Lisa's Blog

What's New in the San Diego Market?

Lisa Clanin (Coldwell Banker Residential Brokerage) — Wed, 26 Aug 2009 17:03:04 -0500

It's incredible how much this market changes every week! I have seen over the past couple of months several changes in the market. First, the buyers came out in groves--it became a feeding frenzy! It wasn't unusal for me to show up at a property a little early, and as I'm waiting for my clients to show up, people to be streaming in and out of the house. It was so bad in some homes that I would walk in, there would be 10+ people in the house, and an agent walk up to me and hand me the keys. As I would show the property, more would pour in. Then we would rush back to the office to write up an offer, submit an offer only to find out there are mulitple offers now (yes, I did call the listing office before and there would be no offers on the property). Then by the time all was said and done, there could be upwards of 65 offers on the property!

Now I'm seeing this slow down a bit. Over the last three weeks, I'm not seeing as many cards in the homes, and buyers in the homes. Maybe it's because we're entering into the Fall and school is starting. Maybe it's because some buyers just got fed up (fortunately, I've only had one set of buyers give up). However, I'm relieved on so many levels with slow down. I keep reminding my clients (and myself) that right now, it's a numbers game. With each "no" we get on our offer, we are that much closer to the "yes."

I'm also seeing that the "flippers" are coming back. Again, over the past 6 weeks or so, I'm finding more and more homes that are traditional sellers. Big sigh of relief--right? Well, yes and no. Investors are purchasing the homes at auction, fixing them up (and doing a nice job too) and then selling the homes. However, the problem is some of them are pricing the homes above comps and/or they won't take a VA buyer. Another problem is the FHA buyer cannot purchase these homes because of the "90 day rule" (FHA will not lend on a property that has been owned less than 90 days). Overall I will say, I'm really happy to see these traditional sellers.

We are "expecting" more inventory over the next couple of weeks. I have spoken with several REO agents and they are being told by the banks that the banks "plan" to release more inventory the beginning of September. We'll see.

So we can see that this is a very different market than it was even 6 months ago. It's exciting and can be frustrating keeping up with all the changes. However, I'm always up for a challenge!

Oh, look at the time! I off to go show more properties!!

A Short Sale Completed in Less than Three Months?!

Lisa Clanin (Coldwell Banker Residential Brokerage) — Thu, 16 Jul 2009 13:53:51 -0500

How did I sell a home through a short sale in less than three months and for full price? Were the planets all aligned perfectly? No! It wasn't easy, but there were some critical things both my seller and I did to get it done as smooth as possible.

1. Cooperative Sellers. My sellers were extremely cooperative. They gathered all the financial paperwork and got it to me immediately. Their home was ready to every day. What does that mean? The house was cleaned or picked up every day. Also, they made showing their home very easy and convenient for the buyers.

2. Price the home right. In this market, and especially in San Diego, pricing a home right will create multiple offers. If priced wrong, the house will either get low ball offers or no offers at all. I priced this home just under the market, and within a week had five offers. We countered all the offers and submitted the highest and best to the bank with the short sale package. We kept the others as back up offers.

3. Don't wait for the bank to call you! It took me two weeks, several, several phone calls and faxing documents to the bank eight times before I got to a negotiator (87 page fax was sent 4 times before the bank acknowledged they received it). Now, there's a fine line between becoming a pest and being persistent. It's important to be checking in with the bank on a weekly basis (at least). Once the negotiator was assigned, it only took two weeks to get short sale approval!

4. Remember the "Golden Rule." Never be rude or raise your voice to the negotiator or anyone you are dealing with at the bank. Some agents have shared with me that they were so frustrated with short sales and dealing with the banks that they will actually yelled at the negotiator or the other employees at the bank. What?! Do I want to be treated like that? No way! Yes, it's frustrating at times, but it's frustrating for EVERYONE. I did notice that the calmer I stayed (even when I was frustrated), the easier it was to deal with the situation.

5. Communication is key. Communication with my clients and the buyers' agents keeps the deal moving forward, and reduces stress and frustration. Even if you don't have information to give to your client or the agents, let them know that.

Now, there is no guarantee that every short sale will close in less than three months. However, there are too many short sales in San Diego that are taking 6 to 9 months to close! Some short sales have taken so long that the homes went into foreclosure (I've experienced this with some of my buyers trying to purchase a short sale). Remember, persistence, patience and professionalism will get the deal done.

The transactions had its ups and downs, but everyone involved in the transaction really worked as a team, and everyone walked away a winner.

Missed it by T-H-A-T much--or did I?

Lisa Clanin (Coldwell Banker Residential Brokerage) — Sun, 10 May 2009 11:08:04 -0500

There are some wacky and wild stories with this market--especially with foreclosures. I really can't see what I could have done different in this situation. I worked quickly, did my homework, got my buyer on board, and yet I still missed it.

A few months ago, I was working with my friend who is a first time homebuyer. She is very responsible and was really excited that she finally took her first steps in purchasing her first home. She got pre-approved which was easy to do because as I said before, she's very responsible--she has great credit, a good job and little to no debt. So, off we go looking at places. She definitely knew what she wanted and expressed to me what her requirements were (I love that!). After looking at a few homes, we found that "perfect" place! It was a foreclosed property, but it was in good condition. It was everything she wanted. We submitted her offer and after months (yes, months), the seller's agent was fired and so the process had to start over again. I contacted the new agent's office to find out when it was going back onto the market. I was told that the bank was doing some repairs (there was a broken water pipe and major flood damage). The repairs would take some time. My name was put on a list and they would call me when it was going back on the market. However, I didn't sit back and wait--I continually watched the MLS and called the agent's office probably once a week. Finally, the call came in--it's going back on the market for about $60K less than the previous list price! Wahoo! I immediately called my client and we went to go see the property again (we wanted to check the repairs). It looked great. As we headed to my office to write up the offer, I called the agent's office to let them know that we were submitting an offer and asked how they preferred to receive it--email or fax. We complete the offer, sign it, and I fax it over. About 45 minutes after I faxed it over, I called the agent's office to confirm they received it. Instead of confirmation, I was told "Oh, we already have an accepted offer on that property." What the heck?! Why wasn't I told that they had an accepted offer, or at least that they received an offer and were working on it(which I did ask if they had any offers and was told no). The agent's office didn't even appear to care. Okay, I understand that we are to keep our emotions in tact. But to be honest, it was difficult. I hated that phone call to my client. We waited to see if by any chance the escrow fell apart, but no--it closed within 30 days. Dang it!

I always walk away from each deal or offer and ask myself what I could have learned from this or what could I have done different. After all, in this market, we are learning something every day! Honestly though, I can't see what I could have done different--can you?

Home Inspections Are Worth Their Weight in Gold!

Lisa Clanin (Coldwell Banker Residential Brokerage) — Tue, 05 May 2009 10:50:39 -0500

I have had the privilege to work with many first time homebuyers. In this market, with short sales, foreclosures and mulitple offers on properties, I often spend months working with my clients to get them into their first home. One area of the real estate transaction that I emphasize to my clients is they must get a home inspection! My clients are purchasing a home worth $200,000 or more. An average home inspection is $250--I consider that a small but wise investment. Let me give you a great example of how important a home inspection can be.

Last year, I worked with a very nice couple and we looked for months for the right home. Finally we found it! We submitted our offer and after weeks of waiting (it was a short sale), we got a full acceptance. I always tell my clients that when I call to tell them their offer was accepted, they must immediately set up their home inspection. They set up their home inspection for the next day. The inspection was going along just fine--the inspector climbed under the house, went up on the roof, checked the plumbing and electrical, etc. About 2 hours into the inspection, the last area he needed to check was the attic. He climbs up into the attic and within a couple of minutes, he steps down and with very little color in his face, and he asks me "have you had the disclosures on this house?" Since we just got acceptance, I had not received the disclosures. I told him "no, why?" He said that the house had a major fire in it at some point and he was very concerned about the roof structure. What?!! Sure enough, I looked in the attic and there was clearly a fire at some point. I immediately got on the phone with the agent who was not aware of the fire. She called her client who said she wasn't aware either. I also checked with the local fire department and their records only went back to the year 2000, and there were no fires during that time. Okay, I see this deal beginning to fall apart. What are we going to do? Fortunately, the seller's agent was proactive and professional, and said she would talk with the lender. In the meantime, we brought out a company that does fire restoration and repairs. After they checked out the attic, they confirmed that the roof structure was compromised. I was told that it could cost up to $25K to fix! Again, we see this deal falling apart. I couldn't imagine that the lender would pay for this repair. The end to this very long story is that the lender paid for my clients' roof to be repaired to the tune of $10K (they also paid my clients closing costs and $2K in termite repairs!). My clients, the lender, the seller and the agents walked away happy. What would have happened if my clients didn't spend that valuable $250 on a home inspection. There was no evidence anywhere else in the house of a fire. My clients would not have discovered it for months, if not years.

Bottom line is spending $250 in the short run on a home inspection can save you thousands upon thousands of dollars in the long run. Get a home inspection!

Myth: Short Sales Aren't Worth Pursuing!

Lisa Clanin (Coldwell Banker Residential Brokerage) — Tue, 05 May 2009 09:56:31 -0500

I have heard over and over again from buyers and sellers that it isn't worth pursuing short sales. Though there are many challenges in doing a short sale--whether your a buyer or a seller--the short sales can be done successfully with everyone walking away happy. I know this because I have worked both sides of a short sale and have been successful.

As a Realtor, it is my responsibility to educate my clients on the short sale process, and to warn my them of the potential issues and frustrations. There are so many factors that can go into a successful or an unsuccessful short sale.

The Seller's Lender:

The seller's agent must have experience in short sales, and be proactive with the seller's lender. Submitting the financial paperwork to the seller's lender and then waiting will not get the process going. The lenders are inundated with short sales and foreclosures. The negotiator (the person designated to work a short sale in the loss mitigation department) could have 200 or more files on their desk. In speaking with several negotiators, I have found that they appreciate the experienced and proactive agents. It is my job, as a seller's agent, to get the negotiator all the documentation they need, to negotiate the offers and to stay in close contact with them. It's so important that we recognize that everyone working in the loss mitigation departments are overworked. Believe me, their goal is to get the deal closed and off their desk.

The Seller's Agent:

As I previously mentioned, it is so important that sellers work with agents that have experience in short sales. The current market is ever changing and without warning. As a result, I'm learning something new every day. If an agent is not working full time in real estate (which is not uncommon in today's market), or they do not stay on top of the changing market, they can delay or possibly derail the short sale.

The Seller:

As you can imagine, a distress seller is just that--distressed. The emotions that go into selling a home are amplified by the fact that the seller must sell or face losing their home. A successful agent not only is able to help their client through a successful short sale, but also must take time to listen and answer all their questions. In order to expedite the process, the seller must gather all the documentation needed to begin the short sale and get it to their agent as soon as possible. Open communication between the agent and seller are key.

The Buyer:

Attention buyers: If your agent educates you in the short sale process and have patience, you will be rewarded! Yes, the short sale can take months--sometimes up to 6 months to close. I do take the time to educate my buyers about the process. My buyers get it and have been very successful purchasing a short sale. I have been able to get my buyers' closing costs and termite repairs paid by the lender. In one transaction, during the home inspection, we found that there was a previous fire in the home and the roof was not structurally sound. The lender paid that too which costs $10,000! You will see that many properties here in San Diego have multiple offers. However, by the time the seller receives approval for their short sale, most of the buyers have walked and purchased other properties. So what is the key for buyers to successfully purchase a short sale property? Put together the best offer you can and wait! Most of my buyers do put offers on multiple properties (there is language added to the offer so they don't get more than one accepted offer). Once my buyer has an accepted offer, I formally withdraw their other offers (attention agents: please follow through with withdrawing your offer. It is a requirement and a courtesy for the seller's agent).

Short sales will be a large part of the real estate market here in San Diego for the next year or two. With that said, the short sale process has evolved and improved significantly. With lots of patience, short sale are being successfully completed.

Have You Heard about the Latest Foreclosure Scam?

Lisa Clanin (Coldwell Banker Residential Brokerage) — Mon, 24 Nov 2008 14:09:37 -0600

I'm sure that many of you have heard about some of the crazy foreclosure scams. It's unbelievable to me that anyone can even think of these scams! The most prevalent scam here in San Diego is people breaking into the foreclosed homes, changing the locks, advertising them for rent on Craig's List, obtaining an unsuspecting renter, collecting one month's rent and a security deposit and then disappearing. Often times these renters find out they've been had when they try to get the utilities turned on and they are told that the utilities cannot be turned on because it's a foreclosed home. Of course, the schemers are gone by then.

Here's the craziest scam I just read about that happened here in San Diego and in Riverside--and it could be happening in your area. A guy by the name of Maurice Simmons would find foreclosed homes and claim ownership to it by filing an official looking grant deed with the County Recorder's office. He would then post the document in the window of the home, change the locks on the home, and then move people in. Maurice states that he is able to do so under the cloak of a religious order known as the "Sovereign Solomon Brothers Archbishop Corporation Sole," and insists that makes him immune to prosecution. You can only imagine the cost to the banks getting these people out (one bank spent approximateily $125K to get the squatters out!), and the hassle and expense for the buyers. Maurice's logic is: "Bankers are defrauding people, and all I'm doing with this program is helping people get into homes who deserve to have a home but who got screwed," Maurice said in interviews before his arrest. "I'm tired of people getting thrown out of their homes and no one seems to care."

Maurice Simmons was recently arrested--thank goodness! But this goes to show you, we must keep an eye on the bank owned properties both for the buyer and seller. While showing properties, if you see something that just doesn't look right, PLEASE call the agent. As for the agents for the banks, it's important that you make regular visits to the foreclosed homes to make sure no one has moved in. It's so important that we look out for the best interest of the buyers, sellers and the public at large.

If only these schemers would spend their energy and time doing good rather than stealing from others. I don't know how they can live with themselves. So sad.

How I turned a negative experience into a positive one!

Lisa Clanin (Coldwell Banker Residential Brokerage) — Wed, 29 Oct 2008 13:28:38 -0500

I've been a Realtor for almost 5 years. Prior to that, I had a career in legal. After my experience with purchasing a home with an unethical agent, I decided to become a Realtor and if I could help one person have a great experience purchasing their home, then it would be worth it. Since becoming a Realtor, I have had the privilege of helping several people buy their first, second or even third home. Here's my story.

About 6 years ago, my husband and I decided to purchase a home. We found a really nice home in our area and my husband contacted the agent. The home was out of our price range, but the agent assured us that the seller would be willing to work with us. We talked about it and decided to put in an offer. The agent insisted on writing up the offer for us. It was our understanding that he represented the seller, and this confused us. I then asked him who he represented, and he said he represents us. Keep in mind, we didn't understand the purchasing process, and trusted him. The seller accepted our offer.

The next few months were such a whirlwind. The agent started pressuring us to get the deal closed. During this time, we were having trouble with our lender and needed to find a new one. Also during this time, the agent had us sign was a form that stated we would pay him a 4% commission. Again, I didn't understand the process and didn't know the industry practice was the seller paid his commission.

As time went on, things began to unravel. The seller was changing her mind, and the agent was putting more pressure on everyone. Our new lender was really awesome. This man not only gave us a great loan, but stepped in and stopped this agent from taking advantage of everyone. He truly went above and beyond the call of duty. When our lender saw that the agent was trying to get a 4% commission from us, he confronted the agent and the agent agreed in writing not to take a commission from us.

Okay, so now were going to close escrow. While signing documents at escrow, the agent shows up and tries to get us to sign a promissory note to pay him the 4% commission! We absolutely refused to sign the promissory note.

Well, several months later, we were going to refinance our home. Our lender contacted us and said we had a judgment against us. With my legal background, I understood the legal process and knew something wasn't right. I discovered that this agent had recorded a mechanics' lien against our home for $15,000! This was not only unethical, but illegal! Long story short, I hired an attorney who told the agent that if he didn't remove the illegal mechanics' lien, we would sue him. The agent didn't budge. I also had warned the agent two times in writing that if he didn't remove the lien, I would report him to the Department of Real Estate. He didn't budge.

Before going through the expense of a lawsuit, I submitted a complaint with all the documentation to the Department of Real Estate. Once the deputy from the DRE contacted the agent about my complaint, the agent immediately removed the mechanics' lien.

There was so much I learned about this experience, but unfortunately only after we closed escrow. There were other victims in this story too, like the seller. It was about a year later that I decided to take this negative experience and use if for good. In addition to protecting my clients, my top priority for my clients is to educate them-knowledge is power. My clients cannot make a decision without being fully informed.

Although it was a bummer to go through this experience, I do believe that it has made me a better agent for my clients. Was it worth it? Absolutely!

Sellers Are Paying Buyers' Closing Costs

Lisa Clanin (Coldwell Banker Residential Brokerage) — Fri, 10 Oct 2008 18:20:04 -0500

I have often heard from agent that they are afraid to ask for their buyers' closing costs to be paid by the banks. The agents believe that if they ask for closing costs, their clients' offer will never be reviewed, let alone accepted. Let me tell you about my experience.

Over the last year, all but one of my buyers had their closing costs paid by the seller. One of my clients paid a small amount towards their closing costs. In a recent deal I worked on, I represented the seller for a short sale property. The negotiator started the deal stating that the bank would not pay any portion of the buyers' closing costs-period. By the end of the deal, the bank did pay $1,500 towards the buyers' closing costs. On another short sale deal where I represented the buyers, during the home inspection, the home inspector discovered that at one time in the home, there was a major fire in the attic. The home inspector was concerned about the integrity of the roof and suggested we have a structural engineer inspect it. Well, you can imagine how deflating that news was. I thought the deal was over, but I didn't give up. Long story short, the bank paid $10,000 to have the roof repaired, paid $2,000 towards termite repairs and all of my clients' closing costs!

On the flip side of the coin, I have heard of some buyers' agents that will ask for more than 3% towards closing costs-sometimes up to 10%! Their thinking is their client can use other 6% to pay down their clients' rate. I have not, and will not ask that of a seller.

My point is simply this-at least consider asking the seller to pay your buyers' closing costs. When putting an offer together, asking the seller to pay the closing costs should be considered and discussed with your buyers. Although not all sellers will pay closing costs, if you don't ask, they usually will not offer it!

What is Really Going on in the San Diego Real Estate Market?

Lisa Clanin (Coldwell Banker Residential Brokerage) — Mon, 06 Oct 2008 15:56:41 -0500

Well, if you have been watching the news or reading the paper, you probably feel as though the real estate market is busted. While there are a lot of struggles with this market, it's not all doom and gloom. Although the reports say the "sky is falling," now is the time to buy! We are seeing more investors coming into the market with cash. If they see the value, so should we!

From my own experience working in the market, I'm seeing lots of buyers out, multiple offers on homes and great loans/down payment assistance for buyers. Right now, we are seeing homes priced at 20% to 30% under value, with some sellers are paying the buyer's closng costs! With the many different loan and down payment assistance programs, and lots of homes for sale, a first time homebuyer can get into a home with very little money.

I saw a newspaper article on Friday (10/3/08) that stated the San Diego real estate market will continue to go down over the next two years. Yet, I'm seeing almost daily on the MLS that homes, especially bank owned properties, are selling for more than their asking price and are off the market sometimes within a week! Once a buyer gives me a list of homes that they want to see, I will call the seller's agents to find out if there are any offers. I would say that 98% of the time there are mulitple offers on that property! Sometimes these properties have only been on the market for 2 days.

So, with all that said, do I believe that the market will continue to go down, no. But, I do believe that with all the changes in lending and the "bailout," inventory will start to dwindle. What does all this say, now is the time to get off the fence and buy!