Originally posted at www.bigbearilluminated.com

In today's uncertain market, never count your chickens until they are hatched. Even if the buyer seems rock solid, the carpet can be pulled out from under your feet at a moments notice. Lenders are canceling programs at a rate that is difficult to comprehend. They will preapprove your buyer at one rate, only to change it the next day.

A perfect example of this happened to me this week. My buyer was, in my opinion, very solid. He has a long term job and is paid a good salary. As I always do, I asked questions to ascertain his ability to buy on our appointment together. He has already been approved for an FHA loan on a home off the mountain he decided against purchasing. He was very certain he would have no problem getting preapproved again through the same lender as nothing had changed but the location of the home. As a matter of fact, the new place was significantly less.

Our first day out, we found a house which he really loved. It was a great property, well priced, in a very sought after neighborhood. We made a solid offer and it was accepted. The battle is half over, right? Nope. The next thing we know, he isn't eligible for the FHA loan because his job is too far away from the house. I didn't know that you had to be in an area within a certain distance from your job. I should have suspected. I closed a property with a CalHFA loan a few months back and they made us jump through so many hoops I felt like a circus animal. So the FHA loan was out.

His lender felt like she could get it done with a conventional loan, so we went that route. For the FHA loan, he only needed 5% down. Guess what, for a conventional loan there are zero 95/5 LTV's available. There was a possible scenario where the seller would carry 10% for two years with monthly interest only payments, but he wasn't interested. So, we investigated 90/10 LTV loans. It took several days, but we finally found one, but they raised the interest rate from 6.1% to 7.8%. The difference in the monthly payment was around $300 dollars. That is a huge raise in a monthly payment for most people. This pretty much sank the deal. We eventually found another loan but they wanted 20% down and he just didn't have it.

So, in a nutshell, be prepared for anything in these crazy times. I have had some deals I thought would never work, go through and some that I felt were sure bets, fall to pieces before my eye's. It's almost enough to make a grown man cry. In the end, I was very happy that my buyer did everything he possibly could to make this work. So many times, people will just make us work our tails off with no intention of really sticking it out. In the end, I know we both did our best and hopefully, when things get better, he will remember my efforts and use me again.

Originally Posted At: http://www.bigbearilluminated.com/

I just wanted to relate something that happened to me last week in the hopes that it can be helpful to somebody else. With the large inventory we have at the current time, it can be difficult to sell a home. Lately, we have been seeing an increase in homes that are in an unfinished state and available for purchase. This can happen for a variety of reasons, but usually because a builder extended himself too thin and didn't have the funds to complete the project. In many cases, the homes get foreclosed on and go onto the market as unfinished bank owned properties.

When you are dealing with the bank, they don't have to follow the standard disclosure requirements because they would have no way of knowing them. Most times, the person at the bank in charge of the transaction has never even seen the place. Since the homes are sold " As Is ", the inspection and discovery period is more important then ever. As a buyer, the onus is entirely upon your shoulders.

Last week I showed a bank owned property to a client of mine who is a builder himself. It seemed like a very good buy. On our initial visit, the home looked like it was very close to completion. It was missing some cabinets and a few fixtures, but overall it was in great shape. It looked like it might need around $30,000 or less to get it into finished, salable condition. The home was listed at $315,000 and other comparable, finished homes in the same neighborhood are selling around $450,000 and up. My clients was planning on finishing it and living in it for at least two years and then selling it for a nice profit.

Knowing we have 17 days to do our inspections, we made the offer. Guess what? Somebody else thought it was a good deal and also submitted an offer. Now we were in a position to either give our best and final, or move on. Before he had to make his decision, I went to the city to get all the info on the house I could find to see if we could get a better idea of what kind of costs we were looking at. I'm glad I did. It turns out that not only was the permit expired, it had been for two years. In addition, there were pages of corrections that had never been signed off on. Many of them were inside the walls and foundation. I don't know what the builder was thinking, but we had no way of knowing if he had done the work correctly without tearing out walls and who knows what else. It turned out that the $30,000 could easily turn into $60,000 or $100,000. We passed on the offer.

I'm so glad that I took the hour to go down and do my investigation before this went through. I know we could have withdrawn within 17 days, but that would have been unfair to everybody involved. The other buyer would have missed out and had to buy something else. The listing agent would have to re-list it and redo all her advertising. Most importantly, my client would have wasted a great deal of time and so would I. I would have loved to sell my client a home. Just not this one. I'll just keep plugging away, and next time we will find exactly what we are looking for.

With the increasing number of bank owned properties in Big Bear Lake, Ca, we have seen more and more out of area agents trying to sell homes in our market. This is a bad idea all the way around. Let me tell you why.

First, many out of area agents try to sell property in our area and are too cheap to join our board. This means that the property in question doesn't appear on our MLS and many local Realtors won't even know it is on the market. Without local agents being aware of the home, it might as well be a FSBO. The listing agent is doing his client a grave disservice by charging a commission on a property they are not doing a proper job at selling. Since most buyers in our area use the services of a local Realtor, not listing it on the local MLS is doing a poor job, at best.

Secondly, it is the duty of the listing agent to make the home as easy as possible to show. This means it has to be readily accessible to the local agents who are going to be showing it. A lockbox that is easily located and operational is integral to this process. Here in Big Bear, we are on the Suprakey System and all listings by local Realtors have boxes that work with our keys. Out of the area agents who are not on our board do not have access to these boxes. This means that the houses are on lockboxes that cannot be opened by the Supra Key. In many cases, the listing agent will join our board, but won't buy any of our lockboxes because he doesn't do enough business to justify the expense. They will usually just put a combo box on the door and the code on the MLS. The problem with this is, most of the time when you are showing property it becomes evident that the client is looking for something a little different then they first told you. In that case, you have to improvise and use your knowledge of the inventory to bring them to houses you hadn't planned on. So, there you are in front of a home with no idea of the combo and your Suprakey is useless. This happens to me all the time. I then have to call the number on the sign and try to get the combo. Guess what? Most agents work out of big offices and are almost always ( Murphy's Law ), not available when you call. I can't tell you the number of times I have been unable to show a house due to the other agent not answering my call. Typically I get a call back a couple of hours later after my client has written up a different house. I'm sure if the sellers ware aware of this, they would scream.

Lastly, local knowledge of the market is essential in getting a home priced correctly to sell. There is no possible way an out of the area agent has the amount of knowledge needed to do this as well as someone who deals with our market every day. They jump on the internet for a couple of hours and think they have it down. Big Bear is comprised of at least 20 different areas, each one with different property values. The price values differ from street to street sometimes. Also, how in the world are they supposed to know about things like road noise, traffic, proximity to the National Forest and the lake? The simple answer is, they can't.

If you are thinking about taking a listing in an area you are not familiar with, ask your self a few questions. Do you have enough knowledge to price the property correctly? Are you going to be able to properly market the property and get it on the local MLS? Are you always going to be available to help the local agents sell the home? Are you going to be able to make it easily available to any local agent who wants to show it? Are you going to be able to dedicate the same time and energy towards getting it sold as you do to your local listings? If the answer to any of these questions is no, you seriously need to consider referring the home to a local agent. Most agents would be glad to give you a 25% referral fee and do all the work for you. You can make a nice piece of the pie, make sure your clients get great service, and not have to do any of the work. It's a win-win situation all the way around. Plus you won't have to deal with any angry seller, wondering why you haven't been able to sell their home.

Every morning I get to the office a little before 8:00 am. I pour some coffee, turn the computer on and get ready for my day. Once the computer is up and running, the first thing I do is check my email to see if I missed anything while I was sleeping. Then I pull up our MLS and go over everything that came up the day before. Since I get to the office before most Realtors, there usually isn't anything new that I haven't seen. Today, due to our agent tour, I didn't get to look at the MLS until around 11:00 am. Imagine my surprise when the first thing I saw was a new listing on a home I had listed that had expired. The part that galled me was, the house was listed at the price I had recommended numerous times to the seller if she wanted to sell her home. She refused my every attempt to get a price reduction and then acted like it was all my fault her home didn't sell. Then she relists it with someone else and goes down to where I was telling her it needed to be for months.

Every Monday we have an office meeting where we talk about what went on during the week and discuss ways to make ourselves better as agents. During these meetings I have heard time and again how important it is to price a listing correctly if it is going to have any chance of selling in this difficult market. I know many agents will take any listing at any price and then beat the seller up on the price until they lower it. At Coldwell Banker Mountain Gallery we believe that we aren't doing our sellers any favors by following this line of thinking. It is better to be honest up front and risk losing a listing than to be dishonest and have to deal with an angry client because their home isn't selling.

My point to all of this is, I should have been much more assertive during the initial listing presentation. At the time I didn't have any escrows going and I felt like any business was better than no business. I was wrong. By being " weak " all I did was buy myself a headache for six months. I dreaded having to contact this seller because all I had to report was bad news and try to talk her into a price reduction. She had her back up because she was mad her home wasn't selling and she had a mortgage she had to pay. What I needed to realize is, any seller who bought their home after 2004 is probably in the same boat. It is our duty, as the experts, to not candy coat it and let them know how things really stand. If I had been more blunt, I may not have gotten the listing but I would have saved myself a great deal of effort and time. Who knows, I may have gotten it at a price that would actually have sold.

Originally posted at http://bigbearizzy.typepad.com

With the large amount of home owners in financial difficulties these days, short sales are becoming more and more prevalent. Some really great prices on short sale properties have been coming on the market every day in Big Bear. While they can be a good buy, there are a few things you need to be aware of.

First, just because a Realtor lists a property as a " Short Sale " doesn't mean it really is. Some Realtors don't do the research and just list a home as a short sale because the seller tells them he is willing to take less than he owes for the property. While that sounds great, it isn't all up the the seller. The bank has the final say on whether or not they will accept less than is owed on any particular home. A good example of this is something that happened to me a little bit ago. My clients and I found a short sale listing that they really loved. It was listed at $299,000 , which was a very good price. I told my clients that short sales can take some time and to be patient. We made the offer and prepared to wait. Imagine our reaction when, a week later, the bank countered us at $330,000. $31,000 over the listed price. The bank was not prepared to do a short sale in any way. They countered back at the full amount owed on the home. Somewhere along the line, there was a communication breakdown between the Realtor, the seller, and the bank. To make a long story short, we had to find another house and the Realtor had to list the home at $ 330,000. My clients were disappointed, but they realized it is the nature of the game.

Another thing to be aware of is the fact that as soon as the contract is signed by both parties, it is valid. Even though you have to wait for the banks approval, you have still entered into a legal contract and must act accordingly. If you, as a buyer, decide to buy a short sale property, it is something you need to be aware of. I would recommend that you don't make an offer unless you are serious about purchasing the property. Making an offer " To see what happens " is not a good idea. Make sure that your Realtor checks the box on the short sale addendum that states that the contingency period does not start until the bank accepts the offer. You don't want to waste money getting inspections on a home where the offer might not even get accepted.

If you would like a list of the properties available in Big Bear, shoot me an email and I'll be more than happy to accommodate you. It's a beautiful day in Big Bear.