DALIA's Blog

THE MESS ACROSS THE STREET

2008-10-12T12:29:04Z

Some weeks ago, I blogged about the home across the street that had been trashed by its owners. In effect, the owners moved to a rental nearby & proceeded to gut the house, i.e. they removed the kitchen cabinets, sink & appliances (except for an old refrigerator); left mounds of trash behind; removed bathroom fixtures, etc. Neighbors had seen mysterious trucks, no doubt friends or acquaintances of the owners, back up to the house to remove more from the home. The pool was left to become a putrid mess. I believed that the best we could hope for was for the home to be foreclosed by the bank. Sadly, last weekend, the family has moved back IN the house! How amazing is that! The owners that didn't want anything to do with the house & proceeded to gut it of anything of value, are now living in the home again, amidst their own mess. Neighbors are puzzled & dismayed--we had hoped that the house would've sold (it received 5 offers, despite its nasy condition) to people that cared about property values. Alas, we must now deal with the disappointment that the house may now be only marginally improved.

SIMPLER FINANCIAL LIVES

2008-10-12T12:16:23Z

Just one generation ago (my parents'), financial lives were much simpler. My parents had one savings account, one credit card (Sears) used for appliance purchases & one vehicle; they would cash their checks on payday, put the cash under a mat in the hall closet & pay bills with money orders. Groceries were paid with cash. My folks were conservative and lived well within their means, not buying a home until their early 30s with their own down payment. Incredibly, they raised 3 daughters, sending us to Catholic schools for most of our schooling; and saw all three of us get college degrees. When my dad died nearly 22 years ago, they owed Sears $400 for a new range, had no mortgage nor car payments. How incredible and, yes, successful their lives seem now!

Today, most of us have multiple accounts with brokerages all over town, we have several credit cards with 'free money back' programs attached, many more 'toys' that eat up money (cell phones, computers, MP3 players, etc.). If my dad had seen the number of bank & brokerage account statements, prospectuses, proxy statements, etc, that we received monthly, he'd would have had a heart attack! My parents' financial expectations were more modest than mine and, candidly, more attainable, especially after last week's bloodbath on Wall street. Yes, we 'have' more but at what cost?

CREDIT AVAILABILITY

2008-10-07T11:27:54Z

(Excerpt from my newsletter)

The recent upheaval in the credit & banking sectors has had an immediate effect on interest rates & credit availability. There is plenty of frustration to go around for buyers & homesellers alike. Buyers must now come up with higher down payments & have very good or excellent credit report/scores to qualify. Many are also overwhelmed with the housing choices available & fear overpaying. Homesellers, meanwhile, wait many months to sell, often reducing their property's list price to remain competitive.

With financial institutions afraid to lend & inventory at such high levels, there remains much uncertainty. The market will stabilize only when the bloated inventory is largely absorbed & banks' losses decreasexcerpt from my newsletter)

SHORT SALE PACKAGE SUBMISSION

2008-10-06T09:58:55Z

I submitted a 'short sale' package to my customers' lender on Thursday (10/02) & called today to confirm receipt of same (I have the FAX confirm sheet from my end, but want to know that someone has taken actual possession of the package). I was told to call back on Friday, 10/10 to check if the FAX is in the system,,,evidently it takes this financial institution 5-7 business days to enter a FAX into 'the system' and assign the package to an analyst! From that point on, I'm told it'll take another 35 to 45 business days for a reply. This is my first short sale package so I'm, admittedly, a tad nervous about the process. I would've preferred mailing the package but the lender insists on FAXes. I'm guessing this is standard protocol?

ARE BANKS AFRAID TO LEND?

2008-10-02T09:45:39Z

I've had a deal going on for the past month with a wonderful buyer. Twelve days after the contract's effective date (when we received bank approval for the short sale), he was told by his lender that the development he wants to buy into isn't 'FHA approved". However, the bank sent the buyer the papers needed to obtain a 'spot approval'. To expedite the process, the buyer paid the homeowners' association $195 to overnight the completed papers to the lender. Eight days after initially informing the buyer that the project wasn't FHA approved and after receiving the papers completed by the HOA, the lender nonetheless declined to fund the purchase. The excuse was that the development (a condo project) discriminates because it requires a pre-purchase interview of all buyers & that FHA wouldn't accept that. When the buyer suggested that he could go 'conventional' so that FHA isn't an issue, the excuse was that his debt ratio would still be too high. Undeterred, the buyer went to Bank of America & was pre-approved immediately (he expects to be fully approved by 10/03/08). A commitment letter will follow right after the final approval.

So, what gives? It would appear that the first bank didn't want to lend on a property located in a condo/townhome development. It would have been much better from the beginning if it had said it wouldn't/couldn't do it. Instead, with time running out, the buyer had to scramble to get other financing. Extending the contract isn't the problem--we now run the risk of losing the short sale approval. These are wild times for the business & we associates have to remain on top of everything, especially the financing, to assure that our deals get to the closing table.

FEDERAL BAILOUT

2008-09-30T14:32:30Z

Much has been written about why the financial institutions are in the predicatment they're in. Certainly there is blame to go around. But, as a former financial institution regulatory examiner with the FDIC & the Office of Thrift Supervision (OTS), the federal agencies in charge of regulating commercial banks & thrifts, I have to wonder: where were the regulators during the boom? I remember thinking, "Are regulators still assessing a bank's loan policies & procedures? Are loan files still being reviewed? Where are the bank's boards of directors & loan committees?"

As a taxpayer, I do a slow burn thinking about the bailout. However, if the bigger picture is that we lose our global investors (who fund our massive debt) & credit becomes an even more difficult situation, then what? Our business depends on credit & deals are hard enough now without making credit even harder to obtain.

SHOWING SHORT SALES

2008-09-28T10:49:17Z

By now, most of us have had to deal with a short sale transaction--as a list or selling agent. Most recently, I showed a lovely short sale condo that greatly excited my customers--this was the one! As we drove back to my office (in separate cars), I called the list agent & asked if there were any offers on the property. Yes, she said, three of them. She went on to say that one of the offers was 'above list price' & the buyer would put down 30%! What a waste of time! I had to tell my customers about the offers. They were very disappointed & decided to not make an offer at this time on that unit. OF course, I started scouting the development for any others that may be truly available but nothing did.

I learned, again, that I have to ask the right questions when setting up an appointment: how many offers are on the table? How likely are these to be accepted? How far into the short sale process is this property? etc. I would've saved myself some work, time & disappointment. Of course, this experience proves again that if a property shows well and is priced right, the buyers are out there.

PROSPECTING

2008-09-25T08:02:50Z

I'm participating in a new, company-wide initiative that started 10 days ago. Select associates from each of my broker's offices have been teamed up to rev up their prospecting efforts (the program is intended to increase the lifeblood of the busines, i.e. listings). We are to record what we do online (number of calls, attempts, contacts made, leads received, listing appointments made). I recorded my prospecting efforts for the first time since the program started yesterday & realized that I need to rev it up considerably. Realty is a numbers game yet it's easy to, almost imperceptibly, lessen the prospecting efforts over time. While I have some deals on the table with buyers, they're very time-consuming & cut into prospecting time considerably.

Luckily, I've stayed in contact with my sphere of influence & farm area (monthly) through my newsletter. Contacting expired & cancelled listings' owners, FSBOS (not too many down here anymore), warm & cold calling, etc. will be the order of the day!!

BUYING DISTRESSED PROPERTIES

2008-09-22T09:37:27Z

(Excerpt from my newsletter)

Buying properties that are candidates for a short sale or a foreclosed property, both known as distressed properties, can be significantly more difficult than purchasing a well-maintained home conventionally from the owner. Many buyers & their agents actually avoid short sale properties because of the following:

•· These transactions can take a considerable amount of effort & time. Offers received must be submitted to the lender for its approval & lenders can take several weeks or longer to approve the sale;

•· The property remains actively on the market, even when several offers may have been submitted to the bank. A buyer may wait a long time for a response from the lender & may still lose the property to another offer.

Foreclosed properties, priced well below market, are generally easier to sell than a short sale property because there is no waiting for bank approval. However, foreclosures may require a significant amount of money to rehabilitate. Further, if using a FHA loan, buyers must know that any property they're considering, including foreclosures, must have appliances. Many foreclosed properties have no appliances and, as such, are not deemed habitable by the FHA. The FHA will fund the sale of such homes only when appliances are in place or monies are ‘held back' at closing for new appliances.

In the end, properties that are neither a short sale candidate or a foreclosure and that have been priced to sell have a huge selling advantage. They are generally shown more often & will sell quicker than those distressed properties, all other things being equal.

SENIORS' ONLY COMMUNITIES

2008-09-20T16:23:28Z

I recently had a rental listing in Century Village, Pembroke Pines, Fl. that was a real eye opener for me & the unit's out of state owners. The owners were surprised & disappointed, as the listing went on, at the lack of showings & offers & at the continued need to reduce the monthly rent. We had started out somewhat high ($850) & had reduced it to $700 when I luckily found a motivated tenant. The place will rent for $650.

So, what has happened with these communities? The local paper recently ran an article on these communities & noted that these condo units are experiencing huge price declines for several reasons. Demographically, communities down here (Southeast Florida) aren't drawing the number of retirees they used to; newly retired folks have a lot of choices when it comes to retirement homes, i.e. in other parts of FLorida. Arizone, Nevada, etc. Further, condo heirs often opt to sell at what could be described as 'fire sale' prices rather than continue paying high monthly HOA fees. One huge seniors' only community down here (Sunrise Lakes) was badly damaged 3 years ago by Hurricane Wilma; many condo owners there couldn't or didn't want to rebuild; many units there were sold super cheap, hurting resale values for the remaining, undamaged buildings.

Perhaps in 10 years, when the new wave of newly retired are in their low 70s, they'll be more inclined to move to one of these communities. Or perhaps the communities could lower the minimum age when you can move in, to 50 years (from 55), to expand the pool of potential tenants/buyers. Meanwhile, the financial pain is real for many condo owners that wish to sell.

GATED COMMUNITIES

2008-09-16T11:30:15Z

I realize that gated communities are here to stay. But showing properties in these communities can be a nightmare. On Sunday I had to show properties in 3 separate gated communities---and had difficulties with each one.

Gated Community #1

This development in Miramar can't be accessed during the weekend unless you have a vendor code or know a resident. I attempted to show a condo unit that is tenant occupied. I had been given his phone number but when I called, no answer. I got inside the community by tailgating a resident in. Wrong & dangerous, I know; when my customer called me from outside the development, I told her that I'd try knocking on the unit door to see if perhaps I could show it--no surprise, no one answered so we left for the other community.

Gated Community #2

Located minutes away from #1, I had the gate code to this development but, again, no one answered. Again, I spoke with my customer. I tried one last time & the owner finally answered the phone! He refused to let me in b/c he said I didn't have an appointment. I had specifically spoken with the showing instruction desk & the list agent & yet the unit owner claimed to not know anything. I realize that this owner is selling 'short' so he's likely not a very happy person, but still.. WHen I spoke with the list agent later & told him what had happened, he was surprised & we agreed that, next time, I'd call him immediately after speaking with the showing desk so he could call the owner himself to reiterate the appointment.

Gated Community #3

This was actually the worst of all. I had been given the gate code; I tried it & it didn't work. I decided I must be doing something wrong so I tried reading the instructions on the gizmo. That was very hard to do given that the plexiglass covering is badly etched & the sun was right on the thing creating blinding glare. Finally, the list agent who evidently lives within, had to come out to let me in through the pedestrian door (I had parked my car across the street at a shopping plaza). When my customer showed up, the list agent went inside the small station in the front & managed to open the electronic gate himself. In other words, there was no way that a visitor to the community could get inside unless they know a resident.

Making all of this worse was the extremely hot & humid weather. I go out of my way to avoid these communities but sometimes I can't. Hopefully, I won't have a day like that anytime soon!

UNREALISTIC BUYER EXPECTATIONS

2008-09-13T13:51:55Z

Down here in Southeast Florida, 'buyers' are all over the place--sadly, many haven't a clue about what they need to do to purchase. They insist that properties have to be in pristine condition & the price has to be rock bottom. Buyers want their closing costs paid by the sellers, haven't been to the bank for financing & then want to see about 50 properties before deciding.

I understand that it's a buyers' market but buyers have to understand that they must be financially ready to fund a down payment & closing costs & should be decisive. Ideally, a strong buyer would also have narrowed down the neighborhoods he/she is interested in & be prepared to act. If more than one buyer are purchasing together, then all should be looking at properties together.

EXTREME MAKEOVER-HOME

2008-09-08T08:43:24Z

I enjoy watching 'Extreme Makeover-Home Edition' for the same reasons I enjoy HGTV & 'This Old House'-- I like houses. However, as I watch the extreme show, I can't help wondering "How well-built can this house be?" Imagine, in just one week, these builders & designers put together, in effect, very large homes (many would call these mini-mansions). I don't doubt that permits have been pulled & cabinets ordered long before the building starts, but it is still highly ambitious to obtain a 'certificate of occupancy' in just one week. No question, between the build & the family's emotional or financial story, I think it all makes for compelling T.V. However, I can't be the only one that thinks (doubts) about the structure's integrity.

REMINDER OF FIRST IMPRESSIONS

2008-09-08T08:24:27Z

(Excerpt from my newsletter)

Front Entry

The front entry of a home can make or break the sale of a property. Buyers inevitably form an opinion of the entire property based on those initial impressions of the residence. To assure a very positive first impression & hopefully a sale, consider implementing the following tips:

· Power wash the front walkway & repair any large, possibly dangerous cracks;

•· Refinish the light fixture, if the style isn't too dated. A brass fixture can be spray painted black or given a nickel finish for an updated look;

•· Replace and/or repaint the door's jamb. Any rotted wood should be replaced;

•· Replace the doorbell cover plate if it's rusted or gauged;

•· Clean, repaint or replace the front door, as needed;

Install a new door knob or handle if the existing hardware can't be refinished nicely;

•· Remove shoes, toys, gardening tools, etc. from the entryway;

•· Remove weeds from any plant containers & replace with fresh, healthy plants.

FLORIDA WEATHER--AGAIN

2008-09-05T08:45:25Z

The pastor of the church I used to attend would often say that Florida has two seasons: the summer season and the sauna season. That always got a chuckle from the congregation b/c it was an amusing way to describe, very aptly, this state's weather. In September, however, I'd add that we also have the active hurricane season. The local TV stations are abuzz 24/7 about the weather systems out in the tropics & we're told when anything has formed near Africa! The constant alarmist hype, while well-meaning, often has the unintended consequence of heightening anxiety among us homeowners & residents. Inevitably, lines form at gas stations, grocery stores & the like as we prepare, once again, for a possible hit.

As we now fret over uninvited Hurricane Ike, let's pray for a wind shear or cooling waters (from Tropical storm Hanna now over us) to dissipate Ike. I'd rather deal with the hype than the aftermath.

SHOWING PROPERTIES

2008-09-03T10:07:50Z

Now that I'm working more with buyers, I realize that a lot of the aggravations I recall about looking for properties & calling up for showing instructions haven't changed, even in this buyers' market. This is a sample of what I've dealt with in the past month:

1. Listings with no photos or hideous photos. Clutter doesn't photograph well, regardless of the home's decor or price. When I take photos, I move & remove items (always with permission & I put items back) so that the photos enhance the listing, not hurt it.

2. Voicemail full. When calling for showing instructions, it amazes me when I can't even leave a message. If you're not listening to your voicemail, is any business being conducted? How fair is that to the selling client?

3. Answering services that won't answer. Closely related to #2, these answering services are a mixed bag. I've called some that, for some reason, I can't reach (I'm instructed to call back). Eventually, I get through but that's b/c I'm persistent.

4. Missing keys or lockboxes that aren't where I was told they'd be. Enough said.

Let's make this job easier on each other!

MUSINGS ON THIS LABOR DAY

2008-09-01T15:53:51Z

Labor day may be the unofficial end of summer but, for me, it signals the start of a lot of enjoyable goings-on. Down here in Florida, I'm eagerly anticipating the start of cooler autumn temps & the (albeit artificial) colors of the season, and relieved that we apparently have dodged another bullet (H. Hanna), weatherwise. Anecdotally, I'd say that that a lot of folks in the area opted to stay home this labor day. Higher expenses & our hot & unpredictable weather probably made the decision (to travel or not) easy. Other areas of the country are preparing for the start of a new school year tomorrow & that's always exciting.

Happy Labor Day!

WE HAVE TO SHOW UP!

2008-08-31T14:17:28Z

I went out earlier today (Labor day Sunday) & was amazed at how many people are out looking at property. It appears that the much lower prices & distressed properties are finally shaking loose some buyers who had been 'on the fence'...hooray! But it appears that realty professionals need to get back to selling fundamentals--like answering their phones! My new clients were amazed & delighted that I responded to their emails last night & quickly arranged to show a foreclosure in the area today. The husband added that he has made a lot of calls to agents & has waited as much as 5 days to get a reply! He doesn't understand how business gets done. Indeed! Grant it, this is a long weekend but from what he said, his experience hasn't been great getting someone to call back or provide information.

What separates the successes from the failures in this business is that the successes show up & take care of business.

BUYERS & SHORT SALES

2008-08-30T12:15:50Z

A lot of buyers down here (Southeast Florida) don't want to be shown short sale properties b/c the word is out that these can take a considerable amount of time. Yet, if they want a deal, this may be time well spent. In life, we have two currencies--our time & money. You'll pay with one or the other, sometimes both.

When speaking with a buyer that doesn't want to see short sales, I reply that, in their price range the available inventory is over 50% short sales & that they're eliminating a lot of potentially good stuff. I'm not crazy about dealing with short sales either, but the market is such that you can't avoid it completely & remain in business for long.

TOOLS OF THE TRADE

2008-08-27T14:57:55Z

Recently I received a call from a broker-agent who wanted to show one of my listings. All was well, as we set up the time/day that he'd show the property. When I called to confirm that my sellers knew about the appointment, I mentioned that the property is on 'supra lockbox', that is, the electronic key system. I added that he can just knock first, then use his supra key to get inside. I was stunned when he replied "Oh, the owners won't be home? I don't have the supra key, I don't believe in that system & won't give my money for that."

How can he be in business, as a broker no less, and not have the supra key? I realize it's another $140 or so annually, but it's critical to have this tool. I wondered if his agents also don't have supra keys. They're losing business for sure if that's the case.

FIRST TIME HOMEBUYER GRANTS

2008-08-25T09:19:49Z

Mortgage lenders now require virtually everyone acquiring a mortgage loan to fund a down payment, even if it's as low as 3% (FHA loans). On a purchase of $250,000, that 3% translates to $7,500; closing costs can be another 3%-6%. Coming up with this considerable sum of money is especially difficult for first time homebuyers. However, free money may be available for these buyers in the form of federal & state government grants. For additional information on federal grants, visit www.grants.gov.

For state of Florida first time homebuyer grants, visit www.first-time-home-buyer-s.com/first_time_home_buyer_grants.htm

CONDOMINIUMS & FORECLOSURES

2008-08-25T08:59:44Z

There is trouble in condominium paradise for many South Florida developments:

Condominium Associations

Chapter 718 of the Florida Statutes requires condominium associations to obtain & maintain adequate hazard insurance based on the replacement cost of insured property. Failure to do so is considered a breach of fiduciary duty. But what happens when a high number of properties in a development are foreclosed? Increasingly, many associations throughout the state of Florida are experiencing difficulty paying for insurance, plus operating & maintenance expenses, as owners cease paying their monthly fees. That was the conclusion of a recent survey taken by the Community Association Leadership Lobby. Two thirds (2/3) of the respondents also reported that many banks, mortgage lenders & other lienholders do not regularly pay the monthly association fees due on their foreclosed units, forcing associations to raise the fees to paying property owners and/or pass special assessments to cover their expenses.

Because of the number of nonpaying owners, some condominium associations try to make up the budgetary shortfall somewhat from their rental tenants. In those communities, tenants or their absentee landlords, are required to pay a set amount (often one month's rent) to the association as a refundable ‘security deposit' prior to the tenant moving in. The deposit is earmarked for any future damage to common areas. However, this practice has had the unintended consequence of hindering rentals & may actually reduce the property's appeal to future buyers.

CRAIGSLIST SCAM?

2008-08-24T11:19:06Z

A rental listing I have in Century Village, Pembroke Pines, Fl. was put on craigslist by the owner. A few days ago, she was contacted by a Professor John Michael from the UK inquiring about moving for a year, having his furniture moved to the unit, etc. The lengthy letter goes on to say that he'd need someone to be at the apartment to accept delivery of his furniture, that he'd like to review the lease agreement prior to arriving in the US but he wouldn't sign it until he arrived here, etc.

This morning, I told the owner that I was going to 'google' this professor & am I glad I did! Following is the website revealing that this is some inexplicable scam:

http://craigslistscammer.blogspot.com/2008/06/what-joke-scammer-indiana-jones-is-now.html

I don't understand where the scam comes into play but clearly it's some kind of wierd joke. Beware active rainers!

BUYERS & MORTGAGE PREQUALIFICATIONS

2008-08-21T07:41:50Z

The real estate mantra is to go out only with buyers that are prequalified to buy & have a prequal letter ready to submit with an offer. That makes total sense. However, in recent weeks, I've been in touch with would-be buyers who, when asked if they've been prequalified by a lender have replied "no". They've gone on to explain that they've been told by lenders to 'find a property first, then come back for the prequalification'. If true, it appears that mortgage lenders don't want to spend time with future clients unless they (lenders) see that they (clients) will come back to complete a loan transaction. I can understand where the mortgage provider is coming from but from where I sit, it's also ill-advised to show a wonderful property to someone who hasn't been prequalified. Sellers won't seriously consider offers unaccompanied by bank letters, so it's a 'catch 22' scenario.

This happened to me yesterday. I showed a great townhome to someone who very much wants it. The list agent told me that she was expecting another offer soon, so I should put together an offer from my client & FAX it to her ASAP. Luckily, this buyer is highly motivated & by last evening had been to the bank & approved. We plan to get together today to submit an offer. But will we be in time?

FIRST DAY OF (HIGH) SCHOOL

2008-08-20T06:50:37Z

Following up on my previous blog, today I saw my daughter off on her first day of high school. Wow, that was quick! As is our custom, I took her picture just outside our front door--all of her 'first days' have been commemorated that way. I initially thought my request to have her pose for the annual picture would be met with an exasperated "Mom!" and a refusal. To my delight & surprise, she didn't give me a hard time & positively beamed in the photo. A lot has changed over the years, but this little tradition between us hasn't--yet. Here's hoping everyone has a great school year!