Today’s rant. I’ve been working with buyers who are in that “affordable” price range of under $200K, and we’ve been looking at those ever-popular bank-owned/short-sale “deals.” There are lots out there these days! But beware, DO NOT just take the MLS status of “Active” as the truth. Make sure your Realtor calls the listing agent directly before setting showings. I have shown quite a few properties recently that are shown as “Active” in MLS, as well as with the showing desks, but come to find out (after my buyer fell in love with the place) that the bank had 20 offers and had already verbally accepted one weeks ago. But since they do not having anything in writing, they can’t put it as “Under Contract” in MLS, or even add it into the comments field. Unbelievable! So, basically, buyer’s agents need to do unnecessary double work, and/or waste time, and resources and contribute to global warming by driving to Aurora to show properties that are already under contract.

We’re lucky to have Scott Mulvany of Cherry Creek Mortgage with us again as a LIVE blog contributor… Scott’s great with first-time and seasoned buyers alike, and he is always available to answer a question, even if you aren’t his client!

Seriously. 

People always ask me why bank owned listings are on the market for so long.  I’m happy to tell them that it is not for lack of able, willing, and qualified buyers - it’s because the BANK takes FOREVER to process the offers!

My latest and greatest example:   I have been working with a young couple to find their first home.  They are flexible, well-qualified, and looking for a starter home within their means.  They have written SEVEN offers on SEVEN bank-owned properties and have patiently waited for a response from Mr. Bank on each one, only to get out-bid by multiple offers during the WEEKS that it takes for Mr. Bank to review their offers.

Seriously. 

Finally, they wrote their best and highest offer on a house that had been on the market for one day.  They love this house.  The listing agent called and countered the offer, which my buyers happily accepted.  I told them they were under contract.  They celebrated, showed the house to their families, and started packing up their stuff.

The next day, the listing agent called me back and said that the bank now had multiple offers and wanted new, higher offers from everyone.  WHAT?!

Mr. Bank, you sort of suck.

I recently listed a Short Sale for a woman who was no longer physically able to live in her cute little house.  I received several GREAT offers in the first few weeks, but couldn’t get past the call center people at Countrywide to anyone who could actually review and respond to the offers.  The buyers got bored, or frustrated, or mad, and walked away by the time their offers were actually looked at.  In the meantime, the seller was forced to miss several payments on the house while she lived in a rental, because that is the only way a short sale will even be considered by a lender, no doubt damaging her credit and future purchasing power. 

What is wrong with this picture?  It really does sort of suck.

The bright side?  If you have time, and patience, you will get a great deal on a bank-owned property.  Just write the offers and hang in there, eventually Mr. Bank will actually look at them. 

Are prices going to continue to drop, or have we finally hit bottom?

So I got out my crystal ball, shook it a few times, and said…”this is it.  the bottom is here.  buy now.”

If I really did have a crystal ball, I’d be in Vegas, baby.  But I really do think that prices have to be near their lowest.  I have seen banks slash prices on their complete inventories - by up to 20 or 30 percent across the board.  Banks are also putting new listings up at unbelievably low prices, creating multiple offer situations the first week they are on the market - which, I think, is better than having homes sit empty on the market for months on end before finally dropping the price.

It does create frustration for those buyers looking for the deal of the century - they are learning that they need to write their best offer on those homes rather than trying to low-ball the bank, because someone is going to come in with a better offer on those houses that are listed at 70% of market value! 

Here is a great article from this morning’s USA Today that breaks down the price drops (and rises in some cases) city by city.  Denver is down, of course, but not by nearly as much as some other cities!!

http://www.usatoday.com/money/economy/housing/2008-04-16-bargain-hunting-real-estate_N.htm

I often hear from clients who say they need more space. Often during these conversations my mind wonders to Nick Park’s “Creature Comforts” from way back when….1998…even way before kids. Visualize those cute little claymation critters in their cages…complaining (with British accents) about their crowded little zoo digs.

So, you have a few kids, you have lots of stuff, your in-laws visit all too often, and you want those in-laws to stay on a different floor than you. Basically, you, the former care-free ski bum, have somehow morphed into a family.

Depending on your budget, there are lots of great deals out there all over Denver. Yes, I am talking about brand new large and lovely homes selling for a lot less than just one year ago. Brand news homes in Washington Park, Park Hill, Stapleton, Lowry, Montclair, Mayfair and University Park. Name your neighborhood. They are out there and lots of developers are trying hard to sell them. Now is the time to get lots of space for a good price.

For example, there are over 50 active home listings for houses built in 2007 or later on the market in zip code 80220 (Montclair, Mayfair and Hilltop area), and well over 100 homes on the market built in 2007 or later in Washington Park, Bonnie Brae, University Park area. Yes, you got it…a surplus of new construction.

I recently helped some clients purchase Brand New construction in Lowry. Choose your very own finishes in Lowry and Stapleton right now for the same price as older homes being resold.

Get that space you need and WANT… and lots of it….NOW for a great, shall I even say, bargain price! Even space for all your favorite Wallace and Gomit dvds!

Many inner-city Denver neighborhoods are currently embroiled in a battle to curb graffiti and fortunately the city has come up with a FREE solution to this problem. By granting authorization to the city via a waiver located at http://www.denvergov.org/Default.aspx?alias=www.denvergov.org/DenverPartnersAgainstGraffiti, home and business owners can have the city come out and clean up their grafitti free of charge. By signing the waiver anyone can call to report the graffiti on the property and the city will promptly come out (usually within 48 to 72 hours) and clean it up for you. You might have an older or disabled neighbor who can’t maintain their property for themselves; simply print out the waiver, have them sign it, send it back and let the city do the rest. I have used this service for years and recommend it to anyone who is facing this problem.

Why do they call it a short sale if it takes so long?!

It’s true - the short sale process can get you the deal of a lifetime, but you have to have the time and patience to wait out the process. 

In a traditional home sale, the buyer makes an offer to the seller.  The seller might counter-offer, the buyer and seller might go back and forth for a couple of days negotiating the terms and arguing over the basketball hoop, but the entire process really only involves the buyer and the seller, along with their respective agents.

A short sale is a whole different game.  There is no face to the negotiation - only a frustrated buyer and a person, or team of persons, sitting in an office somewhere, crunching numbers and apparently taking very long lunch breaks. 

The buyer is hoping to move in, make the house their home, and live happily ever after.  The seller is hoping to get out of a mortgage they can’t handle, for whatever reason.  The lender has to figure out how much of the orignal loan(s) to swallow.  This situation is even further complicated when there are second and third mortgages with different lenders, each of whom wants their piece of the pie.

It’s a mess, but I do have to admit that I have seen short sales get approved with increasing speed lately.  Some lenders have figured out ways to expedite the short sale approval process, and some are letting properties go for unbelievable prices, and even offering concessions including down payment and closing cost assistance!  Every situation is different, and when you make an offer you will have no idea how long you will have to wait for an answer to your offer, be it a counter, an approval, or even a rejection.

I had one listing agent tell me the other day that I should avoid all short sales, including her listing, which I had called to submit an offer on!  This doesn’t make sense, even in today’s mortgage meltdown aftermath!

So, go ahead, shop the short sales - there is certainly no shortage of them in the Denver Metro area - but be prepared for a lengthy, sometimes frustrating process.  It’s the process that could lead to your next home.