Hell Yeah!... Sally's Foreclosure Song... YEOWWW!

Times are tough... people are losing their jobs, their credit scores and their homes to foreclosure. But this guy gets even. (This is not a typical Wednesday office meeting for Lyon Real Estate, Fair Oaks office, but we do have fun! YEOWWWWWWW!!!!) (And thanks Montgomery Gentry, for not suing me for butchering the great tune of your song, with my cheap rendition!)

So seriously... this was for a talent show, which was a fundraiser for the Salvation Army. Lyon Fair Oaks has been the top money contributer to the Sacramento Association of Realtor (SAR) CanTree, raising over $160K for the needy at Christmas time. This talent show, hosted by the Hostess Honeys (Marg Graf, Patti Nelson, Lyn Gras, Kathy Chigbrow and Mary London, all of Lyon Real Estate), raised over $2,000 in one night of fun, frolick.... and embarassment for some.

This is the song I wrote fpr the talent show, but this version turned out a little better than my live version... so here you have it. File this under: Work Hard, Play Hard.... or Life is Either a Daring Adventure or it's Nothing.... Hell Yeah!

Get Out of the Rabbit Hole, Before it Becomes a Sinkhole!

It was Valentines morning. I had just read two articles in the Sacramento Bee. One about a woman, employed a few months ago, who was just "evicted" from her car for failure to pay registration fees - it had become her only home after she couldn't pay for her rental. She's now homeless.


The second, about a family who moved to Boise after a job loss, hoping to scrape together the money to buy an old RV or trailer to live in, as they couldn't make ends meet. They were hoping to find an affordable trailor park.


I got depressed.... On Valentines morning, as my sweetie was frying up the spuds for a wonderful breakfast.

As my mind went down the rabbit hole of doom and gloom and "the end is near" thoughts, I fa
st forwarded to our losing our house when the entire economy collapses, that I never have another buyer again because they will all be living in Boise in a Happy Trails RV Camp. Life is over... the subprime snafu..... Blah, blah, blahhhhhhhhhhhhhhh...... .Oh My God, STOP IT!!!!!!!!!!!!!!!!!!...........


I suddenly swerved to miss this mental pothole, which was beginning to look like a sinkhole.
Then I remembered.... I've got.....


Buyer "A" is biting at the bit to find a home for him and his sweetie - to get out of their cramped apartment. He has saved up over $30K to be ready for this... living at home with Mom and Dad.


Buyer "B" has a giant down payment ready, and is proposing to his sweetie today, then prepared to offer on one of 4 perfect homes we've found, once his soon-to-be-betrothed picks her favorite. His company has a huge pool of money available for employees to get home loans from.... They're pretty strong.


Buyer "C" can't wait to find his perfect home, with room for his 2 RV's, room for his live-in daughter and two kids, and a master downstairs - They are pre-approved and SOOO ready to go. We just need to find the home.


Seller "A" is relocating to So Cal in a few months, and counting on me to sell her home.
Seller "B" has moved to Arizona, and waiting for me to sell their home after the rehab is finished (It almost is)


GET TO WORK, YOU BOZO........


OK.... I'm back to happy land. I've quit licking my wounds about how miserable this economy is. It is what it is. Life goes on. This too shall pass. I can focus on the desperate situations out there (and there's a lot of them), or on the job to be done to help my clients. For the 10% (or whatever) of homes facing foreclosure, 90% are not. (I don't have the patience right now to look up the accurate stats, so just get the point!) For the huge number of homes upside down... the rest are not. Of the 70% of Americans thinking about the interest rate on their home loans, 30% don't even have loans! For every seller losing their home in foreclosure, there's a buyer getting a great deal on a first time purchase or an investment. It's all dependent on which side you focus on.

Every day we choose whether to be productive or whether to get sucked into negativity. Every minute we choose to go down the gloomy rabbit hole of "It's so awful", or HOP up into the sunshine of the positive.

I do peak into that gloomy rabbit hole periodically, but only enough to know I don't want to set up house there. I have buyers to help, sellers to help, homes to go find, statistics to analyse, classes to attend, systems to perfect. Hell, I've even got a song to finish writing for a talent show.

Life IS good... and sometime it's not..... but mostly it IS!

How Do You Buy a Short Sale? First... What is it?

Buying a short sale is very different than buying a bank foreclosure or from a regular seller. So first... what is it?

A short sale is when the owner is "upside down" or owes more than the home is worth. In order to sell, he would need to bring cash to escrow to sell, or would need the banks approval that the bank will accept less than the amount they are owed. In order to accept less (accept a short sale) the bank must convince themselves that the home is actually worth less than they are owed, and that there is no other way they will get the lost money out of the owner (like from money they have in savings, or an IRA, or another home they own).

The process goes like this. First, the real estate agent puts the home on the market. The list price has no relation to what is owed, and is probably listed somewhat low for the market, in order to get an offer. The list price is their "bait". Once they receive an offer, they send it in to the bank, along with an application from the seller. The application contains the reason why the seller feels the bank should let them off the hook. Their tax returns, bank statements, and a letter explaining what their hardship is are all included. The hardship must be a medical problem, divorce, forced relocation, job loss, etc. It can't just be "I'm upside down and don't want to keep paying".

Now here's the kicker... the bank takes as long as they want to decide what they are going to do. It's usually a minumum of 60 days. But it can be 4 months, like my last one!

But let's say the bank comes back in a record 30 days and says they will agree to let the seller off the hook... they agree to a short sale. At this point they come back with the price they need to sell for in order for them to agree to the short sale. It's rarely the same as the list price. I'm in contract on one now that was listed for $161K, the bank came back at $182K. The other one I'm in escrow on was listed for $214,500, and the bank came back at $240K. The bank deteremines the price they will accept (if they accept the seller for a short sale) after they have done an appraisal, regardless of what the list price was.

OK, moving on... so let's say the bank has told the listing agent they will do the short sale, but for THEIR price, which they give the listing agent. (It's actually more complicated, because they actually give the agent a "net" number, which the agent has to compute into a sales price, considering all the liens and other charges.) The agent goes to the first person who submitted the offer to see if the bank's offer is acceptable. (That's because the first acceptable offer is in contract with the seller.) Many times, it has taken so long the first buyer has already found another home and moved on. Or, if the price comes back higher, the first buyer may not qualify at the new price. Or don't want to. So, if the first buyer passes on the bank's offer, the listing agent then calls the other agents who have made offers to see who else is interested. At that point they can choose the offer that will net the bank the amount they need, and the one that seems to offer the most likelihood of being able to close.

THAT's the person who will end up buying the house.

At the point the new person says YES, the inspection time periods begin, and that's when you really have a good look at the home from an inspector's viewpoint... but we'll save that for another discussion!

Bottom line -
* It may take months to get an answer.
* There's no guarantee what the price will be , regardless what the list price is.
* It's somewhat of a crapshoot as to who the buyer will end up being.


What it takes to be a successful short sale buyer is patience, and to not have a pressing timetable. It also helps to not expect concrete answers from your agent, as they are hard to come by. But you can be successful.... just hang in there!

Flickr photos by doug8888, seekyu, flexyourhead, thinkpanama