Thursday, March 4, 2010

Latest News from RIS Media -home-sales-down-in-january-2010-but-higher-than-year-ago

Tuesday, February 16, 2010 The case for principal reduction.

New Short Sale Program for Bof A, Wells Fargo and Freddie Mac Loans

Coming soon these three organizations will be announcing new programs for short sale sellers. This program will be designed to encourage sellers to short sale using financial incentives and will reintroduce the "deed-in-lieu" of foreclosure method of exchange. I will provide more details later.

Sunday, February 14, 2010

Mortgage Lenders Pursue Homeowners even after Foreclosure.

I have posted on Trulia and elsewhere that attorney will be buying up the banks bad debt contracts and looking for situation where they can pressure formely foreclosed owners into settlements. Buy and bail homeowners from early in this correction will find it difficult and expensive to fight these collection attorneys.

Wednesday, February 3, 2010

Friday, January 1, 2010

What are agents thinking?

These comments were recently posted in a Q and A question on Trulia;

"I am working with an agent who showed me a house, I was a bit concerned about the cracks on the side of the exterior wall, my agent suggested I find someone to check it out before submitting an offer, if not I would have to get an inspector to look at it. She went ahead and scheduled the inspector. My dad ended up looking at it and stated it was merely the stucco. After I told her to cancel the inspector, she laughted and stated I needed the inspection anyways. Based on her guidance, I had the inspection done. My offer was not accepted, I feel as though I should not be stuck with the bill? Who pays for these types of situations?

When we were going to write the offer, I voiced my concerns to the agent. I notified her that I wondered if there were foundation problems but I told her we wanted the house. She told me to have someone look at it, that she wasn't going to waste any time putting an offer in if I was unsure. I reiterated to her that I wanted the house but that was my only concern, we didn't even make it to her office when she told me to go find someone to see it. She later called me and notified me she had scheduled an inspection, I agreed, but after I had my family member see it and he stated there were only cracks because the stucco was old. So, I told her I didn't need the inspection to be done, that I was comfortable. She was amused and told me we needed it anyway. So I said okay. This is why I agreed to it, she stated we should just do it, since it was required later. I guess I was just not thinking and should have just insisted on canceling it and/or asked more questions. The day of the inspection I realized the listing agent worked in the same firm as she did. We later wrote an offer and even though there were some obvious findings in the inspection, she suggested we not ask the bank to fix as they would probably not take my offer because of it. If anything, I must admit after reading some of the comments, I guess I do look gullible. I just really wanted that house and trusted her to guide me correctly. I truly just wanted to know, for future reference, who pays for inspections before or even after an offer has been accepted. Do I come out of pocket all the time, or do we wait for closing?

(End Question)

I know it sucks to spend money on a home and then not get it. That happens. When it comes to Inspections though you have to look at them like insurance policies. You pay for the protection in order to protect you from what can go wrong. Doing inspections before you write your contract is a good practice. Though it must be mentioned that some practices come with risks.

Agents often act in ways that are important to protect you but there are some things that should have been performed differently here. The question of preinspection comes up very often. It is an adviseable practice for sellers to preinspect theeir homes for maximum liability protection. In California, our disclosure law is based on the sellers expert knowledge of their property and any defects known are to be fully disclosed to buyers in a real estate transaction by law.

Many people are not experts in construction, building codes, and few people crawl around under their home and in attics, regularly inspect HVAC ducts, or clean out plumbing lines. People generally live in their homes and fix problems as they occur. Familiarity with a home also lulls people inot a false sense of security. A current homeowner may have bought thier home decades ago for tens of thousands of dollars and it may be worth hundreds of thousands of dollars now. Some minor quirk to the current homeowner could be a dealbreaker for the new buyer since the expectation level is commensurate with the investment in the home.

Let me make the point by imagining this transaction happening in a different way. Let's say dad said the home was fine and based on that the buyer elected to purchase the home. The bueyr is going to inspect that wall where the home inspector will advise the cracks are probably nothing but protects himself by advising you to perform an expensive destructive test of the wall. You decide its ok based dad's advice and close in 30 days.

Let's say the buyer moves in and in the next rainstorm water comes pouring into the home or worse in an earthquake occurs and the wall fails. Now whose fault is it? You're not going to sue dad, I mean he said the wall was ok, but he's your father. The home inspector(s) protected themselves by advisng the destructive test which few ever especially after having 3 seemingly competent people look at the wall. Where was your agent to protect you? That is the reason for the preinspection.

The agent here tried to do everything he could to protect his buyer from a nightmare scenario but did not do one thing. The agent did not inform the buyer of preinspection risk and did not let the buyer chose to assume the risk for the inspection or "insurance" protection. In this case, the buyer should have been advised the cost and the risks before being asked to pay for the inspection or simply moved on and continued to look.

The buyer should have been given the option to first lock up the home by writing the contract and getting the seller to accept it and the inspection could have been scheduled for the first day after seller acceptance. If the inspection came up badly, then the buyer could have immediately backed out. Agents do not like this way but somtimes it is the way it must be done. Especially if the buyer has little cash.