For the past two years I have been involved with an affordable housing project with the City of Poway. I was hired to sell 33 brand new homes for the developer, Pacific Scene Homes. The homes were completed in December and so far we have closed 14 homes! What is interesting about this project is that the developer used some state of the art green technologies, the main one being a solar electric system. This system uses photovoltaic tiles that are installed on the roof and actually look like roof tiles. What you see is a much more aesthetically pleasing look instead of the ugly solar panels that sit on top of the roof.
Recently I asked some of the homeowners who moved into their home in December to report how much their electric bill was last month. The response was exciting! So far four homeowners replied and their electric bills ranged from $5-$20. Wouldn't that be nice to have an electric bill that small? During the various parts of the year I can imagine many of these homeowners to actually earn a credit for their energy contribution. The kicker is each homeowner will earn about a $4,300 tax credit for having this solar electric system and their assessed property value will be reduced about $15,000 due this system as well. That's what I call worth it!
These systems cost the builder about $23,000 for each home. I have to congratulate Pacific Scene Homes for their commitment to green building, given the extra costs they incurred. I believe this is the wave of the future. If want more information about the solar company or other green features in these homes please contact me. 760-458-0797
Saturday, February 27, 2010
Wednesday, February 17, 2010
Termite and roof repairs almost Kills the Sale
In my previous post, I mentioned that I have a client who waited four months for a lender approval on a short sale. We finally received and and moved into escrow. What quickly came after almost killed the sale! Here's what happened. The first thing we did was order a termite inspection. This inspection, by the way, was not paid for by the seller or seller's lender, as I have found lenders don't approve termite inspections/repairs when dealing with short sales. But, a termite inspection is important when buying a home because the report will call out not only termite infestation, but also wood dry rot and wood damage. Turns out, our report estimated about $6,500 in repairs! That's a lot of money.
We decided to get a second opinion on wood repair. Many times you can save some money by have the termite company handle the fumigation and having a skilled handyman handle the wood repair or replacement. Our handyman bid came in at $4,000 which when added to the $1,325 fumigation cost totalled $5,135. That's a lot of savings.
We didn't stop there. There was some stains on the ceiling noted by the termite report so we called out a roofing contractor to assess the roof. Yes, there were some minor failures in the roof, mainly caused by lack of maintenance around the vents and junctions. That estimate wasa $1,400 to bring the roof up to snuff and provide a 3 year warranty.
My client was getting cold wet by this time and noticed another home in the area for sale. Long story short we ended up putting an offer on the 2nd home. . . . by the time we heard back from that seller (reo lender), my clients decided to continue with their original decision. Yes, another ride on the roller coaster of real estate sales. Now we are back on track and my client is saving even more money after a 2nd termite company bid came in at $4,125 total! My client still will come out ahead because prices in that area have climbed a bit and I estimate even with the additional $5,500 in termite and roof repairs, he's about $15k under market value at this point!
Until next time. . . Crista :)
We decided to get a second opinion on wood repair. Many times you can save some money by have the termite company handle the fumigation and having a skilled handyman handle the wood repair or replacement. Our handyman bid came in at $4,000 which when added to the $1,325 fumigation cost totalled $5,135. That's a lot of savings.
We didn't stop there. There was some stains on the ceiling noted by the termite report so we called out a roofing contractor to assess the roof. Yes, there were some minor failures in the roof, mainly caused by lack of maintenance around the vents and junctions. That estimate wasa $1,400 to bring the roof up to snuff and provide a 3 year warranty.
My client was getting cold wet by this time and noticed another home in the area for sale. Long story short we ended up putting an offer on the 2nd home. . . . by the time we heard back from that seller (reo lender), my clients decided to continue with their original decision. Yes, another ride on the roller coaster of real estate sales. Now we are back on track and my client is saving even more money after a 2nd termite company bid came in at $4,125 total! My client still will come out ahead because prices in that area have climbed a bit and I estimate even with the additional $5,500 in termite and roof repairs, he's about $15k under market value at this point!
Until next time. . . Crista :)
Tuesday, February 9, 2010
Lender squashes credit to buyer
The lender said "No." As mentioned in an earlier blog, we had a termite report done on a short sale transaction which came back with a $6,500 price tag to correct the damaged wood and fumigate the house. We decided to submit an addendum to ask the lender if they would credit the buyer $5,000 at closing to compensate for this unforseen cost. Sounds fair right? Wrong, the lender said , "No." So, now what? I did another check on market value and even with another $10,000 is possible repairs, my client is still looking at purchasing a home for a great price. We will initiate some additional bids on the work and see if we can save some money. . . We had a skilled handyman bid the wood replacement and he came back with a $4,000 bid. That's about $1,000 less than the termite company had bid. The listing agent is also having another termite company come do an inspection to make sure we have some consistency with what the issues are. So, for now, we will proceed and fact find to see exactly what the rest of the condition of the house is in. Tomorrow is the inspection. I will let you know how that goes. Have a great day. Crista :)
Thursday, February 4, 2010
Termite Expenses with Short Sales
In a previous blog, I mentioned I finally received short sale approval for an offer that I submitted about 4 months ago. Part of the agreement to the short sale approval was that the lender was not going to pay for any termite repairs. This is very common, as lenders don't want to come out of pocket any additional money they don't have to.
Generally, termite repairs are minimal. . . $500-1,500 is common. This amount is palletable by buyers and generally not deal breakers. What happens when you get a termite report that calls for about $6,500 in repairs? Well, that's what I'm dealing with now in this short sale transaction.
I have successfully negotiated termite repair credits in the past (after the fact) and this is what I am attempting to do this time. Lenders won't cough up any money upfront, but there is a chance they will issue a credit at close of escrow. Recently I successfully negotiated $5,000 credit for another similar situation, except the transaction was a bank owned property, not a short sale.
We are requesting the lender credit buyer $5,000 at close of escrow for this transactionas well. Why $5,000 and not $6,500? $5,000 seems to be a breaking point for credits for many lenders. It will come across as more reasonable, then requesting the $6,500 amount. I will keep you posted on what the lender says. . .. Aren't short sales fun??
Generally, termite repairs are minimal. . . $500-1,500 is common. This amount is palletable by buyers and generally not deal breakers. What happens when you get a termite report that calls for about $6,500 in repairs? Well, that's what I'm dealing with now in this short sale transaction.
I have successfully negotiated termite repair credits in the past (after the fact) and this is what I am attempting to do this time. Lenders won't cough up any money upfront, but there is a chance they will issue a credit at close of escrow. Recently I successfully negotiated $5,000 credit for another similar situation, except the transaction was a bank owned property, not a short sale.
We are requesting the lender credit buyer $5,000 at close of escrow for this transactionas well. Why $5,000 and not $6,500? $5,000 seems to be a breaking point for credits for many lenders. It will come across as more reasonable, then requesting the $6,500 amount. I will keep you posted on what the lender says. . .. Aren't short sales fun??
Monday, February 1, 2010
Wachovia Short Sales Made Easy
Last week we had an office meeting where a representative came in and talked to the agents about Wachovia's new accerated short sale approval process. If you have a Wachovia or World Savings mortgage, this blog may interest you. Wachovia has just launched a streamlined process for getting short sales approved and closed.
Here's the difference between what you can expect in a typical short sale versus Wachovia's new streamlined process:
Typical
Lender won't even talk with you until you submit an offer
Wachovia
Listing agent contacts a personal representative right when you sign a listing agreement
Typical
Owner typically doesn't speak with any consistent lender contact
Wachovia
Personal Lender rep. meets with seller at seller's home and conducts confidential interview
Typical
Accepted offer is sent to lender along with financial hardship package. There's usually at least 3 weeks before a negotiator is assigned. Once assigned, they order a Broker Price Opinion or Appraisal. As long as they don't lose the package or switch negotators, you may get an answer in another 4-6 weeks. My last one took 4 months and that one was suppose to be "easy". There are cases when this may take a shorter time depending on other factors.
Wachovia
Accepted offer is sent directly to local sales rep and an answer is expected within a week!
Wachovia still needs to see that the owner is in a financial hardship position prior to approval a short sale. If the owner wants to stay in the home, they will first attempt a loan modification. Either way, Wachovia has set a tremendous precedence for streamlining the short sale process. Way to go Wachovia!
Here's the difference between what you can expect in a typical short sale versus Wachovia's new streamlined process:
Typical
Lender won't even talk with you until you submit an offer
Wachovia
Listing agent contacts a personal representative right when you sign a listing agreement
Typical
Owner typically doesn't speak with any consistent lender contact
Wachovia
Personal Lender rep. meets with seller at seller's home and conducts confidential interview
Typical
Accepted offer is sent to lender along with financial hardship package. There's usually at least 3 weeks before a negotiator is assigned. Once assigned, they order a Broker Price Opinion or Appraisal. As long as they don't lose the package or switch negotators, you may get an answer in another 4-6 weeks. My last one took 4 months and that one was suppose to be "easy". There are cases when this may take a shorter time depending on other factors.
Wachovia
Accepted offer is sent directly to local sales rep and an answer is expected within a week!
Wachovia still needs to see that the owner is in a financial hardship position prior to approval a short sale. If the owner wants to stay in the home, they will first attempt a loan modification. Either way, Wachovia has set a tremendous precedence for streamlining the short sale process. Way to go Wachovia!
Short Sale Listing Showing on Saturday
This weekend, I showed numerous homes in Vista and Carlsbad. It was a very nice day and I am very happy work with these new clients from Arizona. One house we saw was a short sale listing in Carlsbad. The listing said vacant, but when we showed up there were people there. Luckily, the occupants answered the door and let us in after having a brief conversation with the listing agent. These occupants were new "tenants".
So, here I pose a question to you. . . is there an ethical issue here or not? The owner is selling his home as a short sale which means they are asking the lender to agree to accept less than what is owed for the home. Generally, this means the owner has stopped paying their mortgage due to financial hardship, etc. With some exceptions the lenders don't typically agree to short sales unless the owners are delinquent and in a financial hardship position.
So, let's assume the owner is not paying their mortgage. Yet, they are collecting rent from tenants. . . I think you get the point. Do you think the bank should be aware of this? If so, should they demand the rent money that is being collected? Is the owner just making a prudent business decision? Or maybe, is this ok because the owner is obviously desparate and doing whatever they can to bring in some money? I find these situations very thought provoking. What are your thoughts?
So, here I pose a question to you. . . is there an ethical issue here or not? The owner is selling his home as a short sale which means they are asking the lender to agree to accept less than what is owed for the home. Generally, this means the owner has stopped paying their mortgage due to financial hardship, etc. With some exceptions the lenders don't typically agree to short sales unless the owners are delinquent and in a financial hardship position.
So, let's assume the owner is not paying their mortgage. Yet, they are collecting rent from tenants. . . I think you get the point. Do you think the bank should be aware of this? If so, should they demand the rent money that is being collected? Is the owner just making a prudent business decision? Or maybe, is this ok because the owner is obviously desparate and doing whatever they can to bring in some money? I find these situations very thought provoking. What are your thoughts?
Subscribe to:
Posts (Atom)
