Deb Espinoza's Real Estate BLOG

As an ABR, Accredited Buyer Representative, in San Diego County I am learning that in the current market we need to have a few more tools in our tool kit in order to provide care and service for our clients. In the past 6 months I have had to become very diligent when researching listings for my buyers. Here are some items that I feel are imperative in order to do the best job possible for buyer clients.

Is it a short sale? We must find out who is the lender(s), has an initial package been submitted to them, is the seller cooperating with a short sale or are they still trying to hang on and get a loan modification, is the seller cooperative? will they be caring for the home until it's sold? if vacant are they keeping the utilities on, yard maintained, pool cleaned? If HOA are the dues current and will they be kept current? What is the past history of the deal if it's been on the market for awhile.?  On top of this, we need to do our own market analysis because some inexperienced agents are far underpricing the properties and chances would be high that the lender would not accept that value and we would need to council our buyer of a probable counter by the bank and find out if they are willing to go up before wasting everyone's time.

Will the property qualify for financing that the buyer is approved for?  I spent 4 hours attending a VA Seminar put on by local brokerage Military Home Loans & Ken Bates, who went over all the details of a VA transaction. Requirements of old are not the same today- we must know what these requirements are for condition, termite, costs that can't be paid by the vet...etc. etc. There is A LOT to know and you need to have a good mortgage company working with you that doesn't put extra underwriting guidelines on TOP of what VA or FHA or FNMA or FDMC require.

If it's a condo and the buyer is FHA or VA, do you know where to find out if the property is approved? Many FHA approved complexes in San Diego County have expired or are nearing expiration. Many listing agents have no idea that properties must be approved for certain financing or the listings may have been on the market for awhile and the approvals have expired. It's our job to check out the reliability of the comments in the MLS that say a property is or is not approved for FHA or VA financing. Know where to go to find out and what the options are to get the property approved so your buyer can make the call if they want to work on getting the property approved.

This last point is pretty important. Do you assist your buyer to check out a property thoroughly when they are ready to make an offer so that you can include repairs, upgrades, etc in your initial offer, or price according to estimated costs to take care of problems you see UPFRONT on a house? BEFORE you go into escrow and come upon costs for inspections and requests for repairs?? I know that we are not, nor should we claim to be contractors or inspectors, but in California we are required to provide agent visual inspection disclosures (AVID) on all our transactions. We don't make "assumptions' on things we know nothing about (if we see staining on a ceiling , for example, we are told just to say that and don't call it 'roof leak' because we don't know for sure.) However, in California when making an offer on a property, the contract is AS-IS. When it comes to inspections and request for repairs on a property it clearly states in our contract that a seller does not even have to RESPOND to the buyer's request. In doing our duty for a buyer client we should try to save them the cost and the heartache of a deal falling apart at this time in the transaction by pointing out items we see BEFORE making the offer so we can include them UP FRONT in the contract.

This item is especially important in San Diego County right now because of the high number of investor purchased properties and the many number of rehabs that are being done by unlicensed contractors and inexperienced agents that are listing them; sometimes the agents and rehabbers are part of the same company and the 'agent' just got a license for the purpose of not having to pay both sides of a listing commission. ALWAYS check the county records to see the bedroom and bath count and square footage that is recorded on the property. These rehabbers may be creating un-permitted additions or they may be fixing up an un-permitted addition put on by the previous owner who lost the property to foreclosure. You buyer's appraiser will not be able to value the property based on un-permitted square footage or bedrooms and baths that are not on record. Make sure your buyer is not overpaying based on what the county records show and if there appears to be un-permitted work; ask the seller to correct that upfront in the initial offer. Really look at all the mechanical systems; is the electrical panel too small? plumbing leaks, old connections? look up at the roof, the eaves, is there evident termite damage? wood rot?  what is the age and condition of the water heater and furnace? I have seen PLENTY of rehabs that are done by a company that basically buys at auction, throws in new carpet, paint, and appliances and puts it on the market for sale. These are common things I see with this particular company: range hoods are hung but there is no venting out through the cabinet above or through the roof where it's supposed to go, if it's plugged in there is no electricity to the plug and or no wiring in the conduit leading to the unit to power it. A new gas heater was installed and vented right into the attic!  The buyer representative must protect their buyer by assisting them to really check the house first, then get a good licensed home inspector to do a thorough inspection AND always have a home warranty and to advise the buyer to renew it so that mechanical, plumbing, electrical systems and appliances will be covered if and when something goes wrong.

Being a REALTOR is an important job and representing our buyers and sellers to the best of our ability includes knowing our contracts, disclosures, laws, market trends and statistics AND a little about everyone else's job who makes a deal happen; escrow, title, inspectors, contractors, lenders... A lot of people seem to think that we make too much for what we do, well, maybe if you've never been represented by a REALTOR who doesn't really take their career seriously you may be correct; but for those of us who spend our time always learning and finding ways to better serve our clients, I have to say that we probably don't make enough for what we are required to know in order to do our fiduciary duty to our clients. So, when you get ready to buy or sell- do your homework and get the right agent. It will save you time, money and heartache in the end.