Archive for January, 2011

WHAT YOU NEED TO KNOW BEFORE CHANGING REALTORS

Buying a home is not easy as it might seem, especially if you are working with multiple Realtors to find you the best deal in town.
In the end, if you close on a property, only one Realtor will get paid. What about the other Realtors who took you around and showed you one, two, three or more houses? They don’t get paid and they work for FREE. Nobody wants to work for free. Successful Realtors are able to detect red flags regarding a prospective transaction and may choose to decline a buyer’s request to help them with a property, afraid that their time is not being spent constructively.
Recently, a cash buyer called me after seeing my website and asked if I could find him a home. I asked him if he had another Realtor that he is working with, and he said yes. But, he said, he was not satisfied with his Realtor, who had not found him a home after over one year of looking. I further learned that this buyer had a pending offer on a home with this same Realtor recently but does not know where he stands on the offer.
Though it looked like a good and solid buyer looking at a decent price range, the transition from the previous Realtor to me is not that easy. In order for me to get the commission, Real Estate Rules requires that the buyer has to confirm the following;
1. There is no buyer-broker agreement signed by the client with a previous Realtor.
2. The buyer is not under contract on another home.
3. None of the homes I show the client may have been shown by the client’s previous Realtor.
My broker, through me, cannot interfere with any existing contracts and I am not guaranteed a commission on a home that was previously shown by another Realtor due to something called “procuring cause.”The legal definition of procuring cause would be “the cause that results in the attainment of a stated goal.” In real estate, it would take on the meaning of the real estate agent or broker who, by their actions in producing a buyer, brought about the sale of a property.
In simpler terms, procuring cause determines which Realtor rightfully deserves the commission. Sometimes, it could be the Realtor who showed the home first to the buyer that led the buyer to like the house and ultimately close on the home. If another Realtor was awarded the commission, the first Realtor has a few months to go to arbitration and claim the commission from the second Realtor. Sometimes, the first Realtor could go after the buyer for the commission.
Many real estate cases brought to arbitration are due to procuring cause. If you are not satisfied with your Realtor, give that person a courtesy call to inform and offer him or her an opportunity to resolve any issues you have with his or her service. If you still do not come up with an agreement, talk to the Realtor’s broker and ask for help.
In summary, you only need one Realtor who will be committed to finding you a home. To find the right Realtor for you, check on the Realtor’s website, ask references and check testimonials. You could even ask another Realtor for a recommendation for Realtors and the referring Realtor could get a referral fee at closing. Referring Realtors are likely to refer you to a good agent that can close on a home for you.

January 24, 2011 at 12:46 pm 1 comment

HAFA is a Joke

by Maria Hass
The Home Affordable Foreclosure Alternative (HAFA) program launched by the federal government to expedite short sales is doing just the opposite – it prolongs the short sale.
I spoke to a HAFA counseling representative at Bank of America (BofA) recently, and he said it takes two to four weeks to find out if a the homeowner is approved for HAFA. During this time, if an offer comes in on the house, the offer sits until a decision is made on the homeowner’s HAFA qualification.
If approved, an appraisal is ordered prior to an offer. The appraisal value becomes the “pre-approved” price that the bank will take for the house. Is that good or bad? It depends on the market and the value. If the value is high, it will be difficult to find a buyer that will pay over prevailing market prices. In a declining market, the offer may not reflect the appraised value taken months earlier, resulting in an offer that will be rejected – or no offer at all.
The incentive to the seller is a $3,000 relocation check upon closing. But only a handful qualify for the program and a majority of these HAFA short sales do not close because of the terms and the long process.
The HAFA program, along with the other government housing programs like the Home Affordable Refinance Program (HARP) and Home Affordable Modification Program (HAMP) have been failures overall. It is difficult for people to qualify for the programs and lenders are not required to participate.
What else will the government come up with? I hope to see the day when Uncle Sam can create a program that will really help the people – and quickly.

January 16, 2011 at 2:33 pm Leave a comment

What You Need To Know Before Buying a Lender-Owned Home

by: Maria Hass

When purchasing a lender-owned home, it is common practice for the seller — which is the bank — to determine the title company that will process the transaction.

These lenders and banks base their decision on who gives them the best deal in regard to title costs. But the banks do not consider the title costs to the buyer. In some cases, lenders may choose a title company in California that charges anywhere from $1,000 to $3,000 more in total title costs to the buyer.

Unlike in Arizona, California title fees and escrow fees are two separate charges resulting in a double charge.

I was surprised to find out in one of my transactions that my buyer was charged close to $7,000 in closing costs rather than the expected $4,500. As I looked deeper into the HUD statement detailing the items included in the closing costs, it was apparent that the title company based out of California charged $1,000 more in title costs compared to Arizona title companies. Fortunately, the seller paid $4,000 of the buyer’s closing cost. So, the buyer did not assume the entire cost.

If you are looking to buy a lender-owned property, find out the charges of the title company selected by the seller prior to signing the contract. That way, you will have an idea of your expenses and there will be no surprises. You could also negotiate if the seller would agree for the buyer to choose the title company. It is unlikely, but there is no harm in trying. After all, buyers used to decide the title company until the age of REO properties came about.

January 7, 2011 at 10:38 am Leave a comment


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