The day arrived when the phone rang and I heard those magically words, “Hello, this is your closer.” Ah, it was like blue birds burst into song, the sun shone out from behind the computer and all was right with the world. I could see the sale happening in a month, perhaps a couple of weeks. This was not so bad, it was easier than I expected. And then… more demands, more documents, countless HUD statements. As if that was not enough, weeks go by and another phone call stating that the government has just come out with a new form that must be filled out by the owner of the property, a form that did not exist two weeks prior.

What totally mystifies me is that each time I have asked these handlers and closers if they have every bit of information they need, they say yes and I should hear in 48 to 72 hours. I hear nothing. Then when I call back to find out why I haven’t heard, they want another document, or they want it revised. It is frustration beyond words. Just as you think you have the brass ring, it slips away and you have to wait until you go around again.

What I have learned is to treat my handlers and closers with the utmost respect, warmth, humor and cooperation. I only once lost my temper, at the request for a new form that had to be filled out. The number one rule in working out a short sale with the bank is: DO NOT GET PISSED OFF AT YOUR HANDLERS. I apologized.

I have scanned, faxed and re-scanned and re-faxed the same documents over and over, still they insist that they do not have them. Where they are (perhaps a nice shredded bed for some rabbit)? So here I am stuck in the middle of the tunnel waiting to come out in the daylight. Will I succeed in getting the second mortgage holder to accept the offer made by the first mortgage holder? Will the first mortgage holder sell at the price they have told me?  Stay tuned.

My advice… this is not a money maker for a real estate agent when you consider the time and frustration. Why am I doing it? It fascinates me. It is a puzzle to solve, it appeals to my creative side, and it makes real estate interesting.

In most cases there is yet another form that they are looking for. It does not seem to matter that you were diligent sending the owners financial information, the purchase and sales agreement, the listing agreement, the buyer’s mortgage qualification; they will want some other document. If you succeed in accomplishing all their demands you are rewarded with a “handler.” You will dance around, sing hallelujah and feel like you hit pay dirt on Match.com.

My “handler” and I began a relationship that lasted over two months. Alas, I have to admit I was a two-time unfaithful mate. Behind my handler’s back, I had another handler from the second mortgage company. I actually preferred him, as he was upbeat and friendly, but the first one was funny. Everyday was exciting to me as I waited with baited breath to hear from them. Although, I would immediately respond to their demands, there would always be another one the next day or week. My true quest was to get to the “closer.’ This was like dating the ugly step sisters to finally have an audience with Cinderella.

Short sales require patience, perseverance and humor.  Have you ever seen a rabbit warren? Well, I can’t say that I have actually laid eyes on one, but I have seen pictures. There is the entrance into a space and then another narrow tunnel to another space, and so on. This is how I view working out a short sale. One needs perhaps a rabbit’s foot for good luck but I have never been completely comfortable with the idea of some poor rabbit limping around without a foot.  Most of the time I picture myself as a well armored warrior, championing the cause for my client. This of course, is the exact opposite approach that one should take with a bank. Instead, you really need to breathe deeply and calmly, and then slowly dial the phone numbers  you have found on the internet.

I, originally thought the worst part of contacting the banks would be finding the right person to talk to. And in the beginning this was true. I made numerous phone calls to various people that would then transfer me (or not) to someone else, who would then transfer me to someone else. All the while I would have to explain to each person that; yes, I did have permission from the owner of the property to talk to someone about their loan; and yes, I did have the loan number, and yes, I wanted to talk to someone in the short sale department.

My most common response when I would identify the loan number was: “we do not have that loan number”. And I would have to breathe deeply again and explain that, of course, they did not have the loan number because it was in foreclosure, and that it was necessary that they put me through to the right department that handles short sales and foreclosures.

More about my adventures next week…

In the latest issue of Money Magazine (April 2008) there is an article (Dream It, Build It) about building your dream home. The article makes an argument stating that” now “might be an excellent time to build that home. It says that “behind the dark clouds hanging over the houseing market is a very compelling silver lining. The cost of building your dream house is coming down.”

Why would this be? Well, there are many factors, but the main one is; the cost of raw materials has dropped and contractors are not as busy as they once were. In interviewing some modular home companies I have found that the demand for modular homes is so far down that some companies are running on a skelton crew. What this means to you the consumer is; dollars are not coming out of your pocket. Money Magazine states that framing lumber is 18% cheaper thtn 18 months ago and that drywall is selling for 40% less.

Not only are prices dropping in the construction area ,but also land prices have dropped in Vermont; in some cases 48% of the asking price from 2006. This is not as true in resort areas such as Stowe. The list price of land might not have dropped, but the actual sale of land has done so. We have seen the listing price of large lots over 25 acres being dropped while the smaller lots prices have stayed the same. Overall, large or small lots have not seen a record number of sales, and this has lead to lower sales prices.

Before one rushes out to take advantage of this slump in the market there are some essential rules that one should follow:

1. Hire a real estate agent that is knowledgable in land sales and land development. This could save you headaches and thousand of dollars. That agent will know exactly what you might not know regarding state and local permits, septic issues, well issues and what lies below the surface, both figuratively and literally. Each town and state has different requirements and it is necessary to know all about those before you start. For instance: your daughter has a horse that she is devoted to, you purchase a parcel of land only to find out that horses are not allowed in the sub-division. Or you wish to build a 1200 sq. ft. house and the covenants state that you can build nothing less than 1500 sq. ft. In Stowe, you might be subject to Ridgeline Overlay District. You have just purchased a parcel of land with a trememdous view of Mt. Mansfield, but there are trees in the way. Your intention is to cut them so you have an unobstructed view. Then you find out that you are in the Ridgeline Overlay area and you have to leave many of the trees to create a canopy around your house. Just as you would expect someone to hire you because you are an expert in your field, you will want to hire a real estate agent to advise you.

2. Get pre-approved for a construction loan. I have seen many people that have not done their homework before they start the process of building a home. If you do not have the cash to build your dream home, it is important to go to a lending institution to make sure that you qualify for a construction loan. A construction loan is similar to an equity loan. You draw down on the amount of money that you need, or that you are qualified for, until you finish the home and then you convert this into a permanent mortgage. Some lending institutions will do a construction to perm loan which locks in an interest rate at the beginning of the construction period. This protects you from rising interest rates.

3. Hire an architect, a designer or buy existing plans before you build. If you truly want to save money it is important to have plans before you start and not give your builder something sketched on the back of a napkin. There are many magazines that have plans available. However, unless you are building on a flat suburban lot with water and sewer available, these plans may not be suitable for the terrain of your lot. Site, views, terrain, exposure etc. are all important factors that must come into consideration. Designers and architects can save you thousand of future dollars because of their knowledge. This may be in the form of passive or active solar, green building, something as simple as the way the plumbing in the house stacks up from kitchen to bathrooms. Do not always rely on the builder to know these things. Their job is to contruct the house and they usually rely on the designer, or architect to have consulted with the experts on structural walls, plumbing and electrical. This does not mean that your builder would not double check any aspects of the plans and bring to your attention defects if he saw any.

In the next series I will discuss how to assemble a confident team to guide you through the process. Meanwhile, you might find my phamplet on ” What You Need to Know Before you Purchase Country Property” a helpful guide to get you started thinking about a land purchase. You can call me at 802 253-7358 ext. 13 and leave a message with your name and address and phone number or you can email me at www.peggysmithvt.com and I will send it to you immediately.

“Vermont is insulated from much of the housing crunch drama afflicting other parts of the nation, Allen said. Unlike some areas, especially places like Florida and California, Vermont does not have much of an oversupply of houses and condominiums for sale, Allen said. A large oversupply tends to drive prices down sharply.Also, speculators built a lot of housing in some corners of the nation, anticipating huge profits that failed to materialize, Allen said. Vermont experienced little speculative building, he noted.For those who can afford it, Allen said 2008 might be a decent time to buy. “Prices are high relative to historic standards, but there may be pockets of opportunity because the market is slow. They might find sellers more willing to make some concessions,” Allen said. Torpy of the Champlain Housing Trust said programs to encourage affordable housing should remain intact and fully funded.

But even with the high price of houses and condominiums, people with moderate incomes who are have done their research and are sure their finances are stable can buy a home, Torpy said. “If you go in the market and are an informed and wise consumer, you can find a good value,” Torpy said.

Most resort areas in Vermont have experienced a slowing of sales but the prices and the equity that people have in their houses remains stable. Properties over a million have been less affected because this buyer usually pays cash , or finances less than 50%. The slowest real estate sales areas are between $500,000 and $1,000,000. I beleive this is because that buyer would have used the equity from their primary home for a downpayment on their vacation home. Now they are reluctant to do so.

Stowe’s homeowners, in most cases, are not pressed to sell. They may desire to sell for a variety of reasons, such as down-sizing, retiring, lack of use, but it is not a necessity. If they are anxious to get income from the home, they can get very good rentals while they wait for a buyer. So the short answer to:” I want a deal ,” is “there are no deals.” But there is opportunity.

Sellers know that the real estate news is doom and gloom. Even when all the statistics will tell you that resort real estate has remained stable, or has continued to climb in price, Stowe and other resorts get lumped in with the doomsdayers and naysayers. Because there has been a slow down country wide, there are people who want to sell and will listen to reasonable offers. This is where opportunity knocks.

One of the perks that our Sellers are offering to entice Buyers is a home warranty program to our Sellers. Through Coldwell Banker they are able to put a home warranty on their house to insure against appliances, furnaces, electrical, and plumbing failures. This is a free warranty program for 18 months with no cost to the Seller until their house is sold. At the closing the home warranty is paid for by the Seller and it is transferred to the Buyer. It is good for one year. I have found that homes with a home warranty program attract buyers.

In a study done recently by Coldwell Banker Carlson Real Estate, most houses today are sold within 5% of the asking price. Several years ago, homes and land were selling at asking price, or just slightly above. In rare cases there is a 10% drop. In the $1,000,000 to $1,500,000 price range you get the best dollar value for your home. Most of these homes are selling at below replacement costs when you take in the today’s square footage prices and the current cost of land. Below I have linked to several properties where you can apply this formula.

Click here for Peggy’s Picks for Stowe Real Estate Opportunities:

http://www.vreinmls.com/ver/maildoc/a007Hh7611.html

Click for: Real Estate Resolutions 

Sometimes it is better to listen to what experts outside of Vermont have to say. It is a quick and easy video to watch, just four minutes long. It offers good advise on selling your home in the current market. Go to How to Sell Your House and see what the experts have to say.

Also I am offering a FREE book on “Who’s the Best Person to Sell My House?”. Just make a comment on my blog and I will be happy to send you a copy

To Search the MLS check out my website: Peggysmithvt.com

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