Redfin to Zip Diaries::. The Welcome

Today, I attended my first all district meeting here in San Diego. It was held at the Carmel Mountain Ranch Country Club, a little less than a hundred agents met to discuss current market conditions and introduce the newbies (like myself) to the rest of this large district.

Christian our District Director was proud to say that our district had a 92% increase in closings when compared to May of last year.  –  Nice.

One of today’s guest speakers was from E-Loan(one of Zip’s partners).  When I was rocking with Redfin, I remember closing quite a few with them. Cathy from E-Loan spoke about the Nehemiah program. I wasn’t too familiar with it but I promised myself that I would do some research on how it works when I got home.

Here is what I found out.

The program was named after Nehemiah, the biblical leader who re-built the walls of Jerusalem.  FHA(Federal Housing Administration) lending guidelines allow for the 3% minimum down payment to come from a wide variety of sources. Secured, borrowed funds, retirement accounts, and “Gift” funds from family members, employers or qualifying Non-Profit entities. There were a large number of organizations set up over the years to provide these “Gift or Grant funds”.

Typically they would charge fees ranging $500-$1,000 to perform this service. The program has been under fire recently, when a number of these organizations lost their “Non Profit” status after review by the IRS.  Always. The model was threatened and FHA decided to limit the program to organizations that were Non-Profits. Some of the big players in this market are Nehemiah and Quick Down.

First off, the seller must agree in contract to participate in the program. The seller agrees to make a “donation” to the non-profit in an amount at or above the amount being granted to the buyer. Typically the amount is 3% + the administrative fee that the non-profit charges (now around $500-1000). Once the seller has agreed to make the donation, funds are reserved for the buyer. The day before closing, funds are ordered by the lender with instructions from the escrow company regarding wire transfers or cashier check requirements. At closing, the funds are used for the down payment for the buyer, while part of the seller’s proceeds are sent off to the non-profit as a donation. If the seller has also agreed to pay the buyer’s closing costs, the buyer can get into the home with little or nothing down.

The program works and remains approved by FHA. Check the site.

Tomorrow, I will reach out to Nehemiah and Quick Down to get some other questions answered for me, overall, this may be another piece to assist my clients in purchasing a home in today’s current market.

3 Months Later. Ohh, another Short Sale Approval. Figures.

Today, I received a preliminary report for a contract that I wrote almost 3 months ago. Can you imagine? I left Redfin 5 weeks ago, but for whatever reason the title company still decided to send me the escrow package as the broker of record. I specifically told them that I was leaving. Title companies are funny that way.

I just finished looking at the photos online; it is a 4 bedrooms - 4 bathrooms - 2,541 square foot whopper sitting on a huge parcel. I am so happy for those clients; after all I really went to bat to help them acquire this property.

From my notes, this home endured multiple bids as a short sale. The agent that was representing the seller is a Super Lister in San Diego and his assistant did his best to assure me that we would be able to get this short sale approved. During my last week at Redfin, I wanted to make sure that my clients were comfortable with the transition. My client ‘let’s call him Ryan’ for the sake of privacy, was a really nice guy. I explained to him why I was leaving, he understood. Likewise, I told him that his next agent would do her best to help him. He and his wife were in love with the home and I was more than happy to get it for them.  It was all worth it. I must admit that my twice a week call schedule and persistent email inquiries to the listing agent have a way of paying off. In this case, even if I am not at Redfin, it is important to me that Ryan and his wife received the home that they waited so patiently for.

So this is what I did,

During the negotiating process, my client wanted to come in at the bottom of the range, in my world, I am okay with that. (To me the most important aspect with any client relationship is trust; this must be established, one of the ways that I do this with my clients consists of them leading me in price at least initially. Just LISTEN. I realize that there are several negatives to this approach but, when you are working with internet based clients you have to be open this type of strategy.)

My clients were a little apprehensive of the bidding process. After a few calls from the listing agent he informed me that there were several other offers in the pipeline, I let my client know. We submitted the offer at the low part of the range, 450k. The listing agent stated that he wanted our ‘highest and best offer’ , I told him that we would be willing to come up in price only if he guaranteed that he would take the property off the market, (super important) so not to invite other offers to the table. He agreed. So we came up 19k. Our research was still telling Ryan and me that we were still significantly lower than the closest comp. I kept telling Ryan that it will only be a matter of time, most buyers and agents will focus their attention to other homes.

Fast forward, almost 2 ½ half months later. Here I am reading their lovely prelim with all the appropriate details. So what does this all mean, well it means I get to add another property to my short list in San Diego. It also means, that it brings my total to REO/Foreclosure/Short Sale deals to a grand a** spanking 13 transactions. Not bad from a guy who grew up in the Excelsior district of San Francisco and only moved here to Sunny San Diego 8 months ago.

Last week I was in San Francisco for a board meeting, I asked my mother if she remembers her first short sale, she laughed and said, “Those things are terrible”, I smiled. Mom always know best.