Posts tagged ‘short sales’

BPO AGENTS KEY TO SHORT SALES

by Maria Hass

An EMC Mortgage negotiator recently countered what I thought was a very good short sale offer by $22,000 more. I informed the negotiator that the BPO value was flawed and the house would sell very low because it sits next to a gigantic electrical structure but he would not believe it. I escalated the matter to the executive office of EMC and got in contact with the customer service representative, who forwarded my concern to the manager of the negotiator.
I wouldn’t have had to go to all this trouble if the BPO was reasonable in the first place.

BPO agents hurry to meet the deadlines of lenders and in so doing, submit inaccurate data that may result in the seller being foreclosed on and the agents being left empty-handed. Many BPO agents don’t care about the possible outcome of their BPO to the seller, buyer, agents, and the housing industry. All they care about is getting a value done and going to the next one.

It helps for the listing agent to meet the BPO agent at the home to be valued and to share information about the home to increase the chances of getting fair value and eventually closing the sale.

What makes a short sale unpredictable to close is, you never know the value that BPO agents submit and who your negotiator will be. Either one could kill the deal.

February 25, 2011 at 1:30 pm 1 comment

What Should a Buyer Expect When Buying in Today’s Real Estate Market?

By Maria Hass, Realtor

A buyer who is looking to purchase a home in today’s market should expect to either wait on a short sale, play the games of the lenders when bidding on bank-owned properties or pay a little more for a traditional sale or a new construction home.
1. Short Sales – This type of transaction could work for buyers who have the time to wait and are flexible about price changes. Short sales could take anywhere from two to eight months to close. The sale and price are not guaranteed until approved by the lender. This may be frustrating for buyers who waited a long time for a house only to find out that the seller’s lender wants an additional $10,000 or more from the buyer to close the deal.
2. Lender-owned Properties – This type of transaction usually ends up in multiple bids because the home is listed for way below market value. The lender’s strategy is to hold on to offers and specify 7 to 14 days on the market prior to reviewing the offers. Some lenders go through three rounds of counter offers before deciding on who the lucky “winner” is. First, they counter with highest and best. Buyers come back with a higher offer than before. Then, the lender makes a short list of who to counter to. By doing this, the lender hopes to improve the offer for the second time before finally deciding on the lucky winner. The potential buyer could go through an emotional roller coaster — and could end up frustrated.
3. Traditional Sales – This is the simplest and easiest transaction. The homeowner sells his/her house through a Realtor. No banks are involved. A response to your offer can be received within 24 hours.
4. New Construction Homes – Spec homes are available for occupancy within a certain time frame. The transaction is simple, easy, and the response is fast. Pricing for spec homes is a little higher but you get a brand new home with a warranty and usually can still choose your flooring colors and upgrades to give the home a personal touch.
One thing buyers should realize is that depending on the price range, area and your home’s features, buying a house in today’s market may offer challenges and some waiting time. Having a lot of patience and starting three to five months prior to your desired closing should give you enough time to find a home. At times, a buyer may submit three or four offers (or more) to a distress home prior to finally winning one.

May 18, 2010 at 9:34 am Leave a comment

SHORT SALE SHENANIGANS

State Treasurer Dean Martin has been highly visible in the media lately — in case you didn’t know, he is running for state governor. Recently, Mr. Martin made a media statement that in order to expedite the housing market’s recovery, the clog of short sales should be dealt with in a quicker manner. His proposal? A law forcing all Realtors to take a 15-hour class about how to handle short sales.

Well, obviously, Mr. Martin has not negotiated a single short sale transaction. The problem of short sales being delayed lies with lenders, not Realtors. An additional 15-hour class will do you NO GOOD if banks do not respond to and process short sales paperwork in an expedient manner.

My message to Mr. Martin: “You ought to manage the banks, not us.” Realtors are the ones pushing the paperwork to get it DONE. If Mr. Martin really wants to know what is happening in the short sale world, he should come and sit in at a short sale discussion meeting among Realtors, where he would learn how much he doesn’t know about the process and how banks are slowing it down. Then, just maybe, he would have sympathy for the many Realtors who have worked so hard and consumed so many hours and months of labor only to end up with zero dollars in commissions because the powerful lenders denied and foreclosed on hundreds if not thousands of legitimate, profitable short sale deals.

February 18, 2010 at 11:00 am Leave a comment

What is the Future of Short Sales in the Greater Phoenix Real Estate Market?

I was fortunate recently to be in the same room with Mike Orr, author of the Cromford Report, a widely-respected publication with current real estate market analysis information. Mr. Orr was one of the guest speakers at a class that focused on “The Future of Short Sales in Real Estate.” Based on compiled data based heavily on the Multiple Listing Service (MLS), Mr. Orr observed the following regarding the Greater Phoenix real estate market:

1. There is no evidence of shadow inventory as others project. In other words, the lenders are not hoarding foreclosed properties. It just takes time for the lenders to sell the houses to the public. There is no sign of “new wave of Foreclosures.”

2. Far fewer Notice of Trustee Sales (NOTS) are turning into foreclosures in 2009.

3. Short sales are five times more likely to succeed in 2009.

4. Loan modifications are being accepted in 2009 – around 500 to 600 successful loan modifications monthly.

5. There is a 20 percent increase in sales of properties bought at the Maricopa County Courthouse.

6. As of this date, the inventory of homes for sale is made up of 39 percent short sales, 13 percent lender-owned, and 48 percent are traditional sales.

7. Average days on the market for short sales is 139 days and 34 days for lender-owned homes.

8. Lender owned properties have been rising in price since April but are currently stable. Normal sales experience a sharp decline from June onwards. Short sale prices declined between May and September but are showing more strength. Current average price per square foot is: Normal sale – $114.18, Short Sales and Pre-foreclosures – $87.55 and Lender owned – $69.45

Conclusion: The impact of lender owned homes reached a peak in the winter season 2008/2009. While these were available in large quantities and at falling prices, buyer interest was focused almost entirely on them. Supply was sufficient to keep REO prices declining until early April 2009.

After the second quarter of 2009, REO became much harder to find and with competition for them very fierce, short sales have become far more important. Given the large number of homes in distress and the banks’ apparent determination to avoid foreclosure if possible, we expect short sales to become the most important segment in the market over the next few years.

Greater Phoenix suffered a very significant price decline which prevailed between May 2006 and April 2009. So the majority of non-lender homeowners who wish to sell their home and have a deed of trust on their property are going to find themselves in a short sale situation for the foreseeable future. Fortunately, lenders are now devoting more effort and resources to short sales and many Realtors are learning the tools and techniques to bring them to a successful conclusion.

As properties get purchased by new buyers at the new lower prices, and prices stabilize and then increase, we will eventually see a peak in short sales and a long slow decline in their importance. However that peak is still ahead of us and the next several years are likely to be remembered as the “Age of the Short Sale.”

*Information obtained from Mike Orr of Cromford Report

November 21, 2009 at 8:53 am Leave a comment


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