September 2011

Short Sale Time Sink

by Ross Kaplan on September 30, 2011

Learning the Market — Twice;
or Rinse “Flush and Repeat”

What’s the worst thing about a short sale that doesn’t work out (depending on who you ask, the result 50% to 70% of the time)?

From the would-be Buyer’s perspective, it’s the frustration and disappointment associated with having flushed months waiting on a home that, ultimately, wasn’t really for sale — at least, not at the price that it was listed at.

From the perspective of the Buyer’s agent, there’s the time wasted on monitoring a file all that time with nothing to show for it.

And for both, there’s the added aggravation of having to re-learn a housing market that’s inevitably changed and turned over while you were sidelined, waiting for a response from the bank(s) holding the mortgage(s).

The bottom line?

Instead of showing a client 10-15 homes, doubling back for second showings on the most promising 2-3, then negotiating to purchase the best of those . . . . you do it twice.

P.S.:  the graphic above is a black hole, in case you couldn’t tell.

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Counting on Open Enrolling? Not . . So . . . Fast

by Ross Kaplan on September 30, 2011

Property Premiums — and Discounts

It’s certainly a logical strategy:  buy a discounted home just outside a stellar school district, then open enroll your child(ren). 

The hitch?

Actually, there are three:

One.  Most districts determine open enrollment on a year-to-year, school-by-school basis.

So, an elementary school in a particular school district might have openings, the junior high not, and the senior high school — who knows?

Furthermore, in the Twin Cities, several school districts are now significantly restricting open enrollment as a matter of policy.  See, “Coming:  Not So Open Enrollment.”

Two.  Just because a given school has room doesn’t mean that the school buses do.

Locally, so many students open enroll from the Robbinsdale school district into the Hopkins school district that the buses serving the latter are full.

Which means that parents are responsible for schlepping their kids — as much as 10 miles or more one way if they live outside a far-flung school district like Hopkins.

No Guaranties

Three.  District lines and bus routes are subject to change.

That’s a consideration for couples with very young children — or planning to have them.

By the time their kids are ready for school, there’s no guaranty that the district lines and bus routes will be the same.

Bottom line?

The safest strategy is to buy a home in the school district you intend to send your kids.

Which likely means a widening premium for areas served by quality schools — and a discount for ones that aren’t.

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Fast Close = Strong Buyer (Usually)

by Ross Kaplan on September 29, 2011

Vetting the Buyer’s Finances

Prior to closing, at least, the best evidence that a (non-cash) Buyer can financially perform is a Written Statement from a reputable lender.

Typically given by the Buyer to the Seller a couple weeks after the deal has been struck, it says that the lender has:  a) completed vetting the Buyer’s finances, credit, employment, etc.; b) received an appraisal supporting the loan amount; and c) based on a. and b., finished approving the Buyer’s loan.

Contrary to what some Sellers believe, the Pre-Approval Letter that customarily accompanies the Buyer’s offer says none of those things.  See, “Pre-Approval Letters and Written Statements.”

But what do Sellers have to go on before they receive the Written Statement?

Such things as a fat (or skinny) earnest money check; how big a downpayment the Buyer is putting down; and whether the Buyer seems to check out based on an initial conversation with their lender (my first call after receiving an offer on one of my listings).

But to that list, I’d add one more anecdotal factor:  financially strong Buyers often want fast(er) closes.

Telltale Signs

Of course, cash Buyers can close immediately after the Inspection Contingency has been removed and the title work has been completed.

By contrast, Buyers who need to obtain a mortgage need more time.

How much?

The standard is 3-4 weeks for the Buyer’s lender to complete underwriting.

However, an especially strong — or confident — Buyer is often willing to accelerate that timetable.

Because the Seller has the option of cancelling the deal if the Buyer misses the Written Statement deadline, committing to a quicker deadline is a bullish sign.

And if the Buyer washes out?

The Seller gets the bad news sooner rather than later, allowing them to move on to a stronger Buyer.  

P.S.:  Corollary to the above:  financially weak Buyers seldom push for an accelerated closing timetable.

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How Many MLS Photos is Too Many?

by Ross Kaplan on September 27, 2011

When Less is More

Things should be made as simple as possible — but not simpler.

–Albert Einstein

Listing agents should use as many photos as necessary to convey a sense of the home — but not more.

–Real estate corollary; Ross Kaplan

Just because MLS allows listing agents to include up to 18 photos doesn’t mean that they should.

Case in point:   the tiny St. Louis Park home with way too many photos that I just saw online.

Instead of including 6-8 home shots and 2-3 of the surrounding area (parks, shopping, etc.), the agent used up all 18 allotted shots.

That included 3 each of the Kitchen and Family Room, from as many angles.

Sometimes, less is more . . . .

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Taps for Eastman Kodak

September 27, 2011

What is the Opposite of “Plastic” (circa 1967)? It may be hard to believe if you’re under 50 years old (60?), but once upon a time, Eastman Kodak — along with other technology pioneers like Polaroid, Xerox, and Motorola – held the same place in the American corporate pantheon now occupied by such companies as Apple, [...]

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“The Next Big Thing” — From Greece!

September 27, 2011

Greek Deja Vu See if you can guess what I’m talking about: –It’s from Greece. –Leading American companies are playing a central role in creating and exporting it. –It’s likely to affect every American household. Give up? Greek . . . . yogurt!! (what did you think I was going to say, “sovereign debt?”  “Financial [...]

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“Meticulously Maintained” — Deciphered

September 26, 2011

Real Estate Synonyms — and Antonyms Test your knowledge of real estate marketing and answer the following “True or False” question: “Meticulously maintained” means the same thing as “updated”: A.  True B. False Answer:  False In fact, “meticulously maintained” is almost always Realtor code for not updated. P.S. :  Ditto for synonyms such as “well-loved,” [...]

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“Very Near New Roof” — excerpt, MLS

September 26, 2011

That doesn’t mean that it’s on top of the neighbor’s house, does it? (Sorry, not enough sleep last night and I’m a little punchy — does it show??).

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