Pro Tip: use inexpensive lights and light timers to keep a vacant property secure

Occasionally I will list a vacant property, and my sellers will be jittery about the home's security during the time it is on the market. One quick and easy way to make a vacant home seem occupied is to install lights and on timers so that lights go on and off all night long. This gives the appearance that there is activity inside the house, and can be a strong deterrent for would-be troublemakers. These lights in the photos were about $7 and the timer devices were about $5 at a hardware store. A good investment!

Buyers - you should rekey your newly purchased home!

You just closed escrow and got the keys to your newly purchased home, yay! But who else might have the key too? Even if a seller has turned over all the keys in their possession, you as a new homeowner have no idea if that seller gave a copy of the key to a family member, or a neighbor, contractor doing work at the property, or hid a spare under a rock in the front yard.

Replacing all of the lock hardware in a house can cost a several hundred dollars. Most homes have at least a front door, back door, and door into a garage...three new locksets are expensive! And some homes would need more than three. But there is a much less expensive way.

Some new home owners do not understand that in order to rekey a lock, the entire lock-set does not need to be changed out. A good locksmith can reuse existing locks, reconfigure the inner-workings, and make a new key that fits. 

And scheduling a locksmith to come out, rekey locks and make you copies of new keys is more like $125-$150. This is a small price to pay for added security at your new home.

Verify wiring instructions before you wire funds to escrow...

So luckily I have not experienced this first hand with any of my clients, however I know other agents who have clients that have fallen victim to this. Beware...falling victim to this scam can not only derail your home purchase, but also completely derail your life.

BUYERS: WHEN YOU WIRE YOUR DEPOSIT OR DOWNPAYMENT FUNDS TO ESCROW, BE SURE TO VERIFY THE WIRE INSTRUCTIONS AND ROUTING INFORMATION WITH YOUR AGENT AND ESCROW DIRECTLY.

I can not emphasize this enough. If you receive an email with wiring instructions, call and personally talk to your agent to verify the information is correct and legitimate.

Sadly enough, there is an online email scam that seems to be getting more prevalent. Criminals will hack into a real estate agent's email and just sit back, read the emails, and monitor activity and the progress of transactions...then, when it comes time for a transaction to close, the hacker will use the agent's email and send wiring instructions to the client -- impersonating the agent. The wiring instructions lead to offshore bank accounts, not to escrow. One funds are wired to an offshore bank account, they can not be recovered.

Again, this is not some rumor. I know real people this has happened to. I know an agent whose client wired over $100,000 to Nigeria -- lost and gone forever. Don't let this happen to you! I have recommended to my buyers NOT to wire funds at all, and obtain cashiers checks and deliver them to escrow directly. The California Association of Realtors has a new advisory/disclosure document that addresses this as well. Just be careful.

I was featured on the news...Squatters are becoming more common in Sacramento...

It seems like "squatters" have become an issue again. For several years during the housing crash, as many homes sat vacant they were prone to vandalism and break-in. It was not uncommon to encounter people squatting in homes. When values started to go up again and there were not as many vacant properties, it seemed like squatters became less of a problem. Fast forward to today, and squatters seem to be an issue again.

What is a squatter? A squatter is someone who unlawfully enters into a property and stays there without permission from the owner. It is a crime of opportunity, as well as the fact I do think that with the proliferation of smart phone devices squatters can search MLS for vacant property to target.

I encountered squatters at one of my vacant Midtown Sacramento duplex listings a few months ago. I approached the property to install a carbon monoxide detector, and noticed a shopping cart near the front porch. As I got closer I could hear voices inside and footsteps echoing off the hardwood floors. I immediately called the police. Before the 9-1-1 operator could take my information, a police car drove by and I flagged him down. Luckily those squatters did little damage and probably had not been there too long.

I just represented buyers on another Curtis Park triplex property that was broken into and torn apart by squatters. That property was the subject of an ABC Channel 10 news story by John Bartell. You can watch the news story here. Luckily I was able to negotiate a price reduction on the property once we got a full understanding of the extent of the damage, which in this case was extensive. All three HVAC units were stolen. Holes were punched in the walls. All of the copper plumbing and wiring was removed. It was bad.

How can you as a home seller prevent squatters? I highly suggest if you have a vacant property that you give it the appearance that it is occupied. Park a car in the driveway, or ask a neighbor to do so. Make sure your windows have blinds or curtains so people can not see inside. Put a lamp with a plug-in light timer in a few rooms that is set to go on and off during the evening. Keep the grass and landscape trimmed. Make sure you suspend mail so your mailbox does not overflow. Same with the newspaper. Set your alarm and spring for month-to-month monitoring services. Make sure your neighbors are aware the property is vacant and let them know to alert you to any suspicious activity.

A little vigilance goes a long way.

Sacramento County Sheriff's Department volunteers will do "Vacation Checks" while you are out of town...

When you're on vacation or away from your home for an extended period of time, would it give you peace of mind if someone was checking your house occasionally to make sure it is secure? I know I sure would love that at my house!

Do you live in the Sacramento County area? 

The Sacramento County Sheriff's Department and its "Volunteers in Partnership with the Sheriff" (VIPS) provide a free service to do "vacation checks" for Sacramento County area residents. They will visit the home while residents are away and perform periodic checks that the property is secure. You can find out more information about this program or sign up for this service at a local Sacramento Sheriff Service Center near you.

Temporary paper window shades are a great way to keep your vacant Sacramento home secure...

If you have a vacant property listing and want to take extra steps to try to keep it secure, temporary paper window shades can be a great aid. They are inexpensive -- a box of 6 is about $20 at Home Depot and a lot cheaper than installing mini-blinds or curtains. They look decent and much better than other cheap solutions like trying to hang sheets or taping newspaper over the windows. They are translucent and still allow natural light to enter the house. They are easy to install with an adhesive strip that sticks to the window or the window frame, and they can be cut with regular scissors into different sizes. Best of all, they prevent folks from looking inside to see that a house is vacant. I highly recommend using these...since break-ins and other crime can occur in any Sacramento neighborhood no matter how nice or safe you think the area is. They work great on occupied homes too! I can even install them for you. =)

One of my buyers fell victim to this SCAM! Do not let this happen to you!

Ugh. One of my buyer clients was SCAMMED for nearly a thousand dollars. Please read on, and do not let this happen to you...

About a month ago, a very nice lady called me about one of my listings in Rancho Cordova. My listing was available, and I happily arranged to show it to her. When I met her at the house, we hit it off immediately, and she was not already working with another Realtor...so she decided to work with me to find her a house. She did not think my listing was a good fit for her needs, so we made arrangements to see other properties. She had already been pre-approved for a mortgage by a loan officer with a company called MortgageClose in southern California, and she provided me with a copy of her pre-approval letter. I made contact with her loan officer to make sure I understood the terms of the loan she was approved for, and had a nice conversation with him. Things seemed to be moving foward in a typical way...

So after looking at a dozen or so homes over a couple weekends, we found the home of her dreams; a Fannie Mae Homepath bank repo in Sacramento. We made an offer immediately, and after a few days it was accepted by the bank! I called the loan officer and let him know that we made an offer that was verbally accepted and I would forward him the fully executed purchase contract with the bank asset manager signatures as soon as I received it. He said great, he was ready to go...so on a Friday afternoon I received the signed purchase contract, and I forwarded it to him immediately.

I didn't necessarily expect a reply from the loan officer that afternoon, or even over the weekend...but come Monday morning I did expect a response. Part of our purchase contract with Fannie Mae stated that the buyer's appraisal must be ordered within 7 days, and the clock was ticking on that timeframe.

So Monday around noon, I had not yet gotten a response from the loan officer. I called and left him a voicemail, and sent him another email. I called my buyer client and asked her if she heard from the loan officer directly, and she said no. Hmm...that's no good! But, perhaps he was out of the office? Most loan officers I know have a smart phone and at least check their email if they plan to be out of the office, but okie dokie.

Tuesday morning rolled around, and by about 10am I still had not heard anything from the loan officer. Again I called and left him a voicemail. I also emailed him, this time cc'ing my buyer client on the email. At the end of the business day around 5pm I had not heard from him, and I called my client and asked if she had heard anything from him -- and no she had not. I explained to her that we had timeframes in the contract we needed to meet, and if we did not get in touch with him by the next morning we needed to figure out 'Plan B' for her loan. She said she really wanted to work with this loan officer, but she understood that his unresponsiveness was a bit alarming.

On Wednesday morning, I had a home inspection for another buyer client in Natomas at 8:30am. From the home inspection I checked email on my iPhone, and there was still no response. From my phone I looked up the company website, found the company main telephone number and called it. The number was disconnected. Something was seriously wrong...if the unresponsive loan officer wasn't alarming enough, this was a HUGE red flag. I called my client immediately and told her, and she agreed it was time to find another loan officer. I went through my contacts, made a few phone calls, and referred her to a great local loan officer -- Kris Karge with Comstock Mortgage, who happened to be the first loan officer I called who answered his phone that morning. Within a couple hours, she filled out a new loan application, forwarded him all of her bank statements, and paystubs. Kris ran her credit, locked her interest rate, and ordered her appraisal right away. Wow, that was so easy!

I checked in with Kris around noon to make sure he had everything he needed...he did and her loan was now on track, but then told me something very troubling. My client had paid $995 in advance to MortgageClose to get pre-approved. My heart sank. This practice is NOT legal, even if the company claims the funds will be applied to your downpayment or closing costs. She was scammed. The ONLY fee a loan officer can collect in advance is a credit check fee (usually $20-$30). An appraisal fee (usually $350-$450) can be collected by a loan officer only after the "Truth In Lending" Disclosure has been signed and dated by the buyer, which generally happens only once a home is in contract.

I called my managing broker, and he googled "MortgageClose Reviews." They have an F with the Los Angeles Better Business Bureau. There are numerous complaints on numerous websites.
PLEASE buyers...I can not encourage you enough to work with a local, reputable loan officer. Ask your friends, family, co-workers, or your Realtor for a referral. Meet with the loan officer in person, and make sure they give you a written itemization of the costs and fees associated with the loan you are applying for. NEVER give a loan officer money in advance unless it is associated with a credit check fee. The appraisal fee should only be paid once you have a property in contract.

Most people only do a handful of real estate transactions in a lifetime and have no idea what lending practices are common, ethical, or legal. If you need a referral to a great Sacramento loan officer, feel free to contact me directly. Luckily, this little glitch did not completely derail my client's home purchase, and she is in great hands with her new loan officer. She is also taking steps report this fraud to the proper authorities, and she will hopefully get her money back...someday.

Ask Erin: What is an "Arm's Length" Short Sale Transaction?

In any given week, I receive a dozen calls or emails from folks seeking more information about the possibility of doing a short sale for their Sacramento home. Most folks are just doing fact finding to weigh their options (short sale, vs. foreclosure, vs. loan modification, etc.)...often times they know someone in the process of a short sale, or perhaps they are nearing default on their mortgage and their lender has suggested they try a short sale, or they have just suffered a financial hardship. These folks are on information gathering missions...cool - I am happy to answer questions about the procedural ins and out of short sales. I refer these folks to qualified professionals to answer their tax and legal questions since I can not address those issues.

About a quarter of the inquiries I receive take on a much different tone...they tend to start something like this..."I bought my house in 2005 when it was worth $X. Now in 2009, its worth substantially less. I married my spouse in 2008 and he/she is not on the loan or on the title for my house. I would like to do a short sale and sell my house to my spouse."

SORRY!

Number one...doesn't a scenario like that sound like fraud? Sorry, but I will not participate in that. Number two...I did not hear anything about a hardship necessitating a short sale. Number three...most lenders entertaining short sales require that the transaction be at "Arm's Length." A short sale lender I have worked with several times requires a document to be signed called an Affidavit of Arm's Length Transaction." It reads - "All parties to the contract on the premises dated ______ hereby affirm that this is an “Arm’s Length Transaction.” No party to this contract is a family member, business associate, or share a business interest with the mortgagor. Further, there are no hidden terms or special understandings between the seller or buyer or their agents or mortgagor. The Buyers and Sellers nor their Agents have any agreements written or implied that will allow the Seller to remain in the property as renters or regain ownership of said property at anytime after the execution of this short sale transaction. None of the parties shall receive any proceeds from this transaction except the sales commission."

I hope this clears up any confusion regarding this issue...the seller can NOT benefit in any way from a short sale transaction.

Check for Sex Offenders in CA using the Megan's Law Online Database

Did you know that there is a paragraph in the California Residential Purchase Agreement (in paragraph 5C) that informs prospective home buyers that information is available to them pertaining to the proximity of registered sex offenders to the property they seek to purchase. The paragraph reads:

"Pursuant to Section 290.45 of the Penal Code, information about specified registered sex offenders is made available to the public via an Internet Web site maintained by the Department of Justice at http://www.meganslaw.ca.gov. Depending on an offender's criminal history, this information will include either the address at which the offender resides or the community of residence and ZIP Code in which he or she resides. (Neither Seller nor Brokers are required to check this website. If Buyer wants further information, Broker recommends that Buyer obtain information from this website during Buyer's inspection contingency period. Brokers do not have expertise in this area.)"

While I review this paragraph with all of my buyer clients when we write up offers and encourage them to check the Megan's Law website, I'm not sure that all of them actually do check that out.

Well, let me just tell you that one of my clients did check.

We wrote an offer on Friday evening, had a counter offer from the seller in hand by Sunday morning. On Sunday afternoon, while my buyer clients were contemplating how to respond to the seller's counter offer, they decided to check the Megan's Law database...they found a registered sex offender living 3 doors down from the house they made the offer on. They decided not to pursue that property and look elsewhere...

Let's face it, registered sex offenders are out there and do live in our neighborhoods...but you as a buyer have the ability to make an informed choice as you make your home purchase.

Bad boys, bad boys...whatcha gonna do...

You may be thinking to yourself - what is wrong with this picture? That is exactly what crossed my mind as I was driving in a residential Sacramento area neighborhood earlier this week. What you can not see in this photo (which was hastily taken as I drove by), is that sitting in this trailer is a used air conditioning condenser with all of the electrical connections still attached and dangling off the other side.

Even in the nicest, safest neighborhoods, it is not an uncommon crime to have the air conditioning condenser unit stolen...there is valuable copper inside. While it has never happened at one of my own listings, it has happened to properties I have had in contract with buyers. Replacing these units can cost up to several thousand dollars.

In this instance, when I saw this vehicle and noticed some other fishy behavior nearby, I took down the license plate numbers and called the police. They showed up on scene in just a couple minutes. I probably saved some unsuspecting homeowners a load of trouble. Be alert folks! This was happening in broad day light around 10:30am!