Saturday, August 29, 2009

End of the month, and bank holidays

Just a friendly word of advice to anyone reading this. I've said this before, but it bears repeating. If you haven't heard about an offer by Friday afternoon, you're not going to. You're not likely to hear on Monday either--the asset managers are dealing with the pile of paperwork on their desk that the listing agent has forwarded to them, after it piled up on his or her desk over the weekend.
If you haven't heard about your offer and it's within three business days of the end of the month, you're not likely to get an answer. Everyone is trying to close the deal before the end of the month to avoid recalculating property taxes for the escrow impound account.
While your offer is really important to your agent, the other people in the transaction chain, might have different priorities, at least at these particular times. I, and any agent getting paid on a commission (almost all of us) will definitely let you know if there has been a counter-offer, rejection, or acceptance. It's in our financial interest to do so.
It's August 29, and Saturday, enjoy your weekend.

Friday, August 28, 2009

Lease-option or Rent to own

In a rent-to-own (commonly called a lease-option) there are two separate agreements that you are going to enter. One is the lease. The second is the 'option to purchase' or 'option to buy'.

Generally, people who want to rent to own have poor credit, or unverifiable income. They are often self employed. Lease-options are also used by real estate investors, as there are new caps on the number of conventional mortgages an investor may have at any given time.

The lease, is generally a typical lease, which will spell out the responsibilities and rights of both parties. Typically, the lease conditions will reference the 'option' and all conditions of the lease must be adhered to for the 'option' to be exercised. The lease will generally have the right to renew the lease a certain number of times (a lease in CA can only be for one year, so generally people need more than one year to fix their credit and get a down payment)

Often, there is no 'security deposit' for the lease. You only have the monthly payment. As the intention is to transfer the property to the lessee (renter), most agreements require the lessee to take care of all repairs and maintenance, though many lessors will guarantee the property for a period of three to six months. The upside is that you're also allowed to paint and decorate the house in any manner you see fit. In fact, most agreements allow you to do anything that improves the property.

The 'option' is generally purchased from the lessor. This amount will typically be greater than the amount of a security deposit, but less than the cost of a typical down payment and closing costs on a purchase, but will also may be influenced by your credit history--typically $5000-25000. The 'option' money is usually credited to the purchase price once you buy the property. If you fail to abide by the lease agreement, you are not entitled to any of this money back.

Typically, a certain portion of the monthly rent will be credited to your down payment. This is completely negotiable by both parties.

Depending on who you are dealing with, you might be able to trade something valuable instead of cash. Examples include, but are not limited to: vehicles, jewelry, collectibles, or tools. It's entirely between the parties. The parties would have to agree to the monetary value of the items to be credited to the down payment.

Once your credit has improved to the point where you can obtain financing, and you have acquired the necessary down payment (through saving or accumulating the necessary credit through your 'option money' and your monthly payment) you can exercise your option. You and the seller enter into escrow and after completing escrow, you own the home.

That's generally how it works. Specifics vary from agreement to agreement. You should only enter into an agreement which you are certain you can complete in the time allotted by your lease and the number of renewals, though some sellers will allow you to re-up your agreement with additional payments.

Backwoods Home Magazine

I fond this site while using Stumble Upon. It's great
This is a great online magazine with recipes, gardening tips, articles on all sorts of self-reliance. August 2009 issue has an in-depth look at identity theft.

Thursday, August 27, 2009

More on Reply Real Estate

This is a post from 6 days ago (August 21, 2009) from an allegedly former employee.

Reply Real Estate is definitely a SCAM. I had the misfortune of working there for a week at the San Ramon, CA office and wished that I had found this blog before accepting the job. I had interviewed for the position of Regional Sales Executive that was advertised on but, after the three days of sales training, the job turned out to be nothing more than a boiler room style of “high pressure” telemarketing. We were forced to make over 100 phone calls per day and were threatened to lose our jobs if no sales were made. We were encouraged to do what it took, to close a deal. The veteran employees that obviously bought into this SCAM were professional liars. If anyone is considering a career with Reply Real Estate, please take my advice and stay away.
 This post can be found here:

Why you should do your due diligence on companies.

Obviously, I've have made a mistake by getting involved with

I should have Googled them while on the phone. There are plenty of sites with complaints about the service that are in the same vein as my own. The seem to be kept in business with infusions of venture capital and gullible folks like me.

Here are some links:

Rip Off Report: Reply Real Estate Avoid this company! San Ramon ... -

My Experience with

August 29 Note: Any information is regarding people is bogus (what they entered on the site to protect their privacy)

So yesterday I signed up for some real estate lead generation and has a provision to send back (not be charged) for leads that are supposedly 'prescreened' for people looking for a house in my area. I got 3 'leads' withing the first 16 hours. 3 leads is the amount they can start to bill you for ($54.95/each) and all of them had problems. I had to go through the motions of trying to contact telephone and email to verify, then send them to the customer service department of
I also sent them a cancellation email and called to my representative. She did not call me back. Instead some high pressure salesman called back telling me it was all a numbers game and as long as I kept sending back the 'bad' leads (100% so far) I wouldn't get billed for them. He offered all sorts of incentives, but was unwilling to let me out of something I'd begun a mere 24 hours earlier. I got all the usual jargon about how valuable their leads would be, and that on average, agents 'only' paid for 10 leads ($549.50) per closed transaction, which in this area can be more than 1/2 my commission (generally you pay 25-33% for a successful lead).

In today's REO and short sale market, you're not even likely to see a commission for 3-4 months, but these guys will already have your money.

Here's a copy of the letter I wrote:
Yesterday when I spoke with your salesman on the phone he misrepresented your company and said that you prescreened your leads and had qualified buyers. It is obvious from looking at some of the first 2 emails that I received, that you don't screen your 'referrals' and that you don't qualify them before you forward them on to me. I have contacted my credit card company's fraud department.

The first emailed lead was from someone with 'poor' credit looking for a home from $1,000,000 to $1,250,000 in an area that has mostly $100,000 homes. He also gave me his wife's phone number. I spoke with her and emailed him, but she seemed surprised by my call, and implied that her husband was at home 'messing' around with the computer.
Prospect No: 311597
Please contact this potential client as soon as possible.
Prospect Contact Information:
Prospect Type: Buyer
E. Aguila
 Best time to Contact:Evening
PH#DELETED 8/26/2009 6:15:41 PM
The second lead was the most obvious example that your company does nothing resembling 'screening' of applicants who fill out the forms on your site. Like the others, I'll post it here for you to read. You'll notice his email address is probably not even available, as it probably would have been used in-house by the ISP before opening. His name is suspect. He's claiming to be a 'seller' but does not even seem to know the square footage of his house. I did email him, but got an error from the email server. His phone number is a Michigan area code and it's a non-working number at a medical center.

Prospect No: 311664
Please contact this potential client as soon as possible.
Prospect Contact Information:
Prospect Type: Seller
J. Smith

Best time to Contact:
(989) 321-4563 8/26/2009 10:05:02 PM
Prospect Details:
Property Type:

Single Family Home
Location: Hesperia, CA 92345
Price Range:

$100,000.00 - $124,999.00
Square Footage: Any
Bedrooms/Bathrooms: 3 bd / 2 bath
Sell Timeframe: 3 - 6 Months

Error message from email to 2nd 'lead':

Delivery to the following recipient failed permanently:

Technical details of permanent failure:
Google tried to deliver your message, but it was rejected by the recipient domain. We recommend contacting the other email provider for further information about the cause of this error. The error that the other server returned was: 550 550 Requested action not taken: mailbox unavailable (state 14).

From the 3rd Lead:
Notice his online identity does not match his name, and I've included his email (which I'm keeping for future reference)
Prospect No: 311695
Please contact this potential client as soon as possible.
Prospect Contact Information:
Prospect Type: Buyer
Best time to Contact:
PH# DELETED FOR CONTACT 8/27/2009 7:08:17 AM

From the 'lead':
Reply is bogus web site. I HAD to register to view bank forclosures only to be offered a real estate loan without any links to forclosures. This is just another gimmick to sell loans. Quit wasting my time, why would I want a loan without a potential to FIND a home. I think that’s called Bait and Switch. Thanks for nothing. Don't bother to contact me again.

Your company might provide something of value, but that seems to be more a matter of happenstance, then by any service you actually provide. I want you to immediately cancel my contract and immediately reverse any charges you have made to my credit card. Failure to do so will result in legal action, and I reserve the right to publish my experiences with your company.

Thank you for your cooperation. If you have any questions you may email me, or call me at 760 887 2284.
James C. Foy
All Cities Realty, Inc.

Monday, August 24, 2009

Moving 101

As a real estate agent, landlord, person who likes to travel, and former member of the military, I know a few things about moving. This post is to give you a little advice on how to move. The advice is free, hopefully it's worth more than the price. If you can afford to hire movers to pack and move everything to your new location, you can skip this piece.

If you are thinking about selling your house, or vacating your rental now is the time to decide what you really need. This gives you an opportunity to downsize all of the 'stuff' you've been collecting. You will also save your (and the people you con into helping you) back when moving day comes. Moving day comes a lot faster than you think, and you have WAY more stuff than you think.

The first step is to sort your stuff into three piles of 'keep','toss', and 'not sure'. These are self-explanatory.

Advice for the 'keep' pile. This is all the stuff you pack immediately except for the stuff you need for day-to-day life, like food and toiletries, and whichever electronic devices you must have like your cell and laptop or business computer. All the family memorabilia, pictures, favorite china, silver, art work, jewelry, and furniture. For sellers, anything you are not using to stage your home.

Homemakers, I suggest you make meals with whatever you have in the house, and work towards, having a few boxes of mac'n'cheese, or pasta, or something simple for the first few days in the new location. Pack away all the dishes you want to keep, and serve on paper plates or plates you plan on putting in the toss pile. Start using plastic cups from Del Taco and commuter mugs for coffee that you're just going to put in the car when you leave anyway.

The 'LAST & FIRST' box: This is the last thing to get loaded into your vehicle and the first thing out. It has toiletries, some easy to prepare food (possibly in ready to eat out of containers and some utensils), can opener, coffee maker, alarm clock, some towels, makeup for the ladies. This contains everything you need to setup base camp in your new location. Once this stuff is unpacked and set up, you can more easily keep moving with the rest of the unpacking. These items are the last to be packed, but should be some of the first to be identified and planned for.

So you will have to store three things. The 'keep' pile, the FIRST & LAST box(es), and food, clothes, and toiletries. Hopefully you can store them in your garage or a shed. Furniture can be stored in the house. There is also the option of commercial self-storage. Keep two things in mind. They charge by the size of the room, so the less you store, the more you save. Most people intend to store for a couple months, but the average stay is about six. My uncle ended up using a small storage space for two years due to health problems and spent $1800 instead of the $150 he intended.

The 'toss' pile is everything you don't need or want to move. Most of the stuff you own will probably cost more to move and store than it would cost to sell and replace. Things in the 'toss' pile can be sold, donated, or given away. Used items,for the most part, lose a notorious amount of value.I have a few suggestions.

Want to keep your kids artwork? How about scanning it into your computer? Then you won't end up with an attic/basement/closet full of paperwork in the future. If you have a scanner with a document feeder you can scan up to 50 pieces at a time. Some will obviously need a flatbed scanner. This will also allow the paper to be put in the recycle container and might save a few trees.

Do you really need them? Think long and hard on this. Think especially long and hard about anything fragile. If your Capo di Monti or Belleek porcelain breaks in transit, will it be worth it. Luckily, there are plenty of types of packaging and cushioning available, much of it free or cheap on

If you don't have the original packaging for TV's, or old CRT monitors, they are not likely to travel well. Additionally, they are heavy, and are cheap to buy and sell used. You might also use this time to sell the unwanted and upgrade to a used flat screen at your destination. Additionally, if you have a flat screen and are changing elevation, it might be better to get a screen that at that altitude. As we all have experience, the continuing march of technology makes it cheaper every month, so the sooner you sell your old stuff, the more it will be worth. And you really don't need that Commodore 64 anymore.

Some of your friends and family will help you move. This is the time to listen carefully for them to admire anything you aren't sure you want. Give it to them. You can always visit it later (as long as you're still friends). Your friend will be ecstatic, and that will be one more thing you don't have to move.

If you know you're going to sell something, give your friends first crack at it if you need the money. Otherwise, give it away, or trade for help with the move.

Charities can be any of several varieties. There are thrift shops, churches, homeless shelters, public and private schools (have 500 pens from your bankrupt business?), political causes, etc. Just about anything you can think of has some sort of charitable establishment.
In these tough economic times, donations to charity are down. This may be the place to bring everything you couldn't sell,and get a tax break. If you couldn't sell it for a dime at a garage sale, it's probably not worth moving. Don't bring them trash, no one wants the couch that is torn up and smells of pet urine.

Price your items reasonably. Most items are worth a dime for a dollar. Think of it as someone paying you to move your stuff. Give bulk discounts. If you call it a moving sale, people will know you don't want to move it, so will make lowball offers accordingly--haven't used that exercise equipment in six months? Take what they offer, you weren't using it anyway. Sell your more valuable items at any of the free online advertising sites.

Packing is always problematic. Organizing will help minimize the difficulties. I've already mentioned the LAST & FIRST box. Some people like to organize by bedroom and that's good. I have another suggestion, that can be used as a stand-alone method, or in combination with other methods.

Label your boxes with a letter number combination. You could use 'K1' for 'kitchen 1' or 'J4' for "James' 4". The important thing to do is use your word processor to keep track of the contents. Most word processors have a "find" feature. So, if you use the box designations as paragraph headers, and type a list of items in each box, you are able to use the "find" function of the word processor to find any item you want, without having to write on the boxes, or tape lists to the boxes.

If you've labeled things as I've suggested, and you have a laptop computer, your move will be SO much easier. Even if you don't have the electricity on, you can whip out your laptop and start unpacking. After you get the boxes dropped into their respective rooms, you can start unpacking, and use the laptop to find anything you find an immediate need for.

Hope this helps. I plan to blog about packing your truck next time.

Saturday, August 22, 2009

Some thoughts on housing, both buying and renting

Two articles from RISMedia this week have highlighted the fact that prices are at some of the lowest prices in nearly 20 years, and that the affordability index is 67%. This comes as no surprise. Here in the High Desert, in California, it is still possible to buy a house for less than the construction costs.

The good news, is there is continuing commercial and industrial development here, despite some problems caused by local government overextending themselves financially (like most levels of government during the tech and real estate bubbles). The City of Hesperia has just been named an enterprise zone.

Due to Governor Schwarzenneggar's moratorium on foreclosures, I've seen a slight upward trend in the prices in the Victor Valley, as supply of houses on the market is causing an increase in bidding on the houses. I think prices are likely to drop again as there is another wave of foreclosures on the horizon in California. This is going to be exacerbated by small business people deciding to leave this highly regulated and taxed state, even if they have to walk away from their homes.

The affordability of houses has caused quite a bit of competition. First time buyers are competing for houses, with small and large investors. My wife and I had a small house in escrow, but the house wouldn't appraise, so I'm sure an investor with cash will buy it. I could go look up the sales price at the county recorder or online, but I don't want to aggravate myself.

I have seen a trend toward lower rents. Many rental owners are advertising move-in specials. I see family members moving in with each other. I have seen people leaving the area, some to be nearer the larger metropolitan areas, some to leave the state, a few to leave the country.

There is a push for more government subsidized, low-income housing (projects), which will lower rents as landlords compete with the government subsidized landlords.

Some of these landlords are likely to find the competition too fierce and add more units to the market place through sale or foreclosure, which will reduce rents further. It is a question of where the market will bottom out on the government induced spiral. Look to the subsidized unit costs, and the features to set your prices. It may be more important to keep a good renter than make a profit. This is a typical of what happens when the government starts competing in the private sector.

Thursday, August 20, 2009

Renters, Sympathy, and Media

I recently was reading a local newspaper article about the closure of a complex of low income housing. The place definitely had problems. However, they interviewed one of my former renters and portrayed her very sympathetically.

That renter and I had come to an agreement with me regarding our mutual need for her and her family to move out. She owed me money. She had a history of falling behind and catching up, but her behavior had become erratic, and her husband was no longer working. She 'fell' at work and had a black eye. The list goes on.

She moved out peacefully enough and we avoided the eviction process. She moved from a 3 bedroom duplex to what I heard was a 1 bedroom apartment and went from a rent of $660 to an alleged rent of $575.

I was left with a place that required a remodel. She hadn't vacuumed in the 3 years she was there. She had dogs, and several children who weren't much help around the house (along with the husband).

So Below are some examples of the move-out pictures. The first is the layer of grease caked on top of the stove hood, along with the 4" putty knife I was using to scrape it off.

The next photo is a picture of the stove knows and the underside. The stove knobs and front were scrubbed with cleanser until most of the lettering came off. The underside and burners hadn't been cleaned at all. In fact, grease had accumulated to the bottom of the burners. I cleaned much of it out by hand, then took the stove to a car wash and spent $15 in quarters with a high pressure grease remover and still didn't get it all off. I ended up scrapping the stove along with a broken washing machine that got left behind.
Then there's the broken toilet and the scraped up linoleum in the kitchen. Some broken electronics and windows were also left behind. I haven't determined whether I actually came out ahead after 3 years of renting, as it cost me a few thousand to remodel and repair, and she was a few months behind by the time she left.

This is, perhaps, nothing more than a warning for those who are sympathetic to a sob story. Most of the twelve years I've been a landlord have shown that most people with a really long run of "bad luck" have been the cause of it. I have quite a few more pictures, as I photograph or video all move-outs, but those can wait for another post. This was salient due to the nature of the article I read. These are not the worst move-outs I have cleaned out. I have myself to blame on most of them, poor management skills on my part.

Keep your handbag or purse safe.

Many women hang their handbags and purses in public toilets by the coat hanger hook provided on the back of the door. Professional thieves know this and case bathrooms for hooks that are easy to reach from the outside of the stall. They case the facilities and reach over for your purse while you are indisposed and unable to defend your belongings.

Tuesday, August 18, 2009

Relax, you'll get your answer on Tuesday.

You should pay attention to the calendar when you start looking for property. Because certain days of the week and month are a better use of your time and produce less anxiety than others. And, if you are forewarned that certain days are unlikely to be productive, you won't stress when you don't get any feedback from the variety of professionals that you'll be dealing with.

You may have certain biases for and against certain days of the week. Just as The Bangles complained about a manic Monday, and we've all TGIF'd, and for the Monday to Friday crowd, Wednesday is 'hump day', I've come to appreciate that, in the world of real estate (and probably in many other places), certain days of the week are better for some things than others.

Because we are talking real estate here, we are primarily limited by two things, the government and banks. Government offices and bank offices are only open certain days of the week, pretty much Monday through Friday. Now, with budget cuts, many government offices are closing on Monday or Friday to cut costs. Banks and loan brokers are often open late on Friday and sometimes on Saturday, and can take a loan application at any time online, but I haven't seen anyone get a usable prequalification on a weekend.

So, if you want a loan you are going to be spending a weekday talking to a lender, even if it's only on the phone. So which day should you use? If you're able to, use Wednesday. Mondays are filled for many lenders with all of the business that has stacked up on the loan officers desk over the weekend, and in really busy times, Tuesdays get spillover. Fridays are the last day of the week to close and Thursdays are preparatory for Friday.

And, while this post has been waiting in draft form, I've gotten confirmation from three other agents, that on REOs and short sales, they almost never get an answer until Tuesday on any offer's they've made.

If you have made an offer on a house, you're not likely to hear from the seller, until the next Tuesday. This isn't, necessarily a bad thing. If you put an offer on a house that is 'acceptable' and time the offer to expire on Monday, it gives you the weekend to look at other homes that may be more desirable.

Once you submit your offer(s) you can relax, or at least be patient, because the listing agent might have 50 properties that he or she has received any number of offers on over the weekend. Just breathe deeply, keep you fingers crossed, pray, and submit the best offer you feel comfortable with on a particular property.

Friday, August 14, 2009

San Bernardino County Building Guidelines Booklet

Here is a link to a 19 page PDF booklet on how to build a house in San Bernardino County. It covers most of the important information you would need to know about single family residential construction. The information will vary slightly from jurisdiction to jurisdiction, but the basics are covered.

Shoot the Duck!

If you see a duck scroll across the screen, you can click on him to shoot him. A little stress relief and humor for your day. :-)