Archive for July, 2008
A while ago I penned a post Should I add Burglar to my Business Card after a round of issues with gaining access to a property. This week I discovered that other agents just leave the breaking and entering to their clients.
So here is the scenario. What would you have done?
My clients and I attempted to view a house that was #1 on our must see list. There were keys in the combination lockbox that worked one lock but not the other. Then I spied an electronic lockbox and discovered a different key inside. That key fit the backdoor locks but didn’t open the door. After all three of us tried to open the door with no success I put in a call to the agent (got VM) and we decided to head on to view other properties. When we didn’t get a return call from the agent we decided to call it a day and hopefully be able to see the property the following day.
On a whim, after grabbing a bite to eat my clients drove back by the property and saw someone coming out the front door. They stopped and said they had been by earlier with their agent but couldn’t get in. The agent said they couldn’t get in either with the keys but her client found an unlocked window, crawled in and came around and unlocked the door. The agent then handed my clients the keys and LEFT! Drove away, gone, bye-bye.
My clients called me and said “guess what we are in the house.” When they explained how they had gained entry I told them to leave. We figured out how they could lock the house for us to get back in and arranged to meet back at the property in an hour.
I don’t know if the other agent had tried the electronic lockbox so there might be a record of who it was but I’m shocked that an agent would just casually drop the keys to a property into two stranger’s hands and walk away without any concern whatsoever.
No matter how much my clients want to see a house I’m never going to resort to breaking and entering. I’m will never hand over keys to someone without an agent who just shows up at the door of a house no matter what their story. This agent can count themselves lucky that my clients did the right thing.
Combination lockboxes with the code in the MLS provide no way of tracking who has been in the property. This is eventually going to lead to a serious incident. Hopefully our local boards and the lenders who suggest the use of them will wise up and put a stop to the practice before it does.
| Discussion: 2 Comments »
How Did the Banks Get Agents to Shoulder the Load?
July 6th, 2008 Categories: Auctions & Foreclosures, Real Estate Ramblings
In Virginia when you sign a listing agreement with a seller it states that the “seller retains full responsibility for the property, including all utilities, maintenance, physical security and liability until title of the property is transferred to purchaser.” Seems simple enough or is it in today’s market?
When an agent goes to meet with a prospective seller to talk about listing their home it would never cross the sellers or our minds to suggest that we will have all of the utilities transferred to our name to make it easier for the owner. Nor would we agree to take on the responsibility for cleaning their home or keeping the yard mowed. However, every day lenders are asking agents to do this and agents are saying YES.
Why? We don’t own the property or have any financial interest in it and still agents are willingly taking on the financial burden just because the banks ask them to. Many agents I’ve talked to who handle a large numbers of foreclosures are shelling out thousands of dollars in expenses to maintain a property. In some cases reimbursements are slow and if work needs to be done they are required to call the lenders “preferred” contractor. If an emergency repair is needed and the preferred contractor isn’t available they risk not being reimbursed by the lender unless they can verify the gravity of the emergency.
On top of the out of pocket expenses, the listing agent often has to wait until the end of the transaction to find out if the lender is going to ask them to reduce their commission to help the lender meet their NET. How did this trend start? Was it one agent who said yes and then the banks began to play the other agents one against another for a cut of the business? Was it an entire brokerage that agreed to it and then everyone else had to follow suit?
If lenders require that the utilities be on (at minimum electricity should be on for safety reasons) then why don’t they set up corporate accounts with the major utility companies in the area where they have large pockets of foreclosures? Why don’t they have a direct 30 day billing cycle with their approved contractors? Why are they relying on agents to take on the accounting and financial burden of selling their properties for them?
The practice is contradictory to our own listing agreements and yet hundreds of agents across our area are willingly taking on the burden. It shouldn’t be a Realtors® responsibility to go into debt in order to sell a foreclosure listing. Wouldn’t it be better if ONE MILLION plus Realtors® would stand up and say “we’re mad as hell and aren’t going to take it anymore” and let the lenders take the responsibility of paying the bills on the properties they own?
| Discussion: 8 Comments »
Condo Special Assessments-A New Twist in Today’s Market
July 3rd, 2008 Categories: Auctions & Foreclosures, Buyers Corner
When most people think of special assessments for condos they think major common area improvements. In the Northern Virginia area condo owners often see them when it is time to repair the balconies, upgrade the amenities or redo the lobbies but in today’s real estate market we also see special assessments for another reason.
Delinquencies and foreclosures are sapping associations of much needed income to keep current on the everyday bills. A few years ago condos in Arlington and Alexandria were flying off the market faster than they could be built. Unfortunately among the buyers who were excited about a new home close to the metro there was a large group of investors out to make a few dollars with a quick flip.
When the market made its dramatic turn the first properties to be hit were condos. Hundreds of flippers suddenly found themselves with units worth less than the paid for them even at pre-construction prices. So what is the first thing they stop paying? They stopped paying the condo dues resulting in large deficits for the associations. Associations in desperation to try and collect some of the dues hire attorneys to put liens on the condo in hopes of collecting some of the past due funds.
However this just adds to the money worries by larger legal bills. Putting a lien on the property isn’t going to do the association any good. When the property goes to foreclosure there isn’t any money to pay the back dues and the lender isn’t responsible for any past dues. When the property is sold the lender will pay the dues from when they owned the property but while it sits on the market the debt continues to rise.
For a buyer today looking at a condo purchase they need to pay careful attention to the association budget. They need to make sure that the see the latest budget that shows the real numbers. Most lenders will not pay a special assessment and a buyer could get a surprise after closing to find themselves with fees to be paid that they weren’t expecting. Today’s market is full of twists and turns. A special assessment because your neighbors aren’t paying their bills is a new one to watch out for.
| Discussion: 3 Comments »