I am pleased to recommend Tony Card at the Chuck Hurd Team as a Realtor.  His experience, professionalism, and outstanding service made me feel secure in my recent home purchase in Big Bear.  Having never purchased a foreclosure, I wasn't exactly sure of the hurdles and procedures that were involved.  But let me assure you that Tony is an expert in this field.  He knew what needed to be done and the correct way to do it.  With the one problem we had with getting the bank's asset manager to complete a task, I was confident in the fact that we had a Realtor that 1) was familiar with how to correctly and efficiently get it resolved, 2) knew the ins and outs of the area and the services available.  Tony didn’t disappoint.  I’m completely convinced that I would still be sitting in escrow if we had had any other Realtor.

As a buyer, I was exceedingly pleased with Tony’s attention to detail from the beginning to the end.  He provided us with comparable property listings, information about the neighborhood, was able to provide a list of insured home inspectors, (with no pressure to choose from the list).  He had everything sent to me before I asked for it, or for that matter, before I even knew I needed it.

With all of the potential issues in purchasing a foreclosure, Tony got us through it like a champ.  His professional standards, outstanding client focus, personal service, impressive market knowledge, outstanding work ethic, and high level of integrity matched with a genuine interest in how we personally were doing in the process, have impressed me to no end.  Tony Card has earned my highest recommendation as a Realtor

On any given day when I look in the Big Bear Multiple Listings, I see more and more homes being listed for sale as short sales.  I’ve been listing and selling Short Sale Properties in Big Bear for a few years now and still find both buyers and sellers unsure of just what a Short Sale is.  I’ve written about this before, but I thought I would go through the Short Sale process once again. 

What is a Short Sale?

A short sale is simply when a house on the market is worth less than the seller still owes on it.  Here is an example of what I am talking about.  Mr. and Mrs. Homeowner borrowed $450,000 to purchase their dream cabin in Big Bear for $600,000.00.  Property values in Big Bear as well as everywhere else in California have dropped and the home that was purchased for $600,000 is now worth $350,000.   The homeowners are upside down or under water on this property.

Let’s say that they put the property up for sale for $350,000 and plan to turn over the whole amount of money to the bank, with a letter to the bank asking the bank to forgive the additional $100,000 that is owed.  If the bank agrees to do this, then that is a short sale.

Most people understand that much.  Here are some factors that catch people off guard.

1)      No one, including the Realtor can tell you how long the short sale will take, or even if the bank will approve the transaction.  One an average, short sales in Big Bear run about 90 days, but I have seen some go as long as 180 days without a resolution.  That is why you see so many buyers walk away from the short sale and move on to another property.

2)      The banks don’t agree to any short sale until a valid offer has been submitted.  The property must be listed for sale and be priced at a price that can be substantiated by comparable sales.

3)      One of the factors that people don’t understand is that the foreclosure process does NOT stop during the short sale process.  Depending on who the investor is, they may be willing to postpone the sale of the property and let the short sale process go forward.  Others won’t.  I had one short sale here min Big Bear that went on for 6 months.  Just before we hit the six month mark, we started the negotiations with the bank, only to have the investor say no more and had the home sold at auction.

4)      Unless you are behind in your mortgage payments, most banks won’t consider approving a short sale.  As a Realtor, I can’t advise my clients to stop making their mortgage payments.  What I would advise my clients is speak to their accountant and find out what the tax ramifications are if they do commit to a short sale.  It might also be a good idea to speak with a lawyer to find out what your legal options are

The Short Sale process starts with the listing agent.  The Realtor is the one who qualifies the seller to make sure that he or she qualifies for a Short Sale. Before the Realtor can move forward with the short sale, he needs to know how many loans the seller has on the property.  He needs to see if there is a true hardship by the homeowner keeping the property, and he needs to see if the home owner has any real assets. Once the qualifications have been met, the Realtor gathers the necessary documents from the seller and puts the Short Sale Package together that will accompany any offer to the bank.  Once an offer is submitted, the short sale package is then submitted to the bank and the process begins.

Buyers go into these Short Sales with the mentality that this is a normal purchase and that they are in the driver’s seat.  They quickly find out that this is not the way it works.  The buyers quickly learn that the seller is not going to do any repairs to the property.  In most cases, the homeowner is broke and has no money to spend on the property.  Forget about asking the bank to do anything.  The bank is only going to do what is absolutely necessary in order to close the escrow. 

What are the Tax Implications of a Short Sale?

That is a question that I am asked on just about every listing appointment that I go on when we are discussing the Short Sale.  The first thing I advise my clients is to speak to a tax professional about the tax implications of a Short Sale. 

That being said, the amount of money that the lender agrees to write off may be considered ordinary income in the form of a gift of a cancelled debt.  As such, the seller will generally receive a 1099 tax form from the lender for the cancelled debt.

Will the Seller be taxed on this gift of forgiven debt?

Again, seek the advice of a tax professional on all tax matters.  That being said, under the Mortgage Debt Relief Act of 2007, a tax payer will not be taxed if the following conditions apply.  1)  The property is the primary residence and 2) The subject loan was used to purchase the cabin. 3) The short sale debt is being forgiven between January 1, 2007 and January 1, 2013, 4) The cap on the debt forgiveness is capped at $ 2 Million.

In conclusion, if you are going to sell your home as a short sale in the Big Bear Lake area, please give me a call and I will see what I can do to help you.

On any given day when I look in the Big Bear Multiple Listings, I see more and more homes being listed for sale as short sales.  I’ve been listing and selling Short Sale Properties in Big Bear for a few years now and still find both buyers and sellers unsure of just what a Short Sale is.  I’ve written about this before, but I thought I would go through the Short Sale process once again. 

What is a Short Sale?

A short sale is simply when a house on the market is worth less than the seller still owes on it.  Here is an example of what I am talking about.  Mr. and Mrs. Homeowner borrowed $450,000 to purchase their dream cabin in Big Bear for $600,000.00.  Property values in Big Bear as well as everywhere else in California have dropped and the home that was purchased for $600,000 is now worth $350,000.   The homeowners are upside down or under water on this property.

Let’s say that they put the property up for sale for $350,000 and plan to turn over the whole amount of money to the bank, with a letter to the bank asking the bank to forgive the additional $100,000 that is owed.  If the bank agrees to do this, then that is a short sale.

Most people understand that much.  Here are some factors that catch people off guard.

1)      No one, including the Realtor can tell you how long the short sale will take, or even if the bank will approve the transaction.  One an average, short sales in Big Bear run about 90 days, but I have seen some go as long as 180 days without a resolution.  That is why you see so many buyers walk away from the short sale and move on to another property.

2)      The banks don’t agree to any short sale until a valid offer has been submitted.  The property must be listed for sale and be priced at a price that can be substantiated by comparable sales.

3)      One of the factors that people don’t understand is that the foreclosure process does NOT stop during the short sale process.  Depending on who the investor is, they may be willing to postpone the sale of the property and let the short sale process go forward.  Others won’t.  I had one short sale here min Big Bear that went on for 6 months.  Just before we hit the six month mark, we started the negotiations with the bank, only to have the investor say no more and had the home sold at auction.

4)      Unless you are behind in your mortgage payments, most banks won’t consider approving a short sale.  As a Realtor, I can’t advise my clients to stop making their mortgage payments.  What I would advise my clients is speak to their accountant and find out what the tax ramifications are if they do commit to a short sale.  It might also be a good idea to speak with a lawyer to find out what your legal options are

The Short Sale process starts with the listing agent.  The Realtor is the one who qualifies the seller to make sure that he or she qualifies for a Short Sale. Before the Realtor can move forward with the short sale, he needs to know how many loans the seller has on the property.  He needs to see if there is a true hardship by the homeowner keeping the property, and he needs to see if the home owner has any real assets. Once the qualifications have been met, the Realtor gathers the necessary documents from the seller and puts the Short Sale Package together that will accompany any offer to the bank.  Once an offer is submitted, the short sale package is then submitted to the bank and the process begins.

Buyers go into these Short Sales with the mentality that this is a normal purchase and that they are in the driver’s seat.  They quickly find out that this is not the way it works.  The buyers quickly learn that the seller is not going to do any repairs to the property.  In most cases, the homeowner is broke and has no money to spend on the property.  Forget about asking the bank to do anything.  The bank is only going to do what is absolutely necessary in order to close the escrow. 

What are the Tax Implications of a Short Sale?

That is a question that I am asked on just about every listing appointment that I go on when we are discussing the Short Sale.  The first thing I advise my clients is to speak to a tax professional about the tax implications of a Short Sale. 

That being said, the amount of money that the lender agrees to write off may be considered ordinary income in the form of a gift of a cancelled debt.  As such, the seller will generally receive a 1099 tax form from the lender for the cancelled debt.

Will the Seller be taxed on this gift of forgiven debt?

Again, seek the advice of a tax professional on all tax matters.  That being said, under the Mortgage Debt Relief Act of 2007, a tax payer will not be taxed if the following conditions apply.  1)  The property is the primary residence and 2) The subject loan was used to purchase the cabin. 3) The short sale debt is being forgiven between January 1, 2007 and January 1, 2013, 4) The cap on the debt forgiveness is capped at $ 2 Million.

In conclusion, if you are going to sell your home as a short sale in the Big Bear Lake area, please give me a call and I will see what I can do to help you.

On June 21, 2010 GMAC will be offering financing incentives on their REO properties.   This program will help buyers save some money on fees and services when buying a REO in Big Bear that is owned by GMAC.  Not all GMAC REO properties will qualify for this program.  When I get new listing that do qualify, it will be noted in the MLS and I will have informational packages at the properties.  As always, I am available by phone or email to answer any questions that come up regarding this new and exciting program.


SAVINGS

            One Year Home Warranty at no charge
            No Pre Approval Fee
            No Loan Application Fee
            No Charge for Credit Report
            No Appraisal Fee

  

Qualifying Loans


              Conventional Loans  (Fixed or Adjustable)
           FHA  (Fixed and Adjustable)
          VA    (Fixed and Adjustable)
          Jumbo     (Fixed and Adjustable)


There is going to be a lot more information coming out in the coming days.  As GMAC provides me with the information, I will be posting it on this blog.

You can contact me anytime by phone or email my phone number is 909 436 8043 and my email is tony@tonycard.com

The Big Bear Valley is expecting the number of bank-owned REO properties to rise in the summer of 2010. Here are 7 Tips that can help you snag a bank-owned property.

First- Hire an REO expert with experience buying and selling bank-owned properties in the Big Bear Valley.  I am that expert

Avoid lowball offers. Since most bank-owned properties in Big Bear are being sold at list price or above, a lowball offer will not work. Consider submitting an offer slightly above list price.

Determine the value of the property. You make your money when you buy and not when you sell. I can help you become an expert in the Big Bear market so you can recognize a bargain instantly when you see it. Also have an inspector and contractor evaluate the property and itemize all the repairs that need to be made. Subtract the cost of these repairs from the estimated value.

Submit a complete package. Each lender has certain guidelines for submitting offers on property in Big Bear.  When you arrive in Big Bear to look at property, be prepared.  Bring proof of funds if you plan on paying cash, a bank account balance statement works well for this. If you need to take out a loan, bring your pre qualification letter and your check book.

Write multiple offers. Don’t expect your first REO offer to be accepted. Competition is fierce for Bank Owned, REO property in Big Bear. Be prepared to write multiple offers on different properties before you land one.

Prepare for counteroffers. Banks will often send you a counteroffer at a higher price. You may be willing to raise your price slightly with the first counteroffer, but if a second counteroffer comes in, respond with your “best and final” offer.

Be prepared to walk away. If the bank doesn’t accept your offer or you’re unwilling to raise the price during the counteroffer period, be prepared to walk away and find another deal.

On my last blog I discussed the Home Inspection process in Big Bear and today I thought I would take it one step further and discuss who is responsible for paying for repairs that came up in the home inspection.

There are a number of buyers that think that after getting a home inspection, they then expect the seller to make all of the repairs that came up as a result of the inspection.  In trying to shed some light on that subject, let’s examine a few things.

What is required of the seller in order to sell a home in Big Bear?

The California Residential Purchase Contract states that the only thing a seller is required to do to his house in Big Bear, or anywhere else in California for that matter is to strap the water heater and make sure that there are working smoke detectors in the bedrooms.   That is ALL that the seller is required to do in order to sell a house in Big Bear.

What is the purpose of the Home Inspection?

The purpose of the home inspection is to give the buyer a better understanding and overview of what they are buying.  You may have picked out the best looking cabin in Big Bear, but by letting the home inspector take a look at the place, you may find out that there are plumbing leaks, electrical problems, roofing issues, and so on.  By letting the inspector go through your choice of properties in Big Bear, you then know what the true condition of the property is.

What do you do with the inspection report once you have it?

Once the inspector has completed his work on your dream home in Big Bear, he is going to issue you a report that explains all of his findings.  Once you’ve read and understood the report, what do you do with it?  Again, the report is to give you, the buyer a clear understanding of the condition of the property.  Some buyers think that after spending $250.00 to $300.00 for the report, that they should then turn the report into a Fix It List for the seller.  This is truly a misconception. 

Will the seller pay for any repairs?

The Purchase Contract gives the buyer the right to do the home inspection and to ask the seller to make repairs.  As I stated at the beginning of this blog, the seller is not required to make any repairs other than to make sure that there are working smoke detectors in the bedrooms and to have the water heater strapped.  After being presented with a repair request, the seller may or may not agree to make any of the repairs that you, the buyer are asking for.  Normally, if the seller agrees to make repairs, the buyer will then sign off the inspection contingency and move forward with the close.  If the seller refuses to make any repairs, then the buyer has to decide whether to move forward with the close and buy the property as is.  If the repairs are too extensive and the seller won’t make any of the requested repairs or offer some sort of credit to the buyers, then the buyer can simply back out of the deal. 

When it comes to buying a home in Big Bear, the question of why have a home inspection and who pays for it comes up quite frequently. Let’s take a few minutes and address both of the commonly asked questions that I get.

Who pays for the Home Inspection?

The home inspection isn’t a required inspection in Big Bear, but it is highly recommended. As it isn’t a required inspection, the buyer would be responsible for paying for the home inspection.

How much does the Home inspection Cost?

The cost of the home inspection on a home in Big Bear will vary depending on the size of the home.  Most home inspectors that I deal with base their fee off of the square footage of the property.  Unless you are looking to buy something rather large, the cost of the home inspection will generally run you somewhere between $200.00 and $250.00

How do I choose my Home Inspection?

If you look in the local yellow pages in Big Bear or anywhere else for that matter, there will be a long list of home inspectors. So, who do I choose?  The first thing I would do as a buyer is to ask my Realtor who they recommend for the inspection.  Generally, your Realtor is going to have some recommendations for you.  If you find yourself looking on your own, then you want to look for two important things.  The first question that you want to ask the home inspector is if he is a licensed general contractor.  Being a licensed General Contractor is not a requirement in Big Bear but I would think that you want someone working for you that know what he is looking at.  The second thing that I would ask the home inspector is this.  Do you have Errors and Omissions Insurance?   Otherwise known as E & O Insurance.  No matter how good the home inspector is, he is still human.  Even the best will miss something every now and then.  By carrying E & O insurance, he is well covered in the event that he misses something and it turns out to be something serious.  I have guys come in and tell me that they are doing home inspections and they are asking for my business.  My first question is this.  Do you have E & O?  Most simply say NO, while others ask me what E & O is!  I thank them but explain why I won’t be recommending them to my clients.

Why spend the money on a Home Inspection?

When you buy a cabin in Big Bear, the owner is suppose to fill out a number of different disclosures, answering truthfully about the condition of the property.  What if you buy a bank owned REO property where there are no disclosures?  You need to find out what the true condition of the cabin is and you really need to have that done by an uninterested qualified third party.  You wouldn’t buy a car without taking a test drive and you shouldn’t buy a home without having it thoroughly inspected by a licensed professional. A home is a large investment and it is imperative you know what you are getting yourself into. I’ve sold new constructions that have a list of things wrong with them. How would we have found out without the home inspection?  It doesn’t matter if it is a brand new home or one built in 1930, you need to get a home inspection. 

If you’re going to buy a home in Big Bear, or anywhere else for that matter, get a Home Inspection!

Long gone are the 5% and 0% down home loans in Big Bear.  If you don't have at least 10% or your down payment, most people look towards an FHA backed loan.  A FHA backed loan allows you to get into your primary residence with as little as 3.5% down.  However, if you're looking for a home loan for a second home in Big Bear, FHA probably won't work for you.  What other options are out there?

Have you heard of Fannie Mae?  Fannie Mae buys home loans from banks and ended up owning a lot of property in Big Bear after the housing bubble burst, Fannie Mae is not in the business of owning homes.  They wanted these homes sold and sold quickly.

Fannie Mae recognized the need for an alternative to FHA financing on homes that they own.  As a result of this, they now offer low down financing through the Home Path Financing and Home Path Renovation Financing Programs. Remember, these programs are only available for homes owned by Fannie Mae. 

If you are looking for a deal on a property in Big Bear, give me a call and ask me about seeing some of the Fannie Mae properties that we have for sale.  You will find that the price is very attractive and the financing terms are some of the best out there.

· Low down payment and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only)

· You may qualify even if your credit is less than perfect

· Available to both owner occupiers and investors

· Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer

· No mortgage insurance*

· No appraisal fees

Fannie Mae doesn't pay ANY closing costs but they offer a credit based off of the purchase price of 3.5% that the buyer can use to cover the closing costs.  In most cases, the 3.5% will cover both buyer and seller closing costs

Long gone are the 5% and 0% down home loans in Big Bear.  If you don't have a lot of money for the down payment, most people look towards an FHA backed loan.  FHA will let you get a loan with 3.5% down.  However, if you're looking for a home loan for a second home in Big Bear, FHA probably won't work for you.  What other options are out there?

Have you heard of Fannie Mae?  Fannie Mae buys home loans from banks and ended up owning a lot of property in Big Bear.  When the housing market bubble burst, Fannie Mae ended up holding title to a ton of homes and they want them sold.

As a result if this, Fannie Mae offers financing on homes that they own through the Home Path Financing and Home Path Renovation Financing Programs. These programs are only available for homes owned by Fannie Mae. 

If you are looking for a deal on a property in Big Bear, give me a call and ask me about seeing some of the Fannie Mae properties that we have for sale.  You will find that the price is very attractive and the financing terms are some of the best out there.

· Low down payment and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only)

· You may qualify even if your credit is less than perfect

· Available to both owner occupiers and investors

· Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer

· No mortgage insurance*

· No appraisal fees

· Also eligible for Home Path Renovation Mortgage

Fannie Mae doesn't pay ANY closing costs but they offer a credit based off of the purchase price of 3.5% that the buyer can use to cover the closing costs.  In most cases, the 3.5% will cover both buyer and seller closing costs

While sitting at my desk the other morning, I received a phone call from a very anxious and nervous client of mine.  Why was he so nervous and anxious you ask?  He came to Big Bear to work on the small fixer cabin that he had purchased and found a note posted on the window stating that the bank was foreclosing on the property.  His first question to me upon arriving at my new office was How could this happen?  I paid CASH for the cabin. 

Knowing that we weren’t going to be able to deal with any of this until my client had calmed down, my first objective was to get him calmed down so that we could focus on the problem.  After all, how often do you arrive at your Big Bear cabin and find a Notice of sale from the bank posted on your property.

Once he calmed down and we started looking in to the issue, it was obvious that the bank made a mistake and posted the wrong Big Bear property.  As simple as it seems, they should have posted the property next door.

Before I called the agent who posted the house, I did some research and found that this particular agent had no experience in Big Bear and in fact has been a licensed Real Estate agent for less than year.  This is just one more reason that these banks should use a local agent who knows the area when dealing with the REO properties.

When I called the agent who posted the cabin in Big Bear, I expected to have a calm and rational conversation.  In my mind, I expected to be able to explain to her where she made the mistake and it would be easily rectified. Boy was I wrong!  The first comments from the other agent were that my client had made a fraudulent purchase and had a fraudulent title!  This statement was made before she looked at anything. Instead of a calm and rational discussion, I was yelled at and then hung up on.  It wasn’t until I was able to speak to the broker later on in the day that we were able to get them to see that they had in fact, posted the wrong property.  My client left the office feeling much better than he felt when he called me early yesterday morning. 

This situation made me sit down and wonder how many times this happens throughout the United States.  I did some research on the issue and was surprised to see that this isn’t an uncommon problem at all.  In the cases that I read about, the one common denominator in each case was that the agent posting the REO property was from out of the area.  When will these out of area banks understand that the whole REO transaction will go much smoother if they contact a local agent and deal with them?

Please feel free to contact me at tony@tonycard.com with any questions.  While I specialize in the Big Bear area, I am available to answer any questions that you may have.

I went out to preview a bank owned, REO property today in Big Bear that I planned to show to a client tomorrow.  According the Multiple listing Service, this property fell out of escrow and came back on the market.  The details in the listing did state that the purchase of the home was subject to the successful cancelation of the previous escrow.  I've seen this verbiage before in listings that come back on the market in Big Bear, but I've never had any problems from them.

To start off with, this REO cabin was back off of the beaten path and was very difficult to locate.  The navigation system in my vehicle was of no help as it didn't even recognize that I was on any type of road.  I finally found the REO in an area that I would call Toad Butt Arizona!   Upon arriving, I was surprised to see the property wide open and work being done on it.  As this was a bank owned, REO listing, my first thought was that the bank was having some work done to the property.  I had no idea why it fell out of escrow but thought that perhaps something significant came up during the previous escrow and the bank was fixing it as to avoid losing anther escrow.  Boy was I wrong!

As this property was in a very isolated area and no numbers were visible on the REO, I asked the person working on the property if I had the right address.  He informed me that I had the correct property but wanted to know why I was there.  Once we started chatting, I learned that the person working on the property was the individual who was trying to buy the property.  What was very surprising to me was that this guy had no idea that the escrow was being cancelled.   He called his agent and was reassured that everything was on schedule and they were going to close the escrow.  I didn't say any more as I was a little confused, but previewed the property and left.  Once I left the property, I called the listing agent to find out just what was really going on!  I was assured that the property was in fact for sale and that the bank was accepting offers.

What puzzled me out of all of this was first off,  was why wasthis guy working on a home that he didn't own and second, what was this buyer doing at a home without the agent present?  
 

Now I've had clients want to have early access to properties and I have always said NO.  To let a buyer have access to a property before it closes escrow puts a tremendous amount of liability on the broker.  But to take it a step further and allow the buyer to work on the property before it closes escrow is crazy. The addednum that the bank makes the buyer sign normally states that there is to be no work done on the REO until it closes escrow.   As an agent, you are putting your own license in jeopardy along with causing serious liability issues for your broker if you allow someone to have access to a home before the close of escrow and something went wrong.  What would happen if the guy was doing some plumbing work and accidently caught the house on fire?  Once the bank found out that the buyer was working on the home and he was there without his or her Realtor, well there would be hell to pay.  There would be questions like, how did you get the access code?  This would all come back on the Realtor and the broker.  For an agent to give your unfettered access to a property in Big Bear without being there is a big No No.  What was the agent thinking?

While it is obvious that I strongly disagree with what was going on at this property in Big Bear.  I plan to keep it to myself and go from there.  When my client arrives, I'll be showing the property and if all goes well, sell the property.

Tony Card is an experienced Realtor in Big Bear Lake, CA who specializes in bank owned, REO properties and Short Sales.  If you ever have any questions about what is going on in the Big Bear Real Estate market, please email me at tony@tonycard.com or call me at 909 436-8043

Clients of mine just closed escrow on a property that was being sold by a private owner.  While the clients ended up buying a cabin in Big Bear from a private party, they originally came to buy a Bank Owned, REO.  This couple came to Big Bear with the intention of buying a bank owned, REO and never gave a thought to buying a cabin from a private owner.  I met these people at the REO one afternoon and after viewing the home, they decided to make an offer.  Most REO properties in Big Bear have multiple offers on them and this cabin was no exception.  Even though the clients wrote a very strong offer, I was informed that they were not the best offer.  They were very disappointed to learn that the cabin that they thought was their dream home would not be there's but they didn't give up.  I ended up showing them a home that was owned by a private party and they fell in love with it.  Escrow just closed and they are very excited to be the owners of a cabin in Big Bear.

This made me think about the differences between buying a home that is privately owned and a bank property, or REO.  Let's take a look at some of the differences.

Picking Escrow and Title

When you make an offer on a privately owned property in Big Bear you normally let the seller pick who title and escrow are going to be with.  Most of the time, the escrow and title are handled locally in Big Bear.

When you make an offer on a bank owned, REO property and it is accepted, the bank will want to select the title and escrow company.  The banks go out and find the lowest bidder and that is who they want to use for escrow.  In many cases, the escrow is much more difficult to deal with because the escrow companies that the banks use are so overloaded that they can't provide you with good service.  The state of California passed a law that stated that the bank cannot dictate to the buyer who would provide these services.  The banks are now forced to offer the buyer a choice of escrow and title companies.  The kicker is that while the buyer can select who he wants for title and escrow, the bank will force him to pay for both buyer and seller escrow and title fees if they select anyone other than who the bank wants.

Inspection Time Frames

Whenever you make an offer on a property in Big Bear, you use the California Purchase Contract.  That contract states by default that a buyer will have 17 days to do his inspections from the time of acceptance.  When dealing with a property owned by an individual, this is normally not countered out.

Whenever you deal with a bank owned, REO property, the bank is going to send you an addendum to the purchase contract and one of the many things that get changed is the inspection time frame.  Depending on whether you're an investor or just someone looking to purchase a second home, the bank will cut your inspection time frame from anywhere from 5 to 10 days.

Removal of Contingencies

As previously discussed, when you make an offer on a property owned by a private party, you are allowed 17 days to do your inspections.  At the end of that time frame you will be asked to sign off the inspection contingency in writing. 

Do you remember that addendum that I spoke of earlier?  Well here it comes again.  If you buy a bank owned, REO property, the bank is going to change the way that your contingencies are released.  Instead of being asked to sign off the inspection contingency at the end of 17 days, you lose the inspection contingency automatically at the end of your inspection time frame.  In other words, if you find a problem with the house, you must notify the bank in writing before the inspection time frame is over.

Repairs

The next step after the home inspection is complete is generally to ask the seller to do a few repairs.  When you buy the home from a home owner, the chances are very good that you're going to get some concessions when it comes to the repair request.

When you buy your cabin as a bank owned, REO cabin, you shouldn't expect much in the way of repairs.  The addendum is very specific that you are buying the home as is.  I'm not saying that you won't ever get a bank to make a repair concession but don't count on it.  I've sold many bank owned, REO properties in Big Bear and I've been able to get the bank to help out on the repair issues twice.  When you buy the bank owned REO, just think of it this way.  The home inspection is going to tell you what you're buying.  If you don't like what the report tells you, then get out of the deal and move on.

Disclosure

When you buy a property in Big Bear from a home owner, he will send over a stack of disclosures about the property. He is required to disclose to the new owner anything about the property that could affect the sale.

When you buy the bank owned, REO property, you are going to get very little in disclosures.  The reason for this is that the bank has never been in the home and knows nothing about its condition. 

I hope this blog has helped you understand some of the differences between buying a privately owned home in Big Bear and a bank owned, REO.  Keep this final thought in mind.  When you buy from a private party, you are going to have some leverage in the process.  If you buy a bank owned, REO property, you will quickly learn that the bank is in control.  You will play by their rules or you won't buy the home.

If you have any questions about buying a REO property or any questions about Real Estate in general, please feel free to contact me.  My cell number is 909 436-8043 or you can email me at tony@tonycard.com

Tony Card

Previously Posted on Activerain

Realtors are specialist, just like your doctor.  Would you go to a foot doctor if you had a heart ailment?   Of course not!  You would seek out a professional that specializes in the area of treatment that you need and then you would go and see him.  Then let me ask you this?  Why is it that you will risk your financial health by using an unqualified Realtor?  When you’re sick, you see the doctor who specializes in whatever it is that you have.  You seek their advice, you heed their advice and you get better.  Yet so many people will want to buy a second home in Big Bear and bring their Realtor buddy from their home town to help them.  Let’s take a look at this and explore why it’s a foolish thing to do.

Real Estate is Local

Just like the weather, Real Estate is local.  What is happening in the Real Estate market Laguna Beach or Apple Valley is not going to be the same as what is happening in the Big Bear Real Estate Market.  You’re Realtor from Orange County, while being an expert in Orange County is probably not going to know a thing about Big Bear.  He or she is not going to be able to honestly direct you to the better areas of Big Bear City and keep you away from the rougher areas.  Let’s say you want to buy a cabin in Big Bear and rent it out when you are not using it.  Is your Realtor from Orange County going to know what the best rental areas are?  How is your Realtor from Los Angeles going to answer the question when asked what a “Stop and Waste Valve” is?  Chances are the down the hill Realtor is not going to know enough about the Big Bear area to be able to provide you with good advice.  Is your down the hill Realtor going to be able to advise you on how to winterize your cabin?  Chances are he won’t even know that it is something you need to do in Big Bear.

How can you tell if you’re “Down the Hill” Realtor really cares about you getting the best deal you can in Big Bear?

The best thing your down the hill Realtor can do in a situation where you want to buy a home in Big Bear is to refer you to a local Big Bear agent.  The chances of you finding the perfect cabin in Big Bear increase 100% for you if you are referred to a local Big Bear agent who knows the area and also knows the inventory.  The local Big Bear agent is going to be able to advise you and what homes would be good properties to buy and flip.  The local Big Bear agent is going to have access to the local Multiple Listing Service and know what the best deals are.  The local Big Bear agent is going to know the best rental areas as well as some of the better areas to live in.  If your friend who sold you your home in Newport Beach is really a friend, he will refer you to a local Realtor in Big Bear. 

Even though I have a CA Real Estate license and am licensed to sell Real Estate anywhere in the state of California, you won’t see me selling  property in any area other than Big Bear.  The reason for that is I am an expert in the Big Bear area only.  I know what areas you want to live in and what areas you should stay away from.  Whether you are buying a small cabin in Sugarloaf or buying a home on the lake, I can advise you on what would be best for you.  

Local is the best way to go!

I have nothing against the down the hill Realtors.  I’m sure that they are very good at what they do in their area of expertise.  Just as I’m an expert in the Big Bear Real Estate market, I’m sure that they are also experts in their markets.  I would not go down the hill to try and represent someone in a sale in an area that I don’t know.  I wouldn’t know what areas were good areas, nor would I be able to tell my client that the price offered is a good value for the property.  This is all information that I could learn, but why should I.  I simply refer the client to an expert in the area that they want to buy and I know that my client will be taken care of.  Making sure that my clients are taken care and they get a good value in their purchase is more important to me than the commission.  I’d rather refer it out and collect a small referral fee at the end of escrow than risk selling my clients a property in an area that I don’t know and sticking them with a home that they will regret.

If you are interested in property in the Big Bear area, please contact me at tony@tonycard.com or call me at 909 436 8043