Brian Fenstermaker's Blog

Sellers mistakes when Listing a home for sale and responding to offers.

Brian Fenstermaker (Keller Williams Realty) — Fri, 27 Feb 2009 13:38:15 -0800

4 HUGE SELLER MISTAKES

Picking the Wrong Buyer

Now more than ever, sellers need to select their buyers carefully. As we mentioned earlier, thanks to all the defaults in the subprime market, lenders are tightening their lending practices, making it more difficult for consumers to qualify for mortgages. So it's critical to find a buyer with a recent prequalification letter (issued no later than four to six weeks ago) for a loan.

Next, watch out for buyers who need to add contingencies to the contract, including a clause stating that the deal won't close until they sell their own home. A better bet is to look for cash-flush first-time home buyers or someone who has already unloaded his existing house. In a slowing market it's difficult to estimate how long it could take your buyer to find someone to purchase his dwelling. And if that property doesn't go for as much as he expected, that person may no longer be able to afford your agreed-upon price.

Not Responding to All Offers

What if you get an offer that's simply too low? Don't reject it outright. See if you can negotiate. First of all, you can't blame someone for testing the market -- after all, in today's market, many buyers are confident that they have the upper hand. Secondly, by entering into negotiations with one party, you'll gain leverage with other potential buyers. Most importantly, it allows you to tell brokers that your property is in play and sends a message that if someone is interested, then he better present a competitive bid quickly.

Just don't get cocky. During this process, it's crucial for sellers to set a realistic bottom-line price they're willing to take, even if it's several thousand dollars below asking.

Questioning the First Offer

Too many sellers reject their first offer, even if it's close to or at full asking price. Holding out for more money is a strategy that rarely works, especially at a time when credit is tight, lending requirements for mortgages are in flux and potential buyers have less purchasing power. (
The reality is that in any market a home's first offer is often its best. Typically, educated buyers will seize on a property they like -- with a competitive bid -- as soon as it comes onto the market, she says. Of course, given the glut of houses on the market, sellers should expect to receive some low-ball offers. Just don't assume that you'll get better bids the longer you hold out. The more time a home sits unsold, the greater chance a seller will have to reduce his price.

Asking Too Much

The single biggest mistake folks make is setting their asking price too high. In today's down market homeowners need to price conservatively or they risk turning off potential buyers.
Figuring out how to set the price is tricky. Gone are the days when you can expect to sell your home for as much as your neighbor did just six months ago. So rather than looking at how much homes in your area sold for six to 12 months ago, compare prices for similar properties currently on the market. If you see a listing for a house that's sitting unsold for a few months, chances are the owners are asking too much and you'll want to set your price lower.

Brian Fenstermaker has been listing and selling real estate for 20 years in the Brockton and surrounding towns which include, Abington, Whitman, Rockland, Holbrook, Stoughton, Avon, Hanson, Halifax, and the Bridgewaters. Brian has become a specialist with short sales. You can contact Brian by e-mail at befrealtor@aol.com. Any questions you have about Listing and Selling a home, Brian can answer. He can also be reached anytime at 508-330-3036.

Foreclosure Alternatives from Mortgage companies Brockton Massachusetts Easton

Brian Fenstermaker (Keller Williams Realty) — Thu, 19 Feb 2009 13:07:06 -0800

What are the foreclosure alternatives for borrowers who are having trouble making their payments? What actions should a borrower take to pursue these alternatives?
There are several alternatives for a borrower that is having trouble making payments. Some of the alternatives available include:

Repayment Plan: A Repayment Plan is used when you have experienced a temporary reduction in income or financial hardship. This option is structured to cure the delinquency over a period of time by paying a full amount, plus a partial payment on the delinquent amount, each month. An initial down payment is required. The amount of the partial payment will be based on your financial situation and your initial down payment. It is important to note, a repayment plan will only be considered if there has been a positive change in your financial situation. For example, if you were previously unemployed but have found employment, we may consider a repayment plan provided you are able to make an initial down payment, and you have the ability to pay the increased monthly amount due while keeping your real estate taxes paid current.
Loan Modification: If you have experienced a permanent reduction in income due to a severe medical hardship, loss of a spouse, legitimate increase in expenses, or other permanent hardship, a loan modification may be offered. Based on your individual financial situation, your mortgage company may be able to change one or more of the original terms of your loan and reduce the monthly payment amount. It is important to note, a modification is done only in hardship situations.
Pre-Foreclosure Sale: "Listing your Property for Sale." If you believe that you will continue to have difficulty making your mortgage and real estate tax payments, and that your hardship or reduced income is permanent, you may want to consider listing your property for sale. Housing values in your area may have declined which may result in an offer to purchase that is less than the total debt due on the property. In some instances, your mortgage company may accept less than the amount we are owed, but in order for them to consider this option, you must submit a package of financial information along with information about the proposed sale.
Deed-in-lieu of Foreclosure: A deed in lieu of foreclosure is essentially a transfer of property to the lender in consideration for forgiveness of the debt. There are some advantages to this process over foreclosure. One benefit is that your mortgage company may waive any right to a deficiency judgment against you if the property is subsequently sold for a loss. A second advantage is that while a deed in lieu of foreclosure may be noted on your credit bureau record, you avoid having a completed foreclosure on your credit bureau record. We will consider accepting this option if the reason for the delinquency was beyond your control and you have been cooperative in seeking alternatives to foreclosure.
Partial Claims-for FHA Loans Only: Your mortgage company may be able to work with you to obtain a one-time payment from the FHA Insurance fund to bring your mortgage current. You may qualify if:
Your loan is at least 4 months delinquent, but no more than 12 months delinquent, and you are able to begin making full mortgage payments. When your lender files a Partial Claim, HUD will pay your lender the amount necessary to bring your mortgage current. You must execute a Promissory Note, and a Lien will be placed on your property until the Promissory Note is paid in full. The Promissory Note is interest-free and is due when you pay off the first mortgage or sell the property.
Full Reinstatement: Full repayment of all past due monies, including foreclosure expenses, to bring the loan current. This is the best option as it completely ceases foreclosure and any further collection action.
Full Payoff: A Payoff, in which the note is paid in full, leaves no loan balance, and the lien against the real estate is released by your mortgage company.

What documents must be provided by the borrower when discussing foreclosure alternatives with the lender?
Before we can recommend the most appropriate workout option, it is important that we have a complete understanding of your current financial situation. As part of this process, we may need you to provide certain documentation, such as tax returns, recent pay stubs, bank statements, and a hardship letter outlining the events which have caused you difficulty in maintaining your monthly payments.

HUD-Certified Counseling Agencies:
To obtain more information about HUD-certified housing counseling agencies please call 888-995-4673 (HOPE)
or 800-569-4287.

Foreclosure Consequences
It is very important to know what can happen when a lender forecloses on your home. Not only will you lose your home and all the money you have invested in it, but the foreclosure goes on your credit bureau record and may negatively impact your ability to obtain another mortgage in the future. In some states, you can be held liable for any loss the lender experiences in selling the home.

The lender is required to report all foreclosures and deeds-in-lieu of foreclosure to the Internal Revenue Service, and you may have increased tax liability, since the IRS may view these events as forgiveness of debt.

Brian Fenstermaker has been selling real eastate full time for 20 years. He is a great listing and sales agent. Also in that time he has become a short sale specialist. You can reach him by e-mail at befrealtor@aol.com

Honesty is the best policy

Brian Fenstermaker (Keller Williams Realty) — Thu, 12 Feb 2009 18:23:07 -0800

Via 'Dee' Mayers San Gabriel Valley REALTOR® (First Citywide Realty):

Cutting corners (as in the case of the peanut factory), cheating on your taxes or using questionable methods is a common practice today. In our business or any business for that matter, the practice of honesty should be applied. Sticking to your agreements or contracts even if things go not as expected, should be upheld. Some may object, but it makes good sense to be honest. It leaves you with a cleared conscience free from fear and stress of being caught in a bad situation. It gives peace of mind, leading to a good night sleep. Therefore, we should not allow our consciences to become insensitive to what is bad.

Someone once said "honesty is like an endangered, if not extinct, species in today's business world". We have all seen what dishonesty produced in the form of bad loans and unethical conduct on the part of some. It had a domino affect which ultimatelyresulted in an economic crisis. If people learn that we have deceived them even once, we will lose their trust and their business. On the other hand if we are truthful and honest, we will build reputations to last a life time. So then, it makes good business sense to be honest, be straightforward and honorable in our dealings with others.

A climate of trust and confidence develops when we pratice the golden rule "All things, therefore that you want men to do to you, you also must likewise do to them." And once an agreement has been signed, "let your word Yes mean Yes, and your No, mean No."

Shifting Markets Require Educated Agents.. That Consult and Care! 7 things that Bug Me.

Brian Fenstermaker (Keller Williams Realty) — Thu, 12 Feb 2009 13:34:46 -0800

This is a great read from my friend and associate Lori Lincoln

Via Lori Lincoln- Taunton to Attleboro MA Rehoboth, Dighton, Swansea, Attleboro (Keller Williams Realty/Realtor Taunton and South of Boston):

So I've seen and heard some craziness among a few individuals in our profession. Most of the unprofessionals left the business, but I still observe some these pet peeves of mine at times. I am not the perfect one, so if you ever catch me in any of the following, speak up!

1. Short Sales- my pet peeve is working with the other agent who represents the other side of the transaction and they just aren't educated on how short sales work. .. the good, the bad.. the ugly. My opinion.. if you don't know about short sales.. get educated BEFORE you start working with buyers and sellers, because they are trusting their Realtor to know and help them. You cannot be their fiduciaryagent if you aren't educated.

2. First Time Buyers and Bank Owned Property-many times buyers agents just don't educate themselves enough to inform their buyers that their lender's chance of approving a loan for a home with no heat, busted pipes and lots of fixes are slim to none!

3. Pre-Approval Letters- A real big one. A buyer called me earlier this week saying he was pre-approved. I looked at the letter and it said he was pre-qualified. I prefer to have a trusted loan officer consult and take a full application using desktop underwriting. This young man was mis-led, and his bubble was burst.

4. Over the Top Over Priced Listings- Why do we still see 70% of our home listings overpriced. Why take a listing, invest your hard earned money and precious time on something that will not sell? We are all guilty of this... some more than others. What the heck are we hoping for?.. some schmuck buyer to fall from the sky who has "sucker" written all over himself? I still see them $100,000 over priced. We do such a disservice to our sellers and the public when we aren't upfront about the comparables, absorption rates, etc.

5. No Photos - Another big one. I cannot tell you how many buyers tell me that they prefer to shop online first. They will pick the homes they like based on the interior and exterior photos. If a listings has just one or two pictures, they will think something is wrong with the house. So now the listing just sits and sits.. 300..400.. 500.. 600 days on the market. OUCH!

6. MLS Descriptions on listings-Did you know that it is a given that the buyer expects the heating system to work, the septic system to be in good operating order. and the words "Motivated Seller" cry out "I'm desperate.". Please stop listing the mechanicals. Use this valuable MLS space to "sell" the reasons why a buyer might like the house. Instead of using "Motivated Seller", just get them to reduce the price.

7. Allowing Buyers to view homes on lock box without you, the agent- Did you know that if something were to happen, you could be held responsible? Your buyer could get hurt.. and if they went to the property without their agent, fell down on ice, stairs etc.. just NOT A GOOD IDEA.. Furthermore, it isn't the right thing. If you cannot make it, schedule a time when you can. IF the buyer doesn't understand and wants to work with someone else because you won't let them go alone.. find another buyer, it just isn't worth the angst.