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Archive for April, 2008

Listing Your House: Sell That House - But First List It!

Friday, April 25th, 2008

Going with a full listing with an agent over doing it yourself as a FSBO-For Sale By Owner.

Let’s go over some of the services that go with a full listing and service of a real estate agent, these are just some of the services included:

-Agent puts listing on Realtor® MLS- Agents have access to the MLS-Multiple Listing service, so they can take photos, add photos and details about your property onto the MLS so that other agents can search and that data is searched by thousands. This is where agents and buyers all search for properties. This gives you more exposure where other agents can help bring buyers to your property.

-Agent gives ideas on home staging- You can learn a lot of steps about how not to clutter a house, how to put your furniture in the house, and maybe even rent furniture from another company to make your property look it’s best.

-Agent gives tips on how to get in show condition-They will show you how to make your house look best against other properties, such as making it in show condition. You may need to clean it every time you get a showing request.

-Agent will discuss today’s market value (CMA)-Get a market analysis report with recent sold comps of properties that have sold recently just like yours to find out what your property is worth. This can be done before you list your property. This is a great indicator of what your house will sell for.

-Agent will help with the purchase agreement-The purchase agreement and many forms can easily equal 15-35 pages in today’s market with all of the possible contigencies buyer ask for, inspections, financing addendums, addendums, etc etc. Let an agent go over the purchase agreement and explain all of this to you.

-Agent will help with the negotiations-Real estate agents are use to negotiating, so it’s recommended you let them do the negotiating and explain to you what your counter offer really means to you.

-Agent will help with ?’s from buyer’s agents- The buyer’s agent may have some questions, and it’s important that your listing agent answer these questions. First the agent will know some of the answers, second, the agent will tell them what should be disclosed about the property and what shouldn’t be disclosed about your situation.

-Agent will help to get a sign in the front yard- Getting a sign in your front yard is important to let others in the neighborhood know your house is for sale, and it helps for extra marketing and exposure. Agents have signs already made.

-Agent will help to post street signs- These may include directional or open house signs on the corner.

-Agent will help to put out ads for marketing- Your agent often will put out marketing in magazines, newspapers, or fliers for extra marketing of your property

-Agent will help with in-house marketing and flyers- The agent may design a flyer to be delivered or just for the house for those that look at the house on showings.

-Agent will help with seller disclosures and paperwork-There are a lot of disclosures and laws these days, paperwork, and fine print, let your agent help with this

-Agent will help with understanding buyer’s inspections-There are buyer’s that order inspections, learn from an agent what this means to you, and the timelines

-Agent will help with understanding buyer’s appraisals-Let an agent explain to you the appraisal process and the good and the bad from the outcomes

-Agent will help with updates from the loan officer-Your agent will constantly be in contact with the loan officer to explain to you where the buyer is in the loan process.

-Agent will help with the closing process-The agent will have to make sure things are moving along with the title company, buyer’s agent, loan officer and more.

-Agent will help on the closing day, reviewing closing paperwork- Let the agent explain the HUD-1 settlement statement to you and the charges and fees on there

-Agent will help get photos taken and on the MLS-Let the agent do the work of taking the photos and getting this on the MLS for you

-Agent will help with measurements, data, add to MLS- Let the agent do all of the measurements and add a lot of the info to the MLS

-Agent will help get a lockbox on my door-This lockbox will be important for that next agent to get in the property

-Agent will help with communication by email and phone- You will want to be in constant contact by phone and email with your real estate agent on any questions you have a long the way, let the listing agent earn their commission with the hard work they will show you along the way.

If you have a house you want to sell, or are thinking about it and need a home value, please email me ron@minnesotainvestors.com and I’ll put you in touch with one of my associates to help you.

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Bank Owned Listings: REO-Real Estate Owned Foreclosures

Monday, April 21st, 2008

A More updated version of short sales is now available here What are Short Sales the Process in Minnesota

Bank Owned Listings: REO-Real Estate Owned Foreclosures

REO is Real Estate Owned, also known as a bank owned property. There are REO agents that specialize in selling REO properties. Let me tell you many of the best REO agents have been around 10-25 years in the business. I will tell you right now that I don’t know a lot about bank owned REO properties compared to some other topics, but I do have some friends who have been buying them or working them for years, so I learn from them.

REO is when the bank gets the house back after the foreclosure process and timeline which you may have seen in our other blog post. Here is what I will tell you. At the time of this writing I have heard of listing agents with 80-100 listings with banks of just REO properties. Keep in mind most good agents work on 3-5 listings at a time. That’s how busy they are. With REO, the bank owns the property free and clear. The previous owner has no ownership anymore, it’s now on the banks books as a non performing asset. Up until the 2007, I saw banks overcharge for bank owned properties and prices, and watched the properties listed on the market for many months until someone paid too much for the house, I couldn’t believe it, but people didn’t know better. Well I’ll be the first to tell you that I think as of this writing April 2008, I think the best deals out there are REO properties. That doesn’t mean all REO properties are a good deal.

The reason I think REO properties are a great deal right now is that banks need to raise money fast, and they are taking back far too many properties, way above normal, it’s putting some in a cash crunch. Also keep in mind that all 2nd mortgages, 3rd mortgages, helocs, mechanics liens, all of that which is typically still a lien on the house when a seller is selling on a short sale, those liens no longer exist when a bank owns the property, the bank can sell extremely low, and just write it off as a loss on their taxes. Especially on $300,000 to $700,000 houses banks are giving great deals right now. You can even get a great deal on new construction houses through the banks. I will tell you right now that REO agents are very particular about using their purchase agreement and having everyone abide by their rules. Also REO agents like to just receive faxed offers, they don’t like to talk a lot on the phone, they are busy people in general. I wouldn’t have the patience to work with banks and be an REO agent, I have a decent temperament and I just couldn’t do it.

One thing I will tell you is if you are a buyer, you better be extremely persistent with your offers. Also you can send in low ball offers and get denied, and do it month after month and eventually one day the bank may take it, timing is everything with these banks. Another thing I”ll tell you is that banks want zero liability with these properties so they will want to play by their own rules on the disclosures, so you may want to hire your own inspector for these properties, after all the banks never lived in them. Banks can sell properties for 50 to 70% of tax value, it exists, I hear about it, I see it. I own bankownedforeclosure.com I may try to list something on that site sometime in the future. Also many bank owned properties need a ton of work, many people underestimate this and can buy something they can’t handle, sometimes it’s structural.

If I could sum up bank owned properties in a few sentences, I would say this: Prior to 2005 let’s say, bank owned properties were in very rough shape on average, banks REO’s were over priced, and they were willing to take months to sell the properties, and the agents were just very hard to reach. Banks were very non negotiable, and the houses were huge projects.

Now if we are talking the current market, I would sum it up saying, REO agents are busier then ever, banks have too much inventory, deals can be had, even new houses, and even houses that don’t need much work or have hardly been lived in. Much of this has to do with mortgage fraud where people didn’t even live in the houses. Banks are willing to negotiate, please work with a buyer’s agent that wants to work with REO’s.

I wouldn’t be that agent to work with the bank’s but I would have 1 or 2 agent friends that know what they are doing and how to negotiate, so please email me at ron@minnesotainvestors.com and I will put you in touch with an experienced agent that knows what he is doing.

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