Like most other professions, in real estate, experience makes a world of difference. Lately I have come across several potential deal killing situations that I have been able to turn into windfalls for my clients. If the same situations had occurred at the beginning of my career, the outcomes may have been much different. The experience I have gained over the years has given me the ability to find solutions to problems that would have been insurmountable for an inexperienced Realtor. In the next section, I will provide a few examples.

1.       Faulty Construction – Recently I had a property in escrow that had several major issues turn up during the home inspection. The most serious of which was the fireplace in the master bedroom seemed not to be properly supported in the subarea of the home. Due to my suspicions, I went to the building department and viewed the original plans for the house. As I suspected, the plans showed the fireplace was supposed to be built in the north east corner of the room and instead had been built against the far south wall. How this slipped by the County Inspector, I’ll never know, but the floor was not properly engineered to support the weight of the fireplace the way it was situated in the room. With this information I was able to get the seller to come down $100,000.00 off of the agreed purchase price. It cost my client far less to have the work done to properly support the floor. In short, he saved many thousands of dollars because I was able to ascertain there was an issue and then was able to properly negotiate a satisfactory amount off the price to make the deal go through.

2.       Low Appraisal – Due to the Home Valuation Code of Conduct we have experienced a rash of bad appraisals up here in Big Bear Lake California due to incompetent appraisers taking assignments in areas they have no business working in. In many cases a low appraisal will destroy a deal faster than anything else. However, in the right situation, a low appraisal can be of great benefit to your client. I remember the first low appraisal I was confronted with back in the day. I and my buyer were both panicked over it and I went to work right away requesting a reappraisal to try to get the value closer to what it was worth. One thing you learn very quickly is appraisal companies almost never admit they got an appraisal wrong. It makes them appear incompetent, especially if it occurs in an area they have no business being in. The last time it happened, I went to work right away finding comps that supported the lower value on the property. Once I found them, I packaged them together along with an addendum lowering the purchase price to the price the appraiser came up with. In many instances a seller will lower the asking price to the appraised value due to the fact that the next buyer will, in all likelihood, run into the exact same appraisal issues as your buyer. The last time this happened, my buyer ended up getting $20,000.00 off  the agreed upon purchase price.

3.       Short Sale Success – Dealing with short sales is definitely one of the most trying issues facing new agents in the business. They are very tricky and filled with pitfalls for the inexperienced Realtor. I have come to realize that the most important thing for a seller in this situation is to get a warm buyer to start the process. Many times the bank won’t even talk to you unless you have an offer to present. As the Realtor, it is your job to price the property at a price that will bring in a great deal of attention from buyer’s and still have a good chance of being accepted by the bank. Even if the first offer is rejected by the bank, you will have started the process and know exactly what amount it will take to get the deal closed. If you are representing a buyer, the most important thing is to counsel patience and let them know to be prepared for the bank to ask for more money and to reject things like termite work and home warranties.

These are just a few examples of the ways an experienced Realtor can be a great boon to buyers and sellers engaging in real estate transactions. As a consumer, it only takes a little time to google a potential Realtors name and find out what other people have to say about them. Don’t be afraid to ask for references and never use somebody attempting to work outside their area of expertise, especially in an area like Big Bear Lake. If you do decide to use somebody new to business, make sure they have great broker support and work for a reputable firm.

Originally Posted At www.mypropertysolution.com

It is a well-known fact that it is a buyer's market. Due to high inventory and low prices, buyers can usually count on being in the driver's seat. But this is not always the case. There are many situations in which a seller will be difficult to work with or actually be in control of the transaction. If you are a buyer and run into any of the following scenarios, be warned that control may have shifted.

•1.       The home you are interested in is new to the market. If a home has only been listed for less than a month and it is priced well, the seller may not be inclined to consider anything that is not close to full price. In many instances, the seller will feel like they need to give their price enough time to see if it works. It can be very frustrating if the home is overpriced but a perfect fit for the buyer. As a buyer you never want to over pay but it can be very stressful waiting for a price reduction, all the while hoping somebody else doesn't come along willing to pay the high price.

•2.       The home has been on the market for a long time without any price reductions. This is a sure sign that the seller is convinced his property is priced right and he is willing to sit on it as long as it takes to get it sold. This is common in instances where the seller owns the property outright and is not burdened with monthly mortgage payments. In some cases, the seller is simply delusional and refuses to see what his home is really worth. These sellers are very difficult to deal with for both the buyer and the sellers Realtor.

•3.       Your first offer is met with either no counter or a very low counter. If you make a bid on a property and the seller refuses to even respond, chances are they are not ready to come down very much off the price. Of course, if your first offer was ridiculously low, the blame lies with you. I am talking about an offer that is not less than 15% off of the asking price. If you make an offer within 10% of the listing price and they don't respond or only come down a very small amount, you can be sure you are dealing with a seller prepared to drive a hard bargain. It is up to you whether you want to continue or start looking elsewhere.

•4.       Bank Owned listings are very difficult to lowball. You would think it would be the opposite, but it's not. In many cases, the banks price the properties to sell and because they are already priced low, they will not come down very much off the price. Even if an REO property is overpriced, the banks would rather just wait a month or two and then lower the price than take anything much below 5% of the asking price. I have had personal experience where I presented the same offer every month, for four months in a row, before the bank finally accepted it. Since Bank Owned properties are usually priced fairly well, you can get a great deal most of the time.

•5.       Keep in mind, if you manage to get into escrow in any of these situations, the seller will most likely be very uncooperative when it comes to making repairs. In almost every instance I have been involved in, the seller will not want to make any repairs or help out in any way. They usually feel like they are giving the property away and refuse to pay anything to get the home in better shape. This is not always the case, but it something as a buyer you need to be aware of.

One strategy I have seen be fairly successful in these situations is to make a good offer and then walk away if the seller is not willing to bend. In many cases I have had the listing agent call after a week or so to see if my buyers were still interested. Oftentimes, the seller will not get another offer right away and will start to second guess themselves and start to think that maybe they should have not been so hasty in rejecting the offer. In many cases, the first offer is the best offer and the longer a home remains on the market, the staler it becomes. The most important thing for a buyer looking for a good deal is to be able to walk away from something that does not benefit them. If you are too eager, you will play right into the seller's hands.

Originally published at www.mypropertysolution.com

Early this week I had the pleasure of meeting a great couple who were looking for a new buyer's agent in my area. They had been working with a different Realtor for almost a year and had not had any success in purchasing a vacation home in Big Bear. As I listened to their story, it became more and more evident that they had been using somebody who was not versed in the art of being a superior agent for their client's. Many realtors seem to think that all there is to representing a buyer is getting them in the car and opening the front door of the listing for them. They don't do the things that they need to do to insure their client is represented in a quality manner. In order to clarify my statements, I am going to list what I feel are the five most important traits of a fantastic buyer's agent.

•1.       Listen carefully to what your client's have to say to you. You are the expert and they are depending on you to find them the home that best fits their needs. If you don't take everything they say into account, you will waste hours of their time, showing them properties they are never going to buy. When I took the couple out I mentioned above, the Wife said to me " Wow, Izzy, we have seen more good properties in one day with you than we did in a year with the other guy!" All because I stopped talking and listened to what was being said to me.

•2.       Know your inventory. This is the most important part of your job. Every buyer in the world is online and looking at all the listings every day. Many times, they will see a property before you do. Mainly because you are playing with your kids after work while they are scanning the web looking at everything for sale. Redfin, Zillow, Trulia, etc  are able to pull the listings off of the MLS where home buyers can see them. In order to have better knowledge than your clients, you need to get off your butt and actually go out and look at the properties in person. The pictures usually don't tell the whole story, and if you can fill in the blanks, you have gone a long way in proving your worth. If you know the five best deals in each price range, you are on your way to being a major asset to your client's.

•3.       Understand your market. Are home values in a particular neighborhood going up or down? Have any homes nearby sold recently? If so, what did they sell for? Are there more or less homes for sale than other areas? If so, why? Are there any issues with noise or the road being busy? In short, you need to know your market to the utmost of your ability. How can you tell a buyer a house is a good deal or not if you don't know what is going on in that market? You can't.

•4.       Be proactive. Study all applicable MLS's every day. Make sure you are aware of anything that could interest your client and get them that information ASAP. If something looks especially good, jump in your car and drive out to see it. Take your camera or video camera with you. Get your buyer the information so they can move quickly if they need too. The great deals don't last long and an hour delay can be the difference between your client getting a solid buy or being left out in the cold.

•5.       Sharpen your negotiating skills. Once you have found your clients a home they want to buy, it is up to you to get them the best price possible. This doesn't mean you just take 20% off the price and go from there. In many cases, you need to have enough market savvy to properly advise your clients what to do. If a home is already priced to sell and is garnering a great deal of interest, coming in low could be the worst thing you could possibly do. You need to be able to tell your clients the truth of the situation and help them the write the best offer possible to get them the home. If you are not good at the rest of the list, you will not be good at this.

The world of real estate is filled with agent's who have cars and electronic key boxes that can open doors. They often have lots of little letters next to their names and pictures of themselves holding dogs.  Many of them have been in business for years and can manufacture cheerful banter. They can write an offer and fax it over to another office. Anybody can do these simple tasks. It is the Realtor who takes the time to perfect his craft and put in the work to be excellent that you should pursue. Don't be pulled in by the glamour shot taken at the mall or the fancy business card. Ask some questions and make sure you feel confident the person you are talking to can do a great job representing you. It's important.

 Originally posted at www.mypropertysolution.com

Believe it or not, the real estate market in Big Bear is very competitive at this time.  Like every market, there are good deals and there are bad deals. If you are in the majority of buyers who are looking for a great deal, you need to have all your ducks in a row before you will have any chance of success. If you take the time to make sure you have everything in order you will have an excellent chance of beating out anybody else who has not done the same.

•1.       Make sure you are preapproved before you start seriously looking.  When you make an offer, having a preapproval letter gives you instant credibility and a definite advantage over a buyer who doesn't have one. Most banks won't even look at an offer on a bank owned listing if the buyer is not preapproved.  Most importantly, it lets you know exactly how much you can spend and what that credit will cost you.

•2.       Find a good local Realtor you trust. This one is right up there with the preapproval letter. A local Realtor who knows and watches the market is an invaluable asset in your search for the right property. There are many out of area agents who will try to tell you that they can do just as good of a job as a local Realtor. If anybody tells you that, turn around and walk away because they are not being truthful. I study this market every day, all day long and it is all I can do to keep on top of things. There is no possible way somebody who does not service this area can even do half of good as a job as somebody who is a local expert. A local Realtor watches the market and can let you know the second a property that matches your needs becomes available.

•3.       Time is of the essence. When a great deal hits the market, it is imperative that you are ready to snatch it up ASAP. Sun Tsu said "The acme of skill is to win a battle without fighting." This is especially true in real estate. If you can make a great offer and get it accepted before another buyer has a chance, you have just saved yourself a great deal of money. Nobody wins in a price war.

•4.       Do your homework! 90% of buyers start their search on the internet, and you should too. Going on line and studying the listings in the area you want to buy is a great idea. It not only gives you an idea of what is available, it also allows the ability to get a good grasp of the local market. Once you see what things are selling for and what is actually selling, you will become an informed buyer and better able to make a good decision.

There are always stories about how somebody, somewhere, got lucky and landed the deal of the century. I am a big believer in making your own luck. By being prepared and doing your homework, you will be amazed at how lucky you can get. I would love the opportunity to earn your business and put my local knowledge to work for you. I can be reached at izzy.barden@gmail.com or 909-273-8980.

When it comes time to negotiate, most folks are conditioned to believe that there are immutable rules that must be followed. What immediately comes to mind is a merchant's stall in Morocco where the buyer and seller smoke a hookah together and banter back and forth until an agreement is made.  The seller always starts high and the buyer always counters low. Then the seller comes down a little and the buyer comes up a little until they reach an amiable agreement that benefits both sides. The buyer leaves with his new rug feeling like he got the deal of the century, while the seller chuckles to himself about the rube that overspent on a rug he bought at wholesale. In today's real estate market, it is not that simple.

As a matter of fact, this kind of thinking can have very negative consequences in today's market.  It seems like almost every buyer I work with starts out with this mentality and it is very hard to get them to change their way of thinking. Even when a property is priced perfectly, most clients have this idea that they need to start low or they won't be giving themselves the opportunity to make the best deal. They don't want to beak the sacred laws governing the whole process of coming to an agreement. In many cases, this is the wrong approach entirely. You have to take into account the consequences of not acting quickly to wrap up a property you really want to buy. By coming in too low, you will actually cost yourself money. By not putting your best foot forward, you are giving another buyer the opportunity to put in an offer and force a best and final situation. Even worse, if your initial offer was weak and your competitors offer is strong, they may just discount your offer entirely and choose to deal directly with the other buyer. Even though you are willing to go higher, you might not get another shot.

In order to be sure you will get a fighting chance, you need to write an offer knowing that your first offer may be your only shot at buying the property. I always tell my clients to make sure their first offer is something that has a chance of being accepted. If the house you want to buy is priced correctly and is a good deal, a full price offer is always a great way to go. You can wrap the house up right away and take any other buyers out of the equation. I can't begin to tell you how many times I have had buyer's try to cut a couple of grand off a house they really wanted to buy, only to end up having to spend thousands of dollars over the list price because they didn't listen to me. It is even worse when they lose the house entirely to another buyer because the other buyer came in strong and didn't try to nickel and dime the seller.  If you want to buy a house that nobody else is remotely interested in, forget everything you have just read. If you want to buy a property that is well priced and will probably garner a great deal of interest, remember that, sometimes, your first offer should be your best offer.

I just wanted to take a minute to tell everybody out there about how great Homepath lending really is. I have sold six properties this year with the Homepath program, and they have all been very easy transactions. For those of you who have never heard of it, Homepath lending is a program offered by Fannie Mae on select bank owned homes in their portfolio. With the utter lack of programs designed to help buyers get into homes with a low down payment, this can be a godsend to buyers.

One of the main benefits of the program is a low down payment. Qualified first time or primary home buyers can get in with as little as 3% down. Second home buyers can get in for only 10% down. Another huge advantage is the fact that Homepath does not require an appraisal on the subject property. With the huge amount of incompetent appraisers blowing deals in our area, this is fantastic. Since appraisals can range anywhere from $300 to $600 dollars, this is a big savings right off the bat.

Homepath borrowers also are not required to pay PMI insurance. If you don't know what that is, it's a monthly insurance premium that mortgage holders force homeowners to pay if they put less than 20% down at the time of purchase. This also is a big savings. Which is usually around $100.00 a month. Homepath also will usually contribute towards the buyers closing costs. If the offer is written correctly, that is.

To find out what properties in your area qualify, go to www. homepath.com and type in your information. A list of all the Fannie Mae properties will appear, as well as information as to which ones qualify for the program.  For help with Big Bear properties I recommend Martha McKinley at Guild Mortgage (909) 866-6856 to get you preapproved with a homepath loan. After that, contact Joe or me to get an experienced Realtor in your corner. We both have a great deal of experience with these properties and would love the opportunity to use it for you.

I just wanted to take this opportunity to reiterate a point I have brought up time and time again. If you are planning on buying a home, bank owned or not, your first order of business is to get preapproved. If you do not take the time to complete this essential step, you are setting yourself up for failure. Why go to all the trouble of finding a property, writing it up and getting your offer accepted, only to have your hopes dashed before your eyes? I know I have addressed this before, several times, but I think it is worthwhile to revisit the subject.

Being preapproved gives you instant credibility with a seller. When you present your offer to the seller, accompanied by a preapproval letter, it automatically lets the seller know that you are a buyer to be taken seriously. It also lets the seller know that you have taken the time to make sure you can actually purchase the property. I would never counsel a seller to accept an offer from someone who was not preapproved.

Being preapproved gives you the ability to move quickly when a property you want to buy comes on the market. Currently, in the Big Bear market, there are a great many buyers looking for a great buy. When one comes on the market, there can be many buyers making on offer on it. If you are preapproved and ready to buy, many times you can get in before the property gets noticed and buy it before anybody else has a chance to make a move. If you need to wait a few days to get preapproved, you have lost your advantage and will most likely have to get into a bidding war.

Being preapproved lets you know exactly how much of a house you can purchase. This can save you from wasting time looking at homes you can't buy. I can't tell you how many times I have been told by a buyer " Don't worry, my credit is excellent and I can buy this house with no problem", only to find out they actually cannot buy the home because it is out of their price range or they have too high of a debt to income ratio. Knowing your limits is a very valuable thing in looking for a home that is going to be a good fit for you.

Lastly, being preapproved is required to purchase a bank owned property. That's right. If you are not preapproved, a bank will not even consider your offer. If an offer is not accompanied by the preapproval letter, the asset manager won't even open it. Since most of the best buys on the market are bank owned homes, it only makes sense to position yourself to be able to purchase one. It takes a little effort, but it will make your home buying experience a much happier one.

Today I am speaking about Fannie Mae bank owned homes and how they differ from other REO"s in Big Bear Lake Ca. If you have any questions on Big Bear real estate, please contact me at izzy@thetimwoodgroup.com .

http://www.youtube.com/watch?v=fVUyDym03OQ

-Israel Barden 

I have always been taught that it takes a real man to admit when he is wrong. Or, in the case of short sales, at least partly wrong. Anyone who has been reading my blog for any length of time knows that I have never been much of a fan of short sales. In fact I have written on many occasions that the only thing a short sale does is cost you your clients. Recent events have led me to reevaluate my position.

The market in Big Bear is red hot at the moment. Just about every bank owned home that comes on the market is receiving multiple offers and selling for substantially over the list price. The competition is fierce and if a buyer is not very aggressive, their chance of getting the deal is not very high. In the current climate, if you are not ready to go at least ten percent over list price, it may not even be worth the effort to put in an offer. After losing out on several deals, I was forced to look at my strategy for buyers who are not interested in getting into a price war, but are still serious buyers. In short, I started to take short sales more seriously. Believe it or not, I have been having success.

In many cases, short sales are just as good of deals as bank owned homes. They just take longer to get done, up to three times as long in many cases. The question is, would you rather be patient and get a great buy or be impatient and end up with nothing? For buyers who can wait, short sales can be a very good deal. For one, because they are notoriously difficult, there usually is not even close to the amount of interest that a bank owned home generates. If you make a good offer, chances are you will get it with no competition. Then the waiting begins.

There are a few things short sale buyers need to keep in mind. Short sale sellers are able to sell their homes for less than they owe because they can prove a financial hardship. This means they have proven to the bank that they cannot afford to pay their mortgage. This means that there probably is not going to be any money to pay for any sort of repairs. If you decide to buy a short sale home, be prepared to buy it "as is ", with no repairs of any kind being done. Also, in many cases, the seller will not agree to pay for the section 1 termite repairs. Don't expect a home warranty either. Basically, be happy with the great price you are getting.

The chance of a short sale succeeding depends a great deal upon the listing agent and how competent they are in dealing with these transactions. If the listing agent is a full time professional Realtor with a ton of experience, the odds are in your favor. If the listing agent is a full time housewife who dabbles in real estate on the weekends, the odds are very poor. This is where my expertise comes into play. I can tell you whether a short sale has any kind of chance of being successful and I know how to structure an offer to make sure you are in a good position entering the deal.

In conclusion, bank owned homes and short sales are both great options for getting a good buy on a home in Big Bear. It is really just a matter of preference and what kind of buyer you are. No matter what the case, I can get the job done for you. Please feel free to contact me with any questions or to schedule a time to view property. Izzy@thetimwoodgroup.com or 909-273-8980.

Let's get one thing straight. In most instances, the days of being able to lowball a bank owned property are over. There, I said it and I mean it. You used to be able to attempt it a few years back when there was a glut of properties and no buyers. Things have changed. Inventory is down by 50% and sales are up by 35%. This means there are much fewer houses to choose from and a much larger number of buyers to compete for what is available.

I can't tell you how many times I have seen buyers lose a property because they refuse to understand this fundamental change in our market.  If you see a house that you think is a great deal, I guarantee there are at least one or two other people who feel the same way. These people are also going to be putting in bids on the home in question. If you put in a low bid, you just took yourself out of the equation. In many cases, the bank will only respond to the offers they feel are the best. Odds are, you will not be given a chance to up your bid. In many instances, your first offer is your best offer. Many listing agents don't even want to get into all the drama of dealing with multiple offers. If a clean, all cash offer comes in, they will just advise the bank to take it as it is a " sure thing ."

In many cases, banks are pricing REO's below value to start a " price war." This strategy is very successful. The bank puts a home on the market substantially below value and watches the offers roll in. They then issue a best and final counter to all parties and take the highest offer. Recently, I had an opportunity to see this first hand. A nice home next to open acreage came on the market at $204,000. My clients loved the house, but I knew it was going to garner a large amount of attention. I advised them not to write an offer unless they were willing to go up to at least $230,000 or so. Since they did not want to spend that much on a vacation home, we didn't write an offer. I saw it closed last week at $255,000. That is just one example of how this system works.

There are a few instances where a lowball strategy can be successful. The most obvious case is where a home is overpriced and sitting on the market. These sellers may be getting tired of waiting and be willing to bend on price. However, you must take into account the fact that the house is overpriced to begin with. Even if you do manage to get a significant price decrease, you are probably only doing a little better than market value. If a home is in really bad shape, and you are handy, you may have a good opportunity to get a deal. Most people are not interested in a home that needs a ton of work and that may present a good chance for you to get a deal.

Keep in mind the fact that these homes are good deals to start with. In most cases, even if you have to go over list price, you are getting a great buy. When you are buying a house for 50% of what was paid for it a few years ago, you have no cause to complain. If you take the time to really put things into perspective, only then can really go about getting a good buy on a bank owned home.