Why Short Sales Don’t Sell….No suprises here

Those dollars down the drain represent the hours wasted. Who wasted them?  Hmmm, how do you waste them? Let me count the ways………

• Begin with the hours a new home buyer spends in front of the computer screen perusing all the homes for sale in their price range (we won’t count the productivity lost when searching at work).
• Then there are the hours the new home buyer spends on weekends, driving around stopping at open houses.
• Next, you have to toss in the hours the new home buyer spends doing research on which agent to use in their search.
• Now, the cost of the hours begins to increase. After all, the agent is doing this for a living and even if they don’t realize it, their time spent is money spent.
• The next batch of hours lost are spent visiting properties that may or may not be available. Under our current rules…..it has become a “crap shoot”.
• These are followed by the painful hours. You know, those hours it takes to prepare an offer, followed by the hours it takes to receive a response. You can even add a bunch of minutes for the time you wait for the agent to even return a phone call.
• The come the hours of death. All the time spent has been for naught.

The home was not really for sale. It was in the MLS. It did have a list price. It did say pending 3rd party approval. It did have a sign in the yard. I did have a lockbox on the door. I did have a fancy sell sheet on the table. The home was not really for sale.

The following is an example. This is not t.v. and this is not a fictional account. Names remain the same. I make no judgement on the innocence of anyone. It just is a sample of why short sales don’t sell.

A very good friend of mine called and asked if I would consider taking a young couple out to find a home. She prefaced the information with “they don’t have a lot to spend, but they are a very nice couple.” I told her absolutely, send me the information and I will do what I can to help them.

I chatted with the wife and she said they could meet me at the property that evening. I drove to Brunswick and showed them a home. Now, now….before we walked through the door, I explained agency relationships and the other information required by the State of Maryland. They liked the home, but said that the location was just a bit farther than they would like. They explained that they would like to find a home soon, but they are not under any time constraints. I told them I would do some searches for them.

I went back to the office and did the usual MLS, Craigs List, FSBO.com searches. I checked the on line classifieds and came up with a group of homes that were in Frederick. I sent them the information. They wrote back with a list culled from list that they wanted to see.

I made the proper arrangements and we met a second time and went on tour. The first house we visited was missing a refrigerator, toilet and upstairs window. I rechecked the listing and the agent had shared “great shape, bank owned.” Apparently, the bank did not own a refrigerator, toilet or upstairs window. We moved on to the next home. Our third stop was very brief. The owner (yet another in a short sale status) shared that “they did not give a rat’s xxx what the agent told us, they were not allowing people to see the home except on weekends”. They slammed the door in our face. (I made a mental note to make sure and call the agent and let them know how much my clients appreciated that treatment. My buyers did not want to reschedule for the weekend or any other day.)

At the end of the evening, they had found the home they wanted to buy! It was a nice little townhouse at 121 Lauren Court, Frederick, MD 21703. It was listed by Homestar Realty located at 8120 Woodmont Ave, Bethesda, MD 20814. The listing agent was Marjorie Perez-Martinez.

The list price in the multiple listing service was $141,000. The AGENT REMARKS : Gorgeous townhouse in perfect location. Hardwood floors in main level, ceramic tile in all baths, huge closets, stone patio with fenced rear, storage shed and much more…PRICE TO SELL..A MUST SEE… This is a Short Sale subject to bank approval. As is condition.

The compensation was listed as 3%.

Now, other than the fact that it was apparent that the agent did not know the difference between hardwood floors and cheap pergo knock offs, I believed that the information provided was correct.

My clients had financing in place and came in to sign an offer. I won’t bore you with too many facts. Using my expertise and knowledge, I suggested that they offer $148,000 with $6,500 in closing help. I was aware that there was another offer and we would be in a competitive bid situation.

My clients signed the offer. I submitted the offer and we began our wait. After about 36 hours of calling and leaving a message with the other agent (trying to ascertain if 1. the offer had been received and 2. had the offer been submitted to the bank.), we were told that the offer had been sent to ………………drum roll, eye roll, belly roll, roll the dice, roll over and play dead……….Countrywide.

Bright and early on day 4 we received a note from the listing agent. Countrywide had sent my clients a counter offer. THIS IS NOT A MISPRINT. Countrywide’s counter offer was $158,000 with 2% seller help and a reduction in the commission to 2%.

I called the other agent. I asked…“Let me understand this. My clients offered your client a contract that would net them $1,500 more on the price and they have responded that they want $17,000 more in price and are willing to offer $3,160 in seller concessions?”

The other agent asked if my clients wanted to counter.

“NO, the offer submitted is their best and final offer. Tell Countrywide take it or leave it.”

We are still waiting.

Oh, why short sales don’t sell? Maybe it’s just my opinion, well, it is my opinion, bait and switch stopped working when vacuum cleaner salesmen stopped going door to door. There is no policy preventing broker’s from listing a property well below what they know or should know would be acceptable to the bank. There is no ethical requirement for those zealously seeking to reap the rewards of people struggling.

I realize that I share the same profession with the other broker and the listing agent. Fortunately, I do not have to ever share the same room with them.

My clients, well, it is a setback, but I will find them a new home.

$10,000 Grant Available for 1st Time Buyers…Interested?

                                                                

The headline is not a mistake. Here’s the deal. Well, before I go into the deal, let me share some background.

It seems that all the news regarding housing, the economy and the future is rather bleak. I have shared many times that the 4th estate has moved from fact to sensationalism. The desire to print an accurate depiction of events has been replaced with the need to sell. I never dreamed that that the National Inquirer would become the model for all news outlets. Sadly, that seems to be the case.

Everyone is affected. Each of us creates our own reality, but it is shaped by what we perceive. I am not surprised to read that Americans feel like things are worse than a statistical analysis indicates. It sure feels worse.

I am a Realtor.  In this area, that does not set me apart. There are probably one hundred thousand real estate agents in this area. Over the last five years, my profession was one of the “go to” places. Let’s not forget it only takes 60 hours of class room training, pass a few tests, a couple thousand dollars in start up and you are a real estate agent. If you join the National Association of Realtors, why you are a Realtor. Those are the facts. The young woman that does Aunt Bessie’s hair every week has had to do more training, spend more time in class (one year) and spend more money to become a hairdresser. I never forget that. It puts those lofty claims of most agents in perspective. I know that fact that I have a license is not the measure of my ability. It has taken years and transactions to cultivate the skills I bring to any table.

I like to work with first time home buyers. For one thing, they have not been jaded by the system. They usually have not suffered through any involvement with one of my peers. They have not been just another number. They are bright eyed, hopeful and seeking a dream. My kind of people.

Well, the world has turned upside down for them. The days of easy money have come and gone. I know it hurts, but the demise of easy money is a very good thing. Credit worthiness and the ability to pay are a necessity when buying a home. Sure, that sounds obvious, but when the hedge fund folks were supporting any mortgage that came through the system, people were allowed to make tragic mistakes.

One of the fundamental reasons that the housing market has gone sour is rooted in “easy money”.

Unfortunately, everyone got lumped together. That is not fair. Society and the business world have a bad habit of using statistical analysis and past history to paint everyone with the same broad brush. I remain fervent in my belief that each individual deserves an accurate portrait of their qualifications.

I found an ally.

My clients have access to a $10,000 grant. Sure, there are qualifications. If you don’t pay your bills, don’t bother calling. If you have more assets than necessary to qualify for a loan, you may not qualify. On the other hand, if you are credit worthy and plan on buying a home priced under $350,000 and you want to be represented by an agent that will put you first….call me or write me.

If you are an agent or you have a relationship with an agent….I can’t help you. Either you as an agent need to do a little more work to find sources for your clients or if you are a buyer, it might be time to find an agent that has been working behind the scenes to make your world better.

I can be reached at 301-537-4377 or macarthurgroup@gmail.com

Lost in translation…….we hardly noticed……….

There will be no pictures here. I ask that you allow you imagination free reign to picture the following as you see it in your minds eye.

Once upon a time there was a little town. 200 people lived there. Their water supply came from wells that were dug near their homes. Those that did not have the funds to dig a well, used the large community well in the center of town. Years passed and everyone had potable water. For one reason or another, the wells began to run dry. They still produced water, but the volumn was diminished. Town meetings were held and it was decided that they should build a series of pipes from a distant river to a water tower they would construct.

The water tower concept was accepted. After more discussion, it was determined that building the water tower would take a professional water tower builder. Requests were sent out to water tower builders across the land. Experts were needed.

Soon, the elected town officials began to hear from water tower builders. Experts came to town to go over the project. The experts began to suggest that the water tower concept was not complete. In order to guarantee the potability of the water, the town would also need a filtration system.

The conversation turned from the need for water to the quality of the water needed. The focus of the community was directed away from the need to clean and quench thirst to the actual composition of the water that would be available.

The competing experts began to form allegiances with the various elected officials. The townspeople hardly noticed that the elected officials were enjoying paid vacations. The townspeople hardly noticed that the quality of life of the elected officials was becoming much more comfortable. The townspeople hardly noticed that the longer it was taking to make a final decision on which expert would be hired, the difference in the quality of their life and the apparent quality of life of the elected officials seemed to grown larger.

Time passed and wells continued to decrease in production.

During this time, the population of the little town continued to grow, increasing the strain on the water reservoir running beneath the town. Scientists were contacted and they confirmed that there is only so much water in the aquifer and the current depletion of that supply was growing exponentially.

The townspeople began to demand a resolution from their elected officials. As new elections were scheduled, candidates promoting a swift resolution to the problem surfaced. The townspeople hardly noticed that the campaigns for the candidates were being funded by the experts that claimed to have the solution.

Elections were held and as fate would have it, the candidates supported by the richest of experts won handily. The townspeople hardly noticed. It is the unspoken secret of elections that the person that spends the most to win, usually wins.

The newly elected officials once again met to address the problem. As luck would have it, the largest contributers just happened to win the bid. The townspeople hardly noticed. The experts plan was to build a water tower. Their plan was to build a series of pipes from the water tower to each home. Their plan was to build a filtration plant. Their plan was to build a pump station from the filtration plant to the water tower. Their plan was to build a damn on the river. Their plan was to build a pumping station on the dam. Their plan was to build a large pipeline from the pumping station on the dam to the filtration plant.

The project would take five years. The scientist came to town and told the townspeople that based on current demand, the aquifer under the town would run dry in seven and one half years.

The project was begun. The elected officials instituted conservation laws that restricted water usage to cleaning and cooking. The large town well had a tariff added to it. Townspeople that did not have their own well had no choice but to pay the tariff. This immediately reduced their standard of living because the expense of purchasing the community water had to be funded with their stagnant income.

There was a long term cost associated with the project. Townspeople had agreed to fund the project out of tax revenue and they were faced with a small cost annually to offset the cost of the capitol improvement. They hardly noticed that there was no maximum it would cost.

As time passed, this forward thinking community attracted more residents. The strain on the water supply was increased. Scientist warned that the stress on the aquifer would result in dry wells long before the project would be complete.

The elected officials confered with the experts and found that the project could be completed earlier, but at an increased cost. The elected officials decided that they would run a community service information campaign supporting increasing the cost to resolve the crisis. The campaign would generously be funded by the experts. The townspeople hardly noticed.

The project was completed.

The river ran dry.

There was always a limit to the flow of the river. There was always a chance that the chosen supply source would not be there forever. The townspeople heard the warnings. They hardly noticed.

If water were oil, would anyone notice? If we are using more oil daily than we produce daily, does anyone realize the implications that eventually, we will have no oil? Does anyone really believe that the answer is building more highways? Does anyone really believe that after 30 years of concrete warning and nothing truly changing except increased consumption, a solution is at hand? Does it seem odd that the people sharing positive views are large oil firms and auto manufacturing firms and construction firms that build our highways? It is a sad day on the planet. This is not America’s problem. This is a global problem.

Current comfort and convenience is being served at the expense of long term survival and life style.

It is inevitable…………..the well will run dry. Will we sit, pedestrian, and look back to realize we hardly noticed?