Get a pre -approval before you make an offer on a new home. Here’s why. 

85% of my business is on the listing side representing sellers. There is no setback in real estate as devastating as the “deal dying.” Typically, when a deal has died in my experience, it has been because the buyer was unable to perform. In many cases, the buyer meant well and was sincere, but either they, their agent, or both were unaware of conditions in their income, credit or cash position that prevented them from being able to close.

There is nothing that can be done to prevent the loss of a job. But there are many things that can complicate your approval process that you may not be aware of. Thinking you have good credit and some cash isn’t enough. You might not have been in your 1099 job 2 years yet. Your debt to income ratio may be off because you co signed for someone. Your FICO score might be lower than you think it is. Your overtime may not count as much as you think. Need I go on? 

If you submit an offer on one of my listings, my seller will not take the house off the market into contract for you until we have absolute assurance that you have been to the bank, had all your information and assets verified, and have been issued a Desktop Underwriting approval. DU is the software that mortgage professionals use for most conventional loans to evaluate borrowers before they issue a pre approval. Otherwise, an accepted offer in July could turn into the house going back on the market in the Autumn with the holidays around the corner. In cases where timing is crucial, this can be a horrible setback. 

Getting pre approved takes 15 minutes. You shouldn’t be insulted that you are asked to be pre approved before an offer is accepted, and if you are you’ll actually attract suspicion. Given the simplicity of the process and all that is at stake (In Westchester County, my local market, the median sales price is still well over a half million dollars), it only makes sense to “show them the money.” While questions about your ability to buy may seem intrusive, given the stakes, they are needed. Moreover, if you are competing against other offers, the one with the pre-approval will be taken far more seriously than one without. Just do it. It gives you leverage as a buyer, and it assures the seller what you know all along, which is that YOU are the person with whome they should do business. 

If you are an agent, you should not go very far with any buyer until they have gone through the pre approval process. Otherwise, you run a high risk of being an expensive tour guide. 

Just Listed!

Price Reduced!

Must Sell!

New Price!

Open!

Buzz off.

You know who you are. I spend $200-300 per month on my primary MLS and then more money on programs to match buyer clients to listed properties. Simply put, if your listing matches my buyer, I’ll know before you do. If you just reduced your price, I’ll see it on the hotsheet. Same for open houses. I don’t need you to email me. 

You know what I think when you email me your listing? I’ll tell you. I think “that listing must be an overpriced turkey because the agent is reduced to being a carnival barker.” Seriously. Nothing says “dog” like an email begging me to show a house.

We get an email every 5 minutes. Some require action or a thoughtful response.  Sifting through the spam of agents who are pacifying nervous sellers is a time-consuming nuisance. Time is money. 

And don’t tell me that what the delete button is for. That’s like sneezing on my and saying “that’s what medicine is for.” I respect your time. I don’t spam you. You know about my listings because you show them, and I didn’t email you about them either.

It gets REALLY hairy when I search for an important email and some similar word puts your overpriced bow-wow in the search findings. Or when I accidentally delete an important email whilst purging your tripe. OR WHEN THE LISTING IS IN A STATE I DO NOT LIVE, WORK, OR HOLD A LICENSE IN BECAUSE YOU BOUGHT A SHITTY DATABASE OF EMAIL ADDRESSES. Aren’t we professionals? Do lawyers spam the crap out of each other? Do Radiologists? Architects? Then why do you? 

Do not spam me. Do not waste my time. Do not hinder my efforts to earn my living.

Have a nice day.

PS- Don’t fax me either.  

As more inventory enters the spring market, over half of my new listings are upside down. I list and sell many short sales in Westchester County and beyond, so they tend to find me, but that still speaks to the fact that there are still billions in toxic assets & lots of people underwater out there.

In some cases, the properties are tenant occupied. They unwittingly participate in the problem, for which they have my sympathy. However, sometimes they are also like the UAW in the respect that they negotiated the landlord out of business. For instance, in one single family home, the tenants renegotiated their lease to 

• lower the rent 25%
• have the landlord pay for heat/electricity

 

You can search the MLS like an agent here.	See J. Philip’s New York Photo Blog Here.
J. Philip Faranda is New York’s Premier Short Sale REALTOR. Read Phil’s short sale blog here at http://NYShortSaleBlog.net.	J. Philip Serves Briarcliff Manor, Ossining, the River towns , Westchester County & the bedroom counties of New York City.

This building is one of the biggest enigmas in Westchester. It is located in a very affluent area (in the Edgment section on busy Central Park Avenue), but has been derelict for years. More information here and  here. One of the real neat pieces of architecture you’ll see in southern Westchester, it sits, year after year, with little more than the lawn mowed. This is one prime piece of real estate, and it will be a shame if and when the land is developed to replace this unique, albeit under-appreciated building. 

 

I was working all day Saturday and didn’t get to see the Kentucky Derby; my wife replayed it for me this morning on DVR. For those of you who ran track or perhaps participated in rowing in college as I did, you’ll know that races involve more than speed; they require strategy. The basic underpinning of any strategy is belief. The horse could not have won without jockey Calvin Borel, who absolutely believed in him. 

A few observations on the race:

• In a 2:02 race, the announcer didn’t speak the name of the winner until about 1:55.
• Mine That Bird, the 2009 Derby Champion, came back from about 8th place from my observation in the final quarter of the race. The final quarter.  And he won in a blowout. 
• The horse was either too stupid or too fast (or maybe just too BUSY) to realize it was customary to bail out with a deficit that large. My vote is busy. 
• The jockey absolutely believed the horse was capable of winning or he wouldn’t have dangerously pushed it through a crowded field on the inside rail. 
• There was a small opening that was exploited. 
• Once that horse got the lead, it’s energy was limitless.
• The horse’s entry in the race was a 50-1 afterthought.  

128 days ago, I sat at a dining room table in Putnam Valley, New York, just north of the Westchester County border with a young couple who were listed 4 times previously with 3 different brokerages in unsuccessful attempts to sell their home. Along the way, they got behind on their payments due to loss of income and had all but lost hope that they could avoid a foreclosure. 

One of my agents, Tom Ricapito, had found these nice people quite by accident, and told them to talk to me before giving up. This was the first time they had ever heard of a short sale. I told them I had closed dozens, and they listed with my company with Tom as their agent. He later told me that our meeting gave them new hope. It is funny how these people found us quite by random chance, and not through our regular marketing. When you specialize in New York short sales, they sometimes find you. 

The home was priced to reflect market conditions, and an offer came soon afterward. We prepared the selling broker for eactly what to expect- the wait, the process, everything. Nothing was left to ambiguity or chance. We communicated regularly. Less than a month ago, the short sale was approved, to the seller’s relief and the buyer’s pleasant surprise. They had been prepared for a far longer wait. 

So, 128 days from the day they listed, the short sale closed successfully. In Westchester and Putnam counties, 128 days is relatively fast for regular listings, let alone short sales. They don’t all work out like that for sure, but we can feel good when they do. 

We will remain in touch with these people. Since the only problem they incurred on their credit was just some late payments instead of bankruptcy, foreclosure deed in lieu or deficiency judgment, they will be ready for to buy again in a couple of years (perhaps sooner) so long as they keep their noses clean. We intend to sell them their next home and help them avoid the pitfalls which contributed to their recent challenges. My hat is off to my agent Tom, who stayed on top of his file and made sure that he headed off any potential issues with the buyers or their agent at the pass. Communication is key. 

Thankfully, there wasn’t any big obstacle or memorable roadblock to this story,as there almost always is. We’ll take it!

 

At the heart of doing business in good faith is representing accurate information. This doesn’t just go for square footage, what appliances convey, or when the roof was replaced. It also applies to compensation. Actually, in my opinion, it especially applies to compensation. 

Charles Stallions has written a thought-provoking post on the re-negotiation of a sales bonus which is going to arbitration. At the heart of the matter is a large bonus promised which was taken off the table by the seller when the offer came in (SHOCK) less than full price. Imagine that in this market. 

A similar thing just occurred with one of my agents. The seller, a licensee selling her own home, offered a $3000 bonus to the selling agent. No other stipulations were on the MLS. When my agent submitted an offer on behalf of the buyer client, he was told by the seller than she had just reduced the price and meant to modify the bonus to $500. He advised her that the printout he had was the most recent price with a $3000 bonus, that was what was in writing, and that was what should be paid. They settled on a $1500 bonus mainly due to the fact that losing a sale for our client over compensation isn’t exactly listed in our fiduciary duties. 

I’m not happy about the settlement, but I will abide by the agreement between the 2 agents. It isn’t about the money- my split of a bonus won’t make or break the company- as a matter of fact I have, in the past, allowed my agents to keep their entire bonus. What bothers me is the bait and switch. That agent should know better. 

The MLS is an offer of compensation in exchange for cooperation. If you cooperate and I pull the compensation rug out from under you, that isn’t doing business in good faith. 

I don’t just see this with bonuses, either. More and more, I see sellers attempting to cut the commission as a bargaining chip as well, and when I am the listing agent I adise my seller client that this could land me in arbitration.  

Simply put, if you are going to offer a certain fixed bonus amout or percentage of the sale price to a cooperating agent, then that is what you should pay at closing, period. The only way out in the case of a bonus is if the bonus stipulates that it will be paid only for a full price sale.  “$1000 bonus for a full price offer that closes” is good verbiage for something like that.

Other than that, your word, and that of the seller client, should be your bond. Good faith has to trump economic convenience-if you make a promise, you should deliver. 

Driving around New York with a digital camera has yielded some pretty neat photos that I can’t put on the MLS. There was the time a herd of deer dropped in on the photo shoot of a new listing, for instance.

So, I have started a photo blog, exclusively to post all the neat things I have seen in my travels. You can see it here: http://NYPhotoblog.net. There is also a link to it in my sidebar.

I have a backlog of cool things to start with, and I’ll update it as I run into new sights. There is plenty of material around here.