Pasadena & South Pasadena Real Estate » Selling Your Home

Frequently Asked Short Sale Questions

Doug Willis — Sat, 31 Mar 2012 23:21:05 +0000

Short Sales, loan modifications and Notices of Default can be a confusing process to navigate and understand. That is why we have developed our list of the Top 10 Short Sale Questions.

A Short Sale does not have to be an overwhelming process. More documentation is required to obtain your lenders approval, and the waiting time can be a bit tedious, but a well crafted presentation package can be a tremendous advantage to a successful sale.

The key or fundamental question in deciding to pursue a Short Sale is “Can you provide your lender with evidence that you have suffered a hardship and can no longer make your house payment?” The fact that the market has declined since you purchased you home is not gong to get you much sympathy, since everyone is in the same boat. However if you have lost your job, incurred some unforeseen expenses such as a medical emergency, experienced divorce or a job transfer or have an adjustable mortgage resetting that is going to escalate your payment, then chances are you have a hardship. This explanation provided to the bank is known as a “hardship letter” and is generally required to initiate the process along with:

two recent mortgage statements
two months worth of checking and savings statements
two most recent paycheck stubs
two years of tax returns
monthly expense budget

Underwater on your Home

For more information refer to the Pasadena Short Sale Guide.

To address the issue raised earlier…..if you happen to be upside down on your home and you find that it is worth a couple thousand dollars less than you paid for it, I am not implying that you cannot submit your case for a Short Sale. A new term has been coined called a strategic default. People are walking away from their property when they see no benefit in continuing to make the payment. Why bother, when you can go down the street and rent the same house for much less money than your mortgage payment? We know that a foreclosure is much more costly to a bank than a Short Sale, so in this instance you still may receive no sympathy, but you might obtain a Short Sale approval.

Pasadena Deena, Skillful Negotiator & Market Savvy

Doug Willis — Fri, 23 Mar 2012 03:34:57 +0000

Pasadena Deena will help you buy or sell your next home in Pasadena, South Pasadena & Altadena!

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Recall and name recognition are two key components to the success of the real estate agent. Referrals which are critical in our industry are highly dependent upon your clients, your sphere of influence and even a casual acquaintance remembering your name.

Pasadena, South Pasadena, & Altadena

If you are in the banking business, wouldn’t it be great to have the name “Cash”? And how about your friend “Joe” that works at Starbucks. Don’t forget Dr. Molar, the dentist. And if real estate is your profession and you sell homes in Altadena, Pasadena & South Pasadena, what better name to have than Deena!

Deena Willis is a real estate broker with RE/MAX Property Concierge in South Pasadena. She makes her home in Pasadena and her latest home sale was just last week in Altadena.

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Not only does she have one of the best names in the business, she has an excellent ability to connect with her clients and find them that special home. Home sellers quickly appreciate her comprehension of how to market and sell their home on the internet. When 85% of home buyers begin their search online, shouldn’t your agent know how to find them? She does.

Make your next real estate transaction enjoyable and memorable, exciting and fun. Call Pasadena Deena today at 626-432-4615.

Tenant Occupied

Doug Willis — Wed, 17 Mar 2010 18:18:42 +0000

Selling a home that is tenant occupied can be a test of ones patience. The litmus test has to do with why the tenant is leaving. Or has the sellers financial situation put the tenant in a situation that they have been ask to leave?

Dirty dishes do not leave a good impression

I have been fortunate to work with some good tenant’s. However in most of these instances the tenants have provided the landlord with a notice they intend to leave. They may have decided to buy a home of their own or they may have found another unit to lease. In either case, when tenants leave under their own volition, they usually have no desire to become vindictive, nor do they want to impair the landlords ability to either relet or sell the property.

Most of the issues occur when the property owner decides it’s time to sell for financial gain or other financial considerations. If a tenant feels they have been treated unfairly, the selling process can become complicated.

The main issue has to do with the “showing” of the property. A hostile tenant may demand a 24 to 48 hour showing notice and have last weeks dirty dinner dishes in the sink. They may remain in the house during a viewing almost to the point of hovering and implying an intimidating presence to the prospective buyer.

The Tenant as Salesperson?

Some tenants will also take it upon themselves to become “Real Estate Agent of the Day” and provide the buyer and their agent with “Full Disclosure” regarding the condition of the house. Which by the way is beyond their scope of responsibility. Also, when a tenant makes a statement about the condition of the property, is it opinion or has it been investigated by a licensed professional who performed an investigation and rendered an analysis?

Suggestions for the Landlord

It has not been uncommon for rental or income properties to be sold “subject to inspection”. This means that you as a buyer must submit your offer on the property sight unseen, at least as far as the interior is concerned. In a slower market this is a great way to allow your property languish on the market. Prospective buyers want to see the condition of the property. They need to see what they are buying.

If you find yourself in the position of needing or wanting to sell your tenant occupied property, my recommendation would be to alert the tenant(s) to your intentions. I see many listings that state “no sign on property, tenants are unaware of the sale”. My opinion is people deal and process facts much better if they know the situation up front. This is the same with disclosing the property’s condition, its better to disclose up front all of the material facts. I believe most buyers can accept it, maybe negotiate the repair and move forward. If they find out on their own, red flags go up and they immediately begin to wonder what else they will they find and think you took advantage of them.

Get an agreement with the tenants on when the property can be viewed and the condition it will be in. Financial incentives also work well. The little bit you are likely to give up will pay long term benefits.

Why Selling Your Home is Like a Job Interview

Doug Willis — Fri, 09 Nov 2007 04:30:08 +0000

To compete effectively in today’s market requires research, knowledge, preparation and commitment. Am I talking about conducting an effective job search or selling your home?

If you said both, then you are corrrrrect! What experience can you take from a job interview or any interview for that matter and apply to getting your house sold?

Preparation – the initial stages of a job search include doing some research on the company, and finding out as much as you can about the position. Selling your home includes meeting with real estate agents who will educate you on the market conditions and provide you with a cma and suggest a selling price. Most people who consider selling their home will also visit open houses in the area to compare the amenities of their home with other’s for sale.
The interview -many job applicants will purchase a new suit and shine the shoe’s. Why? Because you have one opportunity to make a good first impression. The interviewer will call and tell you what time your interview will be. In addition, they are more than likely interviewing several potential candidates for the position. Selling the home is the same and home buyer’s are no different. They may look at ten houses in the same day. Make your house look as presentable as possible, add some potted plants for color and consider painting for freshness. Also, make the home available when a buyer wants to see it. Nothing turns people off more than a seller who is inflexible with showing the home.
Present your qualifications – your opportunity to shine. Why do you feel your price and your value are worth more than the other applicant’s or the other houses on the market? Does your home offer a greater value? Have the systems been updated or are they in need of repair? Do you have a large lot or is the backyard small and close to the highway.
The offer – your worth or market value as it relates to employment or property will be based upon how you handle the offer. Accept to little and live with less or ask to much and consider losing it. Personally, I do not think you should accept the first offer, as it leads to buyer’s remorse. A buyer will always think they paid too much and could have offered less. Accepting a good solid offer is based upon how well you performed and have met the three previous criteria. Negotiate from strength, not from weakness.

Pasadena Real Estate: 5 Things To Consider When Selling Your House

Doug Willis — Mon, 20 Aug 2007 21:51:34 +0000

Gone are the days when you could put your house on the market and have several offers within the first two weeks. Also gone are the days of easy money, there must have been a correlation there. We can’t fret over the past, so what can you do to make sure your house is properly listed for sale?

1. A Thorough Analysis – chances are you do not have access to a bundle of market data other than what you may read in the newspaper. Your real estate agent does. A proper market review should look at the homes that are on the market in your neighborhood, and more importantly in your price range. There is no need to compare your $600,000 house with the one around the corner for $800,000. In this market homes in certain price ranges are selling better than others. What is the current inventory for homes competitively priced with yours and how many sold last month? This will give you an idea of how long it may take to sell your home and may affect your pricing decision.

2. Value Offered – in sales you’re taught to sell the “sizzle”, not the steak. What kind of “sizzle” does your house have? Here you look for things that create value, such as larger than normal lot size, updated kitchen and/or baths, central ac, fireplace, refinished hardwood floors, does the home have character, newer roof, updated plumbing and electrical. People will pay more for homes with greater value or amenities.

3. Property Condition – sometimes owners get used to living in their houses and begin to overlook and accept all of those little irritations that prospective Buyers may find annoying. First and foremost, make sure your home is clean and organized. I can’t stress this enough. A cluttered disorganized house makes people wonder what kind of neglect this house has endured for the past several years. It does not take a lot of effort to clean and maybe paint the front entry, mow the grass and place a few potted plants around the yard. Little things can make a huge difference.

4. Price it Properly – remember in the last article Aces High I discussed interviewing three real estate agents and being on the lookout for the one who quotes you the highest listing price. I have seen Sellers refuse offers that were below their asking price, only to have their house stay on the market for an extra 4-5 months. Now they are faced with a couple of price reductions and are chasing the market down. If they had only accepted the original offer, the house would be sold at a higher price than what it is still listed for today. Price it where properties are selling, not where the houses are listed for sale.

5. Develop a Strategy – accept the fact that if your house has been on the market for 45 – 60 days and you have not had a prospective Buyer visit your house in the last two weeks, you probably need to review where you are in the market. A price reduction is probably in order. Nobody anticipated the fall out from the sub-prime lending fiasco would be so severe. Sellers who made adjustments to market conditions have probably sold their house, while others continue to sit.

By utilizing these five recommendations in your efforts to sell your house, you should enjoy more success and reduce the mistakes others have made in the process.

The Listing Presentation – Aces High?

Doug Willis — Sat, 18 Aug 2007 05:08:26 +0000

The time has come to list your house “For Sale”. You have completed your punch list of things to do to prepare the house for sale, including a fresh coat of paint, some new landscape and fixing that annoying leaky faucet. Here is where we begin to hit critical mass. Do you look at your home from the eyes of a potential seller or a proud homeowner?

How you answer could cost you thousands of dollars.

I will go ahead and answer the question, you are the proud homeowner! You have worked hard to maintain your property and undoubtedly yours is much nicer than the one down the street that is for sale. How do I know this? It’s repeated quite often.

You consider yourself to be a savvy home seller. You have read various articles on the procedure, attended a few open houses and are now ready to hear why you should hire the neighborhood expert to sell your home. The newspaper articles recommend you speak to three real estate agents. You have an idea of what you think your house is worth and are hopeful that one of the prospective agents will confirm your belief.

What do most people look for when they speak with an agent?

They look for the one that will quote them the highest market price and convince them if they list with them, it’s a done deal.

What should you look for during a listing presentation?

1. Experience – How many homes has your agent sold? Can they explain the listing agreement to you, or explain the intricacies of the purchase agreement? Or do they rely on their Broker for all of their advice?

2. Don’t be romanced by the big name company – the agreement to sell your house is going to be dependent upon your agent’s own ability and motivation. Your agent will spend his or her own money to market the house, the company they work for will not spend a dime.

3. Justify – make the agent justify to you how they came up with the recommended price for your house. If the price is higher than most of the comps, why is your house worth this price?

4. How long will it take to sell – this can be a subjective answer, however there is data available to provide you with an answer. By looking at days on market or absorption rates, you can get an idea of what to expect.

Don’t choose the highest price by default.

I have seen home sellers sign a listing agreement for up to six months at an inflated price, only to have the agent recommend a price reduction four weeks into the agreement. It boils down to “tell em what they want to hear”. Anything to get your business.

In the next article we will look at different strategies available to you to sell your house.

Packing The Boxes (part3)

Doug Willis — Tue, 31 Jul 2007 05:18:15 +0000

In the first two parts of this story we looked at the contingencies a Buyer has once you have accepted an offer and your house enters escrow. As a Seller, what can you do to insure this contingency period goes smoothly, while eliminating any of the potential concerns a Buyer may have about completing the purchase?

The first thing you must do is detach yourself emotionally from your house. Easier said than done, right? Imagine you are in the market to purchase a home. What would somebody remenber after visiting your house? The National Association of Realtors did a survey on people who purchased a house and found that a potential Home Buyer will look at up to eight homes in a search that can last up to eleven weeks, before making an offer. Will yours stand out or easily be forgotten?

If there are little annoyances around the house that bother you, they should be corrected because they surely will irritate someone else. Some Home Sellers are opting to have their own home inspection, before the house hits the market. That way you can be alerted to any potential problems that might arise. The other side of this coin is that if an inspector were to find a problem or situation that needs to be corrected or demands additional investigation it should be disclosed, if not corrected, to a potential Buyer. It may then become a material fact, which you as a Seller do have an obligation to disclose. If it was corrected, I believe you should disclose the issue and what you did to rectify it.

Okay, now we have looked at our very own house through the eyes of a potential Buyer and we have corrected the items that needed repair. What else can we do?

I believe it’s best to plan for and address potential issues before they surface. As a Seller, you can write language into the counter offer that reduces the time a Buyer has for their Inspection Contingency from seventeen days to either seven or ten days. Another thought is to have language that completes the Home Inspection within five days, so that if the Buyer’s change their mind, you can get your home back on the market much more quickly.

Selling a home is like anything else, the better prepared you are, the better your chances for success. A painter doesn’t just go out and open a can of paint, and start painting. They sand the surface, patch holes, clean the excess debris, put a coat of primer on and then paint.

The goal is to get top dollar for your house, so you must take the appropriate steps to insure its success. Otherwise you will find that you have only one negotiating tool in your belt and that is the “Sales Price”. In that case you may be disappointed, simple because the price paid is reflective of the condition of the property.

Packing The Boxes (part2)

Doug Willis — Fri, 27 Jul 2007 04:09:20 +0000

Now we have progressed to the end of the seventeen day contingency period. What to do, what to do?

First a little review. The Residential Purchase Agreement developed by the California Association of Realtors states right there in black and white that the house is being sold in its PRESENT physical condition, meaning you (Seller) are under no obligation to make any repairs to the property. You do have a responsibility to maintain the property in the present condition as it was on the date of acceptance.

The Buyers have presented you with a list of items that need correcting. Usually these come from a recap page in which the Home Inspector summarizes all of the issues they have with the house. Understand that Home Inspectors are paid to find problems and no matter how insignificant the problem may seem, it will probably make the list. Also many homes here in Pasadena are eighty years old or more. Many have deferred maintenance and will surely require repairs. Condominiums and townhomes usually have fewer problems because they are newer construction and there is no access under the structure or in the attic. Inspectors cannot inspect what they cannot see.

When the Buyer presents a “Request for Repair”, you have a few options. Option #1 is to fix nothing. Option #2 is to fix everything. Option #3 is to fix some of the items and Option #4 is to provide a credit issued at the close of escrow in lieu of repairs.

Depending upon the request, most Buyers and Sellers usually agree to meet in the middle and fix some of the negotiated items. Usually these are minor issues and can sometimes be handled much easier with an offsetting credit. Why a credit instead of the actual repair? People’s perception of how an item may be fixed or corrected can easily be disputed. If actual repairs are to be made they should be performed by a licensed contractor and should provide a receipt and a warranty. Credits on the other hand cannot be disputed.

If both parties fail to reach an agreement, the Buyer can usually cancel the purchase contract and typically the Seller has to refund the good faith deposit. If this happens, you reset the clock and start over, so it’s always in everyone’s best interest to try and reach an agreement.

In my opinion the purpose of the repair list is not to make the house new again, but to address faulty or safety related issues. Most request’s are reasonable, but I have seen the Buyer ask the Seller to install all new plumbing at a cost of $3500. Much of what happens will be dependent upon the specific situation. How long has the house been listed for sale? What price did the parties agree to?

Of all the Buyer contingencies we discussed in part one, the Inspection Contingency can be the most difficult to overcome. The reason is money. A potential purchaser may weigh all the costs of buying the house along with the changes they would like to make and decide that they are spending more than planned.

In part 3, we will look at ways Sellers can insure their home inspections precede more smoothly. We will also examine opportunities to possibly reduce the number of days a Buyer has for an inspection.

I Wouldn’t Pack Those Boxes Just Yet

Doug Willis — Wed, 25 Jul 2007 23:01:43 +0000

Your house has been for sale now going on 60 days along with many other houses here in Pasadena and you just accepted an offer. Congratulations, time to start packing all those personal items, right?

You might wait a few days before making that trip to the box store and here’s why. When a Seller places a home on the market “For Sale”, they are 100% committed to sell it (most of the time, I have seen some exceptions). When a Buyer has a purchase contract accepted they are usually 50% committed to buy it. Notice a disparity here?

Our purchase agreement drafted by the California Association of Realtors provides for a seventeen day contingency period. Contingencies are provided to the Buyer for a number of issues including obtaining a loan, appraisal of the property, investigation of the condition along with insurability, other reports and disclosures made by the Seller or ordered from a third party, the preliminary Title Report, common interest or HOA documents and maybe even the sale of the Buyers property. This is the time in which a Buyer has to perform their due diligence. Home Buyers should be using this time effectively by obtaining as much information as they can about the property and its condition. If they plan to make repairs or changes, now is also a good time to be obtaining quotes from contractors.

When I mention this to FSBO’s they look at me and say “Huh”? A purchase agreement is a complex document involving hundreds of thousands of dollars, and unless you do it everyday you just don’t know what you don’t know.

During this seventeen day period, most Buyers will pay for a Professional Home Inspection, we strongly recommend it and most agents I know highly encourage it. These usually cost in the neighborhood of $250 to $500 depending on the size of the property and the scope of the inspection. This is analogous to going to your family doctor for a check up. If they feel anything warrants further investigation, they will refer you to a specialist. A Home Inspector will refer you to a plumber, electrician, soils engineer, fireplace specialist, etc., if they feel some area of the house warrants further investigation.

It’s been a short or long seventeen days depending on your outlook and now its time for the Buyers to make their decision. Do they go forward with the purchase or have they discovered something in their inspection process that may make them change their mind? After all, that word contingency means 50/50, maybe they will, maybe they won’t, who knows?

In the next installment of this story, we will take a look at how this ongoing saga can come to a conclusion. We will also look at ways a Seller can reduce this contingency period and their resulting anxiety.