Category Archives: Personal Real Estate Opinions

I’m currently working with a homeowner in distress.  In the last six months both jobs have been lost, savings depleted and hopes dashed.  Eight years of home ownership is now 4 months behind with foreclosure the next step, only days away.

Denial, desperation and frustration are the emotions this homeowner has already experienced.  Apathy has now set in. 

“I really don’t care at this point.  It would be easier if they just took the house.”

A mortgage broker I know put me in contact with this homeowner.  He’s known the homeowner for years and years and he wanted the homeowner to work with someone he could trust.  Problem is any deal I can put together is too thin for investors.  So I turned to Countrywide Home Loans who holds the note.

Turns out they cannot authorize a short sale until the home has been on the market 90 days because this was a FHA underwritten loan.  But we are only 9 days away from foreclosure proceedings.

Listed the house, I did.  Got written authorization to negotiate with Countrywide, I did.  Patience, creative thought and cooperation from Countrywide, I need.  

I do not know if this will end in foreclosure, deed in lieu of foreclosure, short sale or subject-to transference.  All I know is that I pledged fiduciary duty to this homeowner and this homeowner is gonna get my best.  Because I can look into the eyes and see the emotions I previously mentioned.  And rather than get on the moral high horse I’d rather have compassion and help in any way I can. 

It’s easy to look at the housing crisis many are experiencing on a macro level.  I do it all the time.  It’s easy because it doesn’t involve an emotional investment.  But people are not numbers. 

Wood rot is a major pain in the butt here in the Kansas City area.  And left unattended wood rot will expand with each passing year and keep your real estate from appreciating to it’s fullest capacity.

The most common areas I see wood rot here in the KC market is around the window sills, on the trim pieces that cover seams in the siding and on railing or support posts for the stairs and/or front porch.  At first wood rot is barely noticeable.  But soon, within a couple years, it is an eyesore that grades badly on the presentation of your home or rental property and will have a bearing on it’s net worth. 

What can you do to keep wood rot from hampering you from getting top dollar for your property?

• Inspect window sills at least once a year.  That’s the first place I usually notice wood rot.
• Keep all seams properly caulked.
• Keep wood properly painted.  I know painting can be expensive.  But wait until you have wood rot and you’ll get the repair bills and the painting bill!
• As you have to replace pieces of wood that have rotted through consider Hardy style cement siding/trim and or the wood that has a greenish tint because it’s been treated.  Both are more expensive but will make the repairs last a lot longer.
• Buy an all brick house!  🙂

Consider this just another service of my ongoing need to remind people that unless your house is in top condition you really don’t have a right to ask top dollar.  Well, you can ask but only a fool will pay it.  For you rental property owners trying to squeeze out every cash flow dollar imaginable remember that you might have a few hundred more dollars of cash flow per year but you’ll cost yourself thousands (I said thousands) on sales price at the end. 

I told you last week I had a closing crater because of a situation completely out of my control.  Now that I’ve put the gun down I thought I would tell the tale of how anyone can become a problem in the state of Kansas and Missouri if they choose to be.

Less than two business hours before closing I received a phone call from the listing agent stating that we had a “serious problem.”  I don’t like serious problems much.  Especially when I’ve monitored the transaction very closely.  You see, my buyers were purchasing a duplex in Overland Park, Kansas where the owner had very little margin for error in selling because he owed anybody whose anybody money.  Seems his business hadn’t been going very smoothly and he needed to dump this property.  The buyers negotiated a price that made sense to them and that the owner could “handle” which is to say he was going to have to bring a small amount of money to closing while foreclosure proceedings had been delayed by the bank.

One of the units had a tenant in there that had done some remodeling in lieu of rent.  And the tenant had done a good job.  Since there was no lease and since the waived rent was a greater amount than the work performed the seller did not believe there would be a problem in asking him to move out so that my clients could move in at closing.  I watched with a wary eye. 

But I have to say that everything was progressing nicely.  The repairs were being done in their entirety and on time for closing.  I made weekly calls to the seller’s agent making sure there were no ghosts in the closet that would come out.  Heck, even the tenant who lived on the one side had moved out right on schedule so that after closing my buyers could move in.

Then the seller’s agent calls and says “We have a problem.” 

Seems the tenant had forgotten the free rent for a year or more.  Well, at least that’s what I’m told by both the seller’s agent and on a phone call from the seller who was apologizing sheepishly.  The tenant just decided that things weren’t right and filed a mechanic’s lien on work he feels he was not properly compensated for.  About $9,400 worth I’m told. 

Let’s see.  Rent of $725/mo multiplied by 13 months is $9,425.  Hmmmm. 

But the thing that really causes problems is the State of Kansas allows him to do this last minute.  Without verification or proof anyone can file a mechanic’s lien on anything that they want to.  Sure, in time this will all be sorted out and a legal finding will find for the seller or the tenant.  The problem is that in the mean time the buyers have a truck full of furniture and a fistful of cash they were looking to unload on this duplex. 

Scrambling set in and they found an apartment with a three month lease.  Now we have to find them another property.  So the former tenant had better be in the right because let me tell you the smell of lawsuits is in the air if this is found to be a frivolous lien…  Let’s count who lost on all this;

• Seller loses because now the bank decides to press forward with foreclosure.
• Buyers lose because they don’t get the duplex they want, have lost monies spent on inspections, appraisals and travel not to mention the additional costs of leasing a short term apartment.
• REALTORS lose because those commissions are gone.  Well, I’ll help the buyers find something else but the work starts all over again.  The seller’s agent is just out.
• The tenant in the other side who is building a home and was planning on renting the place out for several more months will get notice to vacate now that the property is in foreclosure.  They are also “friends” with the former tenant.
• Bank loses because now they will have tens of thousands of dollars in legal costs to foreclose.

The former tenant.  He gets to give everyone the finger without recourse unless there is a judge out there with a spine. 

Now all of this is going on the assumption that I’ve received the full story.  But the consequences of the matter are clear.  And not to be taken lightly.