Banks don’t always understand the current market - or maybe they don’t care 

I recently showed the property I had written about before in my Orland Park short sale post and was shocked at how this property had deteriorated since I showed it to my prior buyer clients.  The grass was overgrown and filled with weeds.  What once showed as a majestic home now looked run down. 

When I entered the home with the new set of buyers we were greeted with a terrible mildew smell.  We found mold growing on one of the walls in the sub-basement and the smell was terrible down there.  Yet the bank was sticking with it’s price that no one felt was right for today’s market.  So the house has sat and gone downhill. 

In the beginning I thought it was worth the list price but viewing it now I feel it is overpriced.  Yet it remains on the market with a notation that the bank will only accept full list price.  I’m sure time is running out and this home will go into foreclosure at some point.

A buyer called me about a short sale property…

and wanted to see it immediately.  I had never worked with this buyer before and she was telling me how she didn’t like the listing agent and didn’t trust him.  I told her I would show her the property since the other agent stated he would not represent her as his brokerage did not allow dual agency.  

I contacted the agent and he informed me that a decision was going to be made soon which meant we were coming in at the end of the short sale cycle.  There were multiple offers on the table and I informed my buyer of this.  Yet she still came up with a lowball offer.  I told her with multiple offers it was probably not going to be accepted but she stated that she understood.  In fact, she was all rush-rush about it and when I was unable to answer the phone one time when she called she said something to the fact that she guessed I didn’t want her business!  I was with another client and that statement forwarned me that this might not be a client I want to work with.

Sure enough, I called her a few days later to tell her that her offer was too low and was not accepted.  She seemed upset at first but then gave me another address she wanted to view.  Again, she seemed overly excited and everything was "drop what you’re doing and show me this house - NOW!" 

We went to view that house and one more in the same day.  Her mother came along as now she was going to purchase the property and pay cash.  Then they were going to work out the financing between themselves.

I wasn’t crazy about the house they viewed and thought the 2nd home had more potential.  However, they all agreed on making an offer on the first home I showed them that day.  I wrote up the offer and collected the earnest money check.

When I faxed the offer in I was told by the listing office that funds had to be verified so I called the buyer (the mother).  She was very upset because she had purchased with cash in a different state and didn’t have to verify anything.  I told her they would not review her offer if she didn’t follow their rules.  That’s when I found out it wasn’t truly a cash deal but she was getting an equity loan on her home, which was paid off.  And I learned something - you cannot get any kind of pre-qualification or verification for a home equity loan for some reason.

At first I thought there was something fishy going on but I talked to another loan officer who told me that’s how it works with most mortgage companies and equity loans.  So we had a problem and the buyer was getting angry at me.  I had a loan officer talk to her over the phone and pre-qualify her (he was aware of the whole story and did this as a favor).  We then used his pre-qualification and sent it in with the contract.  

Once again, it was a lowball offer and I had to inform her that they accepted a better offer.  She was very irate and yelled, "Nobody ever says no to me!"  That was it for me, I was not going to deal with these buyers again.  

We were talking homes listed under $100,000.  The offers were actually under $50,000.  The few bucks of earnings were not worth the headaches of going on multiple showings, writing up multiple lowball offers and dealing with these people.  I have no idea if they’ve found anything or have started offering more money or if they just gave up.

However, I believe they blamed me for them not getting these homes.  It was almost like they didn’t believe anything I told them (just like they felt with the original agent they worked with).  These people wanted it all their way and did not feel the need to follow rules.  I only worked with them for a couple weeks so it’s not like we forged a close relationship but there was no reason for them to not trust me as I explained everything to them.  I just don’t think they liked what they heard.

I just got a call this week from a buyer asking about foreclosures…

and I once again explained how foreclosures work and how they’re not necessarily a good deal.  I told her that I had no "foreclosure lists" and that foreclosed properties were listed with all other homes on the market in our MLS.  I asked her how much she could afford and that’s the search I created for her.  I explained that if there are any foreclosed listings that they will come up in the search.  She seemed to understand but I truly feel her price is too low for the areas she wants to live in.

Unfortunately, this is not an investor but a family who wants to live in a certain area but can’t afford to purchase an average home in those towns.  So they’re looking for homes that are foreclosed or need work since that’s all they can afford.  I set them up for an e-mail search and we’ll see if anything comes up.

Recent first-time buyers told me to take short sale listings off their search

I explained how short sales work to these buyers after showing them a few properties that were listed as short sales.  I told them my prior story and how long they might have to wait and they finally made the decision to remove all short sale listings from their automated search.  They found a great home in Tinley Park and are now happy first time home buyers.

I now explain the truth about short sales to home buyers, whether first-time buyers or experienced buyers (short sales are in all price ranges), and most don’t want to deal with them.  And that makes me happy because I have become bitter with the experiences I’ve had trying to sell them.

I have read in many different real estate forums and blogs how other agents no longer show short sale listings.  It’s unfortunate for sellers that are trying to avoid foreclosure but until the mortgage holders make these kinds of sales easier and quicker I see more and more agents shying away from these listings. 

I was working with one couple that finally settled on a beautiful home in Orland Park for sale that was a short sale listing.  I wasn’t completely sure if it was a short sale as it wasn’t explained that way on the MLS print-out.  However, it did mention that lender approval was necessary so I figured it was a short sale and the listing agent confirmed it with one phone call. 

I was told there were 2 other offers in already so our’s would be the third.  We were around $40,000 under asking price at that point in time.  Then the wait began.  As much as I told my buyers we would have to wait I could tell they were getting impatient.  Of course, whenever they requested I would contact the listing agent, knowing that if he had any news he would contact me.  

He promised he would contact me on a weekly basis but that never happened.  I don’t even know why he mentioned it as I didn’t expect him to do so, but he should not have committed himself.  Anyway, during the waiting game we noticed the price on the property had been reduced.  Still no word.

Going into the 3rd month or so my buyers once again asked me to contact the listing agent, which I had planned to do anyway.  As soon as I called him he said he was going to call me.  Sure…  He finally got an answer.

And the answer was - the mortgage holder would only accept asking price, which was $5,000 off the original list price when we started looking at it (it had been reduced by a lot before we viewed it the first time).  My buyers weren’t going to pay list price.  

In my opinion the home was worth it.  But today’s buyers simply don’t want to pay full price, even though in this situation the price had been reduced by more than $50,000.  

I checked the listing on the MLS to see if it ever sold and was surprised that even though it still showed as an active listing there were private agent remarks stating that an offer had been approved.  I’m not sure that is acceptable but since my buyers were not interested I didn’t pursue it.

Unfortunately, after working a long time with these buyers they seem to have either given up or maybe started working with someone else.  I tried to get them to start looking again but they gave me an excuse that they were tired of going through all of the listings.  They are still on my Automated E-Mail Home Search but have not set up any further appointments, at least not with me. 

This makes me wonder if the short sale situation left them bitter and maybe they learned of a friend or relative in the real estate business that they started working with, or maybe they walked into an open house and worked with that agent.  So short sales can definitely cause negative feelings and I’m hoping this is not the issue with these buyers.  But emotions can take hold and someone has to take the blame.  I’m afraid in this case it might have been me. 

Of all the good blog posts I read, why would I share one talking about the Phoneix market?  Aren’t they worse off then we are?  Maybe, but I’m seeing our prices in the southwest suburbs continue to decline.  The inventory of available properties far outweighs the amount of available buyers.  And sellers here also have to start worrying about market values being established by sold and closed short sale and foreclosed properties.  We have them here, too, in amounts I’ve never seen in the 25 years I’ve been selling real estate. 

In my opinion, it isn’t just bank-owned properties that are setting low prices.  It is also sellers that need to move and fortunately for them they have built up enough equity that they’re not feeling the crunch. Those sellers can afford to price their properties in line with today’s buyer’s market and still go on with their future plans because they have enough equity.  Sellers that have owned their property for quite some time and not touched their equity don’t really feel that they’re "losing" money because in my opinion, the past seller’s market caused unusual price increases.  Sellers that purchased many years ago, prior to the seller’s market, are still seeing appreciation. 

The combination of high inventory, too few buyers to catch up with the amount of properties available and all of the properties being sold at ever lower prices because of short sales, foreclosures and sellers that are pricing their homes correctly causes prices to continue to fall.  Yes, it’s happening here in the Chicago area and the suburbs.

I keep saying over and over, "Why would a seller want to keep their property on the market for months or even years?"  A property that remains on the market for such a long time becomes stagnant and buyers think something is wrong with it, not realizing that maybe the sellers have reduced $50,000 or more during the long listing time.  They don’t understand that the property is sitting because it was priced too high to begin with.

A seller is much more likely to get top dollar when they first list (if priced right) than letting it languish on the market.  In most cases they end up taking even less than they would have if it was priced at market value in the beginning.

But why was it priced incorrectly?  Was it the agent’s fault, the seller’s fault or a little of both?  I’ll write my feelings in my next post. 

I will talk about my short sale listing that was a condominium for sale in Chicago.  This unit was owned by an out-of-state seller that had only seen the condo once.  It was a family investment and a divorce caused the need to sell.  This condo was a conversion in an original Chicago mansion and was only a few years old.  There had been renters since day one but it was vacant when I got the listing.

When we first listed the unit there was another condo for sale in the same building and one that had recently sold and was deal pending.  Since this was such a unique property we listed at a lower price than the other two listings as the other units offered a bit more.  The deal pending unit lost the deal at the last minute and did not go back on market.

So only my listing and another listing remained for sale.  We were the first to take a price drop as we had showings but no offers.  The other unit finally started reducing.  Still, neither unit was selling.  Our competition was brand new units in new buildings as the Bronzeville area the building resided in has been regentrifying and there has been a lot of new construction and conversions.  We were also up against all price ranges, many units offering similar amenities priced much lower.  Still, not much was selling in the area.

The other listing expired and the unit did not re-list.  My seller had no choice but to sell (the other unit was owner occupied).  After more than a year on market my seller was feeling the crunch.  He couldn’t afford to make payments any longer and his CPA suggested he try to sell the property as a short sale.

My seller contacted his mortgage company on his own and started arrangements.  We were finally told the mortgage company would consider a short sale offer and told the seller that they would consider offers at least within 20% of appraised value.  So we once again dropped price several times until we got interest.

We dropped down to $230,000 when we got our first offer in over a year.  It was extremely low, something like $145,000.  But it started the wheels in motion.  Only the seller had any communication with the bank.  He sent me instructions on how to write up and present the offers.

Soon after the first lowball offer we got a full price offer.  Another full price offer followed shortly.  The offers were faxed as instructed.  Then we all waited.  My seller was calling the loss mitigation department every Friday.  A month went by when he was told that the file was closed.  He asked why.  They said something about not being able to read a page of a contract.  

Something was fishy as multiple contracts were faxed so why would one illegible page cause them to close the file?  I refaxed everything and even made one of the buyer’s agents rewrite her offer as I’m sure that was the offending contract.  She did and I sent the offers once again via UPS.  Still no contact.

It took over 2 months for a loss mitigation person to finally contact me.  He explained that if he worked 24 hours a day, 7 days a week he could not catch up with the amount of files they had to deal with.  In the beginning, he also said I should not have sent the offers UPS as they only work with faxed offers.  I explained about the file being closed because they couldn’t read one of the faxed pages.  He had no answer for that.

I at least started speaking to him on a more regular basis but still no acceptance.  We were nearing the 3 month mark when another offer came in at $236,000.  I went back to the other buyers and as a courtesy gave them the opportunity to come up with a best and final offer.  None of them increased their original offer.  The high offer was finally accepted more than 3 months into the short sale.

Although I thought it was a long time I’ve heard of people still waiting from December and even October of 2007!  So I guess 3 months wasn’t too bad, especially since they actually accepted an offer.  

But think about it, 3 people waited 3 months and more only to be told their offer was not accepted.  The final bidders got lucky enough to come in at a good time as they only had to wait about a week or so for acceptance.  We made it to closing but I ended up forgoing part of my commission just to get it to close as there were problems with the figures at the last moment. 

It was not a pleasant experience although it taught me what to expect and gave me an understanding of the process.  I’m glad I went through it and my seller and I can consider ourselves lucky that we made it to closing on a short sale.  I’ve heard many horror stories about other sellers where the mortgage holders wouldn’t deal or things just went bad.  When a short sale is not accepted then the next step is foreclosure.

If you’re a buyer interested in short sales keep in mind that high bid wins (as far as I’ve seen and heard - I’m not sure how different places weigh other factors such as down payment or owner-occupied vs. investor).  Unless you come in at the very end of the process you need to be prepared for a long wait.

Unfortunately, if you hound your agent to make phone calls there is nothing an agent can do to make things happen faster.  In fact, the more calls an agent makes, the more likely they only get voice mail.  There were times when my contact at the mortgage company had a full voice mail and I couldn’t even leave a message.  If there is no news to give they will not return the call. 

And I can’t blame them for that.  With all the files they’re handling if they returned every inquiry they wouldn’t have time to actually work the files.  

There is no guarantee you’ll get a super deal.  However, with my listing I believe that by the time my listing sold (the market was already declining at that point) it probably appraised for around $250,000.  It sold for $236,000 so those buyers did get a good deal.  But so many buyers think they can make lowball offers and have a chance.  It doesn’t usually work out that way, as I’ll explain in future posts. 

I recently participated in a contest geared towards real estate agents. My team won the contest and the prize was a great real estate website package worth around $5,000. We decided to put this website up for raffle with all proceeds going to the Eco Preservation Society and saving the Mono Titi monkey in Costa Rica.

What is a Mono Titi?

Costa Rica is one of the top booming hotspots in overseas real estate. It has become a popular vacation destination and this beautiful country is facing much new construction.

Of course, this interest has to affect the natural habitat, which is what has attracted tourists and the affluent who want to build second homes or even move to Costa Rica. So the beautiful habitat that was the main attraction is now being depleted.

One of the species suffering from this is the cute-as-a-button Mono Titi monkey which is a squirrel monkey indigenous to Costa Rica. As humans encroach on this monkey’s natural habitat, the Mono Titi is becoming endangered.

I am reaching outside of the real estate community to ask for raffle donations to this worthy cause. In fact, anyone that knows me personally knows that I love monkeys. My monkey gifts and decor in my house attest to that fact.

What’s In It For You

I realize if you’re not in real estate you could care less about a website package for a real estate agent.  So I’d like you to look at this in a different way.  Here are some thoughts:

• You can donate just to help this endangered species like you would contribute to other causes
• If you win the prize you can give it to a real estate agent you know like someone in your family, a friend, etc.  I would love this package myself!
• Anyone who wins that joined because of my efforts can let me know they won and I will refund your donation back if you give me the website.

The donation choice is one raffle ticket at $35.00 or four for $100.00.

Please help this endangered species and the works of the Eco Preservation Society.  I want my grandchildren and great-grandchildren to be able to know that there are still jungles and wildlife and natural areas left in the world.  I realize that species go extinct but if humans continue the way we are now wildlife will be wiped out and we might be witnessing more of this in our lifetime.

Please go donate (which will put you in the raffle) at the Save the Mono Titi website by clicking the link.

The donation can be made through the Paypal button.  If you do not have a Paypal account it can be set up quickly but if you have a problem doing it let me know and I can make the donation for you and we’ll work it out.  This raffle will end on June 1st so please donate now.  There’s not much time left.  Thanks in advance!

This month’s issue has our Featured Listing (the Yunker Schoolhouse already posted here) and a list of market statistics for 8 popular southwest suburbs comparing home prices from 2006 to 2007 and showing the increased or decreased percentages. 

We also have a new feature called Ask The Experts titled "The Math Might Be in Your Favor."  We have more information pluse a coupon for dining at Sam Maguire’s in Orland Park.  If you’d like to be on our newsletter snail mail mailing list please contact me and provide your name and address.

I already have a monthly real estate newsletter that is not written by me that you can access by clicking on Judy Orr’s Real Estate Newsletter.  It is chock full of current real estate news, current mortgage interest rates and much more. 

Address:  14299 S. Wolf Rd., Orland Park IL  60462

This is your chance to own a building that is part of Orland Park’s history.  This is the original Yunker Schoolhouse built in 1910.  It is now an out building at a strip mall located on a corner with a stoplight at 143rd & Wolf Rd.  This location offers great visibility and plenty of parking. 

It’s much larger inside than it appears from the exterior.  It has a main level area with a large reception room and two offices.  But there is also an upper level and a partial, finished basement with a kitchenette. 

Although it is currently being rented out (the main floor client will be leaving soon), it would be a wonderful spot for a small business such as an attorney’s office, real estate, CPA, antiques, clothing, etc.  Click on the photo or View Details above to find out more and get the virtual tour link.

There are many definitions of hypermiling and even distinctions on who can actually claim they are a hypermiler.  In easy terms, it is learning to drive in a new way to save as much gas usage as you can, or to increase your MPG above the EPA as much as possible.  Fuel economy (FE) is the key. 

I have read that some hypermilers get better gas mileage in their gas guzzling SUV’s than the guy down the street driving a Prius normally.  Hypermilers seem to be a new sub-culture with contests and hypermiler "rock stars."

With gas headed to $4.00/gallon this summer, the term hypermiling might become a househould word.

You Have to Relearn How to Drive

The following are very simple hypermiling techniques:

• Drive slooooooow - drive at the minimum allowed speed limit
• Never accelerate from a stop - always allow your car to start rolling on it’s own and accelerate as slowly as possible
• Avoid traffic if at all possible
• Learn to read stoplights so you can try to make it through all green lights
• Learn to use your cruise control as much as possible - not just for highway driving
• Learn to use the cruise control instead of your foot
• Keep your foot off the gas
• Keep your foot off the brake
• Learn how to make turns without braking
• No sleeping at the wheel - this will take conscious effort and you need to stay alert
• Ridding your trunk of junk
• Keep constant track of your mpg with every fill-up

The above are just some of the basics.  There is more but some of the techniques are only for the most advanced hypermilers.

Clean out your car

I’m guilty of driving around with extra non-perishable groceries when I bought them on sale in bulk.  I’ve kept heavy boxes of computer paper in my trunk, once again, to keep it out of the garage or house.  But doing this cuts down on your fuel economy.  So keep your car and trunk clean.  Don’t cart around anything that is not needed.

Constantly calculate your mpg 

Like beginning a diet, you’ll need to weigh-in on what mpg you’re currently getting.  Here is a way to calculate your mpg - click here. 

Practice Makes Perfect

If you’re interested in becoming a hypermiler or just believe in trying to get the best gas mileage possible out of your vehicle, you should search and read everything you can on how to do it.  This article is one gal’s interpretation.  And I’m a hypermiling newbie - but it fascinates me.

Once you learn the basics that you think you can handle you need to practice them in your car.  The easiest to begin is driving slower.  I always drove the speed limit as getting stopped by cops always scared me. 

Slow Down!

As I’ve aged, I’ve become a bit more reckless.  It’s happened slowly.  Always drove at the speed limit, then started going 4 over, thinking it was safe enough to not get stopped by.  Then it went to 9 over and lately I’ll see a cop ahead & see I’m going 15 or more over and slam on the brakes hoping I’m far enough away from the radar.  So far, so good.  Only a few speeding tickets in my lifetime.  

So my start of hypermiling is going the speed limit.  For me this is very easy and I’m pretty good at maintaining speed without using cruise control.  And it feels weird going the speed limit!  But here’s what I read:  trying to get somewhere faster by speeding and weaving in & out of traffic probably only saves you a few minutes of your trip.  This is especially true with city driving with lights and stop signs.  You might make a little better time on highways by speeding but you risk getting a ticket which will set your time back more than if you followed the speed limit.

But we’re not worried about getting someplace faster here, we’re worried about getting the most gas mileage possible.  With looming gas price increases (they’re already too high) hypermilers don’t care about getting someplace quicker or not, but they want to save as much money as possible.

How many times were you behind a slowpoke and pass him up only to see he caught up at the next stop light.?  You finally beat him through the next light and feel jubilant about it.  But now who’s the fool?  You just ate up a lot more gas than he did.  And going the same distance you probably only gained a couple minutes.  A good hypermiler will have to fill their gas tank less than the rest of us.

In fact, many hypermilers don’t drive hybrids but prefer more comfortable cars.  Yet they get better gas mileage than most hybrid owners.  They also drive the minimum speed limits - many times driving way under surrounding traffic flow.

Be light on the gas pedal

Never accelerate from a stop.  Allow your car to start rolling on it’s own.  This is a tough one for me.  I used to take off like a jack rabbit.  But it only took one full trip to get me to learn how to do this.  I’m now very conscious of it and am just waiting to create this new habit.

Stop accelerating while driving.  Unless you’re really falling under the speed limit there isn’t any reason to accelerate unless you’re avoiding an accident.

As soon as you start going downhill (a little before) take your foot off the gas and allow the car to roll on it’s own.  Only accelerate if you start falling below the speed limit when you hit level terrain again and remember to accelerate slooooowly.

Keep your foot off the brake unless absolutely necessary

This is where hypermiling becomes more challenging and almost like a game in the beginning.  It can also be the most dangerous for beginners who are trying to learn how to do this properly.

Why do you have to brake?

• Following too close - tailgating the car in front of you or being in heavy traffic
• Stoplight or stop sign (also trains, avoiding a collision, bad weather conditions, etc.)
• Turning corners
• Entering a busy street from a side street
• Entering your garage or parking spot
• Ending your trip

Those are the most used reasons to brake.  The first one is something many hypermilers will simply have to stop doing.  I try to never tailgate, but now I make an even better effort to keep my distance from the car ahead.  It’s amazing how if you stay behind you rarely have to brake when the guy ahead does.  In most cases you just remove your foot from the gas pedal and roll and in many circumstances never have to use the brake at all.  Once traffic ahead starts moving you can catch up to the speed limit again - sloooowly.

Stoplights:  This is the most difficult thing for me.  Trying to read and time stoplights to me is the same as counting cards in Blackjack.  I’m just not good at it.  But I am now more conscious.  I look ahead to see how long the light has been red or green.  If it’s red I take my foot off the gas and roll towards the light.  I have been lucky not having to brake in many cases.  It’s almost like magic! 

If it’s been green for a long time you will probably not make it through.  Instead of speeding up (eating gas for no good reason), take your foot off the gas pedal and glide as far as you can before having to brake.  If you are able to do this far enough back you might get a green light by the time your car arrives and never have to brake.  

If you’re good at reading stop lights you could really become an experienced hypermiler and save a lot of gas.  For most of us, we just try to do the best we can with the stop lights.

Stop signs can be an evil temptation for hypermilers.  It’s always a thought in trying to save gas by not braking to roll through a stop sign as long as there is no traffic (or police cars).  I was tempted myself and I would never have thought of running a stop sign before learning about hypermiling.  You need to follow the rules of the road so don’t be tempted at saving a few bucks by going against the law.  Not worth it.

Trains or avoiding accidents are a little different.  You will probably have little control over a train unless you can see from a distance that the train is ending.  Take your foot off the gas and glide as far as you can without stopping.  But if the train is just beginning you’ll have to stop (and turn off the ignition).  You’ll need to brake to avoid hitting someone or avoid a collision (hoping you’re not the cause).  Forget about gas savings in certain situations. 

Inclement weather is something you should slow down for but I’ve been suddenly caught in blinding rain.  Pull over if possible and just do the best you can.  If you’re on a patch of ice and going out of control you need to do whatever you can to help yourself.  Use common sense.

Turning corners - this was something that surprised me.  I don’t like scary driving.  I didn’t think I’d be able to turn corners without braking, at least a little bit.  But guess what, I’m doing it!  Remember, I’m driving slower than before and am learning how to take my foot off the gas before I get to the corner.  So instead of turning at 30 mph or more, it’s more like 10 or 20 mph or possibly less. 

The first time I tried it my heart was beating wildly but it wasn’t bad.  The more I practiced the easier it became.  You do have to be careful when turning without brakes if there is oncoming traffic at the corner.  For me personally, I take a wider turn without brakes and maybe I’ll be better over time.  So every time there is another car on the road I end up braking a bit.  Once I can narrow down my turns I’m hoping I can do better.

I can even turn into my garage without braking.  We have an alley and once I roll around the corner into the alley I don’t put my foot on the gas at all.  I roll down the alley, open my automatic garage door so it’s opened by the time I arrive and I roll the car in.  I brake when I’m done.  If I can do this, almost anyone can!

Avoiding Traffic

True hypermilers do not allow traffic as an excuse for having to brake and accelerate.  They claim you should be able to avoid traffic.  I live near the downtown area of a Chicago suburb and am surrounded by busy streets.  It’s the only way to get to or from my home.

I always try to avoid driving in rush hour traffic but as a REALTOR I can’t always stay out of it.  I try to use side streets as much as possible but depending where I’m going it won’t always work.  I just make a conscious effort to drive slowly or roll as much as possible to avoid stopping and starting.

Advanced Hypermiling

Don’t use the a/c - that’s right.  A rigid hypermiler will not use the a/c no matter what (I guess as long as they can breathe).  They keep the windows up, too, even though I read that driving with your windows down doesn’t cause as much gas consumption as was thought.  In my opinion, this in itself could be dangerous because if you’re suffering from heat stroke it might sneak up on you and you pass out at the wheel.  I suppose the pro’s know when the line is being crossed and give up when necessary.

Do not try the following techniques unless you’ve practiced - a lot!  Many will forgo these and still save money using the tips mentioned above.  Remember, saving your life is worth more than saving money. 

Using your cruise control most of the time

I plan on giving this a try.  I think I used cruise control once in my life on a highway and did not like it at all.  I felt a loss of control that freaked me out.  But that’s just me, I know others use cruise control with no problem.  True hypermilers use cruise control in lieu of the gas and brake pedals.  They use their fingers to do the driving.  And not just on the highway! 

To me, this is a big step from being a hypermiler wannabe to becoming a hypermiler pro.  I’ll never make it to a pro but I’m going to try the cruise control.  I just have to read the manual and have my husband teach me.  I’m not sure I’ll ever feel comfortable with it but I’m going to give it a try.  If not done properly this could be dangerous so many will need much practice with this.

Hypermiling on highways 

Stay in the slow lane (right lane) - OK, that’s not dangerous nor does it take a pro.  In fact, you’ll almost have to drive in the right hand lane if you’re traveling at the minimum speed limit.  But here’s the real highway driving tricks:

Drive only the minimum allowable speed limit.  That’s usually different on highways than city streets.  It’s usually 10 mph less than the posted speed limit.  So if the speed limit is 65 mph the minimum is usually 55 mph.  Rarely do we find drivers going this much under the speed limit, even though it’s legal and even in the right-hand lane.  Some consider this as dangerous as reckless speeding.  But this is how a pro hypermiler drives on highways.

Ridge riding - This is driving with your tire on the right white line of the right hand lane.  This is your way of alerting other drivers that you are driving slow.  Supposedly, it also saves gas mileage on rainy days when you’re riding on pieces of road that remain drier because they haven’t been ridden on by multiple cars, therefore rain doesn’t collect in puddles which takes extra gas for your car to drive through and dissipate the water.  Whew!  They think of everything!

Drafting or surfing 

This is the most scary technique and I can’t imagine even attempting this.  I’m almost afraid of mentioning it and I do not recommend anyone try this.  It is basically riding behind a truck to reduce wind resistance.  Some go further by turning off their engine allowing the truck to suck them along.  SCARY!

Turning your engine off

Upon first reading this it might not seem as bad as drafting/surfing.  But different makes of cars react differently when the engine is off, shutting down the automatic steering or power brakes.  Cruising with the engine off may sound like a good idea but if you can’t regain control if needed it could be fatal.  Again, something most consider is not worth the savings. 

What You’ll Notice When Using Hypermiling Techniques

• You’ll be more conscious and aware of your driving - no talking on cell phones or jamming with music while trying to get maximum fuel economy.
• You will notice your need to fill-up the gas tank decreasing and might be amazed at the savings.
• Although it takes effort to follow the tips and techniques, you might feel a calmness from driving more slowly and not rushing and constantly stopping and starting.  Road rage might be a thing of the past - at least on your end.
• A smoother ride in most cases
• Having passengers scream when they witness firsthand turning corners without brakes, depending on your entering speed.
• Seeing angry motorists trying to pass you up, especially on one-lane roads.
• You might be seeing more "birds" than ever - no, not the flying kind.
• People might be more vocal to you - and the words won’t be so friendly (Screw them and let them waste their money)!
• If you cease using your a/c, you’ll need more showers and lose a degree of comfort - water vs. gas, I guess you’ll still save.

Some dissenters feel hypermiling doesn’t save enough money to be worth the effort unless you’re a true hypermiling pro.  Many feel the pro’s are just as dangerous as hot rodding teenagers and are a threat to safe driving.  Some feel the hypermilers to be cult-like, living in a different world. 

I find it interesting because with ever rising gas prices something has to be done.  Are hybrid cars our only choice?  Hypermilers say "No!"

My Favorite Hypermiling Resources

One of the most esteemed hypermilers resides right here in Illinois.  His name is Wayne Gerdes and you can read an interesting story on him by clicking his name.  This article is worth the read and shows how far you can go with hypermiling.

The truth about traffic flow is a long article but all you need to read to see the light is the first part of it (read the whole thing if you have the time).  Click here.  In fact, I don’t know if hypermiling is even mentioned but the traffic portion makes a lot of sense and is part of the hypermiling technique.

If you want to really get into hypermiling and follow the tutorial and join hypermiling forums and even purchase t-shirts with the word hypermiling on them, click here. 

Happy hypermiling!

What is a short sale? 

So many buyers have heard the term but don’t know what it means.  A basic definition is that a short sale is where a bank/mortgage provider agrees to consider allowing the property to sell for less than what is currently owed on the mortgage.  These are also referred to as pre-foreclosure sales as the seller is trying to avoid foreclosure by attempting to sell their property.  I have heard of some areas such as Florida where short sales are accepted even when owners are current with their mortgage payments.  Normally, the home owner has to prove why they can no longer afford the property and fill out a form and write a "Hardship Letter" before the bank will even consider a short sale.

From my networking it seems like different banks handle short sales in different ways.  Most will not give their complete approval in the beginning but will just state that they will consider a short sale.  This is one thing that makes them difficult for the seller, any buyers and their real estate agents.

What is the process? 

The seller has to start the process by requesting a short sale from their bank or mortgage company.  They must fill out whatever paperwork the bank requires.  It seems like the majority of banks don’t offer an actual price they will accept nor will they suggest a listing price.  With a short sale listing I handled we were told the bank would not accept anything less than 20% of appraised value but they would not send an appraiser out until an offer is made.  I was never notified of an appraiser needing to view the property with the exception of the buyer’s appraiser. 

So the seller and I decided to choose a price that would fall within what we considered 20% of appraised value and also a price low enough to generate interest.  This was a listing that was on the market for approximately one year with plenty of showings but no offers.  We made many price reductions throughout the listing period prior to the short sale.  

What happens when it is listed as a short sale? 

The property gets listed in the MLS just like any other property but agents usually warn buyers and agents that it is a short sale and needs bank approval.  They usually state to allow ample time for this to happen.  In other words, be prepared to wait for quite some time!

When my seller and I started marketing the property as a short sale and reduced the price we got an offer pretty quickly followed by two more.  The first offer was ridiculously low but this was before I was even given the bank’s position that they will not accept anything less than 20% of appraised value.  The next two offers were full price offers.

I submitted all offers to the fax number I was given and in the format that I was instructed to follow.  We waited and waited.  The agents kept calling me and I kept calling the loss mitigation person I was assigned to.  Most of the time I left a voice mail.  Only towards the end was communication established.

In the beginning my seller called the loss mitigation department once a week.  After more than a month passed by (might have been near the 2 month point) he was told his file was closed.  He asked why.  The person he was on the phone with checked and stated it was closed because some of the faxed paperwork was not readable.  The seller was furious and asked why we were not notified.  The person did not know.  I prepared the paperwork over again and actually sent the information via UPS.  I was actually told that is not the way they handle it, it must be faxed!  Well, after a lot of work we faxed everything again and the ball finally started rolling.

But we still waited.  It was going on 3 months of waiting when a fourth offer came in that was over full price.  I offered all of the other buyers a chance to come up with their best and final offers.  A couple weeks later the fourth and highest offer was accepted.  Two buyers waited over 3 months to find out their offer was not accepted (I don’t count the first offer as they were informed that there were better offers).

The buyer that ended up purchasing the property was happy and didn’t feel the wait as they happened to come in at the right time - when the bank was actually working the file.  So these buyers didn’t think the short sale was so bad after all.  I’m sure the first two buyers did not want to bother with a short sale ever again!

I am now working with a buyer that has made an offer on a short sale and we’re going on 2 months of waiting.  The listing agent seems to have some communication with the loss mitigation department but he can’t give us any real information because he doesn’t know anything.  We either have to wait or move on.  Fortunately, my buyers have the time to wait but I think they’re getting a little restless. However, I have to admit that if their offer is accepted they will have gotten a good deal.

Why does it take so long?

Once I had communication going with the short sale listing the gentleman I worked with told me if he worked 24 hours a day, 7 days a week he still couldn’t catch up.  There are too many files for too few employees.

Others in the industry feel that some banks would rather let the property go into foreclosure and then sell it at market value rather than taking a loss up front.  I don’t know what to think.   I have read stories of buyers and agents making an offer as far back as October 2007 and still waiting for an answer.  And I thought a little over 3 months was long!

I’m teaching my buyers about the downfalls of short sales

I am currently working with first-time buyers that viewed a short sale listing and just showed interest in another new short sale listing that hit the market.  I told them truthfully how it works and the fact that if they went this route on their first purchase it could very well be quite a bitter experience.  I’ve showed them good properties that were not short sales.

Of course, if they decide to make an offer on a short sale I will do so but I don’t look forward to it.  Months of waiting, phone calls to the listing agent when I know full well if they know anything they’ll call me.  Phone calls from my buyers asking for news when no one has any information.

Many agents I’ve spoken to have decided not to bother showing short sale listings anymore.  I fully understand and wish I could keep my buyers away from them.  Even if I stopped short sale listings from being sent via buyer automated searches, they still find them on Realtor.com and other online sources.  And I believe in sending my buyers everything out there.

I’ll follow-up with the current short sale I’m involved with to share how it turns out.