above market” values. Today the advice is just as valid and perhaps with added twists that weren’t apparent then.
Neighborhoods where foreclosure properties are rampant, neighborhoods where the builder is slashing prices to sell inventory and homes that are surrounded on either side by mega mansions are just a few examples of 
where last years prices are not going to hold up to buyer’s scrutiny in 2008. And that is before the buyer opens the door to your home. Once a buyer is inside if your price doesn’t reflect the condition of your home you can see the calculators working in their heads. But you say I just added a fantastic Jacuzzi tub, new bathroom tile and freshly painted the house! Did you over improve the house for the value of the neighborhood? Sometimes you can go too far and the value of what you added doesn’t add up to an over inflated price.
No matter how you cut it this market is hard for sellers to wrap their arms around. However homes are selling. Buyers today are savvier than ever. They know the value of the home; they’ve done the research and with the guidance of a good buyer’s agent are making realistic offers. Sellers who understand this end up with contracts, sometimes multiple and they are able to move on. For sellers who are still holding out hope for prices from the past they are finding it easy to stamp rejected on an offer and wait for the next one. And wait and wait and wait.
So sellers before you pull out that rejection stamp take another look at the offer in front of you. It might be painful to see but it might also be closer to reality than you know.
| Discussion: 7 Comments »
An Optimists View Of Northern Virginia Short Sales
April 3rd, 2008 Categories: Auctions & Foreclosures, Buyers Corner
Yes Virginia short sales do get to closing. Is it the easiest route to homeownership? No the easiest way is to find an owner who is aware of the current market conditions in Northern Virginia and prices their home to reflect the market. Can a short sale work for buyers who are looking for a good deal and have patience to work through the process? Absolutely!
As an agent who has worked both sides of short sales there are some tips that I’ve learned along the way. For buyers who are considering making an offer on a short sale you need to be aware that no matter what you include in the Virginia Regional Sales Contract the lender will have their own addendums which will supersede just about everything you put in the contract. This doesn’t mean that you shouldn’t write a contract with the terms and conditions that meet your circumstances but it does mean you need to be prepared to be flexible about closing dates, inspections and closing cost credits.
If you are firm that it is your way or no way because this is a “buyer’s market” then a short sale will leave you feeling frustrated and angry. The processors handling short sales don’t really care about what you want. They are running the numbers to see how much they can walk away with at the end of the deal. It is strictly about the bottom line for them.
For agents who are thinking about making an offer on a property listed as a short sale there are a few key questions to ask before you write the offer.
Does the agent have permission from the owner to talk directly to the lender?
Has the agent been in touch with the lender and have appropriate contact numbers?
Has the owner completed the short sale package from the lender?
Has the owner prepared their hardship letter?
How many loans are currently on the property?
If more than one loan are they from the same lender?
Who is the lender (s)?
Have you done a pre-settlement statement for the lender?
How long do you estimate that the lender will take to provide an answer?
While buying a home listed as a short sale may be more time consuming in the end you will get a home a good price without some of the problems associated with properties already owned by the lender. If you are interested in learning more about purchasing a short sale or have a home that you are considering listing for sale give me a call. I’ll be glad to talk to you about the process and see how my team can help.
| Discussion: 2 Comments »