It's been a while

It's been a while since I've posted anything, but for the last 3 months I've been living in a place that I call 'Short Sale Hell'. Or it might be purgatory because it's a place that short sales go to torment the people involved; not quite dead but definitely not near consummation. It's a place where real estate agents of buyers are left completely in the dark as if dropping a contract into a deep well with no end in sight. After all the talk of leveling the playing field, of transparency and protecting the consumer, we are actually no better off and in some cases, worse off then before. Even after the infamous 'stress tests' in which the larger banks were instructed to raise capital, lien holders are still holding onto properties, inflating inventory to an all time high. Also despite increasing sales, deals stay in a pending status for months and months and there is very little reported about the number of sales that actually close with buyers receiving the keys to their new homes.

It has, however, created a blooming industry of REO experts offering their sure fire ways of making a bundle off the misery of others. They alone have the key to unlock the coffers to the banks mysterious methods of doing business in uncertain times. My in box is laden with offers of webinars and easy to follow downloads that will give you instant access to the decision makers and the key words and phrases that will unlock the safe to actually closing sales. It's pure insanity. The longer these listings stay on the market with more looming near foreclosure, the longer prices will continue to drop. Yet lien holders hold on to them as if they haven't read a newspaper or seen a financial broadcast in years.

In my frustration, I wrote a petition stating the frustrations that I'm sure many other real estate agents feel. I've placed it on the Care2 petition site - Short Sale Hell. The text for my petition is as follows:

We, the undersigned real estate professionals and potential home buyers are weary of the insanity going on in the real estate lending industry. We have stood by and watched lenders peddling exotic loan products designed only to bilk consumers out of their hard earned money with zero accountability. We have read of scheme after scheme involving millions of dollars in real estate while we continue to toil for just enough to stay afloat. We have represented clients with the ability and desire to buy a home forced to wait for months and sometimes years for a place to call their own only to have a lien holder accept and then later turn down a legitimate offer. We have stood by while lien holders make promises, talk about 'due diligence', add condition after condition, hoop after hoop only to then turn their noses up when anyone dare to question their complete lack of good sense or basic math.

In the last 12 months property values have continued to plummet, yet lien holders seem to be living in a fantasy land where values are determined by their desire to get the highest price possible. Huge profits were made in recent years by adjustable rate mortgages with sky high caps, late fees and loan costs, yet they want more. Billions of tax payer dollars were poured into an industry that still refuses to accept any blame, yet they still sit on the fence holding on to properties worth a fraction of what they were worth a few years ago.

Home sales by all accounts are increasing but mean nothing because most of these sales stay in a pending status for months and sometimes years. Closed sales on the other hand continue to drop - why? Because lien holders will not allow them to close, forcing agents to drop purchase and sale agreements into a black hole with absolutely no way of knowing what happens to them and no way to adequately represent their client. It's exactly like being on a flight that never lands but continues to circle the airport with an occasional announcement to hold on a decision to land is forth coming. And then of course when you do land you’re back where you started only with less money, less time and more stress an aggravation.

We demand an end to the madness. No more incentives - banks do not care about $1,200 per closed transaction. No more writing deals without any end in sight. No more hoops, conditions, phone calls, urgent emails. We demand that lien holders look at the current numbers and trends and base their decisions on those numbers - like legitimate appraisals, auctions, and home values that continue to drop. Finally no more reneging on their promises. If you agree to a price, you should be forced to accept that price. Enough is enough. We will not stand for another short sale that goes bad at the last minute and we will not deliver another message to a hopeful home buyer that some arbitrary decision has been made after a buyer has gone through an arduous approval and vetting process and waited patiently for the privilege of giving another lender their money. NO MORE.

Pretty heady stuff, I know, but I was angry and tired and had been dealing with a short sale transaction for veteran of 2 wars - Vietnam and Desert Storm. If there ever was a more worthy group deserving of a home to call his home, it does not come to mind. Does not matter to the powers that be who have come no closer to defending our country than the television remote control in their hands. I had to face this gentle giant week after week with absolutely no knew information other than please hold on. Talk about feeling completely useless and powerless. My broker told me to take a step back, not to get so involved. But in real estate, you are dealing with a very personal asset. A place where the most intimate details of your life unfold. How not to get involved and invested is my question and struggle. It's not like we're selling suits at Men's Warehouse where if the suit you had on your eyes on is available right down the street.

Well enough ranting, I have an angel asleep upstairs who is counting on me to maintain order in the home, provide an never ending supply of bagels and cream cheese and ferry rides. No more time to fuss. Till the next time.

Common Home Buyer Blunders

I know that there have been a ton of articles written about the do’s and don’t of buying a home, purportedly directed at the first time homebuyer. Well – first, second or third time around – errors are still made. So I’m going to skip the usual money management approach, as I am not a financial advisor.

I am however a buyer’s agent, meaning I have always represented buyers and in hindsight I am glad to have. So as a home buyer’s agent, I’ve witnessed or discussed with my colleagues the blunders made while actually in the home buying process. Things that are actually counter productive to the process and least likely to produce a stress free (or as close to that ideal as possible) experience all the way to the time you have your house warming event.

I am assuming however that you have been pre-approved before home shopping and you know and feel comfortable with the mortgage amount and estimated monthly payments. Home shopping without a preapproval is like going to the mall without your wallet. Maybe you’ll underestimate how much you have to spend, most likely you will overestimate and then have to go through the emotional pain of reconciling that price with the home you fell in love with as it slips from your grasp.

1. Knowing what you want with the healthy expectation and realization that there is no perfect home. You should know what your ‘can’t live without’ concerns are as well as the ‘would be nice to have’ conditions are. If it’s in the vicinity of a particular school or district, easy access to freeways, close to work, or a particular area – define your conditions and then stick to them. If you need a bedroom large enough to hold a certain amount of furniture, decide in advance if this is important enough to give up a family room or lot size.

2. Seeing too many properties. If you’ve been out to preview 35 homes and you still haven’t found one that you’re ready to make an offer for – review #1 above. After a certain number of homes – it’s difficult to remember how you actually felt about the first or second home that you visited. Even with the most copious notes, whether you could visualize yourself in that home will have escaped you. Oh – and do take notes. I provide my clients with materials to take notes with and few do. I wonder what the conversation later on with the loved one – ‘no, the one we liked today had the island in the kitchen; the one you’re talking about had the steep back yard! Take notes – a few comments at least about favorable homes. The homes that are out of the question – a big X will do.

3. Low balling. Now this is for distressed and non distressed properties. The very real danger of low balling homes that have equity is that you could very well be forcing the seller into short sale conditions where the lien holder would have to take less than is owed – hence now a short sale. Seller’s agents are more than aware of what homes are selling for in the area and based their advised list price to their clients. Your buyer’s agent has access to the same type of information as well as mortgage and purchase history and can equally advise on reasonable offers.

4. Sitting on documents for too long. Home buying involves timelines for each stage of the process from acceptance of counter offers, inspections and appraisals. If you don’t have access to a fax machine in the course of your normal work day or at home, scour the area for an outfit with fax access. There are a number of options – office supply stores (Staples, Office Max, Depot), pharmacies (Walgreens) and shipping and mail centers. If you happen to be a member of a shrinking number of people and don’t have an email account – sign up for one immediately and never disclose to anyone that it is your first one. Seriously, what ever your opinion of an electronic world, it is here to stay and you will need to embrace it if only for the sake of this transaction.

5. Nitpicking the small stuff. This is particularly true in the inspection response phase. Of primary importance is addressing the items of the inspection that affect functionality and value of the property. This would include the roof, foundation, plumbing, electrical and heat. Secondary to that are things that relating to conveniences and appearances. The interior paint, flooring (in most cases), fixtures and window coverings. Your inspector should be able to provide detailed information about the life expectancy for most items as well as information re: the ease or complexity involved with minor updates. Once again, no such thing as a perfect home and most are a perpetual work in progress.

6. As you get closer and closer to closing and alternate between dreaming of yourself living in your new and the fear of an equally new mortgage payment, don’t allow yourself to drift too far in either direction. Exhilaration may tempt you to go off on a tangent and start re-decorating and furnishing your new home before you’ve gotten the key. Particularly in times like today where lenders are particularly skittish when it comes to home loans. Don’t add any thing to your debt load prior to closing, I repeat don’t add to your debt. Even those ‘buy now with no payment for a year’ offers. The debt total is still added to your credit and could shift your ratio and prompt changes in your loan. Wait – you’ll have plenty of time to shop and redecorate in the months and years to come.

7. Finally – be honest and open with your agent. If you’re not comfortable with something, let her/him know. The earlier the better – preferably before the inspection timeline has expired and you still have the option to walk away from the deal without penalty. Your agent then won’t have to scramble and negotiate your way out. The home buying process is a two way street and agency law has developed to ensure that the interests of both parties are protected and considered.

Buying a home does not have to be stressful or draining. In fact, it can be pleasant and exhilarating. You’re moving to another chapter in your life when you can set the stage with the colors and textures of your own choosing. The place that you return to at the end of your day for nurturing, relaxation and rejuvenation can evolve into your particular brand of oasis. Your buyer’s agent can only aid in that endeavor with your cooperation and support. The above are just a few tips to making it so. Happy house hunting.

In the Beginning

Three months after President Obama was inaugurated as our 44th. President, many things have changed and unfortunately many things have stayed the same. It’s difficult to find the good in all the news that is constantly streaming on line, on the 24 hour news channels and in the few print outlets left, but there are glimmers of hope.

Applications for loans have increased both for homes and for small business. Stimulus money is beginning to flow to projects across the nation and there are reports of a few wise and compassionate corporations and municipalities that have chosen to scale back rather than lay off. (City of Kent Employees agrees to pay cuts to save job - http://www.pnwlocalnews.com/south_king/ken/news/41692792.html and Costco - http://seattletimes.nwsource.com/html/businesstechnology/2008996669_nolayoffs07.html ). So how did we get to where we are now and what is to be done by regular people, working 9-5 jobs and trying to raise our children to have lives at least as prosperous as their parents? I think it began decades ago with the creation of ‘reality’ based television programs and the beginning of when people could become famous for doing nothing other than being famous.


In the beginning there was ‘Lifestyle of the Rich and Famous’, followed by in depth profiles in magazines featuring the homes of celebrities with their fleets of luxury and vintage cars housed in garages large enough to house The Brady Bunch and Partridge Family combined and the race was on. Unlike the golden days of celebrity worship in the 40’s and 50’s, the new age of aspiring for riches was omnipresent and seemed attainable, even if it meant maxing out your credit cards and leveraging your future and your child’s future to do it.

Flash forward 20+ years, add deregulation of the mortgage and credit industries along with a blind obsession with more, bigger, better and ostentatious consumption and you have a financial and moral crisis unlike any before. Add to this mix a steady stream of ‘reality’ TV depicting the rich and famous, contestants vying for the chance to become rich and famous and non stop offers on the internet and late night TV to get rich by following a few simple steps and also passing on the names of every friend and family member in your rolodex.

We were no longer content to have a little 3 bedroom 2 bath homes on a little lot, close enough to schools and playgrounds. We had to have marble, granite, hard wood and tile throughout, bonus rooms, recreation rooms and kitchens with islands and eat in dining and formal dining, so builders and developers built to suit the growing wants and demands. We were no longer content with a car big enough for our family, but had to have one that was bigger and grander than anything on the block, with no regard to the price of gas or the interest rates we were paying. Of course, banks and credit companies were more than willing to comply with our growing appetite for living beyond our needs and our means.

I once read once that we in this country don’t have a housing crisis, but a crisis of expectations. But I don’t blame only the consumers, I blame the people selling and companies that actively sought to deceive people into believing that constant consumption was desirable and anything to the contrary was almost un-American. I also blame the anti-regulation crowd who actually expect us to believe that financial institutions have the ethics and incentives to keep the consumers best interest in mind when there are large bundles of money to be made.

So what can we do to counter and reverse history today? We can reject consumption for the sake of consumption. We can reject people who believe in and promote conspicuous consumption be it our favorite movie star, athlete, neighbor or business associate. We can pass up the magazines that celebrate public figures for the number of cars sitting in their opulent garages and for the number of homes they own. We can stop watching the inane reality shows that encourage people to compete to ridiculous ends for the sake of winning millions or for more objects to fill up our homes. We can start instead celebrating and honoring people who serve – our children in schools, patients in hospitals, seniors in our homes and retirement facilities and our veterans who gave the ultimate service of country. In short we can return to valuing character and excellence over bank accounts, square footage and horse power. After all, if we’ve learned nothing from this current financial crisis, it’s what’s really important – integrity, responsibility, service and compassion. Everything else is subject to fluctuations in the economy and can be wiped out by one corrupt and eager business man.