“I’m buying a short sale and was told I won’t have an answer from the bank for about 2 months. Do you recommend that I inspect the home now, knowing I’ll be out the money if the short sale isn’t approved?”

Answer:
Great question.

There are two schools of thought on this:

A) Don’t spend $300 or so on a home inspection until the short sale is approved, as you’ll be out the money if it’s denied.

B) Get the inspection now. Don’t wait (and waste) months for short sale approval, only to discover the house is a lemon and you dont want it anyway.

I lean toward B, perhaps unless it’s a relatively newer home in good shape, as it’s less likely to have any major issues. But still remember to get the inspection once the short sale is approved.

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“I’d like to buy a home, but have some credit issues. Do you know where I can find out how to improve my credit?”

Answer:
Here’s a tip from San Diego credit repair expert Derrick Evens of “Perfect Credentials” (858-571-0271, derrickevens@yahoo.com):

Credit repair/improvement tip:

CHECK YOUR CREDIT LIMITS…
“One of the most commonly misreported items on credit reports is a credit card’s “limit”. This sounds insignificant, but consider this… 30% of your credit score is derived from the balances you carry on your credit cards with respect to the credit limits. 35% is derived from payment history, so your balances are very important! A good rule of thumb is to do everything you can to keep the balances on your credit cards below 50% of the credit limit. This will help your score tremendously. When it comes time to review your credit report (which you should do at least every 6 months), be sure to check that the limits on all your credit cards are reporting correctly. If not, it can cost you big-time!”

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“If my inspection shows that a house has problems and I decide not to buy it, do I get my deposit back?”

Answer:
The standard California contract has an “Inspections and Investigations” contingency giving you a certain number of calendar days (usually 7 to 17) to inspect the home and cancel or ask for repairs.

Most contracts use an “active” release method that require you to sign off releasing that contingency, so if you haven’t signed to release it, you are legally entitled to get your deposit back.

Some contracts have a “passive” release method, where the contingency is automatically released after a certain number of calendar days (usually 7-17). So if you object in writing or cancel before the contingency expires, you are legally entitled to have your deposit returned.

To give you a totally accurate answer, notice I said “legally entitled”.

The seller must agree and instruct escrow to release your deposit. 99%+ of sellers will if you’re within your time frames. If one doesn’t, you can go to mediation, arbitration, small claims court, or superior court.

It rarely comes to this. In my 25 years in real estate and over 5,000 escrows, less than a handful of sellers have wrongly refused to release a deposit.

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“I’m talking to agents about selling my home and one said I don’t need a lockbox for agents to see my home. Won’t it be harder to sell my home without one?”

Answer:
You’re right.

And any agent who (except for special cases or very high-end luxury homes) tells a homeseller not to use a lockbox is doing them an inexcusable disservice.

Some agents “sell” the seller on how they’ll make the process private, convenient, and unobtrusive. They say, “if a buyer is serious, they’ll change their schedule to see your home.” Or “I’ll meet people at your home for showings.”

Sounds great, but…

The reality is too often the seller’s agent never even calls back buyer’s agents to schedule a showing. Or the seller can’t be reached so the home can’t be shown. Or the buyer is only available on their lunch break, but the seller’s agent can’t make it until 3pm.

I’ve experienced all of these when trying to show or preview homes.

Homebuyers and their agents are just too busy today to bend their schedules around for a hard-to-see home. They just move on to the next one–costing sellers of hard-to-show homes $1,000’s from lack of showings and interest, and sometimes resulting in NO SALE.

To sell your home faster, easier, and for the most money, I and other experts advise you to use a lockbox.

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“I wrote an offer on a short sale and it was not presented to the bank. Is that legal?”

Answer:
While an agent owes the seller a duty to present all offers to them, they do not owe that duty to the bank on a short sale. The bank is not their client.

The seller and agent decide which offer or offers are in the seller’s best interest to present to a bank. It’s typically a judgment call based on net dollars, offer strength, and where they are in the short sale process.

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