“Offers to Be Considered on a Future Date”: Is This Really Fair to Buyers?

As I work my way back into the market following the launch of my real estate firm, I am learning just how difficult it is from a buyer’s perspective.  Specifically, I am trying to get a client into a $400-500k home in West Seattle.  It turns out there are only a few thousand other people looking for the exact same thing, and a few dozen homes that fit the description.  OK, I’m making these numbers up, but you get the drift.  It’s tough out there.

Until this week, I had a high degree of respect for sellers and their agents who noted in the listing that the seller would consider all offers on a particular date in the future.  This allows all interested buyers to really put their best foot forward, particularly by pre-inspecting so that the offer is not contingent on the inspection.  Particularly in older neighborhoods like West Seattle, where homes routinely approach or exceed the century mark in age, sellers appreciate knowing that there will be no renegotiation based on the condition of the home.

So on Wednesday afternoon, I met my client at the “target” home where we were awaiting the arrival of our inspector for a pre-inspection.  The seller was to consider offers on Friday morning.  Buyers and an agent were inside, I assumed simply touring the home.  Suddenly, the owner emerged from the house and announced she had just sold the house to the folks who were inside with her.  As the kids say, WTF???

It turns out that the seller had every right to accept this offer, notwithstanding the “offers to be considered” date as stated in the listing.  NWMLS rules specifically allow a selling agent to present an offer directly to the seller long before the stated “deadline.”  So it turns out my anger and frustration at the seller, the listing agent, and the selling agent who pulled the coup were all misplaced.  (I wouldn’t even rule out an apology, now that I know the rules.)

But it begs the question: Is that fair to buyers?  What if my client had completed the pre-inspection?  He would have been out-of-pocket money specifically in reliance on the seller’s and listing agent’s representation in the listing.  And even without that expense, it seems unfair that a stated “deadline” can be wholly circumscribed by one buyer at the expense of all others.  If it were up to me, the rules would be changed. But all I can do is continue working towards providing buyers with an improved home buying process.

The Death of Mortgage Blogs

iStock_000017972256XSmallThere is a buzz going on among fellow mortgage bloggers about how days may be numbered for mortgage blogs. This is as a largely the result of guidance issued by federal regulators late last year specifically on social media. When I first read this guidance, my initial response was “so what? This is pretty much what lenders are supposed to be doing anyhow”… stuff like properly quoting rates, not being misleading to consumers, etc.  It’s also my opinion that this seems to be written in favor of mortgage banks and not mortgage companies. The big banks seem to not want loan originators who have or express their own opinions.

After more thought and discussion with other mortgage bloggers, I can see the real issue is the compliance factor. Many mortgage companies are already stretched with the cost of compliance with just the day to day operations of originating mortgage loans. It’s my understanding that some lenders have made the decision to just not allow their loan officers to have any independent sights or social media sights (like Facebook or Twitter) as this is the easiest route…no extra compliance cost (additional personal hours) and less risk.

Blogs typically have information released freely and quickly. There are times that I have done “live post” when I’m covering an event, such as the Fed testifying before Congress or to illustrate how something like that may impact mortgage rates. I’m not sure it’s feasible for a compliance officer to be able to regulate and approve everything that a loan officer says or does with social media – imagine a person having to approve any comment or update you put on Facebook or Twitter… it’s simply not realistic and it’s no longer “you” being social or in the moment – it’s you-approved by your employer.

The thought of me no longer being able to blog or to no longer have my  blog, The Mortgage Porter, which I began back in 2006 is absolutely depressing. I really enjoy writing and sharing information with my readers about mortgages, including the process of financing a home and various mortgage programs. At times, it’s even been therapeutic by allowing me to vent or “rant”.  Blogging and social media has brought me so many wonderful opportunities and experiences that I would not have had as a non-blogging mortgage originator.

When I began my blog, it was because of a lack of information, or actually because the wrong information was being shared by the media about loan officer licensing. I never dreamed anyone would read it or that people would actually decide they want me to be their loan officer because of the information I freely shared with them – information that they could not find anywhere else!  I use my blog to share information with potential clients – like “what is a letter of explanation” and sometimes, I’ll write a post just to address an answer to a clients question… if they’re asking it, odds are somebody else is searching for that answer too.

I fully agree that content on mortgage blogs must be compliant – however doing away with mortgage blogs is a travesty.

Less information and less transparency is never good for the consumer.

Good thing I have a back up career! 

Stay tuned.

An Open Letter to Glenn Kelman, Redfin CEO, on the “Discount Real Estate Broker” Model

Post Updated 5/20/15:

P.S. Glenn, more than a year has gone by. I’ve busted my you-know-what trying to build a better Redfin-style mousetrap. And a couple of months ago, I said to myself: Wait a sec. I don’t think that sort of mousetrap is EVER going to work. I think technology and modern business practices have rendered that old type of mousetrap obsolete. The world is just waiting for somebody to invent something different entirely. Real estate isn’t immune to evolution. It just takes real change and a new way of doing things before it evolves.

So yesterday, I announced my imminent withdrawal from the NWMLS. A move made possible, in part Glenn, by Redfin’s devotion to solid data quality. Via FSBO platforms, I will be able to list homes for sale on Redfin – exactly where most buyers are looking in Seattle – without having to list on the NWMLS. And thus without having to pay a cooperating broker commission in the first place. But unlike Redfin and every other real estate firm – whether traditional or alternative – I won’t be on the NWMLS.

So this is where we part company – for now! 🙂  I suspect Redfin still has room to evolve…

-CB

The original letter to Glenn dated February 18, 2014:

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Selling a Kirkland Condo – Staging and Photos

condo windows

Whether I am helping a client sell a house or a condo, my thought process is generally the same.

Start at “buyer profiling”. Who is likely to buy this property? Then make a list of the top 3 to 5 reasons why THAT person, whom you have targeted as the likely buyer, will choose THIS property over others that are for sale.

The first part, “buyer profiling” is an old method I learned when I was a Certified Corporate Property Specialist for Coldwell Banker back in the 90s selling vacant properties where the owner was relocated for job reasons. There is less of an emotional pull from the owner, and the process is more of a business effort to sell, with little to no accommodations for the seller’s emotional “triggers”.

For this condo, which was sold about a month ago, I determined the individual would likely be a single professional person…or at least that would be the person who might pay the highest price for it. I also determined that the person (or possibly couple) would likely be younger vs older because there were a lot of steps up to the front door. Not likely an “empty nester”, as might be the case for a ground floor unit with no steps.

Next I listed the reasons why someone would choose THIS condo over the other 65 or so condos for sale in Kirkland at the time priced at $250,000 or less.

1) View of Lake Washington (only 6 of 65 have a view of Lake Washington)
2) 1,000+ square feet (only 11 of 65 are over 1,000 sf)
3) Super high ceilings on the inside interior walls of the main living space
4) Clerestory Windows at the top of the high ceilings
5) Travertine and “wood” floors vs carpet

It is very important that you match your staging and photos to the main selling features of the property. NICE is not good enough. This particular condo is a great example of that because the owner hired a professional stager and I had the photographer take photos…but…

I just wasn’t happy. I didn’t feel the property would sell at its highest possible price based on that in person and online presentation. It was nice, the photos were “good” and better than most if not ALL other properties for sale. But they just didn’t tell the STORY of THIS condo well.

condo before after 1

condo before after table

condo view from sink

Kirkland Condofull set of before photos and the full set of after photos click on those links from the photographers site at HD Estates.

I use Brooke at HD Estates for my listing photos, and it was funny that when she first came she knew immediately that I had not staged the condo. She had done several of my properties this year, all of which I had staged myself, and she just knew. The tired old floor lamp with the fern…the granny orange shaw vs the red throw…the weeds on the table vs the art deco glass bowl…even in the bedrooms and bathrooms she just knew something wasn’t quite right. 🙂

I’m glad I went to the extra time, trouble and cost. The owner paid $92,700 for this condo just two years ago and we were able to sell it in less than a week with five offers at $233,000 with no home inspection contingency and no must appraise clause.

Might that same result have happened if I did not re-stage it myself and have the photos redone? I don’t really know for sure. What do you think?

Lower Conforming Loan Limits

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Back on December 12th, Rhonda posted that FHA etc Loan Limits would be coming down to the same level as previously lowered conventional rates. This came up in a recent discussion I was having with a client and thought the news, which I believe became effective 1/1/2014, should be highlighted a little better, as this is very important news for some people.

Not surprising to us inside the industry. But definitely important to anyone thinking about buying with minimum down and even for those who were not aware of the previously lowered limit for conventional financing.

Disclosure: I am not a lender. Just bringing this news to the forefront now that these limits have become effective so that more people heading out to buy a house in 2014 are aware of the changes.

I also think it is interesting to compare our loan limits to the much lower limits around the State of Washington.

Seattle listed as 2nd hottest housing market for 2014

The new Zillow predictions for the 2014 housing market show Seattle as the second hottest market in 2014.

They also predict only 3% increase in prices overall, so “hottest” could be kind of cool. 🙂

Personally I think it all depends on how many sellers come out to play this year. You will have your same average turnover for must sell reasons. Relocations as example. But with most sources predicting a slower increase in home prices and possibly a slight turn down, perhaps those sellers waiting for a better housing market will succumb to the fear that it might not get any better than this.

No one knows how “hot” the market will be, but the more sellers there are the “better” it will be whether there is growth or not. Zillow is also predicting rates will get to 5% by year end, but that looks more like someone trying to create a sense of urgency whereZC there really isn’t one.

2014 Conforming and FHA Loan Limits for Greater Seattle

Conforming and FHA loan limits for 2014 have recently been released. Conforming loan limits will remain the same as 2013. However, FHA loan limits are being lowered in 2014 from $567,500 to $506,000 for a single family dwelling.  The 2014 FHA loan limits are effective with case numbers obtained January 1, 2014 through December 31, 2014. So you can start your purchase or refi transaction during the last few weeks of this year and still have the higher 2013 FHA loan amount as long as the case number is obtained prior to January 1, 2014.  FHA loan limits do not apply to FHA streamlined refi’s.

The following loan limits for 2014 are for King County, Snohomish County and Pierce County:

Conforming and FHA 2014 Loan Limits:

1 Unit: $506,000
2 Unit: $647,750
3 Unit: $783,000
4 Unit: $973,100

 

 

 

Small Business Funding Event Coming to Seattle

1236729_558062194229624_1577621121_nHey RCG Community!  I’m super-excited that I’ll be returning to Seattle for an Access to Capital event that Dun & Bradstreet Credibility is hosting this Nov 12. The event is all about helping small businesses get the money they need to grow their businesses.

We’ve been running these events all over the country (Los Angeles, Chicago, Atlanta) and they’ve been crazy successful events in terms of helping get small businesses funded… (No kidding, tens of millions of dollars of funding have come out of our first three events!)

544538_557687417600435_2047497257_nI realize that this isn’t a “real estate” specific event, but from my experience a lot of people in the real estate community are looking for funding and/or know business owners who would love to be able to fund their growth. Specifically, I’ve met and heard stories from many real estate investors at previous events who are looking for innovative ways to fund the purchase of investment properties… and know that most Realtors are active in their local business communities.

At the one-day event, we will offer two main things:

  • Access to Lenders: At previous events we’ve had dozens of representatives (typically 50+ people) representing over 20 different lending organizations, and I’m sure we’ll have a similar turn out in Seattle.   Best part, before the event we will work with attendees to schedule one-on-one meetings with their choice of lenders.
  • Funding Education: We’ll have panels, spotlights and speakers that will get down-and-dirty and show you how to prepare your business to get funded.

1229872_557686864267157_1862403206_nIt’s worth noting that the lenders who show up represent the full-spectrum of options for small business owners.  In the past, we’ve had representatives from large banks (Wells, BofA, etc.), representatives from community banks, representatives from alternative lenders, crowdfunding organizations, venture capitalists and more.  Most people are blown away by the number of options that they have!

Obviously, I’m hoping that the RCG community can represent well at the event, so I’m giving you’all access to a Super-Early Bird ticket!

A bit of serendipity…

At our Chicago event, I made all kinds of friends and have loved seeing multiple companies take off.  But one guy in particular has been hitting home runs left-and-right with his BBQ’d Productions company.  He recently announced that through connections he made at our event, he’s not only gone on to get funding through an innovative small business program offered by Sam Adams:

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But it gets better!  His business is even getting featured on an upcoming bottle of Sam Adams!

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Anyway, I tell this story, not because it’s a “success” story from a previous event, but rather because I think it highlights the importance of taking chances for entrepreneurs.  Kris took a chance on the event… met up with some great people… networked, networked, networked… and is making great things happen!  I’ve become a firm believer that one of the keys to turning the economy around is helping more of these innovative entrepreneurs and I feel super fortunate that D&B Credibility is organizing these funding events to do just that!

1229993_560128970689613_980300401_nNow’s your chance to take a chance!

Sign up for a ticket while they’re discounted on top of Super-Early Bird Specials! (note: we haven’t started to do any real marketing around this event yet… but it will come and it will be big!  I’m only pushing this out early because they let me and I love that I can offer something great to the RCG community!)

And of course, let me know if you have any questions!

 

Home Buyer Education Seminars

I am teaching two Home Buyer Education Classes this month sponsored by the Washington State Housing Finance Commission.  Anyone who is interested in buying a home can attend – our class is not limited to first time home buyers.

Home buyers who are interested in programs offered through the Washington State Housing Finance Commission, such as the Home Advantage Program with down payment assistance, are required to take a WSHFC sponsored class.

If you’re interested in attending a class where I will be teaching, you have two opportunities this month:

  • Saturday, July 13, 2013 from 11:00 am to 4:00 pm in West Seattle at the High Point Library. My co-instructor is Ira Sarachoff.
  • Saturday, July 20, 2013 from 11:00 am to 4:00 pm at the Greenlake Library in Seattle. My co-instructor is Jim Reppond.

Lunch is being provided at both of these classes… however, if you have dietary restrictions (or you’re a picky eater 🙂  you may want to bring your own sack lunch.

Both classes are FREE. If you’d like to attend, you can rsvp here.

I’ve always felt that an important part of a mortgage originators job is to educate their clients and make sure their questions are answered before they get to the signing table. I’m very excited to be a part of the Washington State Housing Finance Commission’s program.

BofA HAMP Loan Mod Program: A Giant Fraud at Homeowner’s Expense

Earlier this morning, I came across a very interesting statement made by a BofA employee in a lawsuit against the bank regarding its “participation” in the Home Affordable Modification Program (HAMP).  A “declaration” is a statement made under penalty of perjury and is commonly used in litigation to give facts (typically from a witness) to the court prior to trial.  This particular lawsuit was brought by Max Gardner, a well-known consumer attorney in North Carolina, against BofA for its conduct in working with homeowners seeking a HAMP modification. This Declaration of BofA Employee really pulls back the curtain.

HAMP is a federal initiative to encourage lenders to modify mortgages for moderately distressed homeowners.  As anyone who has dealt with BofA knows, the bank is incredibly frustrating and does an exceptionally poor job in working with borrowers who want to modify their mortgage.  It turns out this isn’t because of low-quality employees – or, at least, not at the consumer level.  Management?  “Low quality” would apparently be a giant step up if this employee is to be believed…