We've Discovered the Secret of "Short Sale Success!

We think we’ve unlocked the secret to actually achieving success and making money with short sales! I’ve worked hard all year on a variety of “Short Sales” with a variety of circumstances and a huge variety of lenders.

After 6 full months of diligently pursuing the listings, contacting the lenders, presenting the offers, thousands and thousands of pages of faxed and re-faxed contracts, and following through with the escrows: these are the final results … ( Drum Roll Please!!!)

7 Short Sale Listings.
11 Offers to Purchase.
8 Accepted Offers that were submitted to Lenders.
10 Different ‘Negotiators” or “Loss Mitigators” or what ever else they call themselves.
5 Frustrated Buyers who walked after the time for Lender approval had come and gone, usually weeks and weeks after the approval time had expired..
2 Contracts still pending that we are trying to obtain “Lender Approval” on and close.

And …

1 (count it … ONE) Closed Escrow!

So … after considerable reflection on the matter … We have come to the conclusion that the success stories surrounding “Short Sales”, are the agents who are teaching and selling the “How To Make Money with Short Sale” Classes.

Rising Interest Rates Affect Buyers More Than Declining Prices

Congratulations on being an astute Buyer … so far. Unless you are a cash Buyer, making one easy payment at the close of escrow, you might want to seriously consider buying real soon. We make this statement based on the fact that interest rates have been creeping upwards lately. They still aren’t too bad, but as they rise you inevitably lose buying power. What if they go to 8 or 9%? In our careers we have seen 18% with 9 points on a VA. It is a ticklish affair for the Feds these days – don’t squash the Housing Market and keep a lid on inflation. As the Market recovers interest rates could well bubble upwards.

Rates have recently gone up three quarters of a percent, from around 5.5% to 6.25%. Considering a $200,000 loan, the payment difference is $95.86 monthly. That equates to $15,569 less buying power if you keep your payment at what it would have been at the lower rate. Some of you might have to keep it there – it’s all you qualify for. Others might just want to do so from a budgeting standpoint. Either way, today you are buying less home, or paying more for the home you want, than you would have just a month or so ago.

Another way to look at it – your buying power has dropped 7.784% in the above illustration. Over the past year the market has certainly dropped more than that in our Valley, but not that much in the past month. If you wait, and interest rates continue to rise, you might find your “timing-watch” wait for naught. We are seeing some traction in pricing lately with the increase in buying activity. Prices aren’t rebounding yet, but the free fall is now more of a guided glide. What is uncertain is the future of interest rates. Interest rates are now the bigger issue and a real risk for Buyers.

Real estate is a long term investment. If you buy now and the value of your home drops another 5%, chances are very good that it will go higher during the course of your ownership. On the other hand, your fixed interest rate will go on for 30 years. Sure, you can refinance if rates go down, but at significant cost. There is no cost to you as the real estate value fluctuates, but there will be a cost if you have to pay to lower your higher interest rate.

Our Advice: We continue to believe that timing the market is like catching a falling knife. You might get the good end … or you might not. If you are looking for a home to live in and enjoy the benefits of home ownership this is a great time to buy. A good agent can help you get a good buy, and a good loan officer will help you get the best loan that is right for you. Historical trends show real estate to be a great investment. History also shows us how volatile interest rates can be. Take steps to secure your destiny - pick a course of action and don’t look back. More important than saving a buck is buying the right home and feeling good about it every day you live in it. Your agent can help you do that so you can quit worrying about what to do.

It isn’t all about money. When it comes to living in your own home there is a substantial emotional return on your investment. Only you know what that will mean to you, and you should act accordingly. Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com , 775-781-5472.

Vacant Lot Myths

There’s a utility pole on the corner of the lot I’m buying. I have power for my home … right?

Yes … maybe. Just because there is a power pole on your property doesn’t mean you have access to it, or that there aren’t significant extra costs to use it. Depending on how many homes are drawing from that pole/transformer and where you place your home on your lot, you could be faced with substantial additional costs. Check it out with the Power Company.

Since the pole is there, we have “all utilities” … right?

No. You should be looking for phone and cable television as well as to power when you evaluate a lot. Just because there is a utility pole doesn’t mean you have the other utilities. We’ve seen areas of Douglas County where power and phone lines are on opposite sides of the highway. Additionally, the phone lines are on short poles and you can’t put power lines on those poles. This can result in substantial increased expenses when you go to construct. Remember, too, more local areas aren’t served by natural gas than those that are.

The neighbors next to the ten acre parcel I’m looking at are on well and septic. I can drill a well and put in a septic … right?

Be really careful on this one! There are areas where homes are grandfathered in with well and septic, but in the intervening years water and/or sewer lines have been run nearby. If you are within the minimum distances from those lines you will be mandated to hook up to them. This situation is not always financially detrimental, but it can affect your intended use of your property.

My lot is in a flood plain so I just build up my house and I’m okay … right?

No, no, no! Things have changed over the years, and might change dramatically in the next few months - Douglas County is in the process of revising its Flood plain Construction ordinance. Some of the proposed changes may have a significant financial and time impact on your construction. Be careful on this one – do your homework!

I see lath at the corners on the lot I’m buying so I don’t need a survey … right?

No! Lath, a wooden slat, is used by surveyors to easily see the location of a corner, or traverse point, but it doesn’t physically mark the corner. Corners are marked with rebar very close to the ground. If the survey was done in the past 20 years, or so, it will have a yellow cap with the surveyor’s license number on it. Be very careful when identifying old corners. Is the yellow cap still in good shape? Does the corner look like it is intact and not tampered with? If you are getting a building permit you will need to have the corners marked for the County inspector. Be very careful in this area.

Our Advice – When buying land to build on, write your offer with a “Due Diligence” period that will give you time to study the property and get the answers you need so you have a total and clear understanding of what it is that you are buying. There is much to consider when buying a lot to build on. All is not what it may seem and you should know as much as possible about the actual status of the utilities, easements and deed restrictions that may affect the property, status of the property corners, drainage and flood plain matters, etc. Some lots are just plain unbuildable - economically or physically – know what you are buying

Don’t fret over buying vacant land – get good Engineering, Title, and Real Estate professionals on your team so you protect your investment and maintain your peace of mind during your acquisition and construction process. Don’t gamble with your most important investment.

Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com , 775-781-5472.

Carson Valley Loses A Real Estate Friend

The Carson Valley real estate industry recently lost a friend, and we thought it appropriate to share her story. Ernestine Pollitt, more commonly known as Ernie … of Bert and Ernie fame, recently succumbed to Lymphoma. Ernie has been featured in our friend’s advertising for almost 13 years in the Carson Valley. You’ve seen them, the one with the picture of an attentive cute miniature Schnauzer and … Bert.

Ernie was acquired as a family pet after a breeder search that encompassed Northern Nevada and Northern California. She immediately became Bert’s fishing buddy and “sign dog”. Many of us give our dogs adventures when we put up or maintain our signs. The Valley is long and wide, many of the properties are rural, and it is fun to have a companion. Early on Bert was taking pictures of a new listing after putting up the sign and didn’t notice Ernie sitting up pretty in front of the sign.

Back at the office another agent was looking at the pictures to see if she wanted to show the home when she commented how cute Ernie was in front of the picture. Recognizing how cute she really was spontaneously posing pretty, an ad campaign was born. A lot of people use dogs in their real estate ads now, but Ernie was the first Carson Valley real estate dog. Over the years several agents actually called Bert, even from Carson City, to see if he’d mind if they used a dog in their ad … such was the impact of the sweet being, Ernie.

Ernie enjoyed a great life as she fished the lakes of the region with Bert. Ernie fished Walker, Pyramid, Tahoe, Topaz and especially Caples Lake. Caples has an island Bert calls Ernie Island because of their tradition of putting ashore there during the day so Ernie could romp and do her “thing”. Ernie loved to stand up front of their bow-rider while Bert raced 40mph across the lake to the fishing hole, her ears flapping in the breeze.

Planned as his companion, Ernie was named for the obvious, the Sesame Street character that Bert’s children watched so many years ago. She had two litters and the single son from the second litter was kept as a companion for Ernie, Earl, after Bert’s “special” uncle. Earl is still in mourning, but they will be acquiring a companion for him in the near future. There will not be an Ernie II as she was one of a kind. She valiantly fought back after being mauled by a big dog during one of her last walks … 3 months after being diagnosed with Lymphoma. She spent 6 days in the hospital and came home for another month of life. She was tough as well as cute. Ernie’s ashes are buried at the family cabin at Tahoe.

Our Advice: Bert’s initial reaction on her demise was to discard the Bert and Ernie ad material, the signs, business cards, print media, etc. His wife and assistant have encouraged him not to, however, out of respect for Ernie and, allegedly, because she is so much cuter than Bert. We encourage Bert to keep her pretty mug in his advertising as part of keeping the Carson Valley beautiful. He won’t be able to go home to get her when customers ask to see her, as often happened, but he can share a beautiful story when asked.

Many agents use animals in their advertising to get separation in the market, to be noticed, but not all have the natural appeal of Bert and Ernie. Ernie will be missed, but not forgotten.

Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com , 775-781-5472.

Motivation, Emotion and Circumstance.

Real estate is really about people – their Motivation, Emotion, and Circumstances – their “MEC” Most real estate transactions are put together … or not … because of the above. The real property is what it is – it is the people that change. So how does this help you be confident in your purchase? Understanding this will enable you to examine your motivation, emotion and circumstances as well as that of the Sellers of homes you are interested in buying.

Your wants and needs in a home will impact every aspect of your MEC. If you have five children you won’t want a two bedroom condo. Want horses … you need the right lot size and zoning. Want a short commute … where do/will you work. Specific schools for your children … buy in that district. Great room or formal floor plan … buy accordingly. Two story, basement, workshop, etc. … put it on your list.

If you want to be near family or friends find the nearest neighborhood to them that meets your criteria and then shop in earnest. Don’t want to be near family … do the opposite! How long do you plan to hold the property … plan your exit strategy when you buy- make sure you are buying something that is generally appealing in the market. Make notes of your family needs, your recreation endeavors, and your budget. How much you can/want to spend. All of these should be considered when you decide what and where to buy.

As you go through your MEC preparation understand that Seller’s, too, have their own MEC. The marks in the doorway charting their children’s growth won’t be going with them. Nor will the sink that their babies were bathed in, or the stunning mountain view they enjoyed so much. They might have a family need to move, a job reason, or health ailment necessitating a change. They are selling for a reason – their motivation. If a Buyer and Seller are sufficiently motivated there will be a healthy transaction. Motivation isn’t always a sign of weakness … it is, however, the main factor(s) that will direct a person’s action or decision making. Understanding your motivation and that of the Seller will help you know if you are making the best buy you can get on a specific property.

Our Advice: When you are clear in your MEC you will be able to study the market for properties that meet your minimum criteria. Knowing what you want will help you establish what it means to you will give you the confidence with your buying decision that you aren’t making a mistake. Remember, your agent isn’t buying or selling anything – only you know what the true value to you is. Don’t act, or not act, because of your agent. Assemble the information your agent provides and evaluate it as it relates to your MEC. There will be a very logical course of action … act accordingly. It isn’t always about price – how good of a deal will you get if you compromise on the house you buy to get a “screaming deal”?

Beauty is in the eye of the beholder … and so it is with real estate. Buy for you and your wants and needs and you can buy with confidence. Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com , email us at carsonvalleyland@hotmail.com or phone us anytime at 775-781-5472 or toll free at 800-814-8799 #254.