Escrows are Taking Forever

The days of the 30-day escrow are disappearing in my world. I just had an escrow go 62 days, the following a VA loan, went 52 days, and a current escrow is no where near closing at 30 days, which is this Friday. Loan docs anyone?

I used to take the 30-day escrow for granted. Now the rules for loans are changing on a daily basis making it very hard for even the most qualified buyers to close a loan in a timely manner. To top all this off, the very companies that make these loan are the same ones who have no tolerance for an escrow that goes over 30 days. Foreclosed homes owned by the banks start charging $100+ per day for an escrow going over its closing date. Short sale approvals will dock the Realtors' total commission a point if it goes over escrow. Yet, try asking these same banks to hurry up an escrow. Surely, you jest!

You think there would be a little empathy here. But no, banks are ruthless entities that don't care about Joe Home Buyer. You're just a FICO score to them. I'm pretty sure there's a special little Karmic Hell for the mean* ones when this is over.

Banks as a whole are mean; however, many loan officers are very, very nice and are not included in any of my lashing.

It's a Seller's Market?

The media is still calling this a Buyer's market, and in some cases it is. However, if you're trying to buy a bank owned property, it's a seller's market. Banks are pricing their listings at rock bottom, which is bringing in multiple offers. A client called and wanted to look at a home that was just listed for an incredible price in Elk Grove, I checked with the agent and it had 17 offers. SEVENTEEN! Sellers of "normal sales" of homes are begging for just one offer, but those homes are overpriced.

So if you're a buyer and making offers on bank owned homes, don't lowball...the bank won't even acknowledge you. Also, be patient, your home is out there and when it's supposed to be yours, that's the house you'll get.

If the Price is Too Good, it's a Short Sale

On a weekly, sometimes daily, basis, I will have a client forward me an email listing of a beautiful home with an incredible, way below market value price. I know immediately that it's a short sale. The short sale speech is one I've gotten quite good at, but it still takes a few times of explaining it or actually living it, for it to sink in.

A way below market price on a short sale home is likely not approved by the bank. It's deceptive marketing just to get buyers in the door and offers to the bank. I'm not saying all agents of short sales do this. Many agents actually do price them competitively within market value. I understand where an agent is coming from in pricing a home low and I truly feel sympathetic for the sellers who are in the predicament of a short sale, but it's still unfair to deceive the public.

If a client is brave enough to make an offer on a short sale, then I have to sound like Ms. doom and gloom explaining in realistic terms that they will not hear back from the bank for at least two months. I have clients who have personally experienced this wait and now believe me. One couple who put on offer on a short sale last December, got impatient and are now living in a home they bought in March, and have still not heard back from the bank.

However, I'm now hearing from agents who are doing short sales that supposedly banks are being more cooperative now that their books are getting inundated with foreclosures. I hope that's true. I have another offer on a short sale for a client. We have been waiting since May 15 for an answer. This client really, really wants this house, so we are holding tight. His is the only offer on the house and there is a true hardship for the sellers, so I'm hopeful.

If a client wants to pursue a short sale, I will do everything I can to get them in contract with the bank. But I will do it only after discussing all the necessary pitfalls and patience needed as well as the potential opportunity to get a great deal on a home and save a seller from foreclosure. I will always hope for the latter.

The REO Adventure

REO (real estate owned) homes, also known as foreclosures, are an adventure in home showings like no other. When I'm touring or previewing homes that are REO I never know what I'm going to find. Sometimes it's an absolutely beautiful home and other times, well, not so much.

This past week I have toured over 20 REO properties and while I will have to say that agents of these homes are really starting to clean them up, there are still 20% or so that are quite the adventure. When opening the door of an REO, I'm always a little hesitant as to what I will find, what smells I'll encounter and how quickly I will feel the need to take a shower afterward.

For instance, one such property had a dead bird at the back window and ants in the process of having a very nice dinner. Another home, had a pungent unknown smell that made it hard to breathe. While another, had piles and piles of garbage all over the home. I practically ran out of that one. And lastly, another had no windows, flooring or inside walls. While I laughingly joked to my client about finding the lock box, I noticed the sign said "By Appointment Only."

Since the Sacramento area's REO properties are predicted to quadruple by the end of 2007, my adventures will continue...never a dull day in real estate!