So I’m a big fan of Redfin. I love their MLS search engine (better mapping vs. my faster FranklyMLS.com) and don’t worry, they love a good debate, as long as they get link love (helps with Google).
This is a 2 part story. 1) Redfin Increases rates and 2) Fuzzy Math on Redfin’s “Advantage” calculation.
Part 1:
Many people might not know, Redfin two months ago increased their buyer agent commissions by 50% (more…)
Posted in
Buying Advice,
Realtor Rebates,
Redfin |
25 Comments »
After 5,000,000 page views served and 40,000 Wiki added photos, FranklyMLS.com (Frankly MLS) has done it again.
A new round of 1sts for MLS Search engine features! And you might have been wondering what I was up to.
PREVIOUS LIST OF FIRSTS:
- First with Keyword search of remarks, subdivisions, zips, city, schools, agent name etc. (like Arlington bank owned)
- First Wiki site. (more…)
Posted in
Buying Advice,
FranklyMLS 101 |
15 Comments »
So the stock market is crashing to the worst week ever (I think due to off books Enron style account, see 07 warning).
So how will that affect the housing market for luxury homes? Don’t care? Then don’t read this.
I had a theory- albeit obvious – that those buying luxury homes over $1 Million in Arlington (more…)
Posted in
Luxury Homes |
11 Comments »
First my thoughts on the $700,000,000,000 bail out… I told you so!
Read my blog post from 12-2007 entitled: SIV= Imagine Enron, Bank Wide. (I posted it on my more frequent, but less polished blog on ActiveRain)
The #1 problem is OFF-BOOKS accounting! All of these sub-prime loans are hidden. Nobody knows how much exposure all the banks have.
Second
ly, people have been emailing me asking what I’ve been up to and why I haven’t 
posted more frequently. Well, as some of you might know I’m in night school at Washington College of Law at American University. (I should be reading right now (more…)
Posted in
Virginia Foreclosures,
Youtube |
10 Comments »
Don’t Buy Our Listings!?
Why?
Because they are Too pretty. Too staged. Too well marketed.
Our listings NET sellers more (not buyers). Many agents will tell the sellers, “I can get you top dolla‘ “ (or they BUY a listing) and then turn around and tell buyers “this is a great ‘deal’!”
Well, you can’t have it both ways.
Is it a good deal for the seller or the (more…)
Posted in
Listing Advice.,
Staging |
18 Comments »
I just got a bank owned / REO property under contract. Was previously $800k, and it was now listed for $400k.
We had to bid on 6 properties before finally “winning” one (ask how we “won” without having the highest offer too!). Wow was that a pain. And people say it is a “buyers market” with tons of inventory? If a home is priced right, it will sell FAST. The key is to get daily MLS email alerts! (or ask for hourly)
So, I haven’t figured out to what degree the hassle was with the listing agent or with the bank (more…)
Posted in
Buying Advice,
Virginia Foreclosures |
11 Comments »
(Warning long a** post, but my best of year.)
FranklyCRA: A Comparative REALTOR Analysis. Unleashed.
Imagine legally eavesdropping onto the conversation of the listing agent, with buyer in tow.
You know, the one that goes like this, “Well, in my experience I think you should…”
Well what if I could tell you there was a way to know what that experience exactly was? Trends that the other agent repeats. Yep, and I have been doing it for 4 years.
A REALTOR friend that I taught this technique to, and works for one of the big boys said, “No Stop, (more…)
Posted in
Buying Advice,
Frankly CRA |
92 Comments »
In case you missed it, MSNBC’s front page linked to their RedTape blog which ran a little piece on bogus Admin fees. My 2007 admin fee post fueled part of the article. So far there are 515 comments over there, and 5,000 unique visitors over here.
I hate admin fees. Never charged them, never (more…)
Posted in
Press,
Shady Agent Tricks |
11 Comments »
FranklyMLS.com now offers in the spreadsheet view a % Difference between the Tax Assessment and the List Price. But I’m here to tell you that I see too many buyers giving TOO MUCH weight to the tax records and tax assessments. (So why offer it? Well cuz you want it anyway).
Problems with Tax Assessments on the MLS:
1) The MLS freezes tax data (more…)
Posted in
Buying Advice,
Tax Data |
11 Comments »
In a long list of “1sts”, FranklyMLS.com is now the 1st Virginia/DC/MD MLS search engine that scrubs for Short Sales! (maybe the 1st in the nation). Also see my quote today in the
Wash Post, and my other articles defining Short Sales.
On the FranklyMLS.com spreadsheet results page, try a search for Alexandria, if you see an asterisk next to the price, that means it is “probably a short (more…)
Posted in
Buying Advice,
FranklyMLS 101,
Short Sales |
21 Comments »
New Series: FranklyMLS.com 101#1 What is the difference between DOM-M and DOM-P?
Both of these terms refer to Days on the Market for a house for sale.
DOM-M stands for Days on the (more…)
Posted in
FranklyMLS 101 |
18 Comments »
My grandmother thinks I’m broke!
The other day she calls me and says in a thick accent,
“Are you still able to feed yourself? Why are you still in Real Estate.”
I asked why, and she proceeds, “I keep reading in the paper (more…)
Posted in
Buying Advice,
Humor |
23 Comments »
(Update 6-16-08: This post was featured in the Washington Post)
I wrote about my distaste for Short Sales (aka Fake Listings), and how only 5% close in Northern Virginia (as of 2-08, but that might be changing). I guess now my distaste has shifted away from Short Sales, and more toward clueless (more…)
Posted in
Buying Advice,
Short Sales,
Virginia Foreclosures |
31 Comments »
Disclosure: I am not a financial advisor. This is not financial advice, and you’d be an idiot to follow what I do personally.
I personally only own ONE “stock”, and that is called SPY. The #1 bought and sold stock in America, meanwhile most individual investors don’t know about it.
It is an Index Fund (also called an EFT, Exchange Traded Fund) that has all of the S&P 500 rolled into one stock with virtually no fees and no annual maintenance. Motley Fool 
wrote that “3 out of 4 mutual funds (more…)
Posted in
How I Buy Stocks |
37 Comments »
I officially have 100% proof that we have officially hit rock bottom.
No other indicators from NAR or the government have been as accurate as the proof that I have. I found a 100% correlation!
When My MOM SELLS, (more…)
Posted in
Buying Advice,
Humor,
market timing |
33 Comments »
I am officially launching FranklyMLS.com, the The First Wiki MLS!
Where BUYER AGENTS, in Virginia and DC, from multiple brokerages come together to ADD information and photo albums to listings they visit. MORE DATA & 1,000+ MORE PHOTOS!
THE “OLD 1.0 WAY”: (see all 31 MLS search engines here)
1) One-Way Information. “Here are homes for sale, as marketed by the listing agent. Take it, trust it, or leave it.” 
2) Photoless MLS Listings!
Sure they sell for $15,000 less but they are a pain for everyone. Oftentimes foreclosures or a listing by an underpaid or sucky agent have no (more…)
Posted in
Buying Advice,
FranklyMLS 101,
Search the MLS,
Wiki MLS |
79 Comments »
Update 3-19-09: This post is OLD. See new Post from 2-09 Short sales are closing, if done correctly. They can be the best “deal” (I hate saying “deal”). The post below is still great background info.
Update 1-22-09: Still reading this #1 blog post on short sales for a background on the process? Well it was written over a year ago. Short Sales are now closing MUCH more frequently in SOME areas (an 0 in areas like McLean). Subscribe to this blog for I plan to run some numbers on the % that are closing. My guess is the range is 1 in 3 (vs 1 in 20) before. However closing rates can be as high as 80% if your buyer agent asks the listing agent these questions: Top 10 Short Sale Questions.
(Update 6-16-08: This post was written on 2/08, this marketplace is changing ever month. Make sure to subscribe to the blog to get updated on the marketplace, like an upcoming post on more Short Sales starting to close.)
As of 2-08, most Short Sales in Northern Virginia are what I call “FAKE Listings.” (note that this is Virginia, every area is drastically different)
Only 1 in 20 sells.
In Arlington only 3 have sold out of 65 attempts.
I briefly went over Short Sales when I defined all SOL Homes including REOs, Bank Owned Etc. But Short Sales need more attention, as they are very tricky and misleading.
A Short Sale is a listing for sale that requires “Third Party Approval.” That means that 1, or 2!!, banks are owed MORE than the list price.
For Example:
- Home is bought for $500,000 with 5%, or $25k down.
- Home has a $475,000 mortgage.
- Value dropped below $475,000
- If the seller is facing foreclosure, they slash their price for a quick sale
- A Short Sale is attempted at $450,000
- If the bank accepts it, the BANK eats $25,000 (see Phantom tax for Seller)
The Theory Behind Short Sales: Banks would be better off to accept a loss now, versus going through the legal expense of a foreclosure, just to end up selling it for less later. Win win, right? Wrong. Read on.
Bank Trick 1: “Sure, we will consider a Short Sale, IF YOU KEEP PAYING US.”
Yep, a bank sees a desperate seller, and a potential $50,000 loss. They then mislead them into thinking that they might consider taking a bath on the deal IF the owner keeps paying their mortgage. The bank then ignores offers for 2-4 months in order to squeeze out another $2,000 x 4 or $8,000 profit. Brilliant. The bank then takes it over after foreclosure and sells it for $10,000 OVER the Short Sale List price. $18,000 better off, NOT doing a Short Sale.
Bank Trick 2: Sometimes the bank has mortgage insurance and it is CHEAPER for them to let it foreclose versus allowing a Short Sale, which is NOT insured.
For example, I was at an NVAR short sale class and a Realtor asked the speaker, “Why after 60 days, calling 2 times a day (120 calls) with a full price Short Sale offer, did the bank not call us back?” The speaker claimed it was due to an overworked staff.
I asked:
- Did they tell you they would consider a Short Sale IF you kept paying $3,000 a month? The answer was Yes.
- Was the home bought with Mortgage insurance? The answer was Yes.
- Bingo! Why eat $50,000, by accepting the low offer, if the bank a) gets $3,000 a month and b) is insured against a foreclosure and NOT a Short Sale.
She was pissed. She realized that she had been “had.” But this goes on ALL THE TIME. It can take MONTHS to hear back.
Another example:
- A seller in Clarendon 1021 tries to sell his property and profit $30,000 at $600k. (Yeah right!)
- Then he drops it to $570,000. No bites, but the foreclosure is pending!
- They SLASH it to $530,000
(sidenote, I get flooded with calls from friend that want to pick it up for a steal at $470,000! I said that it was impossible… since I’d buy if that price was a possibility.)
- It sits for another month, then the listing disappears after 100 days!
- A month later it is “bank owned” and listed for $560,000
- It sells for $540,000 in 26 days.
The moral here is banks are not dumb and the market isn’t so horrible that they will take all these lowball offers. They sold it for $10,000 OVER the previous list price (which probably had lower offers).
Reston homes from $300k to $400k.
- 20 Active “Short Sales” in Reston (watch out for “Not a Short Sale” listings)
- 73 were Withdrawn, or Expired.
- 3 Under Contract (1 under contract since Nov 2007! Many UC do not close.)
/>Only 3 sold in the last 24 months. 3 closed sales in 100 attempts!
- Dropped From $480k to $400k, sold at $400k (Full list)
- Dropped from $430k to $400k sold for $380k (5% under list)
- Dropped from $380k to $350k sold for $345k (2% under list)
Arlington Short sales.
- 25 Actives
- 37 Withdrawn
Only 3 have sold in ALL price ranges in all of Arlington in the last 2 years.
- Listed at $335k, sold for $335
- Listed at 700k dropped to $620, sold for $600k
- Listed at 480k dropped to $420k sold for $420.
In Alexandria, only 8 have closed in 2 years out of 80 attempts.
(most were at list, or 2% under list, some were $20k over list)
I show this, so you don’t think “Wow, they are desperate, we can now lowball. These 3 were the ONLY successful ones. Probably because they gave the bank a real offer.
Ok, so enough already with the War N Peace, what should I do?
Advice for Regular Sellers
- Do NOT blindly compete with a Short Sale. If you get an inexperienced agent, and they see 3 Short Sales in your neighborhood, and they have you compete against these “fake” listings, you can lose $25,000. Hope you “saved a ton” on that agent. (see Realtor Rebates)
Advice for Sellers Facing Foreclosure
- Watch out for the bank tricks to “keep paying.” Talk to a lawyer that specializes in bankruptcy to help guide you. They MIGHT recommend stopping payments immediately and saving it up for a rental.
- Use an agent that has completed (as in CLOSED, not listed) at least 1 Short Sale.
- If you have mortgage insurance, be extra careful, the bank might prefer that you foreclose.
- Get bank approval for your list price before listing it. Put in the listing remarks “List Price approved.” Otherwise you will get lumped into all the other Fake Listings and ignored by smart buyer agents.
Advice for Buyers looking for a “steal” (see “deals” post)
- Avoid Short Sales, or expect to wait 2-3 months and expect to put in 5-10 offers on Short Sales before one is accepted. A Short Sale in my building now has 4 offers. He says he is expecting a reply any day now… sorry, but yeah right!
- Look for Approved Short Sales. Ask if the bank has been contacted and if a price has been approved. Multiply time estimates by 4. Ie. 3 days= 12 days.
- Consider offering near, full or OVER list. What! Over list! Are you nuts! CNN says this is a BUYER’s Market! I know it sounds crazy, but if you and your agent see the price is well under your other options… I’ve said time and time again, I’d rather you pay $10,000 OVER list on a house that is $50,000 under the competition versus “saving” $50,000 on a home that is overpriced by $100,000. Ignore list price, focus on VALUE.
- Focus on Bank Owned. These units get replies in a day or two. (See video of Realtor buying a Bank Owned property)
Advice for Buyer agents & Listing agents
If you get one to close, change the remarks to SHORT SALE, NOT TO BE USED AS A COMP in hopes that the appraiser will take that into consideration and not trash the neighborhood (buyer agents, demand it of the listing agent to try to help your client’s “deal” not turn into destroying his own investment).
Sidenote: A home should NOT go under contract until the BANK signs it, but many agents will make this mistake. The seller signing it means nothing, and it should stay on the market as Active.
New Trick: Now that Short Sales are getting a bad wrap, some listing agents are NOT disclosing that it is a Short Sale.
Conclusion as of 2-2008: Short Sales in Northern Virginia suck.
Question: Realtors, should you have a “No Show” policy for Short Sales that aren’t approved by the bank? Are they really “for sale” if the owner (the bank) doesn’t even know about it? Feel free to just tell your clients “read this blog.”
n style="font-weight:bold;">-Written by Frank Borges LL0SA- Broker FranklyRealty.com
Please report typos.
p.s. See Washington Post Article on Short Sales
Posted in
Buying Risks.,
Short Sales,
Virginia Foreclosures |
118 Comments »
When I say “Buying a Listing,” I’m not referring to the actual act of buying a home. Instead I am referring to industry agent to agent jargon. It refers to an unethical trick where some listing agents will inflate the recommended list price in order to win the deal.
I have referred to my mother several times in my blog. I’ve learned more about real estate from her than anybody else, oftentimes from (more…)
Posted in
Listing Advice. |
24 Comments »
So you are buying a Virginia bank owned property, and REO or a Short Sale? You need to understand the various bank addendums that accompany them, or you might miss a $3,000 hidden fee.
But first, a quick background. Agents that are members of NVAR, and are REALTORS, use a 15 page contract that was painstakingly (more…)
Posted in
Buying Advice,
Virginia Foreclosures |
22 Comments »
So you’ve just looked at 10 homes and your brain is fried.
Everything starting to look alike? Oh No!
The solution: Buyer Agent Photo Albums.
Your buyer agent should be taking 30-50 photos per house (more…)
Posted in
Buying Advice,
Photography |
22 Comments »
