Posts Tagged ‘San Jose real estate’

It Sold! No it didn’t!

As I was walking through the neighborhood, I saw a client who had written a contract a few days ago.  He had hoped to purchase a particular REO property, as he wanted to help some friends by renting the house to them.  This was a multiple offer situation, and he wrote his cash offer above the listed price. 

Photo courtesy of Stockvault.net

I called to him and said, “I haven’t heard anything yet.”  He called back to me, “It sold!”  When I caught up to him, I asked what he meant, as it didn’t seem possible that it could have sold already.  “Oh yes,” he said, “I read it in the newspaper.”  I must have looked incredulous, as he asked me if I wanted to see the paper.  “Yes,” I said, “please show it to me.”  When he showed me the clipping, I saw that some recent sales were listed, and among them was the address of the home on which he had written the offer.  “It sold for more than I bid,” he said, looking at me with disappointment. 

Upon closer examination of the details in the newspaper I noticed that the sale date was January 10, 2010.  We had dated his offer February 9th, and so far had not heard back from the listing agent.  The list of sold homes was prefaced with the explanation that these sales were purchased through foreclosure by lenders.  When I pointed out to him that the sale reported in the paper took place in January, he looked puzzled.  You may be too.  This is what happened:

The prior owners lost their home to foreclosure.  The home was purchased in January by the loss mitigation department of the lender holding the note.  The lender paid $237,000 which was reported in the newspaper.  The lender then engaged a Realtor to sell the home, and as this home needs work, it was listed at $180,000, less than the lender paid for it.  Because this San Jose home was listed so low, multiple bids came in on the property, many of them above the listed price. 

We must wait to see what the sale price will be on this house.  That is not disclosed until escrow closes and the property has been recorded in the new owner’s name.  Will it be what the lender paid?  Or less?  Or more?  It could be any of these, but in this case, in this area, it’s likely to sell for a higher price.  In this troubled time in our nation, lenders would be happy to recoup what they paid, but they may not.  Lending institutions are in the business of lending money, not owning real estate, and their interest is in getting the REO property off their books.

Property Inspections: How Important Are They…And Who Pays for Them?

As home prices inch their way back, I’m seeing more “regular” listings in our inventory, not just foreclosed homes and short sales.  That’s encouraging news for both sellers and buyers.  Sellers who have been holding out are putting their homes on the market now, and these regular sales are quite appealing to many buyers.  “Why is that, Lexie?” you may ask.  Much of our inventory of homes for sale in the past year has been distressed properties.  When a home is owned by a lender, they are not willing to provide inspection reports—and they want As-Is sales.  That means they are not willing to make any repairs to the home.  What you see is what you get. 

 In contrast, traditionally sold homes generally are, overall, in better condition.  Because sellers don’t want surprises that could affect their bottom line, many are willing to pay up-front for inspection reports.  Having inspections done prior to putting a home on the market makes good sense.  Buyers can go over the provided reports with their agent before they write a contract.  Buyers don’t want surprises either.  They benefit by having a better idea of what they’re bidding on and, once they have the contract, they won’t need to have the provided inspections repeated.  Having inspection reports available benefits the seller also because it not only gives them an opportunity to correct some of the items mentioned on the reports, but it also decreases the chance of the buyer backing out after winning the contract. 

 Sometimes a seller is not willing to pay to have inspection reports done.  In this case once the buyer has won the contract, he has a certain number of days to have inspections done and to review the resulting reports.  In this case of course the buyer pays for them.  “What inspections should I have done on the house I’m buying?”  That depends on the house.  Does it have a fireplace?  Does it have a pool?  Did the seller provide any inspection reports?  Each house is different.  Your agent can assist you in determining which inspections should be done, in ordering those inspections, and being at the house when inspections take place.  Are termites brunching on beams or enjoying sub-floor for supper?  Does the home have clogged arteries with corroded pipes?  Regardless of who pays for the inspections, both parties will have a clearer idea of the condition of the home being sold, resulting in greater peace of mind for all parties involved in the transaction.