Thursday, June 11, 2009

Thinking of Selling Your House as a Short Sale? How do you find the right agent

Anyone thinking of selling their home as a Short Sale is already facing a stressful time, adding the normal emotions of escrow and these sellers need special care. What we usually find, however, is the opposite. Often these sellers spend months without knowing what's going on and dreading the threatening notices in the mailbox. These fragile home owners are listed and then get on the short sale roller coaster.

Finding the right listing agent for a Short Sale is critical to avoid the emotional and financial hazards of a Short Sale. Unfortunately there are no specific rules yet on how to list and handle the Short Sale. So you must ask questions of the agent and find one who is going to handle this for you in a manner which fits with your lifestyle.

Short Sales can take a very long time. Understanding that process is the first step. When you first meet with your agent, make sure they have experience in closing Short Sales and understand the process. You should not be the training ground. Many agents hire a Short Sale Negotiator to work with the lenders and negotiate the sale. This can be very helpful, but make sure that the not pay anything out-of-pocket for this service. The agent is making this decision and this fee comes out of the commission. If you are considering a Short Sale and anyone asks you for money, time to keep looking.

Some listing agents don't understand the unique needs of a Short Sale.....and let's face it...we often make significantly less commission on these deals because all fees are determined by the bank. Add to this the fact that close of escrow can be months away, it's human nature to put these sales on the back burner.

So does this mean that you must find a very hungry who has nothing better to do...and then hope for the best? No! It means that you need an agent who will run the entire process correctly.

The first step is listing your home. This is going to consist of a listing agreement and a Short Sale Addendum. In the Short Sale Addendum, the local Association of Realtors is going to outline the terms of the sale for you. It will tell you that this is not a guarantee and that we are going to pursue this sale and negotiation for you. That you are not obligated to accept any settlement. It is also going to outline that you, as the seller, will have no out-of-pocket fees.

Does this mean that the bank isn't going to ask you for money? fact often your lender is going to ask you for money. We simply say "NO."

Every state is different, but in California we are a non-recourse state. What this means is that if your home eventually is sold in a Trustee's Sale, the proceeds from that sale is all the lenders can use to satisfy the liens on the home. This is our bargaining power in the Short Sale....if they don't accept our offer, we will simply let them foreclose and they will get less.

Once you have listed your home, we treat this as a "normal" sale. Present your home as you like to live....neat, clean and pleasant. We put a sign in your yard and give you a lockbox for the keys. The MLS listings will specify the details and show pictures of your home. If a listing has no pictures....does this mean the listing agent doesn't care enough to take them? Your agent needs to treat this listing with respect.

Respect is also shown in the way we handle the offers. The pricing is going to be aggressive.....the sellers will get no proceeds, so the only goal in pricing is to get solid buyer offers. This is where there is the greatest difference in approaches. Some agents will send all offers to the bank, as if they already own the home. In reality....the seller owns the home. We need to look at the offers, counter for the best price and terms, and then send one accepted offer to the bank for APPROVAL.

The right buyer for a short sale is similar to one we would want for a non-Short Sale. We check on their credit, we verify funds and counter for the best price and terms. Then we make sure they are going to be there through the Short Sale process. This involves opening escrow and getting a deposit. I ask for $5000 for financed offers and $10,000 for cash offers.

Does this seem unreasonable? Why? Is the buyer serious about buying this home?

Then we put the home in Back-up and discourage showings so the seller can go back to their lives. What we present to the bank is a solid buyer, solid offer and the Short Sale Package. We ask that they review and approve the offer as given. And we all wait. For the sellers....having the home in back-up will allow them to go back to more normal lives.

Are all Short Sales approved as presented? then what?

Once the bank has the package they will approve it or not based on their internal appraisal and loss mitigation policies. This can take months, but many banks are moving quicker now. The response might include a financial contribution from the seller. NO!!!

Since California is a non-recourse state....we never agree to a seller contribution. I often find that other agents advise their sellers to pay this, or accept a note for the requested money. As a buyer's agent....I'm not going to complain. But as a seller's agent, we refuse!

The right agent will work with you and the bank to the conclusion. That might be a Loan Modification or a Short Sale or a Foreclosure. It's a financial, business decision. But sellers need caring for....they need an agent who is there every step of the way and will handle what comes up. This is not a "numbers game"'s one of the most important decisions a family will make, and needs special expertise and care.

Saturday, May 23, 2009

California Down Payment Assistance Is Back.....Because We Have So Much Money :)

From the title of my post....I sound ungrateful, but I'm not. I'm thrilled!!! CALHFA is a program which helps first time home buyers of California with a 3% deferred loan to be used for the down payment. When used in combination with the FHA loans.....a first time buyer can now qualify to buy a home with only 1/2 % of the purchase price.

(FHA requires a 3.5% down payment......3% of that can be from the CALHFA program)

The mortgage industry calls this a silent second. This is a lien on the property, but the borrower makes no payments on this loan until they refinance or sell the property. So it just sits "silently." Because the FHA allows closing costs to be paid by the seller....this gives an opportunity to many more first time home buyers.

This is a bond-funded program....and there are several others too. Take a look at the link above for more information.

Thursday, May 21, 2009

And The Bank Held Out For Less Money.....Short Sale Idiocy

Last August....yes, August....I took a listing for a short sale. I had my appraiser give the property the "once over" and priced it competitively at $149,900. I had numerous buyers the first week. One was for $165,000 and all cash. Yippee!!! This was ready to go in November. The bank should be thrilled!

They weren't!

The bank did it's own appraisal and it came in at the $149,000 that we had listed....we had a cash buyer ready to go at $165,000....they should be thrilled!

They weren't!

The bank wanted the seller to "take some responsibility" and take a note for $20,000. The seller said "no." We went back and forth with the bank and eventually got them down to $5000 note. By this time the buyer was gone, and prices had dropped.

I put it back on the market in December and it sat and sat, comps went down and down. We finally found a new buyer in March. For $125,000. By this time the seller had received his notice of default and sale date. He saw no reason to sign a note. He was tired and annoyed. I agreed with him. The buyer did want the home and offered an additional $2000 to the bank in lieu of the seller's note.

They agreed!

The bank "stuck to it's guns" and held out for less!!!!

I hope they are thrilled!

Friday, May 1, 2009

Hello Buyer!!! Why It's OK to "Window Shop"

I call it "window shopping"! In the truest sense of the term, you are in fact shopping for windows...and doors...and floors...and kitchens...Ok, you get the point! In my business plan, I include time to take clients who are not ready/prepared to buy out to see homes and neighborhoods. This is not only first-time buyers....this market can be scary!

I think the industry as a whole now understands that buyers are more educated than ever. They use the Internet to do much of the research. Sure they can get a list of available homes and recent sales....but without the context of seeing these homes, this information is numbers. Drive-bys are helpful as well....but an afternoon spent with a Realtor looking at homes with the background information and comps is an education that can't be gained on the Internet.

I have a database full of these future buyers. I don't use the normal "drip" email system of sending 1 or 2 lisitings as they pop-up. I use a gateway is a sample site:

This site allows the future buyer to capture, sort, save and make notes on listings all in one place. These listings come directly from the MLS so nothing is missed. When you are "window shopping" this is a great way to start watching the market. You will be able to watch prices...are they going down? up? are there more listings that fit your criteria? less? This is great information!!! All in one place!

The Real Estate Market is changing every day...if you aren't ready to jump right now....find a Realtor to help you prepare! Go see a few homes, check out the neighborhoods and do some "window shopping."

Saturday, April 4, 2009

California Association of Realtors Mortgage Protection Program: CAR Will Pay the Mortgage

Just announced this week by the California Association of REALTORSis a new Mortgage Protection Program. This program will be administered by the California Association of REALTORS Housing Affordability Fund (CARHAF) and will pay the mortgage payment up to $1500/month if a home buyer loses their job or accidental disability or death. There is also a one-time accidental death benefit of $10,000.

This is offered at no cost to the home buyer and the application is handled by the REALTOR as part of the transaction. To be eligible you must:

1) Be a first-time home buyer who hasn't owned a home in the last three years

2) Open escrow after 4/2/09 and close before 12/31/09

3) Property must be a primary residence in California

4) Be represented by a California REALTOR

5) Be a W-2 employee (Self-employed, sole proprietor, partner, etc will not qualify)
There are no income requirements or limits. Coverage takes effect 6 months after the close of escrow and is subject to a one month wait period after unemployment.

To get full information on this program...please contact me at

Saturday, March 21, 2009

Start Watching the Real Estate Market: A Free Listing Website Set up Just for YOU!

Buyer's and Sellers!

If you're in Southern California...this post is for you!

Regardless of which category you fall into.....I have a system which will help you educate yourself on the real estate market you are actually IN! Unlike the major online search websites....this site will be geared to your specifications and give you real-time notifications of new listings, solds and pending sales. You no longer have to guess if a home price you see online is real! This comes directly from the MLS.

On this site...I will imput your search criteria. If you are a home seller...we will enter the comparable homes to the search. You can begin to watch home values....see all the homes that are currently listed and what the price is. You can see pictures and other important information as well. You can also go in and sort these listings, make comments, and even send them directly to me for more information.

This information comes directly from the Multiple Listing Service...the same system the realtors use...and so you will have the most current information available.

This is a link to a sample site...loaded with a Mission Viejo search. If you would like one for your specific needs....please email/call me and I'll set one up for you too!


Friday, March 20, 2009

Open Letter to Home Buyers

Dear Future Home Buyer,Wow...interesting times out there! Short sales, foreclosures, changing loan's so hard to know what to do. Is this the right time to buy? Or should you wait? Where should you go to find answers.

If you are reading this, you already know there are many websites which are available to give you some insight. You can now find home listings, mortgage rates and even your credit report online. But what you still need to know is how to put all this information together to build a coherent plan of attack. A good buyer's agent can help you do this. And a buyer's agent represents you free of charge. Their commissions are paid by the seller.

A buyer's agent is not someone who necessarily rejects real estate listings, but in your case will be someone who is representing YOU and only YOU. This is not someone who is representing both buyer and seller in the same deal. That, in my opinion, is a recipe for trouble...and something I never do.

A buyer's agent will help bring a team of experts together to work with you depending on your needs. This might include a tax consultant, a mortgage broker, and/or a credit counselor. It will certainly involve a comprehensive discussion of your home needs. You will explore cities, size of home, community amenities, school districts, resale values...all the things that should go into an educated home purchase.

This can be done in various ways. I like to set up a custom website for each buyer and load it with a personal search. Using this site, you will receive all the listings directly from the MLS which suit your criteria. On this site, you can save, sort and make comments on the listings...and send them directly to me by email if you have specific questions....or see something you'd like to view. Once we develop a working list...we can go see them.

This is all the things you would expect a real estate agent to do for you....but do you know what happens after you find the perfect home?

During escrow...your buyer's agent is there for you too! We not only negotiate the price in the offer, but represent you during the escrow period too. You will have a home inspection. There might be repairs needed. Although most listings now say "as-is" even banks recognize that sometimes making repairs for a buyer ready to close is better than holding firm and risk starting from scratch with a new buyer. Especially if the problem is severe.

A good example is mold. Most banks, regardless of whether it's a short sale or foreclosure, will address a mold problem. Once they have been made aware of the existence of mold, they must disclose it to every new buyer...they might as well handle it with us. There are other major problems that can be addressed in a bank approval situation too. If we are working with a seller with equity...there is even more room to negotiate repairs, or credits, to handle problems with the home condition.

Other issues which might occur during escrow include insurance quotes, appraisal problems, title discrepancies. All situations your buyer's agent is prepared for, and experienced in solving. Can all problems be solved? of course not...but your agent will have the experience and resources to guide you during the entire process.

In short....if you are ready to buy a new home, or if you are ready to THINK about buying a new home. Start talking to a buyer's agent.

Good luck with your new home purchase and we are here to help when you are ready.


Wednesday, March 18, 2009

Home Buying Process, or home buying for dummies :)

I'm finding that many buyers are uneducated about the home buying process. Just look at the questions on Zillow or Trulia and read behind the see uncertainty and nervousness. I hold first-time home buyer workshops several times a year in my local area, but you don't have to be a first time home buyer to need information. This is the handout I use at that workshop about the steps we take to purchase a new home:

Home Buying Process

Step One: Indentify Properties of Interest and Go See Them

1)Preview properties online and on MLS Gateway Website
2)Identify properties that appear to fit criteria
3)Get Financial details and listing background

Step Two: Write Offers on One or More Possible Homes

1)Write offers with no deposit or obligation
2)Recieve counter offers and give them our response
3)Come to an agreement on one great home, or keep looking

Step Three: Open Escrow

1) We are assigned an escrow officer and number
2)Deposit check will be sent to escrow

Step Four: Contingency Period (17 Days) time to explore details of the home

1) Home Inspection
2)Loan Approval
4) Seller Disclosures
5) Home Owner Association CC & Rs and financial stability

****Important**** All contingencies are removed in writing!!!

Step Five: Coast to the Close

1) Review and sign loan documents
2) Transfer any funds necessary to close to escrow
3) Close Escrow and title is recorded


I hope this is helpful to understand the process....obviously this is an overview....but it's really a simple process, and we take things in an orderly manner. One step at a time!

Thursday, March 12, 2009

Condo vs PUD: No FHA Project Approval needed on PUDs

I had a nice surprise yesterday. I wrote an offer with FHA financing on a townhouse for a young couple. I had checked the "denied" list of FHA developments in the area and had not seen it. It's a shorter list, so I usually use it before I take clients to see homes. Oops....didn't think to see if it was on the "withdrawn" list. Learned something about completeness. It was withdrawn. Panic!!! The couple's kids had already picked out their bedrooms.

But....determined to save this deal, I looked into it further. The reason the approval had been withdrawn was because it was a PUD (Planned Unit Development). Huh...I thought those were single family development, like retirement communities. So I kept researching. Turns out that townhouse developments can be incorporated as a PUD. They actual deed the land to the home buyer and then convey easement usage to the common areas. By owning the land and only having usage rights, home owners are protected from the legal liability of their neighbors. Really interesting. But the best part???? FHA doesn't have to approve the development!

Deal saved!!! Happy home buyers! And I learned something!

Monday, March 9, 2009

Single Family Home in Mission Viejo for $180,000

Ok....this is a short sale price. But it's still the list price. It's a 2 bedroom, 2 bath home in a nice little area walking distance to the lake. This is what our market has gotten us....some amazing deals! Other single family homes are available too beginning more in the $300,000s but these are great opportunities for buyers.

Buy a family home for yourself to raise your kids in Mission Viejo. Buy and investment property and rent at record high rental prices. Buy a retirement home and enjoy Mission Viejo Lake privileges and other amenities in Mission Viejo.....yes, you can retire at these prices.

Mission Viejo has beautiful parks, lovely views, a state-of-the-art public library, community centers and activities, and of course...the great Southern California weather. At these prices, can you afford not to look into it? Or the surrounding cities? Come and begin your search at

We look forward to seeing you in your new home.

Wednesday, March 4, 2009

Mission Viejo Foreclosures

Mission Viejo has not been immune to the wave of foreclosures we are seeing around the country. My quick search this morning showed just under 500 homes that are bank-owned. Do you think that a bank-owned home is your best investment? Maybe...maybe not!

Bank-owned homes do tend to be very aggressively priced. This is because asset managers do not want to have these files very long. Although they are responsible for the ultimate price they get, and the loss involved, they are also responsible for the length of time these homes are on the books. So they will price the home very well compared to other homes in the neighborhood. But there are pitfalls with offers on these homes.

First, the market in Southern California, including Mission Viejo, is for bank-owned and short sales to be priced below what the seller wants to get for the home. A typical home might be priced 5-10% below the ultimate selling price. This is confusing to many buyers who hear about the "buyer's market" on the news. What many buyers don't realize is that the buyer opportunities are already reflected in the asking price.

Banks expect to have a selection of buyers lined up within a very short time of listing the home, and expect to sell for over asking price. The buyer needs to determine how much a particular property means to them. If this is a dream home and they are very serious about getting the home, they need to go into the offer process very strongly. If it's simply a "home that will work" then we should position ourselves accordingly. Many times the original offer will fall through and then we could be the only offer left and can get a better price at that time.

Other problems with foreclosures involve the condition of the home. Every listing will list the home "as-is" but this does not mean you must buy the home sight unseen. You will have the opportunity to have the home inspected by a licensed home inspector....and sometimes the bank will give an allowance for a significant problem such as mold or foundation issues. Normally, you are going to be refused any repairs and few banks are even doing termite inspections now. So you need to be very careful about the home inspection, unlike a "normal" sale, the bank has never lived in the home, has no disclosures to give you about past problems and has very little, if any, liability if there are problems after the close.

All this being homes can be a great investment, can be significantly lower priced, can be in good physical condition, and should be considered when buying a home...but be very careful how you use the contingency period to do your homework, and make sure you are working with an agent who can help you.

Sunday, February 22, 2009

Short Sales: How to manage them to a successful close

Short Sales, REOs, Investor-owned, "as-is," "subject to bank approval." These are terms that the average buyer is seeing everywhere. In a market that is already getting negative press and "doom and gloom" projections, the idea of purchasing, or selling, right now can be very confusing and scary. Short Sales are here to stay for awhile, if you are thinking of a home purchase, you will definately run into one. Here's what to expect, and how to handle the process to minimize the uncertainty of buying one.

Let's start with a definition. What is a short sale? It is definitely NOT a sale that must be done in a short amount of time. In fact, they have the reputation of taking a very LONG time. This doesn't have to be the case, but it is the reputation. A Short Sale is a situation where the seller is asking the bank to accept less than is owed in exchange for the release of the mortgage lien. The lenders will often do this if they believe that the home owner will ultimately allow the home to go to foreclosure and they will end up losing more money by waiting it out, than in taking a quick deal now.

The process should be simple, but in practice it's not, why? First, the listing agent does not know how to handle this process. In a Short Sale, the bank is NOT the home owner and should not be sent all offers as if they owned the home. But often this is what the listing agent does. They mistakenly believe that their job is order-taker and that they just send offers off and wait. The lender ends up with a file of 10-20 offers or more, many of which are from buyers who are not even interested anymore. When an asset manager has 100s of files to work on, this type of file is not going to get much attention because it's too hard to work. This is not the way to handle a Short Sale, but this is exactly what many people have experienced and why Short Sales have such a bad reputation.

So, how should we handle a Short Sale? Regardless of whether we are representing the buyer or the seller, the goal is to send 1 offer to the bank for approval. As a listing agent, we price the home reasonably and collect offers. We handle them the same way we would for an equity sale...we check credit, verify funds and perhaps make counter offers. Once we have a solid buyer, we open escrow and send the 1 accepted offer to the bank. Then the home goes into Back-up status. This is a benefit for all concerned! The buyer can feel comfortable that they are the only offer on the table, the seller knows that they buyer is committed since they have a deposit in an escrow account, and the lender is looking at a complete file with a solid offer that is ready to close once they give the approval. I average about 45 days on these Short Sale approvals.

When we represent the buyer, we try and work the same way. Many listing agents are happy to find a buyer willing to open escrow and wait. Not many buyer's agents ask for this. We do! I will advise my buyers to write a decent offer if the listing agent will open escrow. We will incur no costs until we have formal approval from the lender, no inspection, no appraisal etc. So we are not jeopardizing our funds, but we know that we are the only offer the bank sees. Frankly, if a listing agent is not willing to open escrow with our offer, I will advise my buyer not to write the offer...or at least to keep looking in the meantime. There is no guarantee we will ever hear anything back from the listing agent. We might also be tempted to outbid an offer that isn't even valid anymore. This is the way to over pay for a home, and that's the last thing we should do in this market. We can watch that listing and at some point if it becomes an approved Short Sale, we can move then.

Which brings me to another term one sees in advertisements. Approved Short Sale. What does this mean? It means that some offer price was approved and now that buyer is gone, as we discussed above. But the approved price is also most likely based on home values from a few months ago so we need to be careful about writiing offers based on the approval price. Due diligence must still be done to make sure we are offering a fair price based on current values and not what the bank appraised the home for several months ago. Therefore, we might still write a lower offer and it will need to go back up the chain of command at the bank for approval. Often the list price will be lower than the approved price for this very reason. So when you see this, ask your agent to explain the situation with that specific home.

I hope you have more of an understanding of Short Sales and how to handle the process. I have more information on my website at which goes into detail about the seller and buyer sides. But don't be afraid of Short Sales, there are some great prices to be had working these.

Wednesday, February 4, 2009

San Clemente, still a sleepy beach town

San Clemente is one of best beach town values remaining in Southern California. Where else can you buy a single family ocean view home for $515,000? And that is not a short sale/bank owned price. From the sunny cottages near the beach, to the spacious villas on the hill, all of San Clemente mixes old time beach charm with a revitalized community. There is even a Starbucks!

San Clemente offers both the part time and full time resident a never ending variety of activities. Take a morning walk along the famous T-Street Beach and watch the sea gulls and the surfers. On the first Sunday of every month, head down town to Del Mar Street for the Village Art Fair. Local business and restaurants offer an assortment of food and specials and you can stroll through the booths of arts and crafts. Then head down to the pier to enjoy a seafood dinner at the Fisherman's Restaurant and enjoy the sunset over the ocean.

San Clemente is a diverse community. There are the young renters who surf in the morning and party at night. There are the young families who gather at the pools in Talega and watch their children play soccer in the parks on weekend, and then there are the older couples who enjoy their ocean views on the deck. with the range of pricing, San Clemente can be a retirement reward, a family lifestyle or a second home for weekends.

Feel free to contact me if you would like some more information on homes for sale in San Clemente, or you can search on your own at our website

Friday, January 30, 2009

When should you walk away from an escrow?

I talk to many buyers who show some hesitation when writing an offer. I think they are worried that they will be stuck with this home, and are trying to make a decision about such an important purchase in the 15 minutes they were in the home. How can anyone be expected to do that?

Buyers need to understand that writing the offer is only the first step to determining if this is a good purchase. I like to tell my buyers that purchasing a home is a series of "yes" answers as we move through the process. As soon as we hit a "no" we close escrow and move on. My buyers and I are on the same side....we are both hoping this is the right home, but if it's not, let's go find the right one!! The fear is that the agent is so invested in making the sale that they will push you into a bad deal....if you think that about your agent, then find a new agent!! A great agent should be concerned about the well-being of their client and thus earn their business for life.

So as we enter the escrow, there are important discovery elements, any one of which could be a deal breaker. The two most important are the home inspection and the loan. In this market, you might add a third to tha,t which is the appraisal. The last thing we want to do is purchase a home for more than it's worth, and the appraiser will give us that information. If it comes back low, we can go back and renegotiate the price.

There seems to be a misunderstanding about the contingency period. With so many homes listed "as-is," many buyers are under the impression that they have to accept the condition of the home once they make the offer. This is not true. Regardless of whether this is a seller with equity, a foreclosure, or a even short sale...we can always ask for concessions based on what we find in the home inspection. What if the home inspection uncovers toxic mold? or a slab leak? or dangerous electrical wiring? Are we going to buy this home only to have major repairs when we walk in the door? Maybe, maybe not. The home inspection is to find out the condition of the home so we can determine if it's a project we want to tackle. Or not....if not, let's walk away. Most major problems can be addressed in escrow and we can get money or repairs done. If not...then let's move on.

The other major misunderstanding buyers have is concerning the loan. You are not obligated to ANY loan you can get. California purchase offers include loan conditions right on the front page. We tell the seller up front what kind of loan we want to get. They accept or reject these terms. While sub-prime loans are gone, loans do vary in interest rates and terms. You will work with your lender to find a program that fits your budget. If you can't find a loan you are comfortable with, we move on. Interest rates and loan programs change constantly, and interest rate available in the morning could be gone by afternoon. Until you have final loan approval on a loan you like...we don't remove the loan contingency.

Lastly....I would like to stress are trying to decide if this is the perfect home for you and your family often with a 10-15 minute visit to the house, often after seeing 5-8 other homes the same day. A home you thought was perfect at 5pm on Saturday afternoon, might be wrong on Monday morning when the rush hour traffic races past the backyard fence. During the contingency period, we need to visit the home often. Find out if the afternoon sun is too hot in the kitchen, is the master bedroom dark in the morning, traffic noise? school noise? All situations that might cause you to reconsider the home. And there is always the panic attack....yep, it happens :).

There is alot to do after you have an accepted offer! There will be times when things just don't fit! I would suggest that you walk away when you realize you are forcing a deal! There is a lot of inventory right now and you don't need to settle.

Wednesday, January 28, 2009

In Trouble? Upside Down in Equity? Don't be Afraid to call an Agent!

This is a scary time for many homeowners...and there are so many advertisements offering help....for a price. There is one free avenue for information, your real estate agent. Don't be afraid to call one!

Real estate agents are professionals in this industry and believe me, they are informed about the latest news. We are watching for new programs, new loan options, new modification options, trends in Short Sales and even Foreclosure statistics. And they will talk to you for free. We are not attorneys, we don't charge you a fee. If you trusted your agent to help you buy your home, call that person for help now.

During the lastest real estate boom there was an influx of new real estate agents, but many of them are gone. The ones who are here and thriving are the experienced agents who have built a reputation and have referrals. They understand that the relationship between client and agent is primary. This often means that they will not make any instant money by offering advice....but by servicing the client who needs help now, they are building their business. It's critical that we offer the best advice we have and build on the trust you have in us.

We can help you navigate through the loan modification process, help you find a legitimate company to help you, or perhaps advise you how to do it yourself. We can show you how to get a reduction in property taxes based on lower home values. We can give you information on the current prices in your neighborhood. We can recommend a loan officer for a good refinance. We can help you sell your house either with equity, or if necessary, as a short sale.

Real estate agents are a great resource for us! We were there when you needed us before, and we are there now.

Monday, January 26, 2009

What does the term "as-is" mean?

One of the most common questions we get when working with buyers is about the listing statement "as-is." This is one of the most frequently misunderstood comments in the listing description. Most people assume that when an offer is given on a property advertised "as-is," that you have to have done all inspections necessary prior to the offer. This is NOT true. A good buyer's agent will make sure that the home inspection contingency is preserved.

So what does "as-is" really mean? First, in a bank-owned property it's quite common to see "as-is" language. They will also include clauses to clarify that they have not occupied the home and have no first hand knowledge of its condition. They will also outline what, if any, seller disclosures they will provide for the buyer. Seller disclosures are required in sales transactions in California and if a bank does have knowledge of an existing problem, perhaps from a previous inspection, they are still obligated to disclose this to the buyer. The main purpose of the "as-is" clause is to pre-warn the buyer that the bank will not make repairs nor concessions based on the results of a home inspection.

During the home inspection contingency period (normally 17 days) we will do as many different inspections as needed. We will start with a comprehensive home inspection by a licensed professional. This might lead to other suggested inspections or estimates. These can include electrical, furnace, roof and even mold inspections. More and more banks are also refusing to pay for termite and other wood destroying pest inspections and repairs. If this is the case, we would want to get a termite company out there as well.

Once the inspections are all done and we find there are some problems, is the buyer forced to choose between the problems or walking away because of the "as-is" language in the contract. Maybe!!! It really depends on the problem. Everything in real estate is negotiable, so we negotiate. As mentioned above, if the seller (in this case the bank) is aware of existing problems with the property, they must disclose it to all buyers. If we find a mold problem for instance, often a bank will provide a credit or even remediate the problem, because if we walk away they will have disclose our report to all future buyers. They often decide it's better to just keep the buyer they have. The same might be true of a major electrical problem, slab leak, termite infestation...if it makes financial sense they will still negotiate with us.

What if we see "as-is" on a short sale? How does that affect the buyer? This is trickier! Remember that in a short sale, the bank doesn't own the property yet and in accepting a settlement, they have to deduct all the real estate expenses from their profit. The sellers are getting no money out of the sale, so they have no incentive to pay for any repairs out of their pocket. This is the toughest situation to get some concessions for repairs, but the bank is trying to mitigate their loss, so they will look at reasonable requests for concessions. Again, mold is a common issue where the bank will include some reduction in proceeds to repair the problem and complete the transaction.

Finally, in this market we are seeing more sellers with equity using the phrase "as-is." This is an effort to set the expectation with the buyers not to ask. But, we will anyway! As mentioned before, everything in real estate is negotiable. In better markets, buyers were used to expecting the seller to replace screens with tears, replace loose tiles and other small items of wear and tear. This could lead to 100s of dollars of cost for the sellers. With so many sellers having big drops in their equity, they often will place "as-is" in the listing to prevent such requests. In case where there are handyman issues, as just mentioned, we often ask for a $500-1000 credit in escrow. This is usually easier for the sellers to agree to than a itemized list which can seem nit-picking. It's all in the presentation. Larger problems again are usually something sellers understand and will normally address.

Obviously we need to pay attention to all information in the home listing and we are not trying to minimize the importance of an "as-is" clause. But it doesn't mean you are buying a problem, sight unseen.

Friday, January 23, 2009

What can your buyer's agent do for you!

I know that this market is unusual, confusing and frustrating. The good news, many "agent" who were really just order-takers have had to leave the industry. This should leave a group of experience, committed agents left to help you. This is a positive step for our market...more experience means better service and smoother escrows. But, if you haven't found the perfect agent yet, and are wondering what they can do for you, I'm hoping to give you an understanding of what to expect from your agent.

Obviously an agent will work with you to put together a list of possible homes to go see. Great Western Realty Group specializes in using the latest technology for Internet searches. Many buyers do a lot of the "leg work" on the Internet before they begin the physical search. Once you contact us with your specific criteria, your agent will create a personalized website for you to begin using at your leisure. This site will be linked to the Southern California MLS and you will receive all new and current listings directly on this site.

You will have the capability to sort home into favorites and possibilities. You can also make notes directly on the listings, email them to your agent for further questions and map them if you would like to drive by them yourself. We like to use this tool to develop a working list of homes you might like to see in person. It allows your agent to know in advance what interests you, we can offer suggestions and do back ground research prior to meeting with you. This system allows you to go at your own pace, with no pressure, often we will work with clients for over a year while they watch the market. Especially in this market, the ability to keep an eye on prices and inventory will lead to an educated purchase.

Once we have identified interesting homes, we will go see them. At this point you might write an offer on one, or more of the homes you see. The Southern California Market has seen drastic drops in price, but there has also been a flurry of offers, no reason not to explore all homes you have interest in. Remember that listing prices are simply the sellers' wish price, not the one they might actually take. The next step would be counter offers or acceptance of our offer. For the purposes of this article, let's assume you found a home at a good price and are ready to open escrow.

Escrow is the term for the closing process in California, other states use attorneys. An escrow officer and number will be assigned to you. The escrow officer acts as an impartial third party whose job it is to make sure that the terms we have all agreed to are carried out. They work with buyer and seller agents to get the full contract and deposit. They will order a title report and title insurance to make sure the seller has the legal right to sell the property. They will also check for liens on the property and make sure they are released. They talk to the current and future lenders, order payoffs and gather information necessary for the new loan documents. They also order Home Owner Association documents to verify that the association is not being sued nor incurring unforeseen expenses which might cause your dues to increase. All monies also go through escrow.

While escrow is handling all this, your agent will work with you to do all home inspections necessary for you to find out the quality of the home you are buying. This should always include a home inspection by a licensed home inspector. You might also need a mold inspection, if there is evidence of moisture problems. If the home is on a hill and/or if you notice cracking in the walls or concrete, you might be advised to get a geological survey. Other inspections could include termite, electrical or plumbing. The home inspection time is also an opportunity to get estimates for improvements or repairs.

The other important activity during this time is finding a loan. You have probably already begun this process by pre-qualifying with a loan officer, but now is the time to get final loan approval. Once you find loan program that fits your budget, your lender will order an appraisal. The lender will want to make sure that the home is worth what you are willing to pay for it. This is especially critical in our market. The last thing we want to do is over pay.

When all these items are done, and meet your approval, we will remove the contingencies and we "coast to the close." Your Great Western Realty agent will be available for you at all times during this process. I know you've heard stories about agents that disappear as soon as you sign an offer, but the great agents will always be there to help you through any hiccups that come along. We want you to find the home buying experience an easy, stress free one. And once you close escrow and have moved into your new home, we want that stress free feeling to every buyer who buys a home through a Great Western Realty Group Agent will have a complimentary home warranty on the home.

A home warranty will cover you for all your major systems in the house for one year....and you can renew it if you like. Electrical, Air Conditioning, Furnace, Plumbing, Pool/Spa Systems and many other major items. This is just one more way your agent makes sure you are a satisfied home owner.

Please visit the search page of our site to get started, search for active listings.....and if you like, register your criteria for your free website.

We look forward to working with you!


Wednesday, January 21, 2009

Why Buy a Home in Mission Viejo, California

Beautiful Mission Viejo has been one of the most desirable family oriented cities since it was first built in the mid 1960s. As one of the very first master planned communities, Mission Viejo set the example for the surrounding cities with every park, school and shopping center designed well before they came into reality.

There are many reasons why families in particular love living in Mission Viejo. The first, and most important, is that it's a very safe city. In fact in 2007 it was named the safest city in the United States. Parents can feel comfortable allowing their children to play out front or walk to the park. During the summer months, you will find children running unsupervised in the parks and the lake, this has become obsolete in most cities of America.

Another big draw is the school districts and the extras they are able to offer the students. There are two school districts that service Mission Viejo, The Saddleback School District and Capistrano Valley School District. Both have excellent schools and many that have been awarded the title of California Distinguished School. Mission Viejo High School is well known for it's athletic programs, especially the football team, the Diablos. Many college and professional players received their start in Mission Viejo.

Capistrano Valley School District also offers wonderful opportunities for students. One such opportunity is the ability to participate in their music program. All elementary schools in the district offer bands and orchestras as early as 4th grade. By the time the students are in middle school there are even more classes available. In fact, Newhart Middle School employs two full time music teacher and have 6 different music classes. There is also a Jazz Band that meets as an extra curricular class after school.

Any discussion of Mission Viejo must include extra curricular sports. Most families participate in at least one after school sports club. There are basketball leagues, Pop Warner Football and of course, AYSO soccer. In addition the world reknown Mission Viejo Nadadores Swim Team has produced Olympic Gold Medalists and any child interested in competitive swimming would find the facilities exceptional. The swim center also offers many swimming instruction classes and beginning swim teams through the Swim America clubs.

Finally, perhaps the most beautiful feature of Mission Viejo is the Lake. Lake Mission Viejo is a private lake open only to residents and their guests. There are two beach areas, one that is open all year. There are free concerts and movies in the summer, white sand beaches with lifeguards, and boats to rent. The association stocks the lake throughout the year with trout and bass and hosts fishing contests. There are also quite areas where you can fish year round.

During the summer and school holidays, the Mission Viejo Lake Association offers day programs including Junior Life Guards, sports programs and basic "hanging at the lake." They also organize special day trips to Disneyland, Knott's Berry Farm, and other Southern California places of fun. The lake also offers enrichment classes year round, such as Mommy and Me, Adult Yoga, Intro to Basketball for Elementary Students...etc. And the best part? The Mission Viejo Lake Association dues are only $222/year, not a month, a YEAR.

We hope this has given you some understanding of the quality of life you and your family can find in Mission Viejo. Please contact a Great Western Realty agent to help you begin your home search in this special family city.

Monday, January 19, 2009

Buyers!! Are you waiting? Sellers!! Are you scared?

We all know the answer to these questions is "YES." At least to some degree. Which is understandable! It also follows that many agents are seeing their leads slow down because the news is constantly telling the public how "desperate" agents are. Wow...a sales industry who's DESPERATE, that's going to get us lots of contact. :)

Well, all of the above might be true, but it leaves many potential....future...clients out in the dark. We at Great Western Realty Group are looking to the future, as well as the present. We are not just servicing the active, immediate buyer or seller. Our philosophy is that if we provide the future buyer or seller reliable information now, without pressure, they will come to us when they are ready to move. This takes an investment, and yes, some of those potential clients will use someone else. But perhaps they will remember us when they talk to friends, referrals are critical to real estate.

How are we providing this service? First our website!
Our website is full of the latest real estate information. We have a state-of-the-art search feature and many pages of information on such subjects as Down Payment Assistance, Loan Programs and low-down FHA loans, School information, Home Inspection tips. There is an easy submission form as well if you don't see the answer to your question.

Then, if you would like a powerful tool for watching the market directly from the MLS, we will set up a custom website for you linked to the MLS. You can give us your specific criteria and see new listings in real time as they hit the MLS. From this site, you can email us directly to ask questions, sort listings into favorites and possibilities, make your own notes and even reject homes that are wrong.

If you are a seller.....let's put a search on this site that best reflects your home. This can be the exact tract, or similar homes in your city. This allows you to watch the home prices and gives you valuable information about how the market is trending. Once we do list your home, you can continue to use this tool to keep abreast of new listings that are competing with your home.
Another way to service our future clients, we have agents available who can do some previewing with you. "Window Shopping" if you will. Why not go see some homes that are in your price range. See what is available now! You might be surprised as to what you can get! You might also find that the neighborhoods look different in person than they do on the internet, and then we can change your criteria.

Doing the right things all the time, providing excellent service without pressure....this is why our Great Western Realty Group members are continuing to thrive, even in this market. And by helping buyers and sellers prepare for the future, we are making sure we have educated clients for the upcoming markets.

Please contact us at for more information about our free websites!


Saturday, January 17, 2009

Urgent!!! HR 600 Will Restore Down Payment Assistance

Up until the Housing and Economic Recovery Act of 2008 was passed, there existed a little known program called Nehemiah Down Payment Assistance. Nehemiah is a charity organization which gives the down payment for FHA loans to the borrowers. This is not a loan, but a gift. The money was donated to the Nehemiah Foundation by the seller, in escrow and then the Nehemiah Group gifted it to the buyer. This worked in a similair way to seller paid closing costs in that it was often "financed" by raising the offer price to compensate. This allowed true 100% financing. Because it was a gift, this met the qualifications for the FHA down payment requirement which was just raised to 3.5%.
The Housing and Economic Recovery Act eliminated this and other Down Payment Assistance (DPA) programs. Today Representative Al Green introduced a new bill H.R. 600 which is a 2009 version of H.R. 6694 which reinstates the down payment assistance by Nehemiah and other DPA groups. They are proposing some reforms, such as a minimum FICO score, but this would dramatically help our markets.
What is often misunderstood in discussing low/no money down loans, is that FHA loan are for people who qualify, they are NOT sub-prime loans. They have to have a job, bank account statements, tax returns....all the old documentation we used to require. They also have PMI (Private Mortgage Insurance). Now with the loan limits much higher in some markets, this has the potential to bring in a whole new group of qualified buyers to the table.
Here is the link to the site DPA Ground Swell 2 I urge all professionals and consumers to support this worthwhile Bill. H.R. 600. If we can get even another 10% into the buyer pool, we can really make some headway toward the recovery of our housing market.
Thank you!!!

Friday, January 16, 2009

Buyers!!! Are you really getting a great Home Inspection?

It's rare that a purcahse offer is accepted without allowing for a home inspection contingency. Just because they are advertising "As-is" does NOT mean that you are not entitled to investigate the condition of the home. If the home is a bank-owned, this investigation is especially important because they do not give you disclosures, they do not have any first hand knowledge of problems and you will have to discover them completely on your own.

This brings us to the next problem. There are many people out there who advertise as home inspectors. And it's sad to say that you may not get the best direction from your agent. Many agents, especially in this market, are afraid to offer a truly GREAT inspector for fear that you might find something out that will scare you out of the home. I understand, but at the same time we agents should be motivated to serve our buyers and their interests. I think we earn loyalty from a buyer who receives a great inspection from an agent and does decide to leave an escrow.
Beware of "visual inspections." Frankly, we can all do that! "Hum, that looks like water once leaked through the ceiling." Is that really the level of inspection you need when purchasing the biggest investment you have, and your HOME? I have an inspector I have used for years and trust completely. He is also one of the few certified mold experts in Southern California. While a routine inspection will not include mold, because of this training, he will alert you to possible mold situations and can recommend further mold investigations if he feels the situation warrants it.

A thorough inspection should include the following:

1) Turn on all appliances and check temperatures.
2) Check the furnace, air conditioning systems and check temperatures.
3) Check the water heater for pressure.
4) Run sprinklers, outside lighting.
5) Turn on all lights and fixtures.
6) Inspect all plumbing and search for evidence of water damage.
7) Check smoke detectors and notice safety issue.
8) Notice cracks in patios, walls, floor and ceilings and make recommendations if further inspection should be done.
9) Climb onto the roof, crawl through the attic, and check storage areas in garage.

In short...this is just the beginning of a good inspection. Then you should get a complete report of what was done and the results so you can make an intelligent decision. And remember, just because a listing claims to be "As-is" doesn't mean you can't negotiate for repairs. Many banks will make concessions for large issues, such as mold or geological problems. Once the bank is made aware of a problem like this, they will have to disclose it to future buyers, so they do have incentive to work with you. FHA will not finance a home with a mold problem, so that again is leverage to use with the bank.

A great buyer's agent knows that the worst phone call to get is the one after the close of escrow with an unhappy buyer due to a foreseeable problem. The best way to avoid that call is to provide the best possible professionals to advise the buyer in advance. A thorough home inspection is just one of those steps and perhaps the most important.

Thursday, January 15, 2009

Staging your home to sell, with a small budget

Realtors have employed professional stagers as part of their service to sell homes for years. In this market, price is king. Buyers expect homes to be in bad shape; they are becoming savvy to the fact that a bank is not going to upgrade a home, that a short sale is likely to have deferred maintenance, and sellers with equity do not want to spend any of their equity making repairs. We are seeing "as-is" on listings routinely. Your Great Western Realty agent will guide you when they do the initial walk-through.

But with the largest inventory in recent years, sellers still want to stand out. Professional staging can cost several thousand dollars and realtors are no longer willing to front that cost when they are unsure about a sale. Let's discuss some ideas that are budget conscious.

First thing to remember is that the stagers themselves are feeling the pinch. It can't hurt to ask one to come over and give you an estimate. They have inventory that is not being used and they might be willing to lower their prices considerably. If they supply you with the staging items for a reasonable cost, then listen to their advice, ideas. As they walk around your home, take mental notes of what they would put/subtract to make the home more interesting. Then see if you can find those items in your home, or a friend's home. Borrow what you can!

Always unclutter.....this is not a new suggestion and costs you nothing. If you must, pile things in your garage. If you do this though, try and still allow potential buyers the ability to see special aspects to your garage, such as extra storage or work area. Take all unessential knick-knacks off of tables and shelves.

Look through magazines or even catalogs for ideas. Take the ideas from these high end stores and look for similar items in discount stores. Don't feel like you need to overdo, just a few nice touches. Some ideas might be a clear bowl filled with lemons or apples. Treat your family to a fruit bowl and keep filled. Find inexpensive throw pillows to tie in a color pattern, take extras off the counters in the kitchen.

Hire an interior designer for an hour. Most designers have an hourly rate for advice. Use them! They are expert at using what you already have, they might also have floor items they could lend you in exchange for some minor advertising, such as business cards or a small sign. Offer to list them on fliers, your agent will be happy to accommodate this as they want the home to sell too.

These are just a few ideas! Check out the Seller's Tips at

Wednesday, January 14, 2009

Buying a House

Are you thinking of buying a new home in this market? Unsure about where to start? Start by visiting for great resouces. At this site you can search, save and research homes directly from the MLS. These listings are collected from all the real estate brokers....Century 21, Keller-Williams, Coldwell Banker, Tarbell, RE/MAX, First Team, etc. Search for listings, mortgage information and other resources. Check out the new Foreclosure Search too!
Most people think that buying a home is ONE BIG decision when really it's a series of smaller decisions. First you make a decision to write an offer, and at what price. Then if they counter, you decide whether to accept the counter offer or not. Once we open escrow, there are many other small decisions. We get seller decide if you want to continue based on the information. We have a home decide if the condition of the house is accetable. You apply for a home loan...and then decide if the terms will fit your budget and lifestyle. Are you getting the idea? There are many other small decisions to make along the way too. The first "no" to any questions...and we move on.
We know that it feels like a BIG DECISION just to talk to a realtor, which is why we created this blog. But be comfortable contacting us directly as well. We know that home buying (and selling) is a huge step and sometimes it takes a long time to find the right situation. Our expert agents will work with you at your speed! We look forward to helping you find the perfect home, investment property or vacation spot.

Tuesday, January 13, 2009

New Restrictions on Rental Income in Qualifying

The decrease in California home prices has created the opportunity for buyers to purchase homes they couldn't formerly afford. However, since this is not a market that is beneficial to sellers, they also would like to keep their current home and rent it out. In the past, these homeowners were able to offset the cost of the old home with the rental income and still qualify for the new homes. New guidelines are going to make this harder to do going forward.
With home prices dropping, many people are seeing homes in their neighborhoods selling for significantly less than they owe. A trend of "Buy and Bail" has emerged. People would buy a new home, show a rental income on the old home, then once they have the new home financed, they allow it to foreclose. In order to prohibit this practice, Fannie Mae and Freddie Mac have new guidelines for qualifying if you are planning to rent out your existing home.
Both agencies are requiring homeowners to show a 30% equity in the property they are going to rent. If they cannot, they will have to qualify for both homes and have 6 months in reserves for both mortgages. Even if they equity requirement is met, they will still have to have a valid lease for 12 months and be able to show that the deposit has been cashed. At that point, 75% of the rent can be used in qualifying. FHA has similar guidelines. They are requiring a 25% equity stake. But there is no reserve requirement.
This is will impact relocation financing, investment financing and those who would like to move, but are upside down in their home value.