FRANKLY Real Estate Blog

Virginia Deficiency Judgement (Judgment) at Foreclosure? Current Trends & PMI

2008-05-12T10:54:30Z

Something smells fishy.

Virginia Realtors: What are you all seeing in regards to Bank Deficiency Judgments/ Judgements* in Virginia?

Disclosure: I am not a lawyer, this is a discussion and my understanding. This information is changing monthly, so please verify with a lawyer. When in doubt, ignore me. READ THE COMMENTS, ONE REALTOR SAID I WAS DEAD WRONG ON EVERYTHING.

My Understanding/Definition (ie correct me if I'm wrong): When a home goes to foreclosure* on the courthouse steps, the bank can either

Buy it at the loan amount, or
Let the price drop below the loan amount and then "win" the property for less.
Let somebody on the courthouse steps win the property for less. (not/rarely occuring)

If they take the #2 or #3 option, they then have the right to go after the homeowner for a "Deficiency Judgment" where the borrower would still be responsible for the shortcoming (amount under the loan amount).

Ie, Home is bought for $1,000,000 with a $800,000 loan. The property happens to be worth $600k. The property is foreclosed on at the courthouse steps. The bank either 1) offers $800,000 and takes over the property, thus losing their right to go after losses or 2) Does not offer on the property and waits for the first bidder and buys for $600,000, or 3) Lets somebody buy it for $550k. In the #2 and #3 instance the bank can go after the previous owner for their $200,000 or $250,000 loss.

What I am finding is that the courthouse steps are vacant. (see Post's "No buyers, no bidders.") Why? Because the banks are taking them back at the loan amount (not the property value).

Now the big question is WHY!

Why would they take over the property at $200,000 OVER what is it worth and let the previous owner be releaved from further obligations?

I suspect:

They don't have the time to figure out which properties are worth what. Sure it would cost $50 for a BPO (Broker's Pricing Opinion) or $300 for an appraisal that they will have to do at the next step anyhow.
They figure it is a waste of time and effort for the banks to go after the homeowner since they are broke.

But the strange thing is it wouldn't cost the banks that much to bid LESS and file a Deficiency Judgment (I can see not letting somebody else win the place for less). I believe the bank would have something like 5 years to go after the money, or package it up and sell it to a debt collector.

Very strange that they are doing this.

Another thing to ask when a seller is considering a Short Sale, is if the homeowner has PMI. Private Mortgage Insurance covers the bank in the event of a loss in value and foreclosure (apparently not necessarily the entire loan amount). So watch out, it might be BETTER for the bank to foreclose and get the insurance, then it is to allow a loan restructure or a Short Sale, both of which as not insurable. Read this about PMI and Foreclosure)

Realtors, why do you think the banks are OVER bidding on these homes to buy them at the loan amount?

In California it seems like the bank can't go after the owner. Read this. Is that correct for VA too?

- Written by Frank Borges LL0SA- Broker FranklyRealty.com

*(50% of searchers misspelling this word as Dificiency Judgements, and forclosure) Other keywords: Bankruptcy, stop foreclosure, deed in lieu, Pre-foreclosure, 1099-C Debt forgiveness, loan modifications, Bank Liens, Maryland, Arlington, Alexandria, VA, DC washington, Maryland, MD.

Spammer? Fax Their Cellphone!

2008-05-09T14:56:29Z

Ok, I got a new secret.

I just got a new spam. Subject line: 100% Loans to Active Military & Veterans to $650,000

It was sent by a stranger to my homesdatabase email of hdb33@franklyrealty.com (don't worry I have change it ever few months due to spam) (they cultivated the emails from that site)

If I get a spam, like that one 5 minutes ago, if they have a cell phone #, I take that cell # and I email it to TheirCell#@maxemailsend.com . It is like efax for outgoing faxes.

It will send that spam as a fax... to their cell phone.

What? Cell phones don't take faxes? Oh sorry, I didn't know that. I guess it will take the fax service 3 or 4 call attempts, meanwhile screaming into the earpiece of the cell caller.

Ok, I leaked my secret.

Also hate Realtor spam? Join my Realtors Against Realtor Spam group.

- Frank

Virginia Commissions Offered to Buyer Agents. MRIS RULES

2008-05-09T14:44:25Z

I just attended the NVAR (Northern Virginia Association of Realtors) Hispanic Forum event, which included Michelle Yam from MRIS's Compliance department.

It was a great way to clarify the rules on how to advertise cooperating commissions on our local MLS.

Here are the rules for MRIS as I understand it (as of today, it might change at NAR's mide year event).

1) "You can NOT put "50/50%" as the commission amount."

It isn't the buyer's fault or the buyer's agent's fault if the listing agent makes a mistake and accidentally wipes out everyone's commissions. Also as Michelle put it "If you were to offer 50%, what is that 50% of, 100 chickens?" (or something like that)

2) You can not put TBD (To be determined, which is the same as putting 50%)

3) You can NO LONGER put Commission Subject to 3rd Party Approval. (either in the remarks or scroll down option)

4) You CAN put X% of Net (sales price minus seller subsidy)

5) You CAN put $1

6) You can NOT put $0 (some offer has to be made)

I am strongly in agreement with the decision to take this route.

Why? Well if I have a buyer agency agreement that states I will be paid "100 Chickens" or X percent, that means that the buyer is obligated to make sure that I get paid that at closing. If the commission changes mid stream (or 3 days before closing) the BUYER is the one that effectively has to come up with the $ difference.

If $1 is offered up front on the MLS, that is fine, then my buyer can decide if they want to proceed with this listing (you really SHOULD since it won't be seen by anybody and we will get a great price on it).

Listing agents that say "but what if the bank cuts the commission, it isn't fair." Well you need to know what you are doing, to make sure that doesn't happen. And it isn't the buyer agent's fault (nor the buyer) if you don't know what the hell you are doing. Also with the lack of certainty, you will get LESS agents to look at your property (because the buyer tells them, they don't want to fill the gap).

And Brokers beware. If your agents are putting in a percentage on the MLS as the "offered" commission, if the total commission gets cut by the bank, the BROKER is still responsible for the entire amount. Even if it gets cut to "1 chicken" on the HUD1, the broker will get sued and LOSE for offering X% or $X and not paying it at closing.

Consumers beware. You need to have this discussion with your buyer agent. You want your agent on your side. You don't want them NOT showing you listings because they fear that they won't get paid. Read my blog on Short Sales, while they currently suck. Don't worry, we are working on a new process where hopefully 90% of them will close.

Just wait, somebody who hasn't read the post, is bound to comment "You can't talk about commissions."

- Written by Frank Borges LL0SA Broker FranklyRealty.com

p.s. Even Lem talks in terms of Chickens.

Superior Termite (DC area). Boycott the Spammers

2008-05-05T08:42:44Z

I really hate spam. You might know this if you have been to my www.RealtorSpam.org

If you also hate spam, please boycott Superior Termite. I have reported these guys 3 or 4 times to MRIS. Nothing has been done, so hopefully this will work. And hopefully Google will pick it up.

What they do is illegally use MRIS's Matrix and they send out daily a mass email to each agent that just went under contract. Brilliant right! No! Illegal. This is against the Terms of Use for Matrix. I have also worked with MRIS to make our emails more hidden and secure, but obviously not enough has been done. (they did some changes a year ago after 2 years of screaming)

So much for SAFEMLS, our data is not safe, and this shows it.

When you get emails like this, please report it to compliance@mris.net

Here is the spam!

From: Superior Pest Management [mailto:fbowers@superiortermite.com]
Sent: Wednesday, April 16, 2008 7:55 AM
To: XXXX@XXXXrealty.com
Subject: your recent settlement contract

$20

Termite Inspection

Dear Frank,

In honor of your recent settlement contract, Superior Pest Management is offering to do the termite inspection for $20

We appreciate your business, and hope you will use us again!

2 easy ways to order

1. Click here to order online

2. call our call center at 1.877.Bug.B.Gone (877.284.2466)

Best Wishes!
Rusty Markland GM
Superior Pest Management

rmarkland@superiortermite.com

1.877.Bug.B.Gone (877.284.2466)

A special offer from Superior just for you!

We also do Home Inspections!

Starting at $215
Click Here for Details

Forward email

This email was sent to web@franklyrealty.com, by fbowers@superiortermite.com

Sorry, I Don't Answer My Phone! And I Won't "Call Me Back"

2008-05-02T16:54:27Z

Many might consider me a horrible Realtor.

Why? Because I won't answer my phone and I won't call random people back, just because they want me to. Is that bad? Let me explain.

First of all, my cell isn't published online. My clients get that, and they can call all they want.

But I get WAY too many random calls (to the "office" published number)

I recently got calls regarding:

Mobile homes in West Virginia (no joke)
Solicitation to join HomeGain.com for the 4th time
A $500 rental in DC that they need to see in 1 hour
A question about a home 3 hours away, since they thought I was the listing agent (I hate how Homesdatabase makes it look like I'm the listing agent for all 65,000 homes in the DC area, I even had to blog about it and send the post to callers that leave their email)

I refuse to have the overhead of these "traditional offices," and hire a full time secretary to answer these calls just to tell them, "Sorry, can't help you."

So I use AnswerConnect.com which is an actual operator that answers the phone with "FranklyRealty..." and proceeds to ask several questions. That includes asking for the email address twice. And then they give a warning that if you don't leave an email, due to the overwhelming solicitations, you will probably not get a call back. I should change that to "will not get a call back."

So If I get a message from somebody that I don't know, and they refuse to say what it is regarding, and they refuse to leave an email and all they say is "Have Frank call me." Sorry I won't. Too busy for that.

What I will do is

Google their phone number to look for their email (works 50% of the time) and send them a questionnaire (and now a link to this post)
Sometimes I will send them a text to the # with a "email me at..."

But to call a random person back because they want to chit chat? Sorry.

I would rather dedicate my time to my clients and focus on their needs then call back and play phone tag 50% of the time, with somebody that 90% of the time is a wasted call. So it might be hard to initially get a hold of me, but hopefully people will see that it is well worth it.

Do I lose business from it? Probably. Actually the Winner of the Apprentice called me to have me help her sister buy a condo. She hated the answering service... yet HER cell phone isn't published online. (I texted her, that worked).

So if you got an email that is linking you to this blog post, I hope you understand. This is how I am able to stay sane.

You can email me, twitter me, gtalk chat with me over at my other blog, but whatever you do, if I don't know you... don't call me. And don't take it personally if I don't call you back.

Writen by Frank Borges LL0SA- Broker FranklyRealty.com

Questions to ask Short Sale Listing Agent BEFORE showing

2008-05-01T13:37:58Z

I wrote extensively before about Short Sales and how only 5% close in my area.

Well, I think it might be a little too harsh to completely ban them, especially if a client is looking further south where the stats might not be AS bad.

So I have come up with a questionnaire to ask the listing agent BEFORE showing a short sale.

What are your thoughts?

*************

Hello I have a possible buyer looking for a home in your area.

Our company policy is to ask for more information from the listing agent, before showing any Short Sales.

Can you please answer the following questions:

Have you closed a Short Sale before?
Have you requested and received the short sale package yet from the bank, including the hardship letter?
Have you sent the package and have you confirmed receipt?
What communications, if any, have you had with the bank?
Has the bank approved the list price?
Have you received any other offers that you are waiting to hear back from the bank on?
Does the loan have PMI on it? (Mortgage insurance)
Is there 1 or 2 trusts? Any other liens?
What is the name of the banks? Are the FHA or VA loans?
How long do you estimate that the lender will take to provide an answer to an offer?

************

Am I missing anything?

Frank

(3 were added by Cindy and 1 by John)

Lost blog post

2008-04-30T23:08:05Z

One of my favorite blog posts, is suddenly gone:

http://activerain.com/blogsview/42723/Spam-Friend-or-Business

It was a post about email headers. I would frequently email it to people that had "Sally Smith" in their From, instead of "Sally Smith- GE Services." Even showing an example of a CEO of a company, with a very similar name to a customer service rep at a trash company.

Any ideas what happened? I know I didn't delete it.

Is it gone forever?

Financial Advisors vs Monkey Throwing Darts, Like REALTORS?

2008-04-30T08:35:57Z

Disclosure: I am not a financial advisor. This is not financial advice, and you'd be an idiot to follow what I do personally.

I personally only own ONE "stock", and that is called SPY. The #1 bought and sold stock in America, meanwhile most individual investors don't know about it.

It is an Index Fund (also called an EFT, Exchange Traded Fund) that has all of the S&P 500 rolled into one stock with virtually no fees and no annual maintenance. Motley Fool wrote that "3 out of 4 mutual funds don't beat the market." (ie SPY)

So why not just be average and beat 75% of the funds every year?

The Wall Street Journal used to have a competition. They would have a monkey throw darts at a group of stocks and compare the results to the experts. I believe the monkey repeatedly won. What does this mean? This means that the market is too efficient for somebody to consistently beat it.

Just yesterday my girlfriend asked me to review what her financial advisor sent her. It was 25 pages of gibberish. It appeared as if the entire intent was to confuse the reader into thinking, "Wow, they really must know what they are doing, I'll just tell them YES." (Sound familiar? Some Realtors take the approach of, "overwhelm the client with BS to scare them into signing.")

So, I looked up the 10 Mutual Funds in her report. I compared them to my SPY and I was impressed... my monkey theory was blown. 8 of the 10 blew away the industry average (S&P 500 & SPY). This couldn't be... So I had her log into her account. I then looked at what her account had. They were totally different mutual funds!

Upon rereading the manifesto, those well performing funds were the "RECOMMENDED funds" for the future. Are you freaking kidding me!!? The funds she owned did horribly! Probably 10% worse than SPY! So what they did was take 10 random funds that DID do well and say "we recommend you buy these, look how well they did, you will do great next year." Are you kidding me?

So much for a long term plan to leave the funds untouched for 5-10 years. The worst thing you can do is dump the under performing ones (all of them) every year and chase the next big thing. (Re-Disclosure: Ignore me, I am not a financial advisor).

Oh yeah, for those that don't know, there is something called Churning an Account. Oftentimes they only make money when they buy and sell, not when it sits. So not only did their initial picks blow, they now want to sell and rebuy everything to get another commission.

What did we decide to do? Sell everything (they were down from the purchase date, so no taxes, actually a tax break). And we bought just SPY (The S&P 500 rolled into 1 "index" stock).

Why haven't you heard about the #1 stock (in volume, look for yourself) being bought and sold in America everyday!??? Because the financial advisors make squat on it! And magazines are always looking to beat the market and promote their advertisers (mutual funds). Nobody gets rich pushing SPY.

Even the torch bearer of truth, the Motley Fool, figured out that they don't make money on pushing "dumb", reliable and outperforming SPY, instead they receive millions from Mutual Funds to sell their products. This link even talks about how 75% of mutual funds stink and their theory on how to find that 25% (which is nearly impossible in the long run, but they make money watching people try!).

Compare your funds to SPY here, and report back in the comments.

(Sidenote: One reason to consider NOT unloading your funds would be the tax ramifications. For my girlfriend's IRA it was a Tax-Free no brainer, but we held off on her other funds since she would have to pay capital gains for the tax. Now that the market has pulled back, and they are nearly all losses, we are cutting bait and switching to SPY. By the way, we would have been much better off if we had paid the tax and swapped last year)

For those consumers that hate Realtors as much as I hate this financial advisor, I now better understand them.

Hopefully by explaining better what we do, and talking straight, and not feeding you BS, we can separate us from Financial Advisors.

I'd love to hear from a Financial Advisor and debate the practice above.

Please correct me. Show me what I am missing (I really want to know!). Nobody in the history of mutual funds has consistently beaten the average, so why buy Mutual Funds which:

Start 1-2% behind every year in management fees (don't be fooled by "no-load" funds, they got fees)
Only have a 25% chance of beating the average, with all the downside risk of doing much worse
Paying a fund manager $400,000 a year, and he can't even beat a monkey.

Discuss. I am making no opinion on whether or not to get into the stock market, but if you did, how did you decide what to buy?

Written by Frank Borges LL0SA- Realtor (not a Financial Advisor)

Please report typos

Read more here: Motley Fool: Why ETFs [like SPY] Beat Mutual Funds

FranklyMLS.com Launch: World's First Wiki MLS

2008-04-08T23:16:41Z

I am officially launching FranklyMLS.com, the World's First Wiki MLS!

Where BUYER AGENTS from multiple brokerages come together to ADD information and photo albums to listings they visit. MORE DATA & 1,000+ MORE PHOTOS!

THE "OLD 1.0 WAY" MLS: (see all 31 MLS search engines here)

1) One-Way Information. "Here are the homes for sale, as marketed by the listing agent. Take it, trust it, or leave it."

2) Photoless MLS Listings! They sell for $15,000 less but they are a pain for everyone. Oftentimes foreclosures or a listing by an underpaid or sucky agent.

3) Confusing Branding.Who is selling what? Each of the 60,000 MLS listings are plastered with one "Brought to you by" buyer agent from one brokerage. I tried to explain: "No, I am not listing 1,298 homes," but it isn't the consumer's fault, it is confusing! See my account on Homesdatabase.com/frankly a service that many agents pay $30 a month for. My annoying face on each listing.

4) Limited Data or Sign-In Required. All but a few sites have stopped the practice of requiring users to create an account and login in order to see listings. Also may sites will NOT show you all the data possible. Some even hide the addresses so you have to "call your local trusted Realtor!"

5) Slow, Fancy, & Feature Filled- Some of it might be useful, but it slows down the website. Their goal is to have such perfectly targeted results that it can take minutes to find something.

6) Small photos.As our computer resolutions get higher, the images get smaller. On my screen most MLS sites show 4 inch photos.

7) Computer based. No focus on cell-phone ready searching.

THE "NEW 2.0 WAY" MLS: FranklyMLS.com

1) Wiki it!

(Attn Buyer Agents, do you have a progressive office? Let me come and talk at your Tuesday meeting so that more Buyer Agents can get involved)

The World's First Wiki MLS. No, we can not CHANGE the listing itself (or the price!) as presented by the listing agent. What we do is ADD comments and photos to the listing and as a community flag and remove inappropriate comments. Every buyer agent with an ounce of techie-ness should be taking Buyer Agent Photo Albums. What is that? Well, the listing agent takes photos for their sellers to put the house in one light, but the buyer agent takes photos for their clients in a more realistic light. Including shots of how far it might be from a highway, or showing bathroom water damage or a roach infested place (scroll to bottom of those listing to see the comments).

The goal is to add information, and not opinions. No "this house stinks" or "this house is great," but instead factual information like "This house backs to Rt 66" or "This house is listed at 44.6% lower than the purchase price in 2006." Information not evident in the listing agent's presentation. I wish everyone was like Loudoun agents Tony and Danilo with their Blogback blogging for feedback where they list the pros and cons of their listings and ask buyer agents to leave comments. How can you find the reviewed homes? When you do a search on FranklyMLS.com, homes with a yellow highlighter, those have the comments, see an example search for 1021 Clarendon.

2) More Photos Than ALL other MLS sites.

So far, prelaunch, 10 buyer agents from 5 firms add photo albums with as many as 40 photos of 50 properties. With this, the database grows to thousands of extra photos. Consumers want PHOTOS,PHOTOS, PHOTOS and on our co-opetition website, several otherwise competing agents come together to give what the customer wants... MORE INFO and PHOTOS.

Sidenote: A year ago I bought a baseball glove from Amazon.com. It was photoless. After getting the glove, they asked if I would take a photo of it and post it on Amazon. That is what first gave me the idea for this Wiki MLS. (see post)

The site also has a point system. 1 point for comments, and 10 points for a photo album. For that, the contributor is listed underneath the listing instead of my mugshot on each listing (see above). They also get a front page link to their website. Why contact me as a buyer agent, if another agent has actually BEEN to the property, specializes in that area and has helped you get more information on it.

Buyer agents, here is a " how to add the photo albums."

3) No branding, advertising, or logins required. Other than the required link from the site owner (me) at the bottom of each page, there is no advertising or cheesy recommended buyer agent next to each listing. Only when a buyer agent contributes to a listing with comments or a photo album, do they get a link to their site. Also, you should already have a buyer's agent by the time you hit this site.

4) ALL MLS DATA(that is legally allowed to be shown) We show everything. Including BOTH the Days on the Market-M (MLS#) and Days on the Market- P (Property). Otherwise known as DOMM and DOMP We even show you the "within the industry 'you must be nuts'" listing agent's name and number. Only 1 other site does that. Don't worry agents, there is a disclaimer that says NOT to call the listing agent and why. So why have it? Well the consumer should ultimately decide.

What we can NOT legally show is: Realtor Remarks, Compensation amount (ask your agent if they take buyer agent bribes), Owner's phone number, showing instructions and lockbox codes.

5) Not Fancy, just FAST.Except for photos of houses, there is not one graphic, icon, logo on the site. No Geewhiz, just speed. With that comes fewer features, but how many features do you see on Google or Craigslist? Just give me info fast, even if it isn't 100% accurate (as in there might be a "madison manor" in both Arlington and Baltimore). FranklyMLS.com searches by keyword only. I know that looking at 400 homes can take a ton of time. The goal was to count each click and scroll in the home buying process and cut that time down by 80%.

"Sexy?" homes? Search the Realtor Public Remarks. Try it, search for "sexy." Only a 3 of the 33 local MLS sites will let you search the Realtor Public Remarks as part of an advanced search. Some information in these remarks can't be found in any drop down or checkbox search. For example: Lake Ridge Short Sales or Arlington Metro
Keyword search for ANYTHING.One box, search anything. Including, search by ZipCodes, subdivision name, school name (if the agent put it in), street name, street number, city, brokerage name, and even by agent name (nobody does that). It takes getting used to, but it works for Google and Craigslist, dso it works for FranklyMLS.com
Spreadsheet mode.Search like the Realtor's back end system. Text only results to quickly find what you need. Also the columns show you in a quick second the List price, Original Starting price, Tax assessment and DOMp/m. (See link above)
Photos only mode. Just a page full of 50 medium sized images. For the quick glance.
Photos and Details mode with image rollover. Most sites that have this mode have useless 1 inch images. We show in this mode the 4 inch images that other sites use for their "full size." Also you can use a rollover link to see all the other 2-30 images.

6) HUGE PHOTOS. Example. All the other sites use the 4 inch photos for each listing. Probably to leave room for mortgage calculators, frames, ads etc. We instead are the only ones that pull the high res 7 inch photos as the DEFAULT. Bigger is better.

7) Cell Phone Ready. Nobody offers this... for FREE.

With the former slogan, "So easy, a cellphone could use it," the site wasn't designed for the cellphone, but it is so simple that it still works great on most cell phones. I recommend the "photo mode." This is perfect for when you are in front of a house and want to get the details. I suggest using the house # and the zipcode.

******

Other interesting features:

FACEBOOK integration.We all have been asking ourselves if a useful tool for Facebook will come up. Well now there is one. You can "save" each listing into your Facebook account with 1 click. Then your friends can comment on what you have selected, or you can share them easily with loved ones.
Super Short URLS. http://franklymls.com/FA6683625.htmlfor easy copy and pasting. (soon we are dropping the .html) into an email for others to share. I'm obsessed with "easy."
Super Short Search Strings: www.franklymls.com/default.aspx?m=R&h=ALL&s=1021+Garfield (soon this will be even shorter). You can also bookmark the search string to quickly see all listings for that search.
Find Similar Results: If you see a "more" or a ">>" click it to find similar homes or to see ALL the listings that a particular agent has (great for comparing listing agents!).
Links to similar Craigslist FSBOs, and to Zillow for previous sale data.
Link to that property on Google maps. Click on the "map" link.

So that pretty much wraps it up. I hope you have enjoy the site. I would love to get some feedback from current users (see Feedback contest), local agents and others on how to improve the site.

- Written by Frank Borges LLosa-Broker/Owner FranklyRealty.com

p.s. Yes I bought WikiMLS.com and I started the Wiki MLS group on Active Rain in early Nov 2007.

p.s.s. Several comments (the ones with no last names) were added by Frank. Those comments were sent in via email.

A Stroke of Genius! The Epitome of Real Estate 2.0 By Matthew Rathbun Real Estate Instructor and Consultant
Broker launches 'Wiki MLS' site Inman News

ALERT! Market BOTTOM! I have 100% Proof!

2008-04-08T11:40:12Z

I officially have 100% proof that we have officially hit rock bottom.

No other indicators from NAR or the government have been as accurate as the proof that I have. I found a 100% correlation!

When My MOM SELLS, THE MARKET SKYROCKETS shortly thereafter!

The chart to the left is factual. Actual points when my Mom has sold her property.

The last arrow is from a recent listing which is now under contract. (see listing).

So there you have it. No more need to think. I have always been against the NAR campaign that says "Buy Now," but now I can show proof that NOW is the time to buy! That market is going UP UP UP!

Thanks Mom, for taking one for the team and helping us all out by single handedly turning markets around!

For my previous prediction on the EXACT best day to buy, read my Market Timing post.

- Written by Frank Borges LL0SA- Broker FranklyRealty.com

p.s. Don't miss my official launch of the World's First Wiki MLS

Home Sale Contingency? 2.4% Use Them Today. Stats and Thoughts.

2008-04-06T00:33:14Z

What are your thoughts on Home Sale Contingencies in this marketplace?

Frankly Definition:A Home Sale Contingency is where a purchaser has a home that they need to sell first before they can buy a home. Oftentimes these offers are written as "Under Contract with Kickout." I will explain the Kickout part later.

I was asked about this today by somebody looking to upgrade, but she needed to sell her place first. My initial reaction was "heck no." If you approach a seller that hasn't been able to sell their place in 200 days, you are effectively telling them, "I know you haven't been able to sell your place, but I want you to accept this contract and wait for me to sell MY place." I would think they would laugh.

But then I decided to look closer into the facts and perhaps it isn't so crazy.

I looked up over 1,000 homes in Alexandria, Fairfax and Falls Church. Of those 1,000 that are under contract...

I found 24 that had Home Sale Contingencies. Or 2.4%

So as I suspected, they are still very rare. Crazy? Maybe, maybe not. If done creatively, I think one might be able to push one through.

Pros for Home Sale Contingency BUYERS:

Less risk for the buyer. Their alternative has been to: a) Own two homes at once or b) sell your place first and run out and buy a place while you are selling your place. (people usually do the "b" option, but there is a major problem if you don't like much that is out there for sale)

Cons for Home Sale Contingency BUYERS:

You don't get as good of a price. Sellers care about price AND terms. Similar to the carfax commercial where they illustrate with a balloon how dealers either inflate the trade in, or the new purchase. If you have bad terms, they will hold out for more money. I prefer to write CLEAN offers and be more aggressive on the price.
Most contingencies are written with a KICK OUT. This means that if another offer comes in, you will have 3 days to remove your contingency, or they KICK you out to the curb. Also known as Curbin'. No not really, but that would be funny. So, if you listed your house for sale and are halfway through that process and a KICK OUT situation comes up, you bare some significant risk. Do you lose your contract to buy or drop the contingency and risk not selling your house? (there are some creative solutions to fill the gaps in time including Options to extend etc)
Your contract can help light a fire under another buyer to finally bid on the house you have under contract, therefore you get Curbed.

Pros for Home Sale Contingency SELLERs:

If you are getting no offers, and your house is unique and hard to sell (near a highway or odd style), and meanwhile an offer comes in with a Home Sale Contingency but the agent can prove it will sell fast... heck what is another 60 days?

Cons for sellers:

The obvious. You pull your house off the market, nobody sees it and the buyer never gets around to selling their place. Or worse yet, the buyer changes their mind and they have a HUGE way to back out.

How best to do one for buyers:

Prove to the listing agent and seller that your house will sell FAST (as in 1-2 weeks). Show them comps, show them the track record of the agent. Even consider LOSING $10,000-$20,000 by underpricing your house to sell fast (something I don't recommend, but something to think about if you can make up that savings on the purchase, also think of it as an insurance fee and cost of making your $100,000 lower offer on your purchase look better). (I hope that wasn't confusing)
See if you can do one without any Kickout. A smart listing agent will say no, but you never know.
Try to make the provisions as long as possible. But the more you ask them to wait, the higher a price they are going to expect.

Tips for sellers considering taking a Home Sale Contingency:

Pretty much the same as above but in reverse. Also KEEP MARKETING the house.The MLS makes you put it under contract and few agents will touch it, but don't forget Craigslist and Open Houses. It is easier to get an offer when you have a standing offer. People love to offer on homes with others that are interested.
Make sure you have the ability to Kick Out the contract and take another contract. Keep the # of days to as short a number as possible. Maybe charge a daily fee for an extension.

And whatever you do, don't have the agent that is listing the place you like, become the listing agent for YOUR house. Wow, that would be a nightmare. No matter what "deal" he offers you. You would never know who he is working for and you could lose far more money and sanity than saved in lower commissions.

Written by Frank Borges LL0SA- Broker FranklyRealty.com

Home Sale Contingencies? Today? Some Stats and Thoughts.

2008-04-06T00:33:08Z

What are your thoughts on Home Sale Contingencies in this marketplace?

HMS Home Warranty "processing fee" = Kickbacks.

2008-03-19T14:24:24Z

I've written before about kickbacks form Affiliated business arrangements.

Well I just got a $60 check from HMS for one of my agents that was involved in a home sale where a $400 warranty was purchased. I consider these checks to be kickbacks even if they are called "processing fees."

We refused the funds and are working on it getting sent back to the customer, or given to a charity.

I was then told "If you don't want the $60 fee, you can just send in $339.00 instead of $399.00"

So it isn't a kickback, but the customer can send in less money and get the same product?

Do you keep the $60 that HMS gives you if you tell your client to buy that warranty? If so, why?

Frank

Shoot Like a Pro! Photo Class March 29th 08

2008-03-18T18:46:01Z

Advanced photo techniques class!

Official promo:

****************

PHOTOGRAPHY Shoot and Use Software Like a Pro
Friday, March 28 from 10am-Noon

NVAR Herndon Center NVAR is hosting a photography workshop taught by former National Geographic published photographer, Frank Borges LLosa, whose photos have been in over 40 publications worldwide.

The workshop will cover: wide angle photography, photo correction with free software, online photo sharing, how to make a website for each home you sell, MRIS's new 30 photo system and buyer-agent photo albums. *Free to NVAR Members with one house photo or MLS Listing with photo(s).

To register please e-mail registrations@realtorschool.com. Don't forget to include a property photo or MLS listing with your registration for class critique.

**************************************

Specifically we will cover:

Wide angle photography. Read about the amazing Kodak v570 Blog Post
Collages for your main image. See Collage Blog Post
Photo correction with free software. Consider downloading Google's Picasa.com and playing around with it before class.
Buyer Agent Photo Albums. Read this blog post and 2 minute video
Domain name per house websites like www.6210n12st.com for only $9
Online Photo Sharing. Check out my album on PicasaWeb
SUBMIT YOUR PHOTOS. Here is one of my listings with 30 photos. Submit your best listing photos and I will go over how to make them better.

Also learn how to do Panoramics:

LEARN HOW TO MAKE A COLLAGE

Advanced:

or Easy, In 30 Seconds:

I hope you can make it. It should be a sell out, so make sure to RSVP above.

Anything else that we should cover?

Written by Frank Borges LLosa

Virginia RPAC. My 1st VARBuzz.com Post. Are you going to Donate?

2008-02-29T17:04:21Z

Today I posted my first (hopefully not my last) post on VARBuzz.com. It is about RPAC and NVRPAC (also written NV/RPAC).

I hope you will post your comments over on VARBuzz.com (and you can repost them here for your points!).

Frank

EOS 21 Auction: "Once In A Lifetime!"?

2008-02-28T18:46:30Z

Only $135,000!? EOS 21 Condos in Alexandria Virginia just announced a condo-conversion auction of 43 units. A "Once in a Lifetime Opportunity!"

This is the second condo-conversion project to take this "liquidation" sales technique. I know I say in my blog "I told you so" a lot, well no exception here. The risks with buying new construction (or conversions) is huge when they have excess inventory. New Construction Bargains: Risks or Rewards?

So what about EOS 21?

Well the auction is brought to you by the same people that held the Parkside at Alexandria auction back in October 2007 (see Parkside at Alexandria 1st post). Parkside had "starting prices" at $225,000, but ultimately got bid up to $280,000 to $290,000 (see post #2 the Results show with video). "Down" from an inflated sticker price of $340,000 (2lvl TH).

All in all they sold for maybe 5-10% off the price you could have gotten the week before with a written offer.

And now a few months later... they STILL have units that are priced starting at $290,000 (and there are a ton of short sales on the MLS in Parkside) which is just about what they went for at auction time.

WHAT A STEAL! Ha!

POSSIBLE BIAS ALERT! One thing that really ticks me off is the buyer agent broker offering. They offer only 1% to the buyer agent. In Virginia 95% of the time the offer is 3%. Why would they want to discourage a buyer from having an agent???? Um, because then the agent can get in the way of the transaction and actually represent their client.

So even though I write this post and people will learn about the auction, I won't take any clients to this auction unless they make up the difference. Why?

1) They will not go for anywhere near $135,000, so I won't even get the 1% ad it will be a wait of time for me.

2) My buyer agent contracts state what I get paid, so a buyer would have to make up the difference.

3) But even if a buyer is ok with paying #2, see #1.

Unless you are SERIOUS about bidding up to 90% of list price, and agree to pay my fee, then I can help you. I know, damn greedy Realtors! Why won't they waste 5 hours with me for that Once In A Lifetime!

Why would they want to DISCOURAGE REPRESENTATION??

So you won't know your rights. Did you know that you can still back out of the contract, even after the auction, if you don't approve of the HOA docs? These auctions do not trump the HOA review period (it does for a foreclosure).

(Sidenote, the "out" that you have is a double-edged sword. Because people know they have an "out" they will probably be MORE comfortable bidding $20,000 higher, so don't just see it as a win win for you)

Disclaimer: EOS gave me permission to post their ad, as long as they reserved the right to ask me to take it down if they don't like the blog post. I'm curious to see if they will request for the ad (not the blog post) to be removed.

- Written by Frank Borges LL0SA Broker FranklyRealty.com

Virginia Short Sales are FAKE. Only 5% Close.

2008-02-20T02:38:56Z

Most Short Sales are what I call "FAKE listings." Only 1 in 20 sells. In Arlington only 3 have sold out of 65 attempts.

I briefly went over Short Sales when I defined all SOL Homes including REOs, Bank Owned Etc. But Short Sales need more attention, as they are very tricky and misleading.

A Short Sale is a listing for sale that requires "Third Party Approval." That means that 1, or 2!!, banks are owed MORE than the list price. For example:

Home is bought for $500,000 with 5%, or $25k down.
Home has a $475,000 mortgage.
Value dropped below $475,000
If the seller is facing foreclosure, they slash their price for a quick sale
A Short Sale is attempted at $450,000
If the bank accepts it, the BANK eats $25,000 (see Phantom tax for Seller)

The Theory Behind Short Sales: Banks would be better off to accept a loss now, versus going through the legal expense of a foreclosure, just to end up selling it for less later. Win win, right? Wrong. Read on. Bank Trick 1: "Sure, we will consider a Short Sale, IF YOU KEEP PAYING US." Yep, a bank sees a desperate seller, and a potential $50,000 loss. They then mislead them into thinking that they might consider taking a bath on the deal IF the owner keeps paying their mortgage. The bank then ignores offers for 2-4 months in order to squeeze out another $2,000 x 4 or $8,000 profit. Brilliant. The bank then takes it over after foreclosure and sells it for $10,000 OVER the Short Sale List price. $18,000 better off, NOT doing a Short Sale. (Let's not forget the banks are losing their shirts too.) Bank Trick 2: Sometimes the bank has mortgage insurance and it is CHEAPER for them to let it foreclose versus allowing a Short Sale, which is NOT insured. For example, I was at an NVAR short sale class and a Realtor asked the speaker, "Why after 60 days, calling 2 times a day (120 calls) with a full price Short Sale offer, did the bank not call us back?" The speaker claimed it was due to an overworked staff.

I asked:

Did they tell you they would consider a Short Sale IF you kept paying $3,000 a month? The answer was Yes.
Was the home bought with Mortgage insurance? The answer was Yes.
Bingo! Why eat $50,000, by accepting the low offer, if the bank a) gets $3,000 a month and b) is insured against a foreclosure and NOT a Short Sale.

She was pissed. She realized that she had been "had." But this goes on ALL THE TIME. It can take MONTHS to hear back.

Another example:

A seller in Clarendon 1021 tries to sell his property and profit $30,000 at $600k. (Yeah right!)
Then he drops it to $570,000. No bites, but the foreclosure is pending!
They SLASH it to $530,000(sidenote, I get flooded with calls from friend that want to pick it up for a steal at $470,000! I said that it was impossible... since I'd buy if that price was a possibility.)
It sits for another month, then the listing disappears after 100 days!
A month later it is "bank owned" and listed for $560,000
It sells for $540,000 in 26 days.

The moral here is banks are not dumb and the market isn't so horrible that they will take all these lowball offers. They sold it for $10,000 OVER the previous list price (which probably had lower offers).

Short Sale Statistics:

Reston homes from $300k to $400k.
- 20 Active "Short Sales" in Reston (watch out for "Not a Short Sale" listings)
- 73 were Withdrawn, or Expired.
- 3 Under Contract (1 under contract since Nov 2007! Many UC do not close.)

Only 3 sold in the last 24 months. 3 closed sales in 100 attempts!

Dropped From $480k to $400k, sold at $400k (Full list)
Dropped from $430k to $400k sold for $380k (5% under list)
Dropped from $380k to $350k sold for $345k (2% under list)

Arlington Short sales.
- 25 Actives
- 37 Withdrawn
Only 3 have sold in ALL price ranges in all of Arlington in the last 2 years.

Listed at $335k, sold for $335
Listed at 700k dropped to $620, sold for $600k
Listed at 480k dropped to $420k sold for $420.

In Alexandria, only 8 have closed in 2 years out of 80 attempts. (most were at list, or 2% under list, some were $20k over list) I show this, so you don't think "Wow, they are desperate, we can now lowball. These 3 were the ONLY successful ones. Probably because they gave the bank a real offer.

Ok, so enough already with the War N Peace, what should I do?

Advice for Regular Sellers

Do NOT blindly compete with a Short Sale. If you get an inexperienced agent, and they see 3 Short Sales in your neighborhood, and they have you compete against these "fake" listings, you can lose $25,000. Hope you "saved a ton" on that agent. (see Realtor Rebates)

Advice for Sellers Facing Foreclosure

Watch out for the bank tricks to "keep paying." Talk to a lawyer that specializes in bankruptcy to help guide you. They MIGHT recommend stopping payments immediately and saving it up for a rental.
Use an agent that has completed (as in CLOSED, not listed) at least 1 Short Sale.
If you have mortgage insurance, be extra careful, the bank might prefer that you foreclose.
Get bank approval for your list price before listing it. Put in the listing remarks "List Price approved." Otherwise you will get lumped into all the other Fake Listings and ignored by smart buyer agents.

Advice for Buyers looking for a "steal" (see "deals" post)

Avoid Short Sales, or expect to wait 2-3 months and expect to put in 5-10 offers on Short Sales before one is accepted. A Short Sale in my building now has 4 offers. He says he is expecting a reply any day now... sorry, but yeah right!
Look for Approved Short Sales. Ask if the bank has been contacted and if a price has been approved. Multiply time estimates by 4. Ie. 3 days= 12 days.
Consider offering near, full or OVER list. What! Over list! Are you nuts! CNN says this is a BUYER's Market! I know it sounds crazy, but if you and your agent see the price is well under your other options... I've said time and time again, I'd rather you pay $10,000 OVER list on a house that is $50,000 under the competition versus "saving" $50,000 on a home that is overpriced by $100,000. Ignore list price, focus on VALUE.
Focus on Bank Owned. These units get replies in a day or two. (See video of Realtor buying a Bank Owned property)

Advice for Buyer agents & Listing agents

If you get one to close, change the remarks to SHORT SALE, NOT TO BE USED AS A COMP in hopes that the appraiser will take that into consideration and not trash the neighborhood (buyer agents, demand it of the listing agent to try to help your client's "deal" not turn into destroying his own investment).

~~Side note: A home should NOT go under contract until the BANK signs it, but many agents will make this mistake. The seller signing it means nothing, and it should stay on the market as Active.~~

Updated Correction 2-29-08 I'd like to thank DAAR CEO Jeanette Newton for this correction. I'm excited that she is participating in blogging!

My above sidenote about when to go Under Contract is 100% wrong. So let me explain... IF a seller signs the offer, as written, it is to be listed by default on the MLS as Under Contract with No Kick Out. The problem for the seller is that most MLS websites will remove the listing, so the chance of a better offer (and a higher chance for the bank to accept) is slim to none.

Here are a sellers' options (please comment if you know of more options) :

1) A seller can counter the contract and add in a "Kick Out" so further offers can be reviewed. The listing then can be set to Under Contract with Kick Out (this was suggested by Loudoun Realtor Tony Arko). But only a buyer agent looking on the back end MLS can find UC/KO. (A Kick Out means "there is still a major contingency here, feel free to submit another offer, it still can be considered and the first contract might be kicked out.")

2) Another way to keep it active (like the unit in my building with 4 offers) is for the seller to send the "offers" unsigned to the bank. Why not try and keep your home as "Active" for as long as possible? Some banks will require the seller to sign, so try #3.

3) Or lastly, the seller might add "acceptance of the contract is contingent on lender approval." or "contingent upon review and approval of the lender." That one line can keep it "Active." I am not a lawyer, so please verify any additions you make to a contract with a lawyer.

As a buyer agent I would prefer it to be "Under Contract" if I was the listing agent, I would want it to be Active. So it depends whose side I am on, it is part of the negotiations. You can even counter with "Increase your price $2,000 and we will place it UC/KO."

Conclusion: Short sales suck.

-Written by Frank Borges LL0SA- Broker FranklyRealty.com
(please report typos)

Roaches & Bullet Holes Or A Market Decline?

2008-02-15T16:12:33Z

The first task in writing this post was to look up whether "bullet holes" was 1 word or 2. Turns out it's 2 words. Learn something every day right? Or is it everyday?

Anyhow, I went to a bank owned property in Falls Church today.It was disgusting. It was infested by cockroaches (we didn't see any live ones) and a bullet hole in the window (or a run in with a Kevlar beaked crow). What a gem!

The good thing was this client was able to see it as an opportunity, instead of being freaked out. Don't get me wrong, it wasn't my thing, but this isn't about me, this is about the buyer.

It got me thinking about how bank owned properties (and other dumps) affect neighborhood pricing. I've never really believed in broad market data that say that an area has gone up or down. See my UP 14%!? No, Down 26.2%!? DATA. What Is It Good For?

Market Increase??

So when I hear that DC's median price supposedly went UP, I believe an insider that tells me, "That is because the condo market stalled out, fewer condos are selling, so if homes (which cost more) are still selling, it will look as if the average is jumping."

Or Market Decrease?

Well the flipside to the DC example is also true too. If you have a community where a 2 bedroom 1,000 ft unit sold for $400,000 and then a year later a similar 2bdr 1,000 sqft condo sells for $350,000, did the area, drop 10% or is it perhaps... a $50,000 dumpier place? Yes dumpier.

So skip the headlines and dig deeper to find the data that you want.

These "average" numbers don't cover same-home-sales. They cover apples that sold in one area to oranges that sold in the same area.

With all of these bank owned properties, which tend to be dumps (not always), I wonder what part of the "average" drop is uglier houses selling, versus an actual drop in an area.

So make sure you look at specific homes that have sold and adjust for the quality of the unit.

Here is a link to a photo album (which all buyer agents should do) of the bank owned property. (viewer discretion is advised)

- Written by Frank Borges LL0SA Broker FranklyRealty.com

Please report typos.

HomeFeedback.com Review: Now w/ Auto Emails. Next up: Wiki It!

2008-02-12T00:46:06Z

Feedback is king with listings.

Too frequently sellers will get frustrated with their listing agent for not following up with buyer agents. This is a crucial step. Oftentimes you can find out who might be on the fence and move them to make an offer, or the feedback will help the seller understand what the buyers don't like about a home (ie. price, location etc). Forwarding untouched feedback is priceless (vs a verbal recall).

But I hate the phone. When I have my buyer's agent hat on, I HATE getting a call after showing 10 homes. They might say, "What did you think about the house with the yellow shutters and the windy driveway." Meanwhile, I haven't got a clue. I have a horrible memory. So the business cards that I leave have no phone number on them! They say to please email me a link to the property.

So I always knew about HomeFeedback.com, a system that would allow you to email buyer agents that came through your property. But for the most part, I thought it was a waste. I still had to spend most of my time compiling the emails from the business cards, or logging into the lockbox's online reporting to get the emails.

Then I would produce a simple email text only template with a link to the property (no attachments!!) and a series of questions. Then 1 by 1 I'd email out a few each day, and forward the replies to my client. It was simple, fairly fast and cheap.

But now, YOU DO NOTHING! They will log in for you and email all visitors! This finally step makes it a killer app. No need to check daily for new visitors. It will automatically log into your lockbox (after you set it up) and email everyone that visited that day. Wow. Very cool. All for $35 a month after a 45 day trial.* A buck a day to check your listings? Give me a break, how can you not use this?

NOW WHAT? I SAY, THE FUTURE IS WIKI!

So where is the future with this company? How do they top this? WIKI the information. Set it free!

Just imagine, thousands of agents giving feedback to each other about thousands of homes. Now imagine if that feedback was added to a site for consumers to see. I know, I know, those that don't fully get the world of the WIKI will be quick to point out the possible problems, but those that "get it" will see the benefits for everyone.

1) The Listing agent looks high tech for allowing their listing to be accompanied by unfiltered feedback from all agents. Also buyers are more likely to believe feedback if there is some negative feedback in the mix.

2) The Buyer agent gets a little free ad. Kind of a "I was here, if you need a buyer agent, and you liked my analysis of this home, consider hiring me."

3) Helps the seller. Press is good press, even if it is bad press. People talking about your home, even if you don't like what they say, is still activity. One can even design a sight to feature listings with feedback. Therefore the occasional negative feedback would boost their viewers.

4) Helps the buyer! Having several people who have already visited the home rate it? That would be amazing for the buyers.

Tony And Danilo already do something similar over at their blogback, blogging for feedback. They haven't seen any of the problems that I'm sure people will raise.

This is the future of the MLS, and HomeFeedback.com should embrace this data, and with permission from all parties, allow it to be set free!

If you are a seller, go tell your listing agent to read this post!

Written by Frank Borges LL0SA Broker FranklyRealty.com

* For full disclaimer, when I saw this product at INMAN, I said to them "If only you all removed the step of entering each agent's name..." and when they said they did, I was sold! So I wrote this primarily to share this with everyone, but I did make the link an affiliate link. Revenue from this link will go to charity.

Listing Agent Trick: "Buying a Listing" Vs No Recommended List Price.

2008-02-11T23:25:21Z

When I say "Buying a Listing," I am not referring to the actual act of buying a home. Instead I am referring to industry agent to agent jargon. It refers to an unethical trick where some listing agents will inflate the recommended list price in order to win the deal.

I have referred to my mother several times in my blog. I've learned more about real estate from her than anybody else, oftentimes from her mistakes. She was never an agent, but sold several homes over the last 20 years. She would frequently fall for the "Buying a Listing" trick. She would interview 3 agents and inevitably pick the agent that would promise her the highest price. But her homes would sit and drop. Only after being on the inside did I learn that this was a technique used to win business.

So now when I meet a seller, I don't give a price recommendation! Pretty counterintuitive heah? And you might be thinking, "I thought that was the #1 value you brought to the table. If not that, what the hell are you good for anyway?" This is why I don't:

Picking an agent based on their list price recommendation is ultimately the worse choice you can make. I've said before, "So they told you $640,000? What if I told you $675,000, would you hire me then?" And the answer is frequently YES!, with a hint of saliva glimmering from the corner of their mouth. Well that is EXACTLY why I won't tell you a price!
Many agents will spend only 20 minutes printing out a list of recently sold homes, and they come up with a range. (sidenote: I don't get ranges. Everyone wants and expects the TOP of that range, right?) But more importantly, it can take upwards of 5 to 10 hours to come up with a price and that is done WITH the client (maybe another post will detail this process). So, I won't spend several hours on a listing, if I haven't even been hired yet. You get my full attention... after you hire me.

I also don't like the agent vs client mentality. It is counterproductive, when it should be more of a collaboration.

Once I went to a "large" real estate company meeting to teach them about blogging. The broker ended the meeting with a pep rally style, "Now go out there and get some price reductions!" Are you kidding me? It shouldn't be a battle between the agent and the client, but instead the agent fighting to NET the client more. Being a partner in the process, not a smug know-it-all looking after the agent's best interest.

If you pick an agent based on the highest recommended list price, be prepared to SIT, DROP and NET less.

Written by Frank Borges LL0SA, and I approved this message.

(please report typos, and tell me about a deal you lost to somebody that Bought a Listing)

Buying a Bank Owned REO Home? Beware of the Bank Addendum and hidden fees.

2008-02-07T18:16:31Z

I have wanted to post this post for a few weeks now. I want community participation on this one. I need examples and things to watch out for in Bank Addendums.

So you are buying a bank owned property, and REO or a Short Sale? You need to understand the bank addendums that accompany them, or you might miss a $3,000 hidden fee.

But first, a quick background. Agents that are members of NVAR, and are REALTORS, use a 15 page contract that was painstakingly created by lawyers and a contracts committee. They try to design it as evenly as possible and several "fill in the blanks." Local Realtors are given hours of training on these contracts. While a client might want to also have the contract reviewed by a lawyer, there is some comfort knowing that it everyone uses the same contract and was written by lawyers with a neutral bias.

But when you buy a bank owned property, you start with a standard contract, but then the bank sends the oftentimes non-negotiable "bank addendum."

They might appear innocent, but they are not. They are written 100% FOR the banks and since every bank has a separate bank addendum, there is currently no training for REALTORS so that they can fully understand them and the tricks that they sneak into them

Here are just a FEW of the things you should know about bank addendums:

Addendum means "Everything in the main contract is nullified if this addendum covers it. So if your main contract says you get a walk through, but the addendum says "As-is," the addendum wins.
Some bank addendums are written nationwide and ignore local laws. Local laws DO supersede these contracts, so sometimes there are points in them that are not enforceable.
Watch out for hidden fees. One of the agents that I work with had their main contract agreed to, but the addendum needed to be sign. The addendum shifted a $3,000 tax to the buyer. Hello! That is real money, don't just sign it.
Most addendums are more "AS-IS" than the regular contract. The bank would rather take less and be done with nickel and diming. This is fine, as long as you realize and are ok with this risk
Most addendums allow the bank to cancel the contract up to the sale date. Yep, they can walk, sometimes for a $1,000 fee or sometimes with no penalty. If they get a higher offer, or whatever, they can break the contract. Again, this might never happen, but you need to know what COULD happen.
Bonuses to use their title company. In Virginia the buyer is legally allowed to pick the closing company. But oftentimes the bank wants their company to do the closing (in part because they get kickbacks) so they offer a $1,000 incentive. On something like a bank sale, with people losing their homes, I would want MY title company to tell me everything is all clear.
Termite provisions are stuck. Normally the seller pays if there is termite damage. The addendum shifts the risk back to the buyer.

Does anybody else know of some tricks that are hidden into these addendums? Again, there are dozens of variations, so make sure you review it carefully and have a lawyer review it.

Written by Frank Borges LL0SA- Broker FranklyRealty.com

(please report typos)

Privacy Alert! Posting Client Signatures Online?

2008-01-11T22:32:44Z

I am still in shock.

I was looking at a listing and I saw a link to "Document 1" and "Document 2."

Amazingly this agent had uploaded the Property Disclaimer sheet with their clients' signatures!

As if identity theft wasn't bad enough, couple that with a couple that has announced that they are moving, and you are perfect prey for identity theft.

I agree with Chuck Boles who taught an NVAR class with me and suggested to everyone that the property disclaimer (since it has the client signatures) NOT be made available at Open Houses so that anybody could have the seller's signatures. Instead put "Signature on file, available upon request by Realtor at time of offer."

So is it just me, or was this a major privacy violation?

I am tempted to call out the "major" company that did this, but I'll restrain until they have a chance to fix the issue. If they say all is fine, then I will call them out by name.

Are you posting your client signatures on these all in 1 property websites?

Written by Frank Borges LL0SA- Broker FranklyRealty.com

All Northern Virginia MLS IDX Search Engines. 31, Add More!

2008-01-05T16:21:24Z

The goal here is to list ALL the MLS search engines in the MRIS area (Northern Virginia, DC Maryland) that pull the entire MLS (all broker listings).

MRIS is the back end provider of the Northern Virginia MLS. They allow Realtors to log into their back end system via Matrix.MRIS.com. But they also let brokers and 3rd party providers have access to the MLS Data and republish it in their own manner via IDX and RETS feeds.

While almost every Realtor website has a "Click here to search," 95% of those link to a partner that slaps their name and photo on it, like Homesdatabase.com with about 1,000 sub accounts.

This list took me 2 hours to compile. Let me know if I missed any!

10,000 NOVA Realtors, but only 32 31 total unique search engines that pull the MLS (all broker listings) directly, yet they display them differently

Large Brokers:

Smaller brokers

BrioRealty.com
Choice Real Estate
NVFH.com (registration required for details)
Realtywatch.com
Redfin.com
TheBestHomeSearchEver.com and BirdsEyeSearch.com
VirginiaMLS.com
ZipRealty.com (registration required for details)

3rd Party Providers (most Popular), something an agent or Broker would subscribe to and put their name all over it.

Homesdatabase.com, Realtor product called Active Agent from MRIS $325/yr. Ex: MLS Virginia
iHOMEFINDER.com, Example Broker: Exit AllStar Realty
ListingsToGo, Watchdog service. "Starts at" $540/yr. Example: Bill Davis
MLSFinder.com from Wolfnet, Agent example: JustNewListings.com or Broker: KellerWilliams.com
MRIS Bridge, From MRIS for brokers. $750 a year. Example: Fairfax Realty
Top Producer, Agent example Grace Neary

3rd Party Providers (less frequently used), something an agent or Broker would subscribe to

Advanced Access, Agent example: Ann Gross
GoMethod.com, Agent example: BernieKagan
HomeCards, Broker example: Westgate Realty
Househunt.com Agent example: Maggie DelGallo (registration required for details)
IDXco, Starting at $468yr, Agent example: (Valarie Smallwood)
IDXPro.com, Agent example: Nova Real estate Team

3rd Party MLS showcasers (not sponsored by a particular broker or agent)

Homes.com
Homescape (Washington Post)
Realtor.com (they strip 50% of the images, details here)

Individuals:

Not included:

Century21 It only searches C21 listings. (Correct me if I'm wrong)
ColdwellBanker.com Only searches their own listings.
Zillow, Trulia. They do not have MLS access, read details here

Let me know if I missed any.

- Written by Frank Borges LL0SA- Broker FranklyRealty.com

Please report typos and errors.

Paying for Junk Hauling? STOP! Free on Craigslist!

2007-12-20T20:52:36Z

So you have a client with a house full of JUNK?

You've considered calling one of those 1-800-PAY-US-TO-HAUL-YOUR-JUNK places?

No need! Try this...

My mother is selling her 25 year rental. The garage was FULL of crap. A pack rat to say the least.

Instead of calling a hauling place, I took at hour to drag it all into the driveway. Then I took detailed photos of each item. Using PicasaWeb, I was able to make an online photo album in minutes. (see my album, I removed things as they were taken)

Then I went to Craigslist and posted in their FREE section: > 50 FREE Items Including Old TV, Carpet, Bikes, LawnMowers.

1) The body of the email listed all the images (good for people searching for particular items).

2) Then I told people to email me for an address and to tell me what they wanted. This way I could guage what was already taken. Also I didn't like putting my address online.

3) I said everything was 1st come, 1st serve. No need to knock, all I asked is that they email me what they took and what was left. I was 10 miles away and couldn't tell what was available for others that emailed me)

The results were amazing. 20 emails and 80% of the garbage is gone in 3 hours!
Here is one happy camper:

Written by Frank Borges LL0SA- Broker FranklyRealty.com