If you're on top of things in the real estate industry, I'm sure you've heard by now that many are anticipating 2010 to be the year of the short sale.  There's also a lot of talk about "strategic" defaults, short sales and foreclosures, where home owners might still be able to afford the mortgage payments but are making a business decision to walk away from real estate because it doesn't make financial sense to keep paying the mortgage as is, especially if they are dipping into savings accounts to do so.

I'm curious, though, how this works in terms of short sales b/c almost every lender requires a hardship letter, outlining the reasons why a short sale has become necessary.  Clearly, issues like losing a job or serious illness would be considered a bonafide hardship by most lenders.  But I heard from one of my colleagues that in one case, the fact that the real estate market has gone down was enough to warrant a hardship, even though the seller in question didn't lose their job or have any other major changes in their financial situation.

Please share your thoughts and experiences on this.  Does this just vary depending on the lender(s) involved?  Thanks in advance for your insights.

Jean

Recently, one of my newer clients asked me, "Do you work with short sales?"  Her reason for asking was that one of the other agents she interviewed told her that he did not work with short sales.  I was somewhat surprised that there are still agents out there who will not work with a short sale. 
Of course, if you asked me a couple years ago before "short sale" became a common household word, I would have said that I'd stay away from them if I could help it. But as an agent, I have a responsibility to my clients to work in their best interests.    Sometimes, this might mean helping them to buy or sell in a short sale situation.  Can it be more complicated than a "regular" sale?  Of course!  But if I got into real estate simply to make an easy buck, then I would have left a long time ago.  Call it naïveté on my part, but it's actually important to me (and I'm sure this is true for many of my colleagues) that I help my clients find a home that they'll be happy with or if necessary, sell a home that is causing undue stress so that they can move ahead with their lives even if that means dealing with the added complications of a short sale.

A few stats as of the writing of this blog - these are active listings of houses and condos:

So, as a buyer's agent, would it make sense to stay away from short sales if it means ruling out 44-48% of the options upfront?  And many experts are predicting that the number of short sales will increase in the coming year.

 Caveat - short sales are not for everyone (for example, those who need to buy in a limited timeframe).  Like the disclaimers for any medications would say, please consult your local real estate professional to make sure a short sale is okay for you.  Common side effects may include nausea, dizziness, fatigue, shortness of breath, sleeplessness, irritability, depression and anxiety...Sorry, I just had to throw that in there...

"Multiple offers?  I thought we were in a Buyer's Market?"  Well, it certainly IS a great time to buy in that we are seeing interest rates that are still at historical lows coupled with housing prices that are more affordable.  But on the other hand, here in the San Francisco & Peninsula area, we are seeing an increasing number of multiple offer situations.  For example, on the last home my clients submitted an offer for, there were 26 (yes TWENTY-SIX!) offers, all of which were put in within the home's first two weeks on the market!  Whatever the reasons for this, it's become clear that if a home is well priced or below market value, there's a good possibility that prospective home buyers will find themselves in a multiple offer situation.  Here are five tips to help make your offer stronger:

•1)      PRICE - no matter how the market changes, this will always be one of the most important issues to a seller, whether you're dealing with a bank or a "real" seller.  Be sure to look at market activity in the area and then decide how much you are willing to pay for the home.  Just ask yourself: "How would I feel if someone else bid a little more than me and got the home instead?"  Of course, don't offer more than you feel comfortable with, but keep in mind that you might only have one chance.  Now is not the time to lowball.

•2)      KEEP IT CLEAN - what I mean by this is, try to keep your offer as simple as possible without asking the seller to do a bunch of work on the home.  Home sellers are trying to sell the home with the least amount of inconvenience, especially if you're talking about a bank-owned property.  Of course, if it looks like you're going to need to do some work and you need a little more cash upfront, you can negotiate for up to 3% of the purchase price in some closing costs, but be aware that this will mean that much less profit for the seller (hence, you've just reduced your edge in terms of price - see tip #1).

•3)      TIMING IS OF THE ESSENCE - as mentioned above, homes that are well priced or below market will often sell rather quickly.  If you are serious about buying a home, make sure to get pre-approved and have your loan agent and real estate agent get in touch with each other, so that you'll be in a position to submit an offer as soon as you find the perfect home.  I don't believe in rushing my clients, but on the other hand, I've seen far too many miss out on a purchase because they took too much time "thinking about it."

•4)      PRESENTATION MATTERS - although the price, terms & timing are essential in presenting a good offer, it's also important to make a good impression on the seller and listing agent.  All other things equal, it will help sway things in your favor if the offer is presented in a complete and professional manner.  Be sure that your offer includes a cover letter, a pre-approval letter, and a copy of your deposit (earnest money) check.  If the seller provides disclosures, sign them.  If you're purchasing a bank-owned house and the bank requires you to get pre-qualified through one of its agents, do it.  If you're dealing with a home owner, you might even consider writing a nice letter introducing yourself and telling them how lovely their house is...couldn't hurt, could it?

•5)      REPRESENTATION MATTERS - find an agent who can assist you with all of the above.  A professional and qualified agent will help guide you through the home buying process and make sure that you have all the resources you need in order to make an informed decision.  He or she will be in contact with the listing agent and help present your offer in the best light possible.

This blog is already longer than intended and I'm sure there might be other issues I haven't covered here, so I'd love to hear thoughts from other agents and home sellers on this subject.  While it's not easy being in a multiple offer situation, the increased activity among home buyers is definitely a good sign for the real estate market and the economy as a whole.

I learned something new today that I thought I would pass on to others.  If one of the buyers is on maternity leave, there are some lenders who will not count that person's income when it comes to qualifying for a loan.  The apparent rationale is that there is a probability that after having a baby, the mother might end up not returning to work and hence, will not have that income any more to help pay for the mortgage.  Just something to keep in mind if you (or a client) are getting ready to have a baby and buy a home around the same time.  Not sure if this applies to all areas and lenders, so be sure to check with your loan agent or mortgage broker.

I recently noted on twitter that the real estate market has definitely been picking up here in the San Francisco Peninsula.  My Prudential office is based in San Bruno, but our agents (like in most offices) work in cities throughout this area - San Bruno (of course), Daly City, Millbrae, Burlingame, San Francisco, Hayward, Antioch, Hercules, etc.  Anyway, our sales board is almost full for January already, which I don't recall happening for any month in the past year.  I've been incredibly busy with buyer consultations, showing homes and providing CMAs, and many of my fellow agents have been as well.  The atmosphere in the office has been buzzing with activity.

When I tweeted about this, I actually received feedback from agents in other places, like GA, IN, NY, etc, that they're seeing increased activity as well.  I thought it might be a good experiment to see if we could have a nationwide informal reporting in from agents as to what they're seeing "on the front lines" of the real estate market.  If this works right, wouldn't it be exciting for us to be able to tell people some GOOD NEWS about the economy.  Of course, busy doesn't automatically translate into sales, but I for one would love to hear that this increased activity is not limited to my area in my state.

So, if you're reading this, please report in - the more the merrier!  (No, this is not an attempt to get more AR pts - I'm still not completely sure what the pts do for me).  I really would just like to know if this is a trend toward good things to come in 2009.  And if you need some positive vibes in your direction, perhaps we can wave some a little your way.  Here's to hoping for a great year for all of us!

Jean

Recently, many people in our office have been learning more and more about social networking sites, such as twitter, Facebook, LinkedIn, FriendFeed...you get the idea.  One of the questions I hear often is, "How is twitter going to help me get more business?  What good does it do to let people know what I had for breakfast?"  The basic answer for this is that this is just another way to make more contacts, put ourselves in front of more people, and hopefully become known as the "real estate experts" in our area.  But another question comes to mind: "How do my clients benefit from the fact that I'm on twitter and other such sites?"  Here are some reasons why it might be beneficial to you to have an agent actively engaged in social networking on-line:

1) You can get to know more about an agent before you decide whether or not to work with him or her.  When buying or selling your home, it only makes sense that you should feel comfortable with the person who will be helping you with one of the most important steps in your life, especially as they will probably need to know more about your finances and living situation than some of your own family members.

2) If you're buying a home, your agent will be able to more easily access information about homes and neighborhoods, and pass them on to you.  In fact, he or she will probably have websites and blogs that provide that information on an up-to-date basis.  You can also be assured of having quick and easy access to your agent, when questions come up along the way.

3) If you're selling a home, your agent can expose your property to a wider network of potential buyers, even from other countries!  Surveys indicate that about 80% of home buyers begin their search on the internet.  Don't you want an agent who knows how to reach those buyers beyond just putting your listing in the MLS?

4) You can know that your agent is on top of the latest technologies and is working hard to develop themselves.  Every seminar and class that I attend is motivated by the goal of providing better service to my clients.  Don't you deserve to have an agent that feels the same way?

5) A real estate agent who is well connected (online & otherwise) is probably in a better position to handle transactions and work with other agents on your behalf.  If you're relocating to another area, they are also more likely to be able to help you find a great agent in that area.

And finally, don't you want to know what I had for dinner yesterday? (j/k) I'm sure there are more reasons and examples that others can give, and I'd love to hear them.  One disclaimer:  I'm not saying that an agent who doesn't do these things is not a good agent - I know many great agents who don't even know what twitter is.  But if you're reading this blog, then you obviously have a computer and are somewhat comfortable with the whole realm of blogs and social networking.  If you're thinking about buying or selling a home, why not use your computer to help you find an agent who will use the "latest and greatest" to help you achieve your real estate goals?

Oh, and if you're not already, you're welcome to follow me on twitter at http://twitter.com/jeanjoh.  Hope to meet you there.  Tweet!

My real estate farm is in Millbrae, California - a very nice neighborhood with many people who have lived in their home for decades.  On one of my door knocking rounds, I met one very nice couple, who also came to our company's Shredding Party last April.  They told me that they had lived in their home for most of their lives and that they would not be moving until "in a wooden box."  I asked how long they had lived in their home, and they said, "Longer than you've been alive."  They then told me that they had been in their home for 43 years, and I agreed with them that it HAD been longer than I'd been alive.

Anyway, I end up meeting many seniors in my area and was thinking about getting the SRES designation so that I could develop further expertise in how to help them with their real estate needs.  I would appreciate feedback from those of you who already have this certification.  I am of the frame of mind that learning and developing myself is always a good idea, but it would be great to hear some stories of how this has helped you & your clients and if this certification has been worth the investment.

Thanks in advance for your input!

My thinking is, if I'm going to invest a weekend afternoon away from my family, I want my open houses to be productive.  I'm sure we all have something else we could be doing with our time.  So, here are a few ideas of things that I've found to make my open houses even more worth my time:

1) Do something special for the neighbors.  Have a special "sneak preview" open house for neighbors on a Saturday.  Whenever I can, I also like to print out invitation postcards and go around the neighborhood to personally invite neighbors to the open house.  A fellow agent takes her remaining cookies/snacks around to the neighbors after her open houses and has made some good contacts there.

2) Advertise on the internet.  Many of you are probably already doing this, but if you're not, you're really missing out on some good advertising.  Craigslist.com is a great source of free advertising.  I also use postlets.com to generate a nicely formatted webpage to use in craigslist and my other internet advertising.

3) Be creative with your open house times.  As mentioned earlier, consider doing a special open house on Saturday just for the neighbors.  If the home is near a school, host an open house right after school gets out.  Try having an open house during the week at lunch hour or twilight.

4) Think of creative snacks for people to take with them.  This is especially useful if children come along.  One idea: microwave popcorn with your business card attached and a "Thanks for popping by!" label on the front.

5) Provide detailed feedback to your sellers.  Ask visitors for their thoughts about the home and write these down to pass on to your sellers.  They will appreciate knowing what potential buyers think as well as any suggestions on how to improve the marketing of their home.  Even if I'm not the listing agent, I like to send a report (w/o names) to the listing agent after each open house.  We all have to help each other when we can, right?

6) Prepare a binder with other active listings in the area.  This has several benefits: 1) Shows buyers how your home compares with others in the area, 2) Gives potential buyers a reason to stay a little longer and talk with you, and 3) Shows that you are an agent interested in going the "extra mile" to provide service.

7) Provide a "Recently Sold" sheet for visitors to take with them.  This is a list of comparable homes in the area that have sold in the last three or six months, depending on activity.  I put my contact information on the bottom of these sheets and have been surprised at how popular they are, especially with those who live in the area.

If you have any other creative suggestions, please share!

Heard the other day that Hyundai has a new Assurance Program.  Apparently, if you buy a new car but lose your job within 12 months due to circumstances beyond your control,  you can give the car back instead of worrying about the payments or ruining your credit.

Hmmm...was just wondering how it would be if we could do the same for selling homes?  I have some clients who are hesitant about buying a home, because they are afraid they may lose their jobs in the near future, even if there is no indication that they will.  Such a program, although obviously impossible because each home is individually owned, might help these people overcome their fears of the unknown.  Now, THAT's a stimulus plan that might work.