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Phyllis Harb's Real Estate Blog

Real Estate Questions & Answers

By Phyllis Harb | Agent in La Canada, CA
  • Selling short, how long before you can buy another home?

    Posted Under: Property Q&A in Los Angeles  |  June 8, 2012 9:31 AM  |  184 views  |  No comments
    Dear Phyllis,
    I got caught in the real estate downturn and purchased my home in 2005.  I currently owe a lot more than its value.  Is there a possibility that we could sell it via short sale and buy another less expensive home?  In other words could I get a loan? 

    Tim

    Dear Tim,

    I am sorry for your dilemma.  As a real estate agent, I hear this scenario quite often.   FHA has recently waived their rule requiring a three year waiting period (after a short sale to obtain a new loan).  An FHA loan is a Federal Housing Administration insured mortgage which is offered by an FHA approved lender. FHA insured loans typically require less stringent underwriting guidelines (easier for borrower to qualify).

    Yes, there is a possibility for you to qualify for a new mortgage, but certain criteria must be met:

    1) You must be current on your mortgage and all other credit obligations for the previous 12 months.

    2) There must be an actual hardship, such as loss of job, job transfer/relocation, catastrophic medical bills, and or/death of an immediate family member.

    3) You must be downsizing.

    4) Your current lender must approve the short sale.

    5) Your credit score must be a minimum of 620 and if you have any outstanding collections accounts, they must be paid through escrow.

    Short Sales can be extremely complex, be certain to contact a Realtor® experienced with short sales so that you may begin the process. 
     
    View more Real Estate Question and Answers here.
  • How long must our home stay in show condition?

    Posted Under: Property Q&A in Los Angeles  |  June 6, 2012 9:29 AM  |  187 views  |  No comments

    Dear Phyllis,

    Last year we tried for five months to sell our home and it never happened.  In March, we relisted with a different agent, who suggested a couple of repairs to tweak the home.  We took her recommendations and had some interior painting done and refreshed the front landscape.  And this time we sold quickly.  Our new agent was much more particular, and frankly a little bossy about how the condition of the home should be when buyers were coming.  We agreed but once in escrow, we thought we could slack off a bit, but our agent wouldn’t let up.  Anytime the buyer came to the home, it was an ordeal.  Although, we closed last week, my question is do you think that the home needed to be in pristine condition, each time the buyer returned? 

    Worn Out

    Dear Worn Out,

    Congratulations on the successful sale of your home.  Each home seller has unique real estate goals.  Most wish to sell their home quickly at the highest price, with the least amount of inconvenience.  When I meet with clients, I try to prioritize these goals. 

    For those who desire a quick sale at the highest possible price there will likely be some minor changes and/or repairs made.   There will also be the inconvenience of having the home in show condition for all showings.  (This is not to say that you shouldn’t be provided ample notice).

    Closing escrow is becoming more complex due to increased lender scrutiny, and the occasional appraisal issue. Other times, buyers may become so exhausted by the lender’s nonstop demand for additional paperwork that they border on the edge of giving up. 

    I agree with your agent that during the course of escrow anytime the buyer comes to your home, it should be in show condition.  Neither you nor your Realtor® know the buyer’s mindset.  Are they feeling anxious?  Are they susceptible to bad news about the economy?   Are they worried that maybe they are getting in over their heads?  Each time the buyer returns to your home, their decision to purchase should be reinforced. And we all know that a home with dirty dishes in the sink and unmade beds is not appealing.  Your agent gave you excellent guidance, it would have been a shame to have gotten so close to closing and then have to face the ordeal of starting fresh. 

     View more Real Estate Question and Answers here.

  • How to get your offer accepted

    Posted Under: Property Q&A in Los Angeles  |  May 25, 2012 12:31 PM  |  172 views  |  No comments

    Dear Phyllis,

    I have been looking at homes for over a year and have made four offers and can’t seem to get a home.  I am not low balling, but making good offers, have a large down payment and am preapproved.  I am feeling very frustrated and nearly ready to give up.  What advice can you offer?  

    Joe K.

    Dear Joe,

    The real estate climate has changed; I have worked with several buyers who took a year (or more) to find the right home.  The fact that you are making offers indicates to me that you are realistic about finding a home. 

    Patience is a virtue.  Certain price ranges and neighborhoods are highly competitive. When purchasing a home in today’s real estate environment it is critical that you buy one you love.  You may be there for quite some time, and you need to be happy going home at night.   Gone are the days when you can move up in a short period of time.

    It seems to me that your issue is getting your offer accepted. Of the four offers you made, why weren’t they accepted?  Was it price? Terms?  Were they all multiple offer situations and the price driven up? You and your Realtor® need to have a sit down and come up with answers and solutions.  

    When I submit an offer for a client, I ask the seller’s real estate agent questions.  Then I write an offer which meets the seller’s needs to certain key issues such as the duration of escrow and possession.  It is not always about price.  When a homeowner has been in a home for years, it can be very difficult to move and in a multiple offer situation, you might try offering them two weeks to move after closing.  Each situation is unique and your Realtor® needs to ask questions, then the two of you can develop a winning strategy.  Best of luck with your next offer!

    View more Real Estate Question and Answers here.

  • Are there pitfalls to the seller rent back?

    Posted Under: Property Q&A in Los Angeles  |  May 4, 2012 11:22 AM  |  207 views  |  No comments
    Dear Phyllis,

    We have been saving for three years, going to open houses and overall preparing to buy our first home.  We found a home we love and made an offer, but the seller doesn’t want to move out until their kids get out of school in June.  Our mortgage lender can only guarantee our interest rate for 30 days.  So the real estate agents suggested that we close escrow and the seller rents the home from us.  The rent the seller proposes will cover our mortgage payment, including property taxes and insurance.  This isn’t our ideal scenario but we agreed.  Do you have any advice for us in this situation?   

    1st Timer

    Dear 1st Timer,

    First of all congratulations on your home purchase!  Inventory is tight and being flexible got you a home you love. This scenario is not that uncommon; I have represented numerous clients in seller rent back situations without a problem.  Some things to consider:

    1) Check with your mortgage lender to find out how long of a rent back they will allow.  Some lenders will not offer you the (lower) owner occupied interest rate if the rent back exceeds 30 days (they may only offer the higher non-owner occupied rate).  If this is an issue discuss with your Realtor® how the rent back can be handled outside of escrow.

    2) The seller agrees to maintain the home in the same condition as it was when you agreed to purchase; you may want to drive by the home and make certain that the landscape is being properly maintained.  The seller should continue paying their gardener, pool man (if applicable), etc.

    3) There should be a fully executed rental agreement specifying the terms of the rental. 

    4) In addition to a final walk through (where you verify the condition of the home) prior to closing escrow, you should have another walk through several days before the seller/tenant moves out.  If you think there may be problems take pictures.

    View more Real Estate Question and Answers here.
  • When can you stop disclosing?

    Posted Under: Property Q&A in Los Angeles  |  March 30, 2012 3:14 PM  |  301 views  |  No comments
    Dear Phyllis,

    We have been in escrow for a bit more than a month.  We completed all of the paperwork about what’s wrong with the house and the couple buying our home signed everything.  The buyer had their inspection and we negotiated a $3,000.00 credit for miscellaneous items. All seemed well until we had that horrible rain storm in March.  Our roof sprang a leak, and I contacted a roofer who repaired it.  Our real estate agent insists that we disclose to the buyer the fact that the roof leaked and that we had it repaired.  But I think that is just asking for trouble, we already fixed it and we don’t want to have to start negotiating again.    Do we really have to tell the buyer about something we already took care of?   

    Sam R.

    Dear Sam,

    I am not an attorney but as a Realtor®, I agree with your real estate agent.  The fact that your roof leaked is a material fact and the buyer has a right to know.  In my opinion you have a larger liability if you fail to disclose the repair. 

    Although, you hired a roofer to repair the leak, how can you be certain that he properly took care of it? What if the roof leaks again?  The buyer will hire a roofer to repair the problem and it will be apparent that there was a recent repair.  The fact that you didn’t make this disclosure may give the appearance that you have something to hide.

    It’s a very simple disclosure, something to the effect that: “During heavy rains in March, 2012, our roof leaked in (indicate which room).  We contacted (name of roofer) who made a repair to the roof.  A copy of the invoice is attached. We have had no further leaks since the repair. (Assuming this is correct)”   But please discuss the disclosure verbiage with your real estate agent who is privy to all of the details in your escrow. 

    View more Real Estate Question and Answers here.
  • After the inspection: What’s reasonable for the buyer to ask the seller to repair/credit?

    Posted Under: Property Q&A in Los Angeles  |  March 15, 2012 9:50 AM  |  346 views  |  No comments
    Dear Phyllis,

    We submitted an offer on a home we really like, because there were several offers and per our Realtors® recommendation we didn’t attempt to negotiate the asking price and actually paid $5,000 more.  The kitchen and bathrooms are from the 70’s and disgusting.  Our inspector told us that the plumbing is galvanized ,  that the roof will likely need replacement in the next five years and that the furnace is old.  What do you think is a reasonable credit for the seller to give us. 

    First time buyers in LC

    Dear First Time Buyer,

    First of all congratulations on purchasing a home you “really like”.  Purchasing a home you  like (or better yet, love)  is critical as you can no  longer count on trading up in a few years.  
    I represent both buyers and seller and try to remain impartial, BUT when you entered escrow you were aware that the kitchen and baths were from the 70’s and “disgusting”.   Likely the listing price and the price you paid took into account the outdated kitchen and baths and that’s why the home attracted more than one offer.   I don’t believe it is reasonable for the seller to credit you for something you were already aware of and should have taken into account at the time of your offer.

    A couple of questions for you:

    1)    Is the roof presently leaking?  You certainly can ask, but if the roof is not leaking the seller may be reluctant to grant you a credit or a new roof.

    2)    As the kitchen and baths are from the 70’s, why expect that the plumbing would be copper?  Keep in mind that you were not the only offer.  Unless the home was advertised as having updated plumbing or copper plumbing, I don’t think you are going to get a big concession from  the seller on this one either.

    Each real estate transaction is different.  If  a home has been  languishing on the  marker for months, you likely have more negotiating power.  I am not privy to all of the nuances of your escrow.  Seek the council of your Realtor® and I wish you much happiness in your new home.

    View more Real Estate Question and Answers here.
  • Short Sale Ramifications

    Posted Under: Property Q&A in Los Angeles  |  March 9, 2012 9:16 AM  |  357 views  |  No comments
    Dear Phyllis,

    In 2006, I bought a condo.  Last year, I was out of work for six months and fell behind on my mortgage.  I recently landed a new job, which is in Westwood and the commute is killing me.  I have met with a real estate agent who valued my condo in the $350,000 - $365,000 range but I owe nearly $425,000.  It just doesn’t make sense for me to try to hang on and make this horrendous drive when I can rent for less than my monthly nut.  What are my options and what can happen to me if the bank forecloses?

    Overwhelmed

    Dear Overwhelmed,

    Congratulations on your new job; I sympathize with your dislike of your daily commute. 
    Approximately one third of California homeowners who have a mortgage owe more that their home’s value. When a homeowner is unable or unwilling to pay their mortgage there are just a few options:

    1)    Contact the lender and request a loan modification. A loan modification alters the terms of your mortgage.  In some instances the monthly payment, interest rate and/or principal balance will be reduced.  If you are not eligible for a loan modification:
    2)    Contact your lender and ask if they will allow a Deed- in-Lieu of foreclosure. A Deed- in-Lieu of Foreclosure occurs when the homeowner, transfers ownership of their property to the holder of their mortgage.  The lender then releases the borrower from their loan obligation.
    3)    Short Sales generally impact a homeowner’s credit less than a foreclosure.  A short sale occurs when the lender agrees to accept less than the amount owed to the lender in a sale.  Contact a real estate agent to begin this process.
    4)    Foreclosure occurs when the borrower stops making mortgage payments. This process typically takes four or more months.  After the lender forecloses you must move out or the lender will begin the eviction process.

    You should consult with your tax professional as to any possible tax consequences due to a short sale or foreclosure. 

    View more Real Estate Question and Answers here.
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