I subscribe to the daily webcasts of Think Big, Work Small (TBWS), which is hosted by these two guys, Brian Stevens & Frank Garay. TBWS was founded a couple of years ago by a bunch of real estate and mortgage people who wanted to teach others in the business how to work smarter to grow their business, specifically through video blogging.
This morning's video was especially interesting because there was a segment on the rise of cancellations of escrow transactions. Did this one ever hit close to home. While NAR credits the appraisal process and less than competent appraisers as the cause of increased escrow, my own professional experiences with my own borrowers here in Los Angeles & Ventura counties is a little different.
What I'm seeing a lot more (especially this year) are my borrowers cancelling the escrow transaction because of sub-par property conditions that were discovered during the inspection process and some of them even before I order the appraisal.
While I try and councel my borrowers after I've pre-approved them and before they start their home search that they are going to see a lot of properties that have deferred maintenance. I try to explain to them that these are just cosmetic matters and don't necessarily have to be deal breakers. However, what they are actually seeing are homes that look halfway decent but are actually money-pits in disguise.
Many are REO's where the bank absolutely refuses to make any repairs and it is because of this reality that many of my borrowers are choosing to walk away after the inspection process or sometimes after the appraisal process when the appraiser has also noted serious property defects. It's transactions like these that make me wonder how my borrowers could avoid such scenarios althogether.
My first instinct is to say, "don't show them these dump" but then that wouldn't be fair to the buyers agents (BA) because quite often it's my borrowers who are insisting on seeing a particular property because they like the neighborhood it's in and it falls within their price range.
While it would be nice if the listing agents (LA) and their sellers for these types of properties were upfront and honest in their marketing and property disclosures, it would be incredibly naive of me to think that the LA and their sellers for these properties are the least bit interested in making a good impression with prospective buyers.
Anyway, this issue continues to plague not only me and my borrowers here in Los Angeles & Ventura but apparently quite a few other borrowers and markets as well. Here is the video regarding the segment I was referring to as well as a an interesting poll on the rise of communicating with social media.
Comments(11)