1) Realtors. Tomorrow (Friday) June 19th 09 at 12-2pm at NVAR Herndon

2) For those of you that read this blog through your email reader, make sure to swing by and check out the new layout http://Blog.FranklyRealty.com

We now sell Trust Me I’m A Realtor shirts that you can give your loved ones (as featured last week in the Wash Post).

3) We received two, yes two, Inman Innovation Award Finalist Nominations. One for the Most Innovative Blog (this one) and one for Most Innovative Web Service for the just turned two,  FranklyMLS.com, now with almost 90,000 added buyer agent photos.

Don’t miss out on the more frequently posted videos on Youtube.FranklyRealty.com.

Written by Frank Borges LL0SA- Broker FranklyRealty.com

Actually many “relocation” companies that are supposed to help the employee are just fronts for making profit. And they have such a compelling pitch! How could an eligible buyer actually decide to bypass them? EASILY!

I’ll explain exactly why you might want to bypass your relocation company AND how you can use PART of their system to your benefit and ditch the other part.

Why am I picking on Cartus? Cuz I was robbed. I got this email the other day:

Hi, I’m moving to Virginia with my job in a month and my fiance and I are a big Frank fan! {Name Omitted} recommended you to us. We love the website and reading/listening to your blog. And, we’d like to go with your realty firm when we purchase a place in Northern Arlington this summer. Fortunately for us, my company (XYZ) is willing to pay Realtor’s fees and closing costs but I need to approve you as a realtor/realty before they will allow us to get started.

I added the emphasis.

1) Fortunately for us. Wow, the company is so gracious. They really care about their employees. Consider it a benefit like healthcare. They will pay Realtor fees and closing costs! (end sarcasm here)

Ok, first of all when you are buying, there are NO “Realtor fees” (sidenote: ha, I wonder if they pay for the bogus Realtor Admin fees which the Washington Post, link, just covered and cited my blog) per se because the Realtor fees are paid by the SELLER. But it surely makes for a good BS pitch in the brochure. Why not also add: free keys! As for the “closing costs” I’ll get to that shortly…

2) Approve you. Approve me for what? Make sure I’m good? Knowledgeable with people that are relocating? Maybe a quiz or a check for references? No. None of this happened.

I knew the “approve” the agent sounded fishy. I warned the buyer… I said “I bet they are up to something.”

Finally Cartus contacts me. I get an email that effectively said: You are approved when you agree to give us 40% of your commission. (actually it said “registration entails a verbal agreement of a 40% referral fee.”)

Are you F-ing kidding me? “Referral fee?” Did they refer business to me? Hell no. These buyers found me on their own. They were a personal reference from a friend that felt like they got great service. And Cartus demands 40% to be part of their program. What is this Robin Hood? Take from one to give a another? And keep a little for profit in the process?

So here are the details for their program, I am a fine print reader, so at the end I will try to parse this out for you.

Isn’t it fun making a really long list of fees that are paid? Even though many of them are next to nothing. I just pulled up a HUD1 for a buyer (note that fees can vary by closing company and frequently get renamed and shuffled around).

Here are a few of the next to nothing fees on the list that you get FREE!!: Notary Fee= $0, Messenger= $55, Tax service fee $0, Recording $65, Termite $35, Credit report $14, Title examination=$0.

The fees that have some real value: Survey= $265 Settlement fee=$195 Title Search=$175 Lender’s title insurance=$1,800 (on a $650k VA home, reissue rate) NOT present in the list of closing costs: Owner’s title insurance= $1350 (except for closing costs) Read more on Owner’s Title

Conditional costs. Ie IF, a big IF, you use their “approved” Realtor. You get: Loan origination fee 1%. Lenders have a ton of names for these types of fees. Sometimes they are called “Rate buy down” points, or “Discount Fee.” The short hand is just “points.” Points aren’t necessarily bad (make sure to subscribe to this blog for a full post on when to buy points). More often than not, if you put down 20% there are ZERO POINTS, ie $0 Loan Origination fees. So if you DO use the Cartus program, and an “approved” Realtor, make sure you go out of your way to max out the full 1% point. (ie if the lender was going to charge you no points, they can make up the fee and buy down your rate, as in make your 5% rate 4.75% approximately)

But here is the fine print as I understand it…

BOTTOM LINE: You only have to use their approved Realtor IF you need that Loan origination fee. In other words, you can still pick your favorite Realtor and get all the other fees covered for free by Cartus. (I could be wrong, but that is how I understand their rules above).

Why in God’s world would you give up the ability to get a “free” 1% loan origination fee?

Well that is a separate and lengthy discussion on rebating and discounting. Heck, there are several companies that will give you a 1.5% cash rebate. Heck a 1.5% cash rebate is MUCH better than no cash reimbursement for a 1% fee you might not have purchased normally.

WAYS TO MILK CARTUS

1) Have them pay ALL your fees except the 1%, and find your own Realtor that will give you a rebate.

2) Or if you find a Realtor that is willing to be “approved” by Cartus, tell them “hey buddy, you are willing to give 40% to Cartus right? And Cartus will just turn around and refund 33% (1% or 1/3rd of the 3% offered to buyer’s agents) of the 40% in the form of a 1% loan rebate, why not just give me the 40% directly?! Cut out Cartus and get 1.2% refunded on your HUD1 vs 1% lender fee repayment and Cartus pocketing the rest.

3) Get your own un-approved agent, skip the loan fee reimbursement, yet accept all the other fees. So why am I telling you the secret path to getting the most cash out of the relocation company and system? Well maybe, just maybe you will then believe me that #3 above might be the best solution for you in the end.

Stop and think about for a second. Cartus demands 40% from a Realtor that you pick or one that they pick. So for the ones that they pick, what kind of Realtors will accept that? Oftentimes desperate ones. Perhaps those that are kinda struggling. You know, economy is tough right now. Weekend warrior Realtors that have nothing better to do? One that will pressure you into a house and hope to get you off their slate as fast as possible so they can make the next 60% deal from Cartus. Perhaps they have to cut down half the time they spend on you, to make it worth it.

So signing with Cartus with an “Approved” Realtor, is not much different than Rebating. I have no problem with the rebating business model. (note: you won’t find many other non-Rebating Realtors talk about it openly).

Why do I talk about it? Well as I like to say

“I use to rebate, but then I got good.”

Yep Read: Realtor Rebates. Free Money or Expensive Savings? and more on rebating.

In the end, know you do have a choice. You can get the best of both worlds. You can get Cartus to pay a good amount of your closing costs, get a loan with NO loan origination fees, and get to pick an agent that is working for YOU, and not for Cartus.

Oh, and remember I’m not too busy for you, so email me. See I’m Not Too Busy For You video #1 and Video #2

Make sure to subscribe and comment and debate. Nobody likes a stale blog!

Written by Frank Borges LL0SA

Broker FranklyRealty.com, Owner FranklyMLS.com

Croc image DrBartje Fish image Phillip

ps. My experience was on the BUYING side. Can somebody comment on the SELLING side of relocating? Do they really buy the house at the appraised price and eat any subsequent loss? Now that seems to have some value in this market.

So, I went to the courthouse steps in Arlington Virginia to see today’s scheduled auctions. First of all, all 3 homes set to be auctioned off were canceled. This happens frequently. The notice makes it to the newspaper, but the owner figures out a workout or a way to delay the process (sometimes multiple times).

I then asked the auctioneer whether consumers are buying them directly from the courthouse. While he said “they can,” he also said they don’t because the banks are buying them back at their loan amount, which is usually OVER the market price. He estimated that 95-99% of the homes sold are being sold back to the lender.

My theory is the banks don’t have the resources to fully figure out what a property is worth. So they just buy it back from themselves at full price, and then they try and figure out later what it is worth. They do this by hiring a BPO (Broker Price Opinion, a non-official, cheap appraisal). (Sidenote: Lawyer question how this will effect the Deficiency Judgments, see the comments in the older post).

But this might change, so I will go back every year or so to make sure (I went there 2 years ago, and it was the same thing).

If you are reading this from your email subscription, make sure you watch the video on VA Courthouse Steps Foreclosures.

Written by Frank Borges LL0SA
Broker FranklyRealty.com
Owner FranklyMLS.com

Broker FranklyRealty.com
Owner FranklyMLS.com

Sorry, but that was so 2000-2007.

With Banks, REOS and Short Sales, money is playing second or third fiddle to TERMS, TERMS, TERMS. Banks are taking 2-4% LOWER offers (when there are multiple offers) that are stacked with great terms including:

• ALL CASH
• No Home Inspections
• No Finance contingency
• No Appraisal contingency
• No VA or FHA loans*
• FAST closings
  * Many will debate this and say that these loans have evolved and are as good as regular loans. Guess what? Banks don’t care!

For example, I was talking to an agent the other day. Her client offered $100,000 over list with 50% down on a Virginia Bank Owned property. Another offer was for full list, ie $100,000 LOWER but with ALL CASH. The all cash won. But then the buyer persnickety (great word) started meddling with the bank addendum (see older post) . The bank said forget you. Went back to the 50% cash offer, which lowered the offer to $50,000 under full list.

Banks want LOW HASSLE DEALS!

For Virginia Short Sales, the seller doesn’t care about the price (slight exaggeration). They aren’t eating the loss. They want somebody that will standby and be patient. I even had one listing agent say “I don’t care about the price, the bank will determine that with a counter, I care about staying power.”

I am in no way saying that you should only buy with all cash (if you can great) and remove all contingencies. I’m just saying that it is very important to meticulously review all the terms in your contract and to make them as strong as you feel comfortable with. Maybe do a home inspection, but make it a “take it or leave it” inspection (not a “information purposes only,” I hate those. They are sheep in wolves clothing.) instead of the default which essentially says “we will inspect it and then demand petty changes.”

And believe it or not, I can’t talk about all the things we do, but there are many other ways to win a contract for LESS than the highest offer. But yes, it takes some thinking (wow, an agent that thinks, imagine that?).

And generally I don’t like escalation contracts.

Why? If you have great terms, you will be outbidding a sucky terms contract. How dumb would you feel if you escalated $10,000 higher because there was a high offer with a home sale contingency? Or if you waive the appraisal and the offer you beat doesn’t. Why beat another offer the seller wouldn’t have taken? You can adjust the addendum to try to protect from this. Make sure you are beating not only the price, but the terms.

Please subscribe to this blog and leave a comment, and feel free to leave your experience, even if you disagree.

Written by Frank Borges LL0SA
Broker FranklyRealty.com
Owner FranklyMLS.com

Also I started a new blog that showcases each of my WheelEstateCam.com videos!

Wow, do I feel for you! It is REALLY hard to find a good Listing Agent/Realtor… anywhere (not just Virginia).

How do I know? Because I’m going through it right now! I’m helping my brother pick a Realtor to sell his house in Texas (yep not doing FSBO since I want him to net more).

Overcoming his hesitations are EXACTLY like customers here. It is HARD to cut through the BS. Here are some typical questions he had and my answers. (He was amazed that I had a blog post for everything. Also I apologize for jumping around.)

1) I taught him to not fall for the oldest trick in the Realtor book… the Buying a Listing Trick (recommend a high price to win the listing, just to drop later, which nets the client even less). He got that, so he warned the agents he was talking to that he wanted real pricing and he would NOT pick based on the highest price.

2) When he mentioned staging, one Realtor’s reply was “Sure we can do that, or we can list, wait two weeks and then stage it. That might save you some money.“

What! Boy did this tick me off. Made me want to pull my hair out and look like I did before my hair drug medicine (see actual photo of me).

Any good marketer knows that you have one chance to make a great impression. You want all marketing efforts to peak at the same time (even down to the exact best day to list, which I think is Thursday). 80% of your visitors will see your vacant stale house? No way. “Run from that Realtor!”

But doesn’t it sound so good? “to save you some money.” Everyone wants to save money!! Even though that might “cost” you tens of thousands. Here is a video on staging costs (specifically granite) and calculating your return on investment (staging ROI)

3) Realtor and Stager in one? Some might be offended by this, and go ahead and call me a “Brainist.” I don’t think those with a degree in design can do staging full time AND be a full time Realtor. They are completely separate parts of the brain. (I messed up here, I initially had him talk to a combo stager/Realtor, but he got the sense that the combo‘er, not to be confused with a comb-over, was not a numbers person. The combo’er said, “my Realtor friend Sally thinks we should price it at XYZ.” That isn’t what a seller wants to hear.)

Also it is hard to find a good stager/redesigner. Some even lie! And you know I’ll call them out on it. See: Stager Caught Lying About “17 day avg” Results!

4) Find a great stager 1st and you will find a great Realtor. (kinda sounds epic?)
(shameless plug… earmuffs… If you are looking for a listing agent in Northern Virginia, MD, DC, then you can skip this step since you already found us… end shameless plug.)
Whenever I jump into an abyss (non DC area) to help a college friend, or a relative find a Realtor… I first find a great stager (I use ActiveRain). I ask the stager “Who uses you frequently and always uses super wide angle photos?” Man of man this eliminates 97-99% of the Realtors and leaves me with some great options. I’m sorry, while it won’t guarantee anything, if I find a Realtor that requires all of their listings be staged, I am 99% confident they will not be a Sucky Listing Agent. Ask Dave and Bill, they were thrill when their houses sold in a down market for over what they were expecting.

5) Another Realtor wanted to hurry and list the property in 48 hours.
I told my bro, no fear… I have a blog post for that too. THROW-UP listings. Do it “RIGHT,” Not “RIGHT NOW!” I consider this to be a trick. Some Realtors go to some brain-washing Realtor training programs (you know who you are) and they push: #1 GET THE LISTING SIGNED. And “How many listings did you sign up this week, did you make quota.” They don’t really care about getting their client top dollar. They just wanna crank through a mass quantity of deals. Fast, Fast Fast. Sorry, it takes time to do it
right, and doing it right, nets the seller MORE!

6) Another hesitation from my brother: “But I want the Realtor that sells everything in the neighborhood.” While there can be some benefits, I know some VERY sucky agents that do a crapload of business.
Here is their secret… They spend $100,000 (yes 5 zeros) sending out postcards endlessly. The postcards look like they are trying to sell somebody’s home. But the inside scoop (which you only get on this blog, so make sure to sign up) is they are NOT marketing the home at all (postcards don’t sell homes, especially “sold cards”). They are MARKETING THEMSELVES NOT THE PROPERTY!
They spend a boat load of $ to get you to call them. That in NO WAY correlates with them being any good at getting you the highest net.
Why don’t I get into that business? If the $100k pays for itself, why not? Because it disgusts me. I’ll just blog and save a forest. I love flipping through those 4-color magazines in grocery stores. With full page ads “selling” homes. That does NOT sell homes, that sells the Realtor and lets them say “look I will put you in this glossy magazine” that no buyers look at. They instead use the interweb.

Other BS.
7) Don’t fall for the guy that uses in his pitch “Google XYZ area and look, I’m #1.” Like above, that just means they know how to do Search Engine Optimization by hiring a firm in India to write mini articles to get their ranking up. Search engines do NOT sell your home, but it might get you to contact that Realtor. Sure sounds powerful doesn’t it? If he can market himself, he can market my home. Yes logical. But no, it is not correlated.
As part of that Realtors’ (NOT MINE) “10 questions to ask a Listing agent”
“How many Buyers are you working with currently? Everybody knows the more buyers your listing agent is working with, the better your chances of selling your property quickly. It will also
affect price because a listing agent with many buyers can establish an auction-like atmosphere where many buyers all bid on your home at the same time.”

8) I got this from a blog reader today, “Jake” thought I’d like to highlight the BS. This came from a Realtor he was getting a newsletter from (he betrayed me I guess):

Are you kidding me? See pulling out hair photo above. This is such BS. And if it isn’t, make sure you are not hiring that agent as a buyer agent, because she just admitted she is going to screw you if you buy her listing. (Meanwhile I tell buyers NOT to buy my listings)

Wish me luck with my brother, and a blogger loves his commenters, even if you say “hi, thanks.”
Sign up for more progress reports on my brother’s listing.

Written by Frank Borges LL0SA
Broker FranklyRealty.com
Owner FranklyMLS.com

Please report typos.
Brain photo by Gaetan Lee

Funny how buyers think they are the only ones buying. As I pulled up, I was rerouted to the next street down to take the “shuttle!” About 20 Mercedes Benz, Lexus, and BMWs lining the road.

At the right price there are always buyers looking for “bargains.” In this post I want to unravel the new techniques in trying to move (sell) mansions and estates in Great Falls Virginia. It also relates to other areas as well.

System #1: Auction
Auctions are sexy. Make sure to get a bunch of people in a room and get each other excited. Even the Open House was only 1 hour, so it looks 4x more packed then a normal 4 hour Open House. But it was packed and my buyers were amazed.

This auction was requiring bidders to bring a $150,000 cashier’s check before you could bid. The “starting bid” was $1.5M. But that means nothing. That is 100% marketing. Why? Because there is an unpublished “reserve.” So even if only 1 person bids at $1.5M, they still won’t sell it to you (most likely). So why not start at $178.72? Because $1.5M lets you think for a second that you might get it for that! And they use you to bid up the next guy.

And on TOP of that… this auction has a “10% Buyer’s Premium.” Oh and did I mention is it also a Short Sale to boot? Bid up all you want, the bank will likely still make a counter.

I have to give it to this Auction company though. They WERE able to sell one home this way. And that says a lot. If this company had never sold one, I would likely 100% write it off. For the one that DID sell, it sold for $500k under tax assessment. It probably also started at $1.5M, but sold for $2.5M. No 1/2 price firesale here.

System #2: BANKRUPTCY.
The seller is in “bankruptcy” so all offers are encouraged (see below). It is not clear to me who actually is selling the property. Does the builder have the right to agree to a price, or does the bank have a say? Does the bank have the only say? Or is it a court?

People ask me “what will it sell for?” Heck I have no idea. This is all unchartered waters. All I can do is look up past data to see if I can predict the future. So I did a Realtor MLS historic search for 10 years for the word “Bankruptcy” from $1m to $4m.

Only 1 had sold in Northern Virginia.
Listed for $1.05m, sold for 1.1m (over list)

And two others “withdrew.”
One of those was listed at $1M and came back onto the MLS a year later as a bank owned and sold for $750,000.

System #3: Bank REO
These are regular bank owned properties for sale. They have already undergone the other tricks and marketing techniques and they are serious about selling. Since 2007, in all of Fairfax I found 13 over $1m . Link to Fairfax Bank Owned and Sold via the MLS
Most of them sold AT list and a few within 10%. How can that be? Well if they are priced right, below “market,” they will sell fast.

These are the best options. I recommend signing up for email alerts via FranklyMLS for the phrase: Cityname Bank like this: Great Falls Bank (note that this site searches the remarks, so if it says “near Suntrust Bank” it will come up in the results).

System #4: “Bring All Offers”
What does that really mean? Does that mean a $4M place will take a $1M offer? Not likely. Or at least I wouldn’t tell you about it, since I’d call my mafia friends and find a way to buy it myself (joke). So again, I look at data. What homes that have used the phrase “Bring All Offers” have sold in Great Falls or Fairfax over $1 million in the last few years…? In all of Fairfax since 2007, only 8 have sold.

Lowest List Closed Price
$1,080,000 $1,058,000
$1,098,000 $1,000,000
$1,149,000 $1,120,000
$1,201,500 $1,185,000
$1,209,900 $1,000,000
$1,299,998 $1,175,000
$1,395,000 $1,230,000
$1,890,000 $1,750,000

I don’t see any huge firesales. I do see two that were 20% off though. So you know an offer 20% below shouldn’t be laughed at. See all 8 “Bring All Offers” Homes Sold

More interesting facts:
How many homes have sold in Fairfax since 2008+ for over $2M? 109 homes sold.
Only 24 were in Great Falls, most were in McLean.

Only 7 have sold in all of Fairfax (including Great Falls and McLean) from Jan 1 2009 to March 1st 2009. Oh yeah one said “Motivated seller” in all caps. Listed at $2.2M sold for $1.9M.

If you are looking in this price range let me know, I can pull some more specific data for you. Whatever you do, don’t just call the listing agent. Having a buyer agent can help you save a ton in the end, if they are good with data analysis.

Soon I want to blog next about creative financing for these higher price estates. Why? Who wants to sell off their stock at a 50% loss to buy a home for a “deal?” (see Luxury Homes blog post) Including full seller financing, or a mix of a bank loan and partial seller financing, also called Seller held trust (either with interest or a balloon payment in 5 years).

Don’t forget to sign up spam-free for this blog in the upper right corner of Blog.FranklyRealty.com

Thanks for reading! Make sure you add your comments and questions. Nobody likes a dead blog.

Written by Frank Borges LL0SA
Broker FranklyRealty.com
Owner FranklyMLS.com

They are the best deal in town, by far. More so than bank deals. But if you don’t read this carefully you will be FORKED!

In case you are new to the world of home shopping, there is something called a Short Sale. You need to read the details on my post: Short Sales Are “Fake Listings.” Only 5% Close!

But the 1 liner explanation is this: A distressed seller facing foreclosure tries to get the bank eat the losses and allow a “short sale” thereby selling the home for 10-20% below market and the bank eats the $50k to $250k loss instead of the bank losing even more money in foreclosure.

The problem was that only 1 in 20 were closing. Read the post above to learn why, but it had to do with clueless listing agents (many still exist) and banks having 1 processor for 600 homes.

Quick Tip:
REOS/ Bank Owned MLS Listings are 7-12% below market
Short Sales MLS Listings are 12-20% below market.
Do you get why this is important? See Wheel Estate Cam Video

1 YEAR AGO
Everyone wanted a Short Sale. They seemed too good to be true… well they were. Then came horror stories of people waiting 4 months and then the bank saying “sorry we changed our mind” and leaving people homeless (they already sold their home!).

6-9 MONTHS AGO
Nobody wanted Short Sales. The pendulum swung too far in the other direction. “Hell no, I’m staying clear of Short Sales, they are fake!”

NOW?
Be Smart. Weed out & Pounce on the Good.

Well the time has come to putting our thinking caps back on. You have to learn how to spot a “bad” short sale and how to know if a short sale is “real.”

Bad short sales still have a 1 in 10 chance of closing (up from 1 in 20).
But a “Good” short sale can have a 80% chance of closing!!!

NUMBERS OF SHORT SALES CLOSING
In my post over a year ago only 3 short sales had closed in all of Arlington in a year out of many dozens of failures. In the last 4 months 3-4 have closed in my building alone (Clarendon 1021)!

Inventory levels
Short sale inventory can vary greatly by each area. Sometimes the “hotter” areas will be so infrequent that a Short Sale might not be an option (keep reading to learn about offers on Under contract Short sales!!! shhhh). Also if you have a good agent (insert plug here for me), for condos, consider asking management about upcoming delinquent condo units.

NEW TRENDS FOR SELLERS/ Listing Agents

1) Undisclosed Short Sales
SS got such a bad wrap that agents stopped putting “Short Sale” in the public remarks. Some even removed them from the Realtor-only remarks. How is that allowed? Something about privacy, and the rights of the seller. And who cares about the buyer anyhow, right?

If it has a crazy low price, like 30-50% off assessment … and it is NOT a bank owned property, it is likely a short sale. (only FranklyMLS.com lets you sort by tax
assessment as a ratio of list price, try it, it is the #1 best tool for bargain hunters, see video)

Sidenote: Undisclosed Bank Properties. This really blows my mind. More and more I am seeing REO and bank owned properties (after foreclosure) that do NOT say “bank” anywhere in the public remarks. Maybe people are getting scared of bank properties too? See video of me skiing a black diamond while talking about banks.

2) “Approved Short Sales”
These can be pretty good. This oftentimes is an experienced agent that has already done the 1-3 month processing and has an “ok” from a bank and a set price. You can sign up for alerts on FranklyMLS for the phrase Approved Short Sale Virginia these can be good, but they go FAST. Note that 50% are under contract.

3) 3rd Party Short Sale Negotiators for sellers

This is a brilliant idea. Non-Realtors that are hired to negotiate short sales for the listing agent. I spoke with one company today. Their team comes from former bank loss mitigators. So they know all the ins and outs. They closed 60 last month! They know exactly what each bank needs, to the “T”.  Sure they cost about 1%, but who cares? If they can double your chances for closing a place, and for 20% under market AND make sure the seller doesn’t get stuck with a note of deficiency judgment… well worth it.

OLD TRICKS/TRENDS BY Listing Agents
1) Way Underpriced/Fake Short Sales. Recently one of my buyers found a $2.5M home that was listed for $700,000. Real or fake?

2) Clueless Agents. I am a 3 year member of the NVAR education committee. We are trying our best to get more free education out there for Realtors to list these properties.

NEW TRICKS FOR BUYERS
1) Offer on “Under Contract” short sales.
This is interesting. Do not skip this, you will be quized.

There is a huge Realtor debate on what it mean to be “Under Contract” with a short sale. Even though I got an “A” in my Contracts class in law school last semester, I am not a lawyer, and I am not giving you legal advice.

MRIS (the local MLS provider) has rules that you must put a listing as “Under Contract” when the seller signs the offer from the buyer (and then most people ignore the listing, but not us! & readers of Blog.FranklyRealty.com (make sure you subscribe, do it now, I’ll wait) ).

However some listing agents would prefer to keep it as active so they can get more offers. Obviously this ticks off the buyers.

On my previous short sale post I covered advice directly from the legal department at VAR. It talks about signing it “contingent upon 3rd party approval” versus “Acceptance upon 3rd party approval.” A night and day difference. One is under contract, one is not.

But regardless, the seller would sign anything. They would sign an offer for $100. They don’t care. They are having the bank eat $100,000+.

So my point is, something might be “Under Contract” for a long time, but if the bank doesn’t sign it, it means nothing. So why not offer on homes that have already sat for 30 days and are about to be considered by the bank (takes the bank at least 30 days to hire an appraiser/BPO, review the paperwork.)

Example:
Sold Market Price Home A: $500,000 (recently sold unit)
Short Sale Home B: $400,000 which is “Under Contract”
Active Regular Home B: $490,000

Offer $410,000 or $420,000 (note it takes hours for us to come to a real price based on FranklyCRA, and tons of other data, but play along here) for the place a month after it goes under contract.

Technically it would be a “bank up offer” but the bank would see both offers (in some/many cases) and reject the initial offer (which is signed by the seller) and take the 2nd offer that is $10-20k higher thus saving you $70k vs the next “regular” listing.

I go more into this over on my Realtor to Realtor Active Rain post where short sellers debate the concept. Anybody Offering on “Under Contract” Short Sales?

2) Short Sale Negotiators FOR BUYERS!

Make sure you read above about how these new companies help listing agents. But I think they should help buyers. I plan to use them, I will let you know how it goes. The next offer I put in, I will require in the offer that WE pay* for this 3rd party company to take over the negotiations. Sure we’ll stick around if professionals are running the show. They can get the deal done in 50% less time, and twice the closure rate. When I say “We” I refer to adding the 1% to the seller’s closing costs. This step could really turn around how short sales are viewed.

3) FINDING GOOD SHORT SALES
a) Spot them using the Short Sale Scrubber (tm). Only on FranklyMLS.com, when you search, if you see a * next to the price, that means the words “Short Sale” (or 3rd party approval, and it removes the * when it says “Not a short…”)

b) Look for a HIGH # of Photos. While not conclusive, a listing with over 5 photos is 4 times MORE likely to go to closing vs a 1 photo listing. Lazy agent tends to lead to failed short sales (not always).

c) Look for Listing Agents with Prior closed short sales. Have your Buyer Agent run a FranklyCRA and see if they have closed a short sale before. IF they have, your chances skyrocket.

d) Top 10 questions to ask a Short Sale.
This was featured in the Washington Post. Ask these questions before getting serious. If the agent can’t answer them, walk. Today I got a “It is none of your buyer’s business if my seller client is still paying the mortgage.” Oh, yeah, my client waiting 6 months because the bank keeps cashing the checks and has no reason to eat $200,000? Yeah right. We have the right to know, or we walk.

e) Short Sale Alerts on FranklyMLS.com
You can set up alerts for phrases like Short Sale Arlington. Our site updates every 90 minutes. Make sure your Realtor is high tech and can do all the contracts digitally (like I always say, dont be silly and try and use the listing agent, subscribe to my blog and soon you will learn why). Consider even offering at or above list sight unseen (that would take another full post to explain pros and cons).

f) Wiki, Wiki, Wiki. 61,000 Additional photos. Found NOWHERE ELSE!
Don’t forget, FranklyMLS.com is the first and only site in the USA that encourages buyer agents to add photos (see video howto) to photoless Short Sales.
ATTN READERS: Why don’t you help out too? You, or your agent, should be contributing photos.
Look at Jeff Royce’s contributions to photoless short sales. Every other site has 1 photo for 14 of these 17
homes. Because of Jeff, we have 300+!

Every other MLS site= 14 homes 14 photos (1 each)
FranklyMLS.com WIKI= 14 homes 350 photos.

Hours saved and money on gas to see a 1 photo short sale= Priceless!
Thanks Jeff from OurFairfax.com for being the #1 Contributor on FranklyMLS.com!

Sidenote for Agents: Ask me about getting a Free Branded IDX. Yep, FranklyMLS.com with your name on each page and email alerts.

FUTURE BUYER TRICKS: (sign up for the new features blog for FranklyMLS.com)

1) What do you think of a feature that would put a GREEN * next to a Short Sales listing if it is being performed by an agent that has previously closed a short sale? I think that would be killer, anybody else? (please add comments)

2) Hyper targeted email alerts for homes in an area by “great short sale agents” that have closed 2+ short sales in a year. These people know what they are doing, and you can get a steal. Currently this is not automated, so email me directly to sign up for your area.

3) What do you think about a feature that lets you “favorite” a short sale listing, and if it goes off the market, but comes back as a REO, you get an email alert? Also working on alerts for closed price. Anybody want to get an alert the day your Favorited home sells with the price, including subsidy?

The End.

So, sorry for the long post. It was 3 months coming. I feel relieved. Now I can point people to this post instead of spending an hour on a 1/4th as in depth email.

Don’t forget to subscribe to this blog in the upper right corner of Blog.FranklyRealty.com and forward this to anybody considering buying short sales. Note every area of the country is DRASTICALLY different.

Written by Frank Borges LL0SA
Broker FranklyRealty.com
Owner FranklyMLS.com

Please report types.

Pendulum photo by Brandi666
Fork image by KevinDooley
Random Chair on Head by jawcey
Cat Pounce by Yogi
Back up truck by Wellohorld

However, today (actually earlier this month, but I never completed the post) I saw a post that I know took 4 hours to write, and is very informative. Also it gives me a chance to introduce Realtor Jeff Royce. He has one of the best blogs around for Fairfax Homes (that was for Google Juice), and after 11 years in the business he just came over to FranklyRealty.com from Re/Max. Welcome Jeff.He also got a Trulia “Best Answer” of the week award (out of hundreds of Realtors), so he knows his stuff.

Anyhow, back to his post, he talks about finding homes near 1 mile from the Metro.

On FranklyMLS.com we allow you to search the public Realtor remarks (one of the only sites that let you do this). Here is an example: Arlington Metro. However Jeff makes a point that data is only as good as the Realtor that puts it in.

He found that for around Pentagon City Metro, only 65% of homes within a mile of the metro, also put the word “Metro” in the remarks.

There is also another way a Realtor can enter in Metro data. They can click the “Within 1 Mile of Metro” when they are entering in their listing. However only 45% of agents do that (shame, shame). And yes, some will JUST check the box and not put it in remarks.

So now (due to Jeff’s suggestion) FranklyMLS.com now will search BOTH the public Realtor remarks AND the Realtor checkbox when you search for the word Metro. But it still isn’t perfect. Some agents leave off both. In that case only a map search can find homes within a mile. FranklyMLS.com doesn’t do that (the focus is to have a super fast data driven site), but maybe it will at some point.

ASK YOUR REALTOR FOR MULTI-MAP ALERTS

Jeff gives examples of the back end Realtor MLS access “Matrix” database that lets him create circles, multiple polygraphs etc. To the right are 10 areas in one search. Can you see the smile?

BUY POORLY MARKETED HOMES!
(vs well marketed homes, see Don’t Buy Our Listings)

1) Buy homes with no photos. See Photoless Listings, save $15,000 (just yesterday I was making fun of my friend Brian for a no-photo home that I sent him a link to. He said “F-that.” To which I sent him the above link.

2) Don’t be too specific when searching.
Many bank owned listings and short sales will forget to check boxes like “garage” so if you search only for homes with garages… you might miss the best stuff.

Here is a little video on the topic. The WheelEstateCam.com went on location again. (Reading via RSS/email? Click here)

I know I have said this a dozen times, but make sure to subscribe to future posts. I have a great one about Short Sales in Virginia. They are…

Also I created a new FranklyMLS.com new features blog so you can learn about each little tweak (like Minimum price, faster cell mode for full listings, Request Wiki Photos, Tag A Hood and LIVE Realtor Chat!).

Written By Frank Borges LL0SA
Broker FranklyRealty.com
Owner FranklyMLS.com

Then they recommended my blog, Youtube and FranklyMLS.com to 3 friends. They also liked what they read and saw. But each one also thought I was too busy.

So to dispel this, I made a video (I didn’t have time to write it out*). (click here if you don’t see video)

Not too busy

Written by Frank Borges LL0SA

Broker FranklyRealty.com

* That was a joke.