Normally, these days I spend most of my ActiveRain time writing articles that are intended to share what I know (or have recently learned or experienced) and apply if to generate business for me.
Having been on ActiveRain since June, 2006 and publishing nearly 400 articles, I have shared a bit of my personal life. In previous articles, I revealed that my life revolves around my faith and love of Jesus Christ first and foremost followed very closely by my wife, Sherri.
Well, this article is an update on Sherri’s condition. I have received many inquires over the last several months and I suppose I have ignored most of them because of my own denial – not that I did not have time to answer or felt as if what is going on in my life is none of anyone’s business. After all, I am the one who initially shared that Sherri has cancer.
Let me start by saying that Sherri is a fighter and a lover of life – which I suppose is part of why I love her so much…which makes this very hard. Her love of the Lord is such a comfort, because no matter what happens, she is confident that she will spend eternity with her Lord – and what could be so bad about that?
I first met Sherri a dozen years ago – right after she was diagnosed with her LCC cancer – a rare strain that was slow growing. The cancer appears as either Leukemia or Lymphoma – and Sherri, of course, has fought both over the years.
Her original prognosis was she should be able to lat about 5 years. Well, six rounds of Chemo later Sherri is still here loving life and shinning as a bright light and inspiration for all who know her.
Last April, (on my birthday) Sherri opted out of continuing her Chemo, as she was convinced it would be the death of her. She instead decided to preserve what dignity she had and wanted as much quality of life that she could muster – and chemo was not the solution.
Her Oncologist was guarded when he predicted that she would probably live for another 6 months and signed off placing her on home hospice care.
For over a year now, Sherri has continued to bless me with her smile and tenderness. It has been a hard year, as her primary care giver. There is no family within a hundred miles and those that are around are tired of hearing how sick she is. It’s sad really, instead of embracing the fight, they think she is a drama queen, or something – which is so far from the case. Needless to say, there is not a lot of support from our families.
We do have a close network of friends, neighbors and church members that mean a lot of both of us. Without them, I don’t think either of us would have survived this long. I guess it goes to prove that you don’t get to choose your family but you do get to choose your friends and spouse – and we have chosen well.
The other thing that really keeps Sherri going is her love for her dogs. We have a pair of Golden Retrievers – Toby and Daffodil who had two litters of puppies last year. What is really cool is that 5 of the 13 puppies are with people we see on a regular basis – so we get to experience puppy hood and the raising of these wonderful puppies through our friends without having to clean up the poop or worry about the chewing of slippers (or couches, etc). Daffodil gained about 25 pounds after visiting the vet to make sure she does not have any more puppies.
Our other two dogs are Daisy the Dalmatian, who has been treated like a princess for 8 years now and our German Sheppard, Tucker who is convinced that it is his job to keep order in the house. Tucker is lovingly referred to as the Sherriff – as he will do his best to maintain that order!
Sherri celebrated her 58th birthday the end of March and she wanted to have a party. I made arrangements at her favorite Mexican Restaurant and 18 of her closest loved ones showed up – no family, but she was definitely loved by everyone there! It was a great time, complete with balloons, party hats and presents.
Since before her birthday, Sherri seemed to be slipping. One thing I have seen with her health is that she goes through a process I refer to as ‘Stair-Steppin”. She remains stable on a plateau for some time and then for one reason or another, the crashes – scarring everyone around her. Just in the last year, there have been at least 4 or 5 incidents where I was making mental plans to say good-by. Then as if a miracle happens, she pulls out and finds herself on a new plateau – unfortunately, it is lower that the one that proceeded it.
However, what has been going on recently has not been a crash as I have seen so many times in the past. Rather it has been a steady decline. What is encouraging is she has not really lost any weight – but the symptoms are just as obvious. First, she itches all over. Her hands shake constantly. The most disturbing symptom is her confusion.
A couple of weeks ago, the doctor ordered a bank of blood tests. We were not encouraged when the blood tech came back to repeat the tests. Then this last Wednesday afternoon, we received a call form Sherri’s doctor letting us know he was on his way over and wanted to make sure that I would be there as well. I was there.
It was a nice day – we decided to sit and wait outside on our front deck. It was such a beautiful day. We talked about our view and how much we loved our home that we bought 10 years earlier. Discussions about improvements we made and ones that are still on the drawing board – wondering if we would ever get them done. We threw the ball for the Golden’s to play fetch with – they just love to run and are so beautiful when they run. I guess we both knew we were getting bad news; we just wanted to hang on to what we had up to this point.
Our doctor is so calm – I guess being a Hospice Doctor you have to be. What else is there for him to do but provide comfort to your patients? He first did his exam – listened to the heart and lungs – announcing they both sound good.
Then the bomb.
Sherri’s symptoms are a direct result of high ammonia levels in her system. Ammonia levels in a normal healthy body typically range between a 7 and an 11. Sherri has an 87. Her white blood count was also much higher than we would have liked – but the number was lost in the cloud of news about the ammonia.
Ammonia is created by the liver – it is an irreversible condition. What we can do is treat the symptoms and this is done by keeping her system flushed with an extremely powerful prescription laxative. Sherri also is advised to eat a low protein diet (steak is her favorite food and we try to eat one at least once a week) and the funny thing is the doctor took her off of her cholesterol medicine, saying that there is very little chance that she will ever have an y cholesterol complications. (The good news is we take the same cholesterol medicine – except hers is a lot cheaper than mine because of her hospice status.)
Another amusing antidote from Sherri’s exam on our front porch revolves around a small growth she has on her lower back. The doctor looked at it and announced it was more than likely a pre-cancerous growth but he would not be doing anything about it, as it normally takes 5 years to metastasize into an actual cancer.
Oh good, Sherri gets to live with the potential of high cholesterol and skin cancer and not even have to worry or take any precautions – how fun can that be?
Since the big flush started last week, Sherri has improved nicely. She still shakes, but her mind is a lot clearer than it was and the constant whole body itch is all but gone. She still occasionally struggles looking for the right word, but we are sure that has more to do with the 2-300 mg of morphine she takes on a daily basis to control the pain. At least she is not delusional and talking gibberish.
Sherri sleeps 20 plus hours a day and has a minimum of one Ensure a day for her nutrition – sometimes two and sometimes she will eat some solid food – but it is not unusual for her to go 2 or 3 days without any solid food.
When her doctor was here we discussed her treatment and prognosis. I suggested that perhaps Sherri cold go back to the first chemo she took – orally. The thought was it was mild and may just be able to reverse some of what was happening. Sherri agreed she could tolerate that and her hospice doctor agreed to consult wither oncologist.
On Friday, we got the call that the oncologist had reviewed Sherri’s file and other that a full found of very powerful chemo, there was nothing left for him to do…and yes, he thought there was a very good chance that she would die while undergoing chemo. The good news is that he was very pleased to hear that she was still alive. He had thought she would have been gone for about 6 months by now.
As far as the future – I guess it is hard for me to know. Her hospice doctor could have been a salesman – he can look you in the eye and tell you everything is OK and you almost believe him.
He tells us that Sherri is strong and who knows, she can fight this and maybe live for another year or two. However, when we spoke with Sherri’s nurse, we felt more like straight information was being provided. The nurse says that it is possible that Sherri is still here for a year, but really does not think that will happen. Realistically, she thinks 2 or 3 months would be a blessing.
So we take one day at a time. We are not making any long term plans and make short goals. Right now, we look forward to our 7th wedding anniversary on July 28th. That doesn’t seem like it is too much to ask, does it?
Thanks you for your thoughts, well wishes and most importantly your prayers for both of us.
God Bless,
John
PS – Thank you for your continued support. I know many of you will leave comments wishing us both your comfort…and it is very much appreciated.
I am sorry to say, that I will probably not respond to all of the comments – at least not right away. Please understand how difficult this situation is and that I do not have the strength to re-visit it on a regular basis. I must reserve my strength to serve and care for Sherri and her needs. She does not know about this post and I will probably not reveal it to her right away, but when I do, it will be awesome to have your well wishes and prayers posted – I know she will appreciate it and will make her feel special again.
About the Author: John Occhi REO REALTOR®, successfully started an REO Team in Hemet, CA that quickly expanded to 3 agents and 2 admin members with over 50 REO properties under his direct control. He was able to keep approximately 20% of his assigned inventory in escrow at any given time and another 20% entering the pipeline with properties in the pre-marketing phase of the business. Today John has been sought out to assist one of the largest franchises in America to expand their REO operations into the Inland Empire.
The CrestREO REO Home Buyer Protection Program
CrestREO has REO sales closings (listings only) that total over $1 billion in asset value. Imagine how much volume 300+ Century 21 Crest REALTORS® have represented buyers to successfully close REO listings.
In order to provide the public with a no-pressure hassle free system for shopping and buying Hemet - San Jacinto REO properties, CrestREO is please to announce the release of the proprietary REO Home Buyer Protection Program.
This FREE Service is reserved exclusively for our VIP Buyer Clients, initially in the Hemet-San Jacinto CA market area.
When you enroll in the CrestREO REO Home Buyer Protection Program a Crest REO Home Buying Specialist will be assigned to help you...
Find The Very Best Home Loan that You will Qualify For
Find The Lowest Down Payment Available!
Find The Lowest Interest Rate Available!
Find The Lowest Monthly Payment Available!
Again, the services outlined here are all FREE and will never cost you a single dime!
The Banks Want You to Use CrestREO To Help You Buy Your REO Home! (The Most Important part of this entire Website)
Banks, Asset Managers and Lenders receive many offers on their REO homes for sale...even the ones that appear to sit on the market forever.
There are many offers that come in that are from low-ball bottom feeders that believe if they throw enough garbage offers against the wall, that some of it will stick...and occasionally, some of it does stick.
Banks, Asset Managers and Investors also receive offers to buy their REO assets from buyers that may otherwise be good offers from good buyers. Unfortunately for the buyers, in many cases agents today do not know how to best structure an offer to purchase an REO home. Most offers written by non-REO agents are prepared as if the offer as it is for buying a home from the original homeowner, just as if times were still good in the current Real Estate market - and we know that is not the case.
Truth be told, the best offers that the Banks, Asset Managers and Investors receive and approve will typically come from a REO agent. It does not matter whose listing it is, REO agents know what the Banks, Asset Managers and Investors are looking for to get offers accepted and get deals done.
Every REO contract will have a set of lender generated addendum's that will have their own particular terms - often negating important terms protecting the consumer in the standard forms that all California REALTORS® typically write their offers on. As an example -
Do you know how many days you will have to complete your due diligence? What rights do you have to inspect the REO?
Do you know what will happen if your escrow date is delayed? What if it's not your fault?
Do you know how much the Bank, Asset Manager or Investor will require for a good faith deposit? Under what terms and at what point does your good faith security deposit become a risk?
Do you know what notices the bank, asset manager or investor has to provide? What disclosures will they provide regarding the property?
And, maybe most importantly...
Do you know what will happen if there is a dispute???
These and many other issues that are not commonly considered in a traditional real estate transaction often blow up into problems that could have been avoided.
These variables are often unique to the REO theater causing situations with buyers who want to buy REO property. Unfortunately, the problem is usually only a problem because of agent inexperience. Buyers select an agent to represent them buy a REO home based on anything but REO experience. Most agents today do not have the same level of experience as a REO listing agent, such as John Occhi and other team members found at CrestREO.
When you let a CrestREO Home Buying Specialist help position you, you will achieve the most home for your money in the smoothest transaction possible, using proven consumer innovations and the latest technology that will go far beyond the resources or knowledge of the traditional agent in the field who is still looking to sell homes using traditional methods.
The REO Home Buyer Protection Program Focuses on YOUR NEEDS!
Your CrestREO Home Buying Specialist will coordinate as the lead person of a selected team of professionals experienced in meeting the needs of the REO home buyer of today.
FIRST - The first step is to take you through the loan process - and not out looking at homes. So many agents and buyers just want to get out and look at a home - often leading to disappointment because they can't qualify for a loan in today's market that will allow them to buy the home they think they can afford.
A big factor to the problem we are having today revolves around lenders who were able to make loan programs work around buyers, just a short time ago. Today, however, the buyer either fits the mold of an available program or they don't and there just isn't getting around it.
Yes, it is tougher to get a loan today - but the loan you get as a qualified buyer will enable you to afford the monthly payments and not worry about losing the home yourself in a couple of years.
Your CrestREO Home Buying Specialistworks closely with several direct lenders that fully understand the REO home buying process.
Once your Crest Home Buying Specialist understands the variables of your personal situation, they will be able to guide you to the lender who will most likely be able to help you achieve your goal.
Today, there are Federally Insured programs where the lender will allow the seller to contribute up to 3% for closing costs and another program that will piggy-back on the first allowing the seller to contribute another 3% for down-payment assistance. As a first time home buyer, there is currently a program that will finance 97% of the purchase price.
This means you can buy a home today for next to zero out of pocket.
By qualifying for a loan before you start writing offers, you will have the ability to write the offer as if you are a cash buyer - and there is nothing more that the lenders like when considering the numerous offers they receive.
The added benefit of pre-approval is that you will be able to close escrow much quicker, once an offer has been accepted by the bank, lender or investor that foreclosed on the property. Now, the pressure is on the seller delivering the title and not you delivering the money.
The pre-approval procedure is very simple. A pre-qualification can be initiated as soon as you complete a loan application and a credit report is pulled so the loan officer knows your credit score (FICO) and can identify any preliminary red flags. This is the extent most REALTORS® and lenders will take prior to an offer being written and escrow opened.
The next step the underwriter will take is to verify your personal information, such as your employment, bank accounts and other information you provided on your loan application. Once this is done, the underwriter, who has final approval authority on your loan, will calculate your borrowing power and issue an Approval Letter that is as powerful as a blank check, to buy the REO home of your dreams.
Based on the strong relationships and expertise of CrestREO, this process can generally be accomplished in about a week - giving you the power to shop as if you were a cash buyer.
The edge CrestREO provides our REO Buyers is unparalleled in today's market!
SECOND - Once armed with your Letter of Approval from a major Direct Lender you are now ready to sit down with your CrestREO Home Buying Specialist . In this initial meeting you will have the opportunity to have all of your questions and concerns addressed, discuss current market conditions as they relate to you and your unique goals and most importantly review all of the important details in finding your special REO home - at the best possible price.
One way of doing this is by playing the game of "Nines". This is where you make two separate lists - select 9 absolutely must have features...maybe the number of bedrooms, a pool, a cul-de-sac location or whatever is important to you needs.
The other list of 9 is what you do not want in a home - under any circumstances...could be an all electric kitchen, an exterior lot, or maybe you don't want a pool. You can also call this "Nine of This and None of That".
Once we know what you are looking for and we have built a custom CrestREO Home-Finding Checklist we will take this data and enter into both the Tempo MLS (SoCalMLS and SandiCor) and MRMLS which provide virtually 99+% MLS coverage of all of Southern California.
Each MLS will search it's database based on the complex algorithms we have developed to find the right home for you in the right neighborhood at the right price and provide you with a report to your email box every morning with every new listing that meets your needs as well as homes that have reduced their price and now fall into your price range.
Because this is computer generated, there will be homes that do not meet all of your requested criteria. You will have the opportunity to review all of the properties sent from each MLS. Depending on you and your priorities - we can set the results to be published once a day, once a week or even once a month - the choice is yours.
Review the listings we send and pick the ones you would like to see - then do a drive by so see if they still meet your expectations. When you find one you like, let us know and we will dig into information available to us as your REALTOR® for the property, providing you with our Proprietary CrestREO Market Report with up-to-date comps and other valuable information that will help assess the value and asking price. Only then, if you are still interested, we will arrange for a private showing.
Never Worry - You will never have to worry about pressure from us to buy any home - regardless of whose listing it is. We know that this may be the most important decision of your life and we don't want to make if for you - we want to help facilitate the decision making process.
Bottom line, the CrestREO REO Home Buyer Protection Program Puts YOU IN CONTROL!!!
As a VIP Buyer in the CrestREO REO Home Buyer Protection Program you will never again have to...
Search the Papers and Internet for homes because they are now coming straight to you, before other buyers have a chance to even consider them.
Waste your time going from house to house because some real estate agent picked them out for you - you will only be looking at homes you want to see that match your specific criteria on your own timeline.
Feel Pressure to buy a home, since most real estate agents will pick out a group of homes and try and pressure you into making a decision to buy one. With CrestREO, there is never any pressure to buy a home that's not right for you.
Worry about paying too much for a home. By being first to see a home we may have an offer written and accepted before the rest of the buyers even know the home is on the market. You should be able to avoid many multiple-offer situations... generating a lower price for you!
THIRD - The REO home shopping process may be fun or it may be grueling (or both) - but finding a good home is the easy part of real estate. Once you have determined which home is best for you and the one that you want, your CrestREO Home Buying Specialist will craft an offer and negotiate for you, taking advantage of our intimate knowledge of the market and insight what each bank, asset manager or investor will and will not accept.
We will review all of the criteria necessary for a good offer and how best to position you so that your offer is accepted.. It is important that you think through every aspect of what you are offering - so we will take our time and do it right.
We will communicate with the lenders REO Agent to present the offer in the best possible light. It's amazing how many offers are submitted by just faxing the documents to the listing agents without any communication or coordination. Needless to say, very few of those offers ever get accepted.
Negotiation is the process of give and take - although many times we are able to successfully present an offer that meets the criteria of the lender, there are other times when we have to go round after round of offer and counter-offer. We know what we are doing at CrestREO and will negotiate the best possible purchase price for you, or advise you to let a home go if it is going to be too expensive and then we will start all over again - without every charging you a single penny for all of these services!!!
Then, once the offer has been negotiated and accepted the toughest part is still ahead - closing escrow. However, with the surprises that lenders often throw into the process eliminated with your Underwriter Approval, the process will be much smoother than many other escrows where the buyer is still scrambling for documents to prove their credit worthiness. Our skilled transaction coordinators will manage all of the paperwork necessary to ensure a smooth on-time closing of your escrow so you can take possession and move into your REO home, as planned.
Your Secret Advantage - Our Specialized Knowledge
Perhaps one of the biggest advantages that an REO agent has in the current market place is our very specialized knowledge. Not only are we experts in the process of buying and selling bank owned REO homes but we are experts in the actual market, as well - making sure you never pay too much for a REO home..
You see, being an REO Agent has a unique responsibility to the Banks, Asset Managers and Investors who actually own these properties. REO Agents are the eyes and ears of our selling clients and we have a huge responsibility for providing up-to-date market analysis information for every property we are trusted to dispose of. There are a series of special reports known as BPO's and MSR's that are completed on every assigned REO listing.
A BPO, or Broker Price Opinion, is a comprehensive in-depth analysis of the market and how it relates to a particular property. These are typically completed when the property is in the pre-marketing stage of the listing process and then repeated every 90 days. A MSR, or Monthly Status Report is a snapshot of market activity for the past 30 days hat allows the Banks, Asset Managers and Investors to watch the variations of the market, as it relates to each individual REO property. These reports not only provide our clients with the data so they can keep their finger on the pulse; arming them with valuable insight to use to consider accepting or rejecting offers and even to justify price reductions in the MLS - they equip the agents with an in-depth study of the current market conditions as well.
The advantage in working with the CrestREO Team is unparalleled market knowledge of local conditions which will help you get the very best price for your REO home purchase.
To find out more about the The CrestREO REO Home Buyer Protection Program please visit our website, www.BuyaCAReo.Com
No doubt the current market conditions have changed in nearly every real estate market across the country. In Hemet, CA, we have seen dramatic transformations over a year earlier, which is why it is so important to properly understand the value of a home in today’s market – whether you are trying to buy or sell an REO (Real Estate Owned – bank owned homes) or other property.
(The figures reported here only represent the data supplied by the local Hemet San Jacinto Association of REALTORS® - HSJAOR - on the local SoCalMLS and do not reflect the properties that were listed in a neighboring MLS – IMRMLS. The IMRMLS is used throughout South West Riverside County by Riverside County and San Bernardino County real estate agents from in the Inland Empire, in Southern California, who are not an actual part of the Hemet – San Jacinto market.)
We have seen home buyers slowly getting off the fence in the last month or so, with many of the best priced homes receiving multiple offers, over asking price – sending them into escrow. There are a handful of cash investors taking advantage of the low entry point of Hemet investment homes for sale as well as first time buyers taking advantage of the down-payment assistance programs that cleared major legal hurdles in March of 2008.
To look back to February, 2005 the market price points were very similar to what they are today. The difference, of course, they were on the way up in 2005 and n 2008 they are going back down.
In February 2005, there were 161 new listings in the SoCalMLS. The average asking price was $294,296. That same month saw 99 homes for sale close escrow for an average asking price of $257,973.
By February 2006, there must have been a lot of excitement in the air as 195 Hemet homeowners put their homes up for sale in the SoCalMLS, asking $322,140, on overage. The actual numbers of homes sold during the month of February 2006 slipped to 87. The good news is the average sold price reached it’s highest ever for a February: $302,941.
Then in February 2007, just as many Hemet home sellers put their home on the market, with 195 new entries on the SoCalMLS and the asking price increased to $339,820. However, the number that actually closed escrow continued to decline to 64 with a shrinking sale price of $300,059.
As a point of reference, February 2007 was the last complete month where sub-prime mortgages were offered. The first signs of collapse did not appear until March 10th, 2007 when New Century funded its last loan before shutting its doors.
In February 2008, the grim reality of the current real estate market is more than obvious. First, there were only 136 new listings added to our inventory – most of which were either short sale listings or REO’s. The average asking price was the lowest it’s been since before February, 2005 (the earliest point of data that I have easy access to). Sadly, only 26 homes closed escrow in Hemet, CA in February 2008, for an average sold price of $268,730. <!--[if !supportLineBreakNewLine]--> <!--[endif]-->
I hope you have found this collection of data and my analysis to be helpful in seeing just what has taken place and what is taking place in the current real estate market in Hemet CA. It is my goal to update this column each month as the year unfolds, so please check back for more useful information.
January is traditionally one of the slower months of the year for selling real estate in San Jacinto CA. In an effort to document what is taking place in the Hemet San Jacinto Valley, I have started a series of monthly market reports, showing the overall condition of the current market and referencing to the year prior.
It should be noted that the data I have chosen to analyze comes exclusively from the Tempo SoCalMLS system which is the MLS used exclusively by the Hemet San Jacinto Association of REALTORS® (HSJAOR). Most agents from outside our unique market area belong to the MRMLS, a competitor MLS system that does not post to the local market data. Yes, there are other sales that can be found from other sources – but at the end of the day, it is all going to average out to about the same. So, just bear in mind that the data is limited but it comes from the best local source we have – the HSJAOR.
As I started, January is a slow month for real estate sales in San Jacinto. In 2007 there were only 18 residential properties that closed escrow and in 2008, January had 50% less sales with 9.
Since San Jacinto has experienced such a large influx of new construction over the past few years, it should be pointed out that the homes being reported in the MLS are getting larger – so the sold price is not the only criteria you should consider, when looking at market data. <!--[if !supportLineBreakNewLine]--> <!--[endif]-->
For example, in January 2007 the average size home was 1628 square feet of living space with its 3 bedrooms 2 and a quarter baths. By February 2008, the average home sold in San Jacinto increased to 2101 square feet and grew by an entire bedroom to 4 and an additional quarter bath bringing the average bath size to 2.5.
Unfortunately, the added size did not help the selling price much. The AVERAGE LIST PRICE of a home in San Jacinto, CA dipped from $305,316 to only $247,355. Even the largest home sold in January was a big difference. Although both years show a 5 bedroom 3 bath home selling, the one in 2007 was 3102 square feet and the one ion 2008 increased its size 5.54% to 3,274 sq ft.
The AVERAGE LIST PRICE per SQUARE FOOT (LP/SqFt) dropped from the January 2007 amount of $196 per sq ft down 36.22% to a mere $125 per sq ft. The LP/SqFt took an even bigger hit, despite its increased size; dropping 44.33% from $282 per Sq Ft down to $157 per Sq Ft.
Looking at what really matters, the SOLD PRICE does not improve the picture. In January 2007 the AVERAGE SOLD PRICE for a home in San Jacinto was $299,438. A year later, in January 2008 the MLS reports the AVERAGE SOLD PRICE for a home in San Jacinto was only $237,544. Again, it appears the bigger the home the bigger the beating. The largest home sold in San Jacinto in January 2007 was sold for $434,900 compared to the larger home that sold in January 2008 for only $325,000. The horror story continues when looking at the SELLING PRICE per SQUARE FOOT (SP/SqFt) for these large homes. The highest SP/SqFt reported in January 2007 was $277 and in January 2008 it tanked at only $148 – a dip of 46.57%. Most importantly, the AVERAGE SP/SqFt took the elevator $72 down from $192 per Sq Ft to $120 a Sq Ft or a 37.5% decrease in value per square foot of a home in San Jacinto, California.
The longer a home sits on the market, the more likely it will be reduced in price. The data I use to analyze the market reports the LIST PRICE as the LIST PIECE when an offer is accepted. A number to consider when looking at the overall condition of the market is the ORIGINAL LIST PRICE (OLP) and how that compares to the final SOLD PRICE. In comparing the OLP to the SP (SP/OLP) January 2007 saw a difference in value of 6% whereas the difference in January 2008 increased 5% to 11%.
DAYS ON MARKET (DOM) are another number that must be taken into consideration when analyzing conditions in a real estate market. The report I looked at does not show great concern here – and I’m not sure why, other than the fact that there are so few home to put into the mix, that any deviation has a significant impact on the overall numbers. In January 2007 the AVERAGE DOM was 70 days which only increased 8 days or 11.43% to 78 DOM. To contrast the longest DOM in January 2007 the longest barely reached 6 months with 181 DOM where in January 2008 the home that sat on the market before it finally sold was there 76 days longer at 257 DOM – or an increase in marketing time of 41.99%.
Hemet CA has continued to experience a dramatic downturn in the real estate market. This report is based on activity reported by the local MLS, Tempo – SoCalMLS, which is used by the Hemet San Jacinto Association of REALTORS® (HSJAOR). There is additional data that can be found in the MRMLS which is the MLS system that the boards in our surrounding markets use.
The data analogized in the segment if for the period of February 2008 and how it compares to the activity of February, 2007. First, it should be reported a 59.38% decrease in the number of closed escrows – dropping from 64 residential properties reported in February 2007 to only 26 in February. 2008.
Perhaps the most shocking difference between the two periods is how close the AVERAGE LIST PRICE is, with only a 4.3% difference. February 2007 saw an average asking price of $302,742 while February, 2008 saw only a $13,012 drop in asking list price of $289,730.
However, as we know, asking and receiving are two different things, especially when it comes to selling a home in Hemet, CA. The AVERAGE SOLD PRICE in February 2007 was 99% of the LIST PRICE at $300,059 while the same period a year later saw the AVERAGE SOLD PRICE dip 10.4% to $268,842 which was 93% of the AVERAGE LIST PRICE.
In February 2007 the AVERAGE LIST PRICE per SQ FT (LP/SqFt) was $201 per Sq Ft and the AVERAGE SOLD PRICE per SQ FT (SP/SqFt) was close at $200 per Sq Ft. February 2008 saw a 26.87% dip in the LP/SqFt seeking only $147 per sq ft and ending up accepting only $136 SP/SqFt; 93% of the LP/SqFt and 32% less than the same period a year earlier.
It should be noted that more and more newer and larger homes are being added to the mix. Whereas the size of the average home on the market in February 2007 was a 3 bedroom 2 bath home with 1546 square feet of living space the average home reported sold in the MLS in February 2008 grew by an entire quarter of a bathroom and 372 square feet, coming in at 1918 square feet
Finally, I’d like to conclude this segment of Hemet Market Conditions by looking at the Days on Market (DOM). It is very common for any report to show that the minimum DOM is zero – and the data I have looked at confirms this. What this can be interpreted as an agent having a buyer for a property before it reaches the MLS. There are times, when an agent never lists the property until he sells it himself – this is referred to as a “pocket listing”. Although not popular with other agents in Hemet, there is nothing wrong with the practice, so long as the seller is fully aware. In both months – February 2007 and 2008 there were listings that sold with zero DOM.
The story is the AVERAGE DAYS ON MARKET. In February 2007, the 64 listings that closed escrow that month took an average of 84 days to receive an accepted offer – with the longest sitting on the market 240 days. In February, 2008 the average DOM spiked by 17.86% to 99 DOM with a high DOM of 282 – a 17.5% increase over a year earlier.
Conclusion: The market is not what it once was and despite rumors and the occasional exception to the rules, prices are not taking as big a beating as some would like us to believe. Remember, “Figures Don’t Lie…Liars Figure”, so be careful when you are listening to people talk about the doom and gloom of the Hemet Real Estate market. It is true that fewer homes are selling and only the best homes at a price point are selling, but many of the homes that sold in February 2008 sold with multiple offers, once they were priced right.
AFTER THOUGHT: After I originally published these results, I realized a very significant event happened just 10 days after the end of the 2007 period. On March 10, 2007 New Century funded it’s last mortgage – signaling the beginning of the ‘sub-prime meltdown” or the “bursting of the bubble”.
The downturn in the local real estate market has been dramatic in Hemet CA. The good numbers are down and the bad ones are up.
In January, 2007 the SoCalMLS reports 57 closed residential sales with an average price of $307,936. January 2008 saw a report with a sharp decline in both the number of closed real estate transactions as well as the value of the sales.
January 2008 only has 26 residential properties that closed escrow for an average value of $250,073. The Hemet, CA real estate market suffered a 52% drop in close escrows and am 18.79% reduction in value over the past year.
The dollar per square foot of sold listings (SP/SqFt) also suffer a dramatic slice in value from January 2007 until January 2008 where the SP/SqFt dipped on average from $189 per sq ft to only $132 a sq ft or a 30.16% reduction in the SP/SqFt.
It should be no surprise that the correlation between the listing price and sold price has also dramatically changed. Bear in mind that the ‘List Price’ is the amount a Hemet home for sale is listed for when an offer is accepted and an escrow is opened. This number does not take price reductions into account.
In January 2007, the average list price at the time of sale was $312,944; asking $193, on average, per square foot of Hemet CA living space. The difference between the asking price and the Sold Price in January 2007 was 97%, on average.
January, 2008 saw the List Price drop down 16.93% down to $261,202 with an asking price 27.98% less, at only an average of $139 per square foot. January 2008 saw an even deeper cut in the difference of Sold Price to List Price (SP/LP) at 95%.
It is also about a month longer to sell a home in Hemet CA in January 2008 with 105 being the average number of days on market (DOM), compared to the 77 it took just a year earlier – or 36.36% longer.
When a REO property is assigned to The REO Team, in Hemet CA and The REO Team has determined that the REO property is vacant it must be immediately secured to prevent unauthorized entry and trespassing by either the former occupant or anyone else who may want to occupy the property, for any reason.
Step 1: Rekey All Exterior Doors
It is important that all doors are re-keyed. Depending on the Bank or Asset Manager, we may be instructed to use a certain key code. If not, it is best to have your own unique code for all of your assigned REO properties; this will enable easy entrance by authorized personnel without accessing the lockbox for each property.
By all doors, I am referring to the front door, a security door if they have one, the garage door (even if detached) leading to the outside.
If there are sliders, it is imperative to make sure that they are locked and cannot be accessed from the outside. It is always best to leave a stick of some sort that would prevent them from being slid open if there is not any other sort of internal locking mechanism (like a pin).
Step 2: Post No Trespassing Signs and Visitor Log
At the REO Team in Hemet, we have a package our contractor carries with a “No Trespassing” sign that gets taped in the front window. It has a point of emergency contact, if we are needed for any reason.
We will also post an Entry Log that will be taped to the kitchen counter. Anytime our contractor or one of our agents is in the property, for any reason, they are required to sign in. If they note any unreported issues with the property, they will use a “Property Condition Notice” that will be placed in the draw, directly below the log in sheet (which is part of our contractors’ package).
Step 3: Unplug Garage Door Opener
It is important that not only is the garage door opener be unplugged but that the door is secured so that it cannot be opened from the outside. Many newer garage doors will have a latch that can be slid closed. Otherwise, it is important that a stick of some sort be positioned to stop the door mechanism from being opened, without first removing the stick.
Step 4: Install Lock Box
Again, some of our clients will insist that a certain lock-box combo is set so that their own representatives can visit the property at any time (we always have to be prepared for unannounced inspections). For properties that the clients do not have a specific lockbox combo they want on all of their REO properties will be set to a code specific to The REO Team, for easier management.
Lock boxes should always be installed on the front door of an REO property. Never put on the water pipe or elsewhere that would require a buyers agent to search out and find (or not find) the lockbox.
Step 5: Install the Sign
The sale sign with the appropriate custom sign rider (we use both a call capture and text message system) is installed on the property. We also always make sure there is a flyer box on each sign – which will be filled within 24 hours.
Step 6: Assess the Property
This is a critical step. We need an initial assessment of the property. Are there any hazardous conditions that must be dealt with immediately? Are there broken windows that need immediate boarding up?
All urgent situations are promptly called into the Admin staff at The REO team, for authorization to correct, which may or many not be granted by the staff. If need be, our trained Admin staff will make appropriate contact with the Asset Manager for this property and share the urgency for authorization to proceed.
In addition, we want the first eyes on the property to provide The REO Team with an overall assessment of the property. What issues will need to be taken care of before the property can be sold. Our contractor will document everything using our internal assessment form as well as digital photographs.
Step 7: Introduce Ourselves to the Neighborhood
We have just started with a new Community Outreach program that we believe will have a major positive impact on our REO Real Estate business.
We will prepare a special flyer, just for the neighborhood that we will distribute by walking the neighborhood and introducing ourselves. The flyer will have the basic information on the REO property as well as our contact information.
What separates this from everything else they have seen is that it offers neighborhood watch tips and asks for their cooperation. We pledge to take good care of the property and help keep their neighborhood looking good, if they will do their part and report any suspicious activity.
The next step is for us to organize a Neighborhood Watch Meeting, by inviting the local law enforcement to send a representative and invite the neighborhood to an open house at the REO Property. This will give everyone the opportunity to preview the home (never know who knows someone who wants to move into the neighborhood) and interact as a community – on our turf.
Again, this final step is a plan in the planning process but one that I feel will have a significant positive impact for the REO property which will keep our clients happy, for the neighborhood which will keep the neighbors happy, and for the bottom line of The REO Team.
In my next article in this series, I will be talking about the Initial Maintenance that we will be required to do, so that we can get the property ready for sale.
Blessings to all who read,
John Occhi, REALTOR® The REO Team at Mission Grove Realty, Inc. Hemet, CA 92544 www.RepoAndForeclosure.Com (888) 540-7243
Servicing THE REO Needs of Asset Managers, Banks and Lending Institutions in the Hemet - San Jacinto Valley, Temecula, Murrieta, Winchester, Wildomar, Menifee, Sun Valley, Perris, Moreno Valley, Romoland, Homeland, Nuevo, Banning, Beaumont, Cherry Valley, Yucaipa, Redlands, Mentone, Loma Linda and throughout South West Riverside County and The Pass Areas of The Inland Empire in Southern California. If you are a buyer, investor, first time home buyer or are just interested in REO real estate, please contact us at the above website or phone number.
Buying an REO home or other real estate in Hemet, CA (or elsewhere) can be a daunting experience, at best.
The process appears to be fairly straight-forward, from the beginning. The banks each have their own proprietary addendums to our California Purchase Agreement which ends up negating many of the key provision of our ‘standard’ contract.
CONTRACT CLAUSES
Probably the most important is that the banks will not (typically) accept the provisions for liquidated damages, arbitration and mediation. Often time, the buyer will initial these clauses – but the bank will not. If the buyer’s agent does not pick up on this, then the buyer would be bound by these terms and the seller would not. I have seen addendums come back after a contract has been ratified by all parties, to exclude these particular clauses.
Other important clauses that are negotiated away when the buyer signs the addendums is that the seller will not perform any repairs – regardless of the outcome of any inspection. The key here is to inspect prior to writing the offer and asking for adjustments in the form of an adjusted asking price. In other words, if you would offer $200,000 for a Hemet REO home for sale but you feel as if there is $10,000 of cosmetic repairs (paint, carpet, etc) then offer $190,000. It is so much cleaner this way and much more likely that your offer will be considered.
PRICING
It has been my experience that the banks will not drop their prices significantly, just because they are an REO property. To determine a price, they have typically ordered at least two recent BPO’s (Broker Price Opinions) and an appraisal. All of the data has been thoroughly analyzed by their in house staff of trained professionals, to establish a price.
Once a month, the REO agent assigned to sell the real estate must submit a MSR (Monthly Status Report) which will show up to date comps and market trends, for further analysis. New BPO’s are ordered every 90 days.
My experience is that a reduction of up to 3% in the first 30 days a property is listed will be given serious consideration – just about anything else will almost be rejected. From 30 to 90 days, after the bank has already reduced the asking list price, they still may consider a reduction from 3% to as much as 8%. Again, there are exceptions, but these are the rules of thumb that I advise my buyer clients of when they want to buy an REO home in Hemet, CA.
Once a home has been on the market 90 to 120 days or more, almost anything can happen. If a client is looking to write extreme low-ball offers, I keep them focused on this segment of the market. There is no point in writing a $100,000 offer on a home that came on the market last week for $200,000. The person who priced that home would just have much too much egg on their face to wipe off.
TIMING of the OFFER
This is where it gets a little bit tricky. Many REO real estate agents will promise a ‘quick response” to all offers in their Agent Comments, as listed in the MLS. The problem is a quick response and an accepted offer is definitely two different things.
You see, nearly every REO property today is managed through an online program that keeps all of the relevant parities connected to one another, so those who need to know, can see exactly what is going on with the property at any given moment.
As a REO REALTOR®, when I submit an offer I am simply completing a simple form that has the terms of the buyers offer. The form is 6 or 7 lines deep and includes 20 to 25 fields that I must complete. It has everything that is relevant to the bank, including, of course, the purchase price, down-payment, financing, escrow time and other relevant terms that make a contract to buy REO homes.
The bank will review this and typically get back to me in just a few business hours – certainly by the next business day at the latest. The response will be in the form of a counteroffer that will include the aforementioned addendums as well as any modifications to the offer. I’ll receive these documents in a PDF document format, which I prefer to email to the buyers agent.
If the buyers agrees to the terms, they are to sign them and fax (or email) me back a copy and then follow very specific instructions to overnight them back to the bank.
THE BIG AND UGLY MIS-UNDERSTANDING
This is where it gets tricky. Most buyers and their agents believe that once they accept a counter offer that they have solidified the transaction. This could not be further from the truth. The transaction is not solidified until the bank actually signs the documents they receive.
The sad truth is it may take the bank a week or more to ratify the contract and make it binding.
In the meantime, as the listing agent for the REO, I still have to keep the property listed in the MLS as an ACTIVE Listing – and let me tell you that makes a lot of buyer agents MAD! Sorry, but I have no choice.
If other offers come in, the bank will negotiate those contracts – if a better one comes along than the one that they have already approved (not accepted) they will ask me to go back to the original buyer and ask for their “best and final” offer. Again, a process that alienates buyers and their agents.
The good news is that the timelines do not start until the offer has been signed by the bank. So, if the bank countered and told the seller they only have 10 days to complete their due diligence and it takes them 2 weeks to accept an offer, they have given the buyer 24 days to perform their due diligence.
ESCROW and OTHER SERVICES
Keep in mind that when the lender accepts an offer, they will immediately open an escrow with an escrow company of their own choice. They have negotiated large contracts with escrow, title and other vendors for deeply discounted services based on volume. No mater how hard you try, the services will be the sellers choice.
The real unfortunate part of this is we are working with clients in different time zones who are assigning escrow work to offices a hundred miles or more away from Hemet. This makes it extremely difficult to work with, as the escrow and title staffs are now overworked and consider themselves underpaid for the amount of work they are doing.
No longer will the buyer have the option of going to escrow to sign paperwork – now it will be sent with a mobile notary – at yet an additional expense to the buyer.
There are of course more nuances to buying REO foreclosure real estate in Hemet from the banks. All in all, if you do it right, it can still be a great opportunity to buy more home than you would otherwise have been able to afford., and one that should lead to a large profit for you when you sell, once the market turns around in the next few years.
In the meantime, just be careful and work with an agent that knows what they are doing when it comes to Placing a Bid to Purchase a Bank Owned Hemet Home.
Blessings to all who read,
John Occhi, REALTOR® The REO Team at Mission Grove Realty, Inc. Hemet, CA 92544 www.RepoAndForeclosure.Com (888) 540-7243
Servicing THE REO Needs of Asset Managers, Banks and Lending Institutions in the Hemet - San Jacinto Valley, Temecula, Murrieta, Winchester, Wildomar, Menifee, Sun Valley, Perris, Moreno Valley, Romoland, Homeland, Nuevo, Banning, Beaumont, Cherry Valley, Yucaipa, Redlands, Mentone, Loma Linda and throughout South West Riverside County and The Pass Areas of The Inland Empire in Southern California. If you are a buyer, investor, first time home buyer or are just interested in REO real estate,
The question of whether a particular bank owned REO (Real Estate Owned – Bank foreclosure) home is as good a deal as it first appears can only be answered by the buyer performing their own due diligence…and not stopping until they have the answers they need.
THE HOME INSPECTION
Yes, it is common in Hemet, CA for a homebuyer to hire a home inspection company to perform a routine home inspection. I have recently found a company that will deliver a printed version of the report on demand at the end of the inspection – while everything is fresh in the minds of the prospective new homebuyer.
The inspection should not be about bells and whistles though – it should be on the thoroughness of the report and the knowledge of the inspector. The inspector should not be preoccupied with his own lack of work that he (or she) is turning the conversation to some multi-level marketing plan…which is why I had to find a new inspection team. (After nearly 4 years of good service, I have quit referring business to an inspector that I have faithfully relied on because he actually defended his right to bring up his on-line travel business as he meets new people…well guess what, I’m not making any more of those introductions. I sure hope his travel business pays off for him. But this is a whole different story.)
The inspector should be confident enough in their work to allow you, the new Hemet homebuyer, to follow them through the entire inspection process and engage in questioning the findings, every step of the way and not defer your interest until the end of the process. This does not mean that the inspector should blow off the final presentation either, if there is a second interested party present.
Just for the record, as a REALTOR®, I typically do not stay for the entire inspection. I like to be there to open up and make sure everyone is comfortable with the process. I get the ball rolling and then I move on to the rest of my work for the day. Three will be times when I sense that I am needed for a longer period, and then I will make adjustments to be there. I will also have an assistant show up before I take off, just to hold things together.
The inspection is a critical milestone in the buying process, which is why having the report at the end of the inspection is so important. Other than financing, the inspection is probably the second most critical element to a transaction and based on the results, can either keep a deal together or be the point where it unwinds.
THE HOMEBUYERS RESPONSIBILITY
As a Hemet REALTOR®, my job is to help the homebuyer find the home that meets their needs and structure the offer to maximize every advantage for my buyer clients.
Yet, the homebuyer has responsibilities that must be taken seriously, or they should be prepared to be dissatisfied with the purchase of their new Hemet home as the months turn to years.
First and foremost, you have to be there and you have to participate. Yes, as your REALTOR® I have assembled a trusted team to get you through the process – but none of us can make decisions for you. If there are issues with the home inspection, then you have to ask the questions until you are satisfied with the answers. If you do not feel comfortable talking about maintenance and repairs because you just don’t understand what is being talked about, then please bring a friend or relative with you that will be your eyes and ears – but please be there.
Many times a home inspection will recommend additional professional inspections. For example, there may be something that does not look right with the air conditioner. Well, the home inspector is not a licensed HVAC contractor and cannot make any determination that requires a licensed professional to determine. All an inspector can do is say, “Hey you may have a problem here – If I were in your situation, I’d get it checked out by someone who has the equipment and knowledge to determine just how bad the problem might be”.
WHAT OTHER “DO DILIGENCE” DO I HAVE TO DO?
This is a question I am asked every time I represent a homebuyer. Everyone wants to make sure that they ask all the right questions and get all the right answers – but few are actually willing to put in the extra effort to uncover what might be right before their eyes.
THE NEIGHBORHOOD
First, you need to understand that as a REALTOR® I have legal limitations as to what I can reveal. We all know about Equal Opportunity and Fair Housing. These are not optional issues for me – they are the law that I must adhere to. So, if you have issues with a neighborhood, you had best be checking it out for yourself and not relying on me to tell you who lives where.
Talk to your neighbors. It will be easy to find out who has all the gossip, because they’ll be watching you every time you return. This is one time when it is advisable to listen to gossip – but take it all with a grain of salt, because everyone does have their own agenda.
See if there are any recent improvements to homes in the neighborhood? How many for sale signs are there on this block? In the subdivision? The overall community?
Improvements will tell you that the people who are here are here to stay for the long term. Lack of signs will tell you that you are in a desirable neighborhood – too many signs may mean that the neighborhood is in trouble and may be a ghost town in a few more months.
I strongly recommend that once a home is selected that my homebuyer returns to the neighborhood at several times of the day over the next week. Come back at 6:00 at night to get a feel for the kids playing on the block. Are there excessive cars parked on the street? Anything else trip your trigger that you do not care for? Return again at 10:00 on a Friday or Saturday night to see if there are loud parties taking place. How about a Saturday afternoon? Trust me, if you don’t do this know, you will find out the answers to these questions…but it will be too late to do anything about them if you have already moved in.
There are numerous online resources where you can research crime, schools and even sexual predators in the neighborhood – all important facts to consider. This is another one of those areas that as a REALTOR® if I lead you to a resource and that resource omits something that is relevant that I could then be found liable for providing inadequate information. So, since most of my clients today are internet savvy, I always ask them to do their own research and satisfy their own needs.
You will also want to find out about future developments that are currently being planned. The city should be able to give you some indication of what is in the process of taking place and what is being planned. Ask to see a copy of the “General Plan” and a “Zoning Map”. Will the future plans add value to your new neighborhood or take away from it?
PERMITS
Again, an issue you should resolve for yourself. Here in Hemet I have never had to wait more than a few minutes for service at the permit desk. Let the clerk know that you are in escrow on a particular Hemet home and that you need to know everything there is to know about the property, from their point of view.
You should have been able to determine if there has been work done to the property, such as a room enclosure or addition. In Hemet, patio enclosures are very common… unfortunately unpermitted patio room enclosures are very common.
You want to determine if there were EVER any permits opened and not given the final sign off by a city inspector. If this is the case, it may be impossible for you to pull a new permit until the previous project is signed off on, which may be very expensive, time consuming and could even result in a sub-standard project being ripped out at your expense.
Another factor to consider, especially with an REO property that has been vacant for months, is any fines on the property. If so, make sure they get resolved in escrow. It might be for weed abatement, pool draining or even graffiti or other eye sore problems.
Does the home still have a certificate of occupancy? They all don’t for a variety of reasons – so check it out. Satisfy yourself…remember, this is your due diligence.
UTILITIES
Since Hemet, CA REO bank owned real estate does not have an owner occupy the property, there is very little history available to the new would be buyer of this real estate. This is why due diligence is critical in purchasing a bank owned REO property in Hemet or anywhere else.
It is important to know how expensive it is to cool the home in the summer and how much it will cost to heat the home in the winter. The only way to do this is to directly contact each utility company and ask for a breakdown of the bills over the past two years.
Not only are you looking for actual dollars spent monthly, but more important the consumption of the utility. After all, there have been a lot if increases in energy costs over the last several years.
Where this gets tricky is trying to determine what type of usage the property received. This is where talking to the neighbors is always good. Find out if there was someone home all day, like a stay at home mom with a house full of kids running in and out all day or perhaps it was a young couple that commuted to work 6 days a week, leaving in the early morning and not returning until the early evening, day after day. Can you see where the utility usage might vary?
For a long time, Hemet was a haven for snow birds (retired folks spending their winters in the mild Hemet climate and then returning to their northern homes for the summers they love there). So, maybe the home sat vacant from Easter to October. This could certainly have a major impact on the annual consumption of utilities.
Due Diligence simply means researching and satisfying yourself of your decision and not relying on anyone else for the answer to your question, “Is A Hemet Bank Owned REO Home Going to Be a Good Deal in the Long Run?”
Blessings to all who read,
John Occhi, REALTOR® The REO Team at Mission Grove Realty, Inc. Hemet, CA 92544 www.RepoAndForeclosure.Com (888) 540-7243
Servicing THE REO Needs of Asset Managers, Banks and Lending Institutions in the Hemet - San Jacinto Valley, Temecula, Murrieta, Winchester, Wildomar, Menifee, Sun Valley, Perris, Moreno Valley, Romoland, Homeland, Nuevo, Banning, Beaumont, Cherry Valley, Yucaipa, Redlands, Mentone, Loma Linda and throughout South West Riverside County and The Pass Areas of The Inland Empire in Southern California. If you are a buyer, investor, first time home buyer or are just interested in REO real estate, please contact us at the above website or phone number. <!--[if !supportLineBreakNewLine]--> <!--[endif]-->
In a previous article I discussed the theory and mechanics of a typical Cash For Keys program. In this article I am planning on sharing how I have tweaked my presentation to the point where I have obtained signatures and successful move-outs on 100% my last 5 presentations in Hemet CA REO properties – whereas prior to my adjustment I was only delivering checks to about half of the homes that were occupied when we did our initial occupancy check.
STEP 1 – Attitude
The first step is to check my attitude. I am normally an aggressive person, one who lives in the moment and demands instant gratification…OK, I may not be that extreme, but I need to check my attitude.
It is very important when making contact that I am humble. I have to remind myself that I am not here to cause anyone any grief or to be a bully, but to offer an amicable solution to what may be a very bad situation. After all my job as a REALTOR® is to put people into Hemet homes, not ask them to leave.
STEP 2 – The Approach
Now I may or may not have had a previous contact when I made my occupancy check. Then again, another team member may have been the one to do the occupancy check, so I am more than likely a stranger.
Again, I may have spoken on the phone (read my article on the occupancy check) and actually set the appointment – perhaps even in my office, which is the most preferred environment for me (not to mention time effective).
If I am meeting at the property, unannounced, I will use the same precautions as I discussed in my Occupancy Check article. If I am in the office, I have a professional environment that I use, making them feel comfortable yet establishing me as the authority figure. In each case I have a file with me – again for the position of authority.
Now it has been suggested in previous articles from my readers that they do what they can to save time and combine the occupancy check with the Cash for Keys presentation. I have even read where an agent simply leaves the paperwork at the door and does not bother making additional contact.
First, my clients do not authorize a Cash for Keys arrangement until AFTER I report back to them that the property is still occupied. As far as leaving paperwork behind, I tried it with my first tow Cash for Key situations and neither one responded, at all.
If I am working without an appointment, then I will attempt contact daily, at different hours of the day until I am certain someone is home and either talks to me or I am certain I am being ignored at the door. It is my job to be diligent, and I take this responsibility very seriously as there are huge implications for everyone involved if I minimize this task.
STEP 3 – The Introduction
I always introduce myself first as a REALTOR® who has been asked by the bank to list and sell this property. I will confirm that I am at the right home and speaking with the right people (as per Title). I let them know this is as awkward for me as it is for them, but to please understand that I have no prior knowledge of their situation, as I have only been assigned this listing in the last day or two.
I’ll ask if they are aware that the home was foreclosed on and taken back when no one bought it on the courthouse steps – the lender is now the legal owner of the property and that the occupant has no legal right to be there.
By this point, there will be a reaction – one that varies from denial to breaking down in tears and sharing their hard luck story. In any event, I want to gather as much useful information as possible – and to be honest I have no idea what will be useful and what won’t – so I take my time and listen. Whatever you do at this point – NEVER TAKE WRITTEN NOTES unless you want to shut them up and put a major barrier between the two of you.
The objective of this step is to get inside and sit down at the kitchen table, in the Hemet CA REO listing. I’ll say something like, “I understand this is a very difficult time and believe me, I have empathy for you – not long ago I was facing similar circumstances of my own. If I can come inside to talk for a few minutes, I’ll explain a little bit about what happened to me and how you can gain from my experience. On top of that, I have a solution that I believe can make this time a little less stressful for you.”
STEP 4 – Get Comfortable & Build Rapport
I have found that if I rush through a Cash for Keys agreement that the likelihood of it finalizing are minimized. It is important that I take my time, say the same way I would in a retail listing presentation. It is very important to establish trust and rapport. After all, I am a local REALTOR® and everyone knows we sell houses, we don’t evict people.
If needed, I’ll discuss a little bit about my personal situation including sharing about my wife who is at home with cancer. The bottom line is I am not looking for sympathy but a way to establish empathy (although I do accept prayer from anyone willing to give it to the Lord on my wife’s behalf). The moral is that life happens and it is not something we often have control over – no matter how well we planned for our future.
In sharing my story, it really does a good job of minimizing the significance of their story, yet I always make what they are going through more disheartening than my own dilemma. It’s all about rapport.
Step 5 – The Offer
Once I am comfortable in the home and they are comfortable with me, I’ll explain that the bank has authorized me to offer them some money, based on some very specific terms.
By now, I will have established that they have not paid a mortgage payment or any rent for the last 7 or more months and that they have funds available to move. They don’t always, but I need to know where they are financially – or get as good a picture as I can. I’ll even let them know I have some property management contacts in the area they want to move to, and ask if I can be of any assistance (cha-ching, did I just earn a referral fee?).
Many times they know where they want to move and may already have a place lined up.
I will share that having a foreclosure on their credit report does not carry the same stigma it might have just a few years ago. I start to joke and say that the social stigma is gone and in some circles is even considered a financial coup. If the family took cash out, I’ll suggest people will be at a party asking one another how much they made on their foreclosure, in the form of a Home Equity Line of Credit or other cash out refinance. If it is not a cash out scenario, I may use other recent social stigmas that are politically correct today. For example, I’ll say, “Do you remember when it is taboo for a racially mixed couple to marry and have kids? Or how about an unwed mother – man, that was so far off the charts when I was growing up and now even my own daughter has a 14 year old and never been married. What was once unacceptable behavior by society has become commonplace and acceptable. Now I’m not advocating if this is right or wrong, but it is the norm – and right now losing your home to foreclosure is not an uncommon event and nothing to be ashamed of. After all, you got caught in a changing market where you could not follow the advise of the people who made a lot of money on you, telling you you could refinance into a lower payment and take out even more equity.”
I’ll continue, “If it makes you feel any better, many of the people who advised you on your loan are not only out of business today but have lost their own homes. I personally know of many lenders and REALTORS® who have already lost their home and many more on the verge.”
I’ll then go into the close, presenting the offer as outlined by the lender. Each lender has their own agreement and terms. I like to read the entire document out loud and stop after each paragraph to make sure there is complete understanding of what is expected.
STEP 6 – The 1-2 Punch
In some situations; the former homeowner is still reluctant to leave. Apparently there is a segment of our society earning a living advising people how they can procrastinate the foreclosure process and stay in their home for a year or more without making a payment.
I’m not saying it can’t be done as I have seen it happen…but at what cost?
First, remember whoever is offering this great advice has their hand in the homeowners back pocket – making a quick and slimy buck.
So now I’ll reiterate the commonality of foreclosures on credit reports and how families that have recently lost their home, but otherwise have good credit make ideal tenants. The families are, for the most part, responsible with their finances and have decent jobs – otherwise they wouldn’t have qualified for the home in the first place.
I’ll explain again how desirable a tenant they are to investors who are terrified of losing their own investment portfolio. I’ll then tell them that if the bank has to evict them from their home that they will be on the lowest level of credit risk for landlords and that it may be near impossible to rent again for many years.
I’ll ask, “After all, losing your home to the bank because your payment went up several hundred dollars every month and the value of your home dropped 2 or 3 percent a month cannot be held against you. So you lost your house, like a million other families in the country. However, most of those families were responsible enough to move on prior to the foreclosure date. They may have been angry at a lot of things, but they did not have s sense of unjustified entitlement – meaning they did not act like anyone owned them anything after living for free for 7 months.
If you were a landlord and you had a choice of renting to two different families who both lost their home to foreclosure and everything else was equal, except one family moved out on their own and the other had to be dragged out by the sheriff…which do you think you would prefer as a tenant in your investment worth hundreds of thousands of hard earned dollars?”
Of course they have only one answer that makes sense.
Trust me, no one wants an eviction on their record; especially immediately following a foreclosure. By this time they sign the papers…
STEP 7 – The Initial Inspection
Now I’ll ask for a quick tour of the property. I let them know I need to take some preliminary photos to document the condition of the property. Now, I’ll explain as we go through each room what I expect to find when I return; i.e. ceiling fans, outlet covers, appliances, plumbing fixtures, etc. I’ll make comments like “I know you would never do this, but please don’t get mad at the house and start punching holes in the wall – because I would have to hold back your money.
While inspecting, I am still building rapport. Commenting on items in the home that they are proud of or finding a link that I can connect to, just as I would in any other real estate situation.
I’ll take at least 2 pictures of each room – if there is any damage, I will document it and ask them to show it to me, as I don’t want to hold them accountable for anything that is pre-existing to my visit.
This is a critical step to the final transfer of the property. Again, I am working on my personal relationship with them and giving them very specific guidelines of what I am expecting. I am allowing them to ask as many questions as they want.
Perhaps the most common question at this point is what about a specific item they had purchased and installed, such as a ceiling fan. I say take it with you if it means that much to you – just please remember to replace it with an acceptable replacement. It does not have to be another ceiling fan, but at least a basic light. You will not get your check if there is nothing there.”
STEP 8 – The Final Inspection
Contact is made the day prior to move out. A set time is established.
We have just changed our internal process. Up to this point, I had gone back to do the inspection and then called for the locks to be changed. Now my contractor, who takes care of all my work, has told me repeatedly that I have been too soft – perhaps I have because I know all about these people and their stories. At this time, I no longer want to hear more sob on top of what I have already learned. Now it has to be the bank first.
So, since my contractor shows up anyway to change the locks – he will now be conducting the final inspection. After all, if there is 10 gallons of paint left in the garage, he’ll be the guy that has to dispose of it. And since the banks just paid good money to make sure the property was left broom clean, we certainly don’t want to submit an invoice to the bank for additional hauling. So in this case if they want their check, they have to take the paint with them
Well there you have it – a clear understanding of what is involved in most cash for key transactions. They are one of the least pleasant aspects of being a successful REO Agent – but a critically important one.
Next time, I’ll be discussing the steps that we take when first taking possession of a REO property – whether it’s a cash for keys transfer or a new assignment of a vacant home – not much difference.
Blessings to all who read,
John Occhi, REALTOR® The REO Team at Mission Grove Realty, Inc. Hemet, CA 92544 www.RepoAndForeclosure.Com (888) 540-7243
Servicing THE REO Needs of Asset Managers, Banks and Lending Institutions in the Hemet - San Jacinto Valley, Temecula, Murrieta, Winchester, Wildomar, Menifee, Sun Valley, Perris, Moreno Valley, Romoland, Homeland, Nuevo, Banning, Beaumont, Cherry Valley, Yucaipa, Redlands, Mentone, Loma Linda and throughout South West Riverside County and The Pass Areas of The Inland Empire in Southern California. If you are a buyer, investor, first time home buyer or are just interested in REO real estate, please contact us at the above website or phone number.
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