Talk about your unintended consequences. Two weeks ago, I was innocently watching Twitter when someone linked to a clever animated video spoof on social media. At the end of the video and to my surprise, I learned that I too could make a funny little video by visiting the site shown in the credits — for free! Being me and all, I took the bait.
At the time, I happened to be in the depths of bank-owned despair. I had been wearing my buyer agent hat a lot lately, and it seemed like every home I encountered was owned by a bank.
My husband had been finding the same thing but, while he had at least been papering the county with failed offers on behalf of his entry-level buying clients for a couple of months, I hadn’t even been able to get my own first-time buyer across a single threshold.
The problem was that my particular client had a cool traveling job that took him out of town four days each week. On top of that, he had some crazy notion that he should actually see a home before making an offer. Buyers!
So in a game of clutching four-leaf clovers, tossing salt over our shoulders, and occasionally rubbing Buddha’s belly, we would spend the remaining three days each week when he was in town staring with glazed eyes at the multiple listing service and resting on the reset button.
Each time we suspected a home might be suitable (a property within his price range and with at least the potential for running water), we would spring into action.
We got so good at this that we had it down to a system. I would e-mail the listing to my client, he would approve it for showing, I would call the listing agent, and then I would call my client again to tell him to go back to watching "Oprah."
The entire process took 12 minutes, during which time we would learn that 83 offers had already been submitted, all well above full-price and many all cash.
So I had my moment of group therapy. I made a little video. I did this in stream-of-consciousness fashion, brain on the well-documented seven-second delay, while enjoying an early morning cup of coffee in my jammies. I posted it on my blog (current readership equals three) and, feeling better, headed out to meet the termite guy.
Now, I’ve heard all this talk about going viral, but I thought viral was reserved for important stuff — like people who dance at their wedding or babies who rock out to "Single Ladies."
My video had no dancing, yet as I write this, my stupid talking-robot production has more than 57,000 views. People are sending it to me now, unaware that I am in fact the evil genius behind the epic. …CONTINUED
I could take this article in the direction of the power of social media. Instead, what struck me was that the world of distressed sales, both short sales and REO (bank-owned) properties, has gotten completely out of control.
And as it turns out, my woes aren’t mine alone — not if you believe the deluge of comments I received from both agents and buyers. We are living in a lawless Wild West, outgunned by a band of bureaucratic strangers armed with an arsenal of smoking deals (most missing the appliances and the mailbox key). They answer to no one.
Despite the fierce competition and multiple multiple-offer scenarios, my client did finally hit pay dirt. Let’s call him "No. 21." He got lucky. This is because we adjusted our strategy, only searching for homes 25 percent below his price range, giving us room to dazzle the seller with our deep pockets.
No. 21’s offer was submitted first day, which was no easy task, considering that the supporting documentation we were required to provide made the Uniform Tax Code look like a recipe for toast.
There were verifications of funds, of course, and the preapproval from the seller’s "preferred" lender (as in "If you would prefer we didn’t set fire to your offer, you will use him"). There were reams of buyer information forms and supplements, each named after the rain forest from which they were hailed.
Electronic signatures, while legal in the U.S. and my own Golden State, thanks to the Uniform Electronic Transactions Act, were considered the work of the devil by this bank. So, I was required to e-mail each steaming mound of majestic oak byproduct to my traveling client.
He would find a copy shop to print the documents, sign them, I would receive the return package to print and sign, and I would in turn send the stuff to the seller to (you guessed it) print and sign.
At least they told us up front. The last lender told us about the e-sign no-no clause 27 days into a 30-day escrow, at which point both agents and our respective clients enjoyed spending our Tuesday evening signing over and around electronic stamps.
Then we enjoyed spending Wednesday night reconstructing everything that had been accomplished prior, because the mere presence of the electronic signatures, we found, was enough to send the lender home early on stress leave.
Then there were the addenda. Where No. 21’s transaction was concerned, my favorite was the one titled, "Things Which Must Accompany Your Offer Lest We Use it as a Coffee Filter and Make You Listen to Barry Manilow Songs until the Housing Market Recovers."
It included all of the typical bank-owned sale clauses, like "We won’t pay for anything," "We won’t disclose anything," "Don’t call us," and "Nothing in the house works — get over it." …CONTINUED
And, of course, there was this in bold: "Seller to choose all services — title, escrow (and what you will name your unborn children) are all choices of the seller." Keep in mind, our offer would only be considered if the buyer signed this addendum before submitting.
Thank goodness for government intervention! California recently passed the Buyer’s Choice Act, which prohibits an REO lender selling a property from "directly or indirectly requiring the buyer to purchase escrow services or title insurance from any particular company." Power to the people!
So, this week I received yet another in the cavalcade of daily afterthoughts for No. 21’s signature. He is now being asked to sign a disclosure saying that he is free to select service providers and, by signing, agrees to use the escrow and title companies recommended by the seller.
Can you say: "Cover your ass"? First, we are told we have to agree to use your favorites in order to play, then two weeks into escrow you want the buyer to sign that he is using your service providers under free will. Makes sense to me.
The reality is that the Buyer’s Choice Act changes nothing. Anyone submitting on an REO property in my neighborhood knows that you are going to be beating off competing buyers with a tire iron. The offer has to be squeaky clean, and naming title and escrow, while permitted by law, will likely get you tossed faster than my mother-in-law’s meatloaf.
Make no mistake; it’s a mess out there. Dealing with lenders has gone beyond stupid. We are currently eight months into another transaction, a short sale, where we can’t seem to get anyone at the bank interested in finding our file.
This particular bank is, in my mind at least, redefining stupid. Packages must be faxed, of course, and we have been advised repeatedly that it takes three weeks to get the package "into the system." Why? So the bank can "image" it, of course. But don’t try sending a ready-made image by e-mail; that makes too much sense, apparently, so it’s not allowed.
Every day is a new day in "Lender Land," and this week we learned of a new rule to better serve us. Faxes to this lender can be sent only 10 pages at a time. No exceptions. The result was five separate batch transmissions on my last outing. I don’t even dare ask why. I’m not in charge.
So, I made a funny video. Only, it’s not really funny at all. And now I have about three dozen people who have subscribed to my future videos, naively unaware that I am a one-hit wonder. Then again, I might have one more in me.
No. 21 is having his appraisal this week. Good thing for us that starting Jan.a 1, 2010, California will have an Office of Real Estate Appraisers (OREA) in place that will have regulatory oversight of appraisal management companies (AMCs). These are the same AMCs, the lawmakers remind us, that "gained prominence after Fannie Mae and Freddie Mac adopted the Home Valuation Code of Conduct (HVCC)." Gained prominence? I’ll say.
I wonder who is going to oversee the OREA. I suppose we will find out in 2011. No. 21 will probably still be in escrow.
Kris Berg is broker-owner of San Diego Castles Realty. She also writes a consumer-focused real estate blog, The San Diego Home Blog.
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