Occasionally I get a call from a seller looking to sell their property however said property is currently occupied with tenants or a future ex. No matter whether it is a normal resale or distressed short sale, I have a strict no tenant policy in place. This means if you have a home you want to sell and someone other than the owner is occupying it, call me when they move out!
Let’s face it, I am an aggressive Realtor. My combination of traditional and online marketing blitz is really unparalleled which results in showing traffic and offers. It is a frustrating experience to get the momentum ball rolling only to have it crash at the front door of an uncooperative tenant.
If I have learned one thing in real estate over the years, that lesson is that exes and tenants really do not care about a seller selling their house. Sorry but it is true. I have had sellers tell me that tenants have promised, even in writing, that they will comply with all showings with 24 hours advance notice however what I have experienced is nothing less than the opposite. House is left unkept ranging from as little as unmade beds and dirty dishes to hoarder type filth. Tenants avoid phone calls, refuse to open the door, sometimes even abusive to the agents calling. Once I had a tenant add an extra lock so even though the key in the lockbox opened 2 locks, the tenant installed a third so we could not enter.
Let’s face it, if the house sells that means one thing to the tenant or ex wife/husband – It is time to move out in 30 days or less! The longer they can prolong the expense of movers and finding a new place to live then they will! There is no motivation for them to keep the house spotless much less sell the house. I have even had buyers avoid looking at tenant occupied homes in fear of facing the eviction process in the event they do not move in time. The only instance where tenants occupying the property is a plus is for investor purchases but the pool of landlord investors has dwindled in this market.
I am positive that there are wonderful tenants out there who do comply with showings however it is my personal choice that I do not take those listings. Good luck and let me know when the property is vacant!
I love marketing real estate. I am always on the prowl looking for new and exciting ways to market my listings to the masses and while my 21st century marketing blitz is on the cutting edge for local realtors, there is one basic step that will always remain CRUCIAL when selling real estate. The most basic marketing concept that (in my opinion) separates the amazing Realtors from the lackluster and differentiates the homes that sell from the homes that sit stagnant on the market. PHOTOGRAPHS!
No matter how high my website is ranked in the search engines or how many e-flyers I send out per month, nothing sells a house more than photos! With that being said, I am still shocked at the quality that are uploaded into the MLS on a daily basis. Let’s not even talk about the listings that completely lack a photo in the first place (gasp!), or properties that only host one exterior shot but what about the photos of dirty kitchens, unmade master beds, blurry or crooked shots, low res with the date burnt into the image. Not only do I want all rooms cleaned for photos, I even remove the little things that clutter a photo like refrigerator magnets or TV remotes.
I take property photography seriously! Unlike most Realtors using a point and click pocket camera, I use a professional digital SLR camera for my shots complete with wide angle lens. I normally average between 150-400 photos (depending on size of property) and then spend hours going through them to select the absolute best for cleanup and/or slight photoshop. Nothing but the best for my Georgia sellers!
Historically peak market in metro Atlanta runs from 3rd week of January through Memorial Day weekend. People are very surprised to find that the summer months (June and early July) are very slow. Your typical American tends to think of the summer months as the real estate boom time, when kids are out of school and families are scurrying around trying to locate, close and unpack a home before the kids start back the next school fall. While that may be true in other markets, Atlanta (at least the western suburbs that my team specializes in: Cobb, Douglas, Paulding, Cherokee and Fulton counties) tends to get things under contract in the spring with closing no later than June 30.
So the million dollar question is now with the April 30 tax credit expiration, has the market prematurely ended? While it is only the beginning of the second week of May, all indicators tend to point that way. Although I keep a positive outlook on all things real estate and beyond, I had estimated that the spring housing rush would peak in April with a loud crescendo at month’s end leaving May with nothing but crickets chirping. So far I am correct. What the tax credit did was push some buyers off the fence and other buyers to rush to get under contract a month earlier.
Unfortunately in the melee of last minute scurrying buyers, a lot of things were rushed: buyers choosing properties they didn’t necessarily love but wanted the tax credit, lenders not taking full loan apps or fully qualifying buyers. The first week of May saw a lot of contracts falling apart much to the dismay of sellers who received multiple offers in last minute bidding scenarios with no buyers to fall back on now.
But never fear, although June tends to be one of the slower months of new activity (kids getting out of school, settling into summer routines, family vacations), historically the market picks back up a bit in July and more in August. It has been my experience that September – November are also very strong months.
Now I realize I may be just a local Realtor but I stand strong that the worst is behind us. The market has stabilized, data now shows the market hit bottom last summer/early fall 2009. If we can all be a bit more patience, I see beautiful blue skies ahead!
10. WHAT IS/WAS FOR DINNER?!? *Insert best caveman voice here* candle, incense, fragrant oils GOOD! Curry, crockpot roast BAD! Unless you are baking apple pie, keep the cooking smells to a minimum especially if you know for certain a showing is scheduled! Sellers should avoid any and all fish, fried or distinct ethnic foods that may leave a lingering scent. I have heard many a buyer discount a home over smells.
9. PETS – No one loves animals more than I do however to the buyers out there that are not animal friendly, nothing will kill a home sale quicker than the family dog or cat roaming around. While I understand that coordinating a showing around animals is very difficult (especially for last minute calls) but sellers should make every effort. Instead of a sign on the front door saying “Do not let cat out” why not put the sign on the laundry room door and leave cat in there? True Story: I once had a client that had a phobia of cats and refused to see any home that had one. When showing, sellers should remove all evidence of animals (toys, water/food bowls, kennels, etc) and most importantly remove all SMELLS and vacuum pet hair regularly.
8. LIGHT BULBS – Nothing looks worse to a buyer when they walk into the master bathroom and see that most of the lights at the master vanity are burnt out. Same goes with kitchen, dining or any other room in the house! Sellers should do a weekly inventory of every light in the house and replace as needed. Which leads me to my next point…
7. DARK ROOMS – While not every showing is scheduled in advance, when possible the seller should turn on all overhead lights and lamps. Also equally (if not more) important is to open all blinds and curtains so natural light floods the rooms. Never underestimate the power of light!
6. TEMPERATURE – whew, this is a tough one especially in the era of vacant bank owned foreclosures and seller deserted pre-foreclosure short sales where most properties do not have power turned on. What I can say from my experience is anytime there are extreme temperatures (freezing cold in winter and blazing hot in summer) buyers are in and out in a flash! Kind of hard to get a buyer interested in a property when they won’t stay in it longer than a few minutes. When possible keep temperatures at a reasonable and comfortable level.
5. FAMILY PHOTOS AS DÉCOR – I have always stood firm that sellers should not remove every photo from their walls however that statement is only reserved for the seller who uses photos sparingly. For the seller who uses family photos as décor on every wall in every room then I recant that statement. Buyers should be looking at the home not counting how many kids the seller has! Removing personal excess keeps the buyer focused.
4. COLORS / WALLPAPER – There is no secret that I have a strict “no wallpaper policy” in place. This is 2010 people, mullets and bellbottoms are gone, so should the wallpaper. I love it when sellers tell me that it is too time consuming and/or expensive to remove and I kindly remind them that the buyer is thinking the exact same thing. I once had a seller adamant against removing her aged yellow wallpaper from the 1970’s and she told me that a home was not a home without flowered wallpaper in the kitchen. I told her I was glad she loved the wallpaper and I would be happy to sell her back her own home for a reduced commission. She didn’t get the joke! I share the same sentiments about paint color. I am so glad that you loved your red family room, yellow dining room, orange kitchen but when it is time to sell it’s time to PAINT! Never go white, it looks too institutional. Behr has an amazing color called “Indulgent Mocha” that is light and bright with just a touch of taupe.
3. SMOKING – If you are a smoker then it is time to take the smoking outside FULL TIME until the home has closed. If you have smoked in the home for 30 years then I will probably turn down your listing. Majority of buyers turn around in the foyer to leave when they smell the remnants of cigarette or cigar smoke. Nothing kills a home sell faster than smoking!
2. CLEAN YOUR HOUSE! – I do not live in a perfect model home but then again I am not trying to sell my house either. Every day you should make your bed, clean your kitchen, hide dirty clothes in laundry room. Every day you should leave for work as if you had an important showing scheduled that same day. A couple years ago I had some buyers up from Florida for a packed house hunting weekend, we had 20 viewings scheduled for the Saturday in Powder Springs and planned to submit an offer on the top pick. The first home of the day was unkept (dirty dishes in sink, pile of dirty laundry on floor, kids toys strewn around the house and seller walking around in his boxer shorts) not to mention every room was painted a different color. My buyers walked out of the home and said “gross”. Nineteen homes later we had made a complete circle and close to where we began our search. My buyers walked in, threw their hands up in the air and said “THIS IS IT! We love this home!” Ironically enough it was the same floorplan, probably from the same builder as the first home. The difference was it was cleaned, neutral and move in ready.
1. SELLER GIVES THE NICKEL TOUR – Nothing is more uncomfortable for a buyer or a buyer’s agent when the seller feels the need to guide us through their home highlighting every change, upgrade and special moment that has happened for the 20 years they have lived there. A buyer on a mission knows within a few minutes if they like the home however if the seller is there now we feel obligated to talk back and walk through observing every room even though the home was discounted as soon as we smelled cigarette smoke. I do not necessarily feel that sellers should always leave the property. Although it is more preferable, it is not always convenient for a seller to leave especially when buyer’s agent has given a wide timeframe of showing window. With that being said, I recommend to my clients that they should take a walk around the block, even just step outside on the deck to give the buyer some privacy to look at the home in peace. It’s also crucial for the buyer’s Realtor to get a good feel of what their client likes and dislikes about the home. It is very difficult to be honest about the home with your Realtor if the seller is standing right there.
You have been out scouring the area you want to be in, walked through dozens of homes in search of the right one. Finally you find it, your dream home! You submit an offer and are looking forward to an acceptance or a counteroffer but instead you are hit with a “Multiple Bid Scenario – Please submit Best and Final Offer”.
What?!?
What this means is that other buyers have stumbled across your prized home and fell in love just like you did! Sometimes it is a foreclosure property, sometimes a short sale and sometimes it is a regular resale listing. Many buyers become very stressed out asking me how to handle it and my answer is always the same. “Best and Final” is actually what it means. The seller is looking for your absolute best and final offer, there will be no counteroffer, the seller will move forward with the best net offer on the table by the offer deadline. The offers of others will always be held confidential (sometimes so will the number of offers on the table).
In these scenerios it is crucial to know the comps of other properties in the neighborhood. In the event of a foreclosure, the property could be priced well below fair market value and the bidding could significantly increase the final sales price. For instance, not long ago a foreclosure hit my client’s radar hours priced at $114,000. After reviewing the comps I found that sales in that Powder Springs subdivision ranged from $189,000 – $260,000 and this particular foreclosure was the largest floorplan in the subdivision. We submitted an offer for $135,000 which was $21,000 OVER ASKING PRICE. Unfortunately we lost the bidding war. We found out later that the property sold for $164,000 – Fifty thousand over asking price. While that is not the norm, it is an example of how important comps are when bidding.
Normally, as detailed in a previous blog “The Skinny on Foreclosure Bidding”, multiple bid scenerios usually result in a final sales price at or above list price. With that being said, how do you know which number makes best sense for you?
I always tell my client to think about the number that they can sleep well at night knowing that they wouldn’t have paid 1 penny more for in the event they lost it. Nothing worse than a client coming back to me and saying “I know I bid $150,000 but I really would have gone up to $154,900”. In best and final scenarios, your absolute highest bid is what you should submit. If your submit best and final is truly that, there is nothing more you can do. Good Luck out there!
Every short sale has its own unique challenges but to try and simply the complicated, here are the six steps to a short sale:
Initiate the Short Sale - Every lender is different as some lenders will want the homeowner to call and verbally initiate it whereas some lenders will not initiate the beginnings of a short sale until an offer has been submitted.
Collecting Homeowner’s Financials – Gathering a bunch of financial documentation isn’t always easy, especially if you are packing up the house or have already moved. What banks are looking for are two years of taxes, 60 days of bank statements, last couple pay stubs, all other financial statements (investments accounts, retirement accounts, etc). You will also need to provide a hardship letter stating why you are seeking a short sale. Hardships can include: job loss, chronic illness or injury, reduction in income, increase in interest rate, divorce, death.
Submitting the Offer – Most of my short sale listings are taken immediately after first contact so upon listing the property for sale, I immediately introduce the homeowner to my short sale coordinator to obtain the above stated financial documents ASAP. I try to set the goal to have all documentation in within the first 48 hours of listing the property. Sometimes an offer comes in before we have all our financials uploaded and sometimes an offer comes in after everything has been submitted and properly uploaded into the system.
Valuations Process – This is the very slow and quiet time, typically the time where uneducated buyers and buyer’s agents with unrealistic views of the process walk away. The valuations process can take 30-60 days with little or no contact from the bank. During this time the lender is ordering appraisals and/or BPOs (Broker Price Opinions) and evaluating the current state of market, local comps and getting a very specific idea of what the property is worth at the present time.
Offer Review and Approval – this is what I consider “Rock n’ Roll time”. After periods of long silence from the lender a flurry of activity ensues. Lenders ask for updated seller financials and updated Buyer’s preapproval letter. This is typically the second tier negotiator who is getting the file complete to present to the investor of the loan for final short sale approval.
Closing – Once final short sale approval is granted, there is typically a 30 day window to close the sale. This is the period where the buyer will inspect the property, lock interest rates, order appraisal and generally get the loan ball rolling. A good short sale agent (like myself) will begin all contingencies (appraisal, financing, inspection, etc) at time of final short sale approval. In essence, the last 30 days are what typically happens in a normal resale closing.
For more information on Short Selling your home in Georgia, please visit our Short Sale FAQs for Buying Short Sales and Selling Short Sales. There is also a lot of information in previous Short Sale Blogs. The Walker Derby Team specializes in short sales throughout the following areas in Georgia: Acworth, Atlanta, Austell, Canton, Douglasville, Hiram, Kennesaw, Lithia Springs, Mableton, Marietta, Powder Springs, Roswell, Sandy Springs, Villa Rica, Vinings and Woodstock.
Most of the last 2 years made your typical “resale” listing the ugly stepchild of real estate. (Note “resale” is defined as a reselling of a previously owned home by a seller/home owner). The hot commodity of real estate since the downturn of the market has been the distressed market which is comprised of foreclosure, bank owned REO, pre-foreclosure and short sales. While April showers may bring May flowers, April will also bring a huge (albeit temporary) sell off in resale inventory!
There are tons of first time and return home buyers who have straddled the home purchase fence for months. Now that the tax credit deadline looms, buyers are becoming frantic! Short Sales are time consuming and this late in the game cannot be guaranteed a June 30 closing date to meet tax credit deadlines. With the influx of foreclosure offers, some banks are now taking WEEKS to respond to offers leaving many buyers worried that they won’t have enough time to find a back up property in the event their foreclosure bid loses.
Enter the beautiful position of the average home resale.
Sellers are available, motivated and ready to make it happen! A good listing agent has advised their sellers that it is do-or-die time until April 30, 2010. Today (Saturday April 17) I received an offer for a resale listing of mine at 1:09 pm and had it binding with a counter offer by 4:25pm. Definitely a refreshing change from the typical bank’s snail like pace and the buyer met the tax credit deadline! That makes THREE of my listings that have gone under contract this weekend and it is only Saturday afternoon!
Metro Atlanta (including suburbs) typical peak spring market runs from late January through Memorial Day weekend. With the tax buyers credit deadline (which said tax credit is not expected to extend) at the end of April, we may actually see an early end to what has really been an amazing spring selling season! Only time will tell however at this moment through the end of the month, resale sellers have become the belles of the ball. Enjoy this brief moment to shine and SELL, SELL, SELL!
As the deadline approaches for the First Time Home Buyer Tax Credit, many are asking whether the credit will be extended yet again. The answer looks to be NO!
The legislation was drafted by Georgia Senator, Johnny Isakson, who ironically spent almost 30 years as a Realtor. The last extension put in place required all first time home buyers to be under contract by April 30, 2010 and close no later than June 30, 2010 to receive the $8000 tax credit ($6500 tax credit for repeat buyers meeting qualifications). Senator Isakson told the GAR, Georgia Association of Realtors, that he assured Congress that he would only ask for ONE extension and this is it. He will not go back on his word and ask for a second extension.
For all home buyers (first time and repeat buyers) on the fence thinking this amazing tax credit will be extended, it is time to get down and take advantage of this amazing deal! There is a mini buying frenzy out in the market place right now on homes priced below market value so do not wait until the last minute or you will find yourself out of luck.
The Walker Derby Team has Buyer’s Agents ready to assist you in the following markets: Acworth, Austell, Atlanta, Canton, Dallas, Douglasville, Hiram, Kennesaw, Lithia Springs, Mableton, Marietta, Powder Springs, Roswell, Smyrna, Villa Rica, Vinings and Woodstock. Contact us for more information!
Ah, Short Sales! There is so much public confusion when it comes to short sales and that should be expected since there is also a lot of confusion in the industry as to short sales. Sometimes I read on message boards where buyers are frustrated with time frames and their agents aren’t exactly clear on the procedure and what to expect. This blog is written not only to the public but also to other agents in the industry as a helpful guide of questions to ask before submitting an offer for a short sale property.
What kind of experience does the listing agent/team have with short sales? A Short Sale Certification doesn’t cut it! I have sat in numerous “short sale classes” and none have prepared me for what I see out in the field. Every bank, every bank negotiator, every hardship and every investor is different! Just because an agent sat through a 3 hour continuing education class does not mean they are now ready to handle a short sale. When you or your agent asks the listing agent this question you should hear a definitive response such as “we have closed $10 million in short sales”. (The combined total of the Walker Derby Team has closed close to $100 Million in short sales)
How many short sales have you closed in the last 18 months? Simple question and make sure you aren’t hearing how many they have listed or under contract, you want to know how many have successfully closed.
What is your percentage of successful short sale approvals? This question really piggy backs on question #1 and #2. There has to be extensive short sale experience and closings to answer this question. The Walker Derby Team has a 90% success rate in short sale approvals.
Who is the service provider? This is probably one of the most important questions to ask after you find out the agent’s experience in handling a short sale. Some service providers are amazing with short sales. For instance, Wells Fargo is really an innovator in processing short sales in a timely fashion. We have a 100% success rate in Wells Fargo short sale approvals and all of them have happened in under 60 days from submitting binding contract (many under as little as 40 days). Small banks are also fantastic in handling short sales. In December of 2009 we obtained final short sale approval from a smaller bank in 17 days! Of course where there are good success stories, there are also some providers that struggle with the efficiency of short sales, mainly BOA. I have Bank of America short sales that have taken 5 months to approve (right now that is a healthy average) however I also have some BOA short sales that we have been working for 7 months with still no answer! I could go into a lot more detail on this so I will hold off and do a separate blog about this very subject.
How many liens are on the property? What this means is how many loans are on the property (1 or 2) and whether there are any liens on the property. One loan is much easier to get short sale approval with over two loans. Two loans with the same provider are easier to obtain approval rather than two loans with separate providers (ie. 1st loan is with Suntrust and 2nd is with EMC). The first loan will offer the second loan a “settlement offer” which the second loan may or may not accept. If they do not accept then your deal is dead. Liens such as HOA liens (for nonpayment of HOA dues or HOA violations) are rarely approved by the first loan so the seller may have to pay out of pocket for those. Same with liens with the local city for ordinance for lack of property maintenance or upkeep
How do you handle the contract? Binding or multiple offer? According to the National Association of Realtors, a short sale contract is a BINDING contract and contingent upon final bank approval. That contingency is no different than a financing or appraisal contingency. If the listing agent is submitting multiple offers to the bank and not selecting one to go binding then RUN AWAY! I cannot make that any more clear! There are a lot of great and successful agents out there making this rookie short sale mistake and I assure you, the buyer and seller will gain nothing but frustration from agents that work short sales in this manner. If the EXPERIENCED short sale listing agent feels it is an acceptable offer and the seller signs off on it then it is a BINDING contract, it is removed from active standing and it is submitted to the bank. Multiple offers do nothing but lengthen the timeframe and make the banks a bit more greedy.
If you ever have any questions about the short sale process, we are just a phone call away!
There are a lot of misconceptions out there in regards to short sales. I spoke a little about the misrepresentations of the terminology “pre-approved short sales” in my section about What to expect when Buying a Short Sale.
Short Sales can be a lengthy process and unfortunately there are fewer buyers that can afford to expend the timeframe and wait. Most buyers have a certain deadline to meet: relocating in 60 days, lease is up in 45 days, tax credit deadline approaching and short sales are not an option.
This post is to comment about how short sale listings are presented in the MLS. In Atlanta FMLS there is a new option under “Special Circumstance” that includes the option of “potential short sale”. I don’t put a lot of weight on that selection. Let’s face it, the multiple input data entry can be performed by hurried agents, their assistant or office staff therefore it is not uncommon to see mistakes and omissions. What I want to place focus on are the public and private remarks.
Public remarks are where agents detail selling points of the property (Large frml living & dining*2 story family rm*). Private remarks are withheld from the public and only viewable by agents (usually including special showing instructions). The term “short sale” should be included in BOTH sections. There are some uses of “pre-approved / approved short sales” however there are a lot of listings that withhold that information. I would also like more information on “possible or potential short sales”. Every short sale is a potential short sale until you receive written final approval from lien holder(s). Once again we as agents need to give a little more detail to what is involved in this transaction. I feel it is unfair to the public and ourselves to market a home without full disclosure of the status.
