I recently sat through a teleseminar regarding short sales and the instructor had some interesting ideas regarding pricing on short sales to which not a lot of agents in my area are subscribing. He said that he always prices his short sale listings at market or maybe even a little bit above. Hmmm...my first reaction was wow, that's kind of scary to think about doing. What if the house sits and doesn't sell?? Right?
Pricing a short sale listing at or slightly above market will prove where the market really is for this property. If you are doing your due diligence as an agent you will have full listing history and showing history for the property, correct? So if and when the bank comes back to you as the listing agent and says we want X dollars for this property, what are you going to do?
You're going to pull out the history and show them, look: at a price of $350,000 we only had one showing. When we dropped it down to $325,000 we had about three showings every week for two weeks but no offers. When we dropped the price down to $300,000 two weeks later, we had eleven groups through and five offers. The seller ended up choosing an offer from a buyer who offered $315,000, was fully approved for a loan and had enough cash reserves to buy the house for cash.
The point is this: Instead of under pricing a short sale property just to get an offer to the bank, you will be doing your job by getting the top dollar for the propety. The other advantage to this schematic is that the buyer who comes in super low may be doing this on fifteen other properties waiting for the first house to get approved. Then where are you with the bank? You don't have an offer any longer and it becomes an issue.
I'd love to hear your opinion on this strategy for pricing short sales. Please leave me your comments below! Thanks~
Susan Manning, Real Estate Agent License #01481594 Realty Executives of Temecula Valley 951-551-7790 cell 951-326-3100 x3155 office
Well, I went to call the short sale department and the number is no longer in service. Just in case you didn't know the old number 866-265-3512 is caput. You will need to call the new number which is 866-880-1232. Fun, fun!!
Hey, I also wanted to share something new I learned this week about Bank of America as well. I have not had a B of A equity line short sale yet, but it you come across a loan that is a 14 digit account number, guess what? Its an equity line and no one in the regular short sale has a clue what to do with you. Save yourself some trouble and read this blog post first!! Haha! Then call 866-413-3757 and get started. They will email you specific documents that need to be completed you are on your way.
As a side note, I do want to commend B of A in that I just faxed in the completed application yesterday and received a notification fax today. It stated that we have a negotiator assigned and should be hearing from her in 14 days! Yippee!!
You win some, you lose some. I guess its what we get for being in the biz...I hope these tips maybe help someone out there. Good luck!
Yep, you can darn sure believe it. I believe our market (Riverside County, CA darling) has definitely not hit bottom despite some chatter about prices rebounding slightly.
If there is a question we get more often than any other it has to be….
“Where are all the REOs…..I see vacant homes everywhere..yet, only a small fraction are listed and for sale…what gives..?”
I understand why we get this question….
After all Harris Real Estate University is the nation’s largest online real estate university. The HREU RSD (REO Specialist Designation) has become one of the preferred designations for many Asset Management companies….in other words, they look for RSD Agents to list their properties.
In today’s post we will answer the question, “where are all the REO’s”….and provide you with a clear window into what is coming next….
Agents, you need to be very clear about what you can do now to become a REO Listing Agent. Understand, in NO WAY is it too late for you to become a REO listing agent.
After you have read this post you will want to take the next step…this Thursday April 15th we are providing a FREE 90 Minute teleconference (or webinar) where you will hear directly from agents who ARE listing REOs (and making big bucks from doing BPOs).
Despite a slight seasonal improvement over last month, mortgage delinquencies still hover near record highs, 21 percent above a year ago. One of ten mortgages are delinquent as of the end of February and new delinquencies continue to run at record rates.
The total number of non-current first-lien mortgages and REO properties is now more than 7.9 million loans. Furthermore, the percentage of new problem loans is also at its highest level in five years. More than 1.1 million loans that were current at the beginning of January 2010 were already at least 30 days delinquent or in foreclosure by February 2010 month-end.
That’s the frightening news from Lender Processing Services latest Mortgage Monitor Report, which also reported that the nation’s foreclosure inventories also reached record highs. February’s foreclosure rate of 3.31 percent represented a 51.1 percent year-over-year increase.
Other key results from LPS’ report:
• Total U.S. loan delinquency rate: 10.2 percent
• Total U.S. foreclosure inventory rate: 3.3 percent
• Total U.S. non-current* loan rate: 13.5 percent
• States with most non-current loans: Florida, Nevada, Arizona, Mississippi, California, New Jersey, Georgia, Illinois, Ohio and Indiana.
• States with fewest non-current loans: North Dakota, South Dakota, Alaska, Wyoming, Nebraska, Montana, Vermont, Colorado, Washington and Minnesota.
Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state. Totals based on LPS Applied Analytics’ loan-level database of mortgage assets.
Short sales and foreclosures accounted for 29 percent of all U.S. home sales in January, First American CoreLogic says.
Riverside, Calif., led the nation’s top 25 markets with so-called distressed sales accounting for 62 percent of the transactions. Las Vegas (59 percent) and Sacramento (58) were the next worst. Fort Lauderdale was at 42 percent and Miami was at 32 percent, although those numbers are down compared with a year ago.
Although Florida and foreclosures seemingly are synonymous, only two Florida markets — Orlando and Cape Coral — cracked the top 10 for distressed sales. CoreLogic, a California research firm, says the most likely reason is that foreclosure cases take longer to process in the Sunshine State than in California, Arizona or Nevada.
What do you think about the number of distressed sales in South Florida?
And now to the heart of matter….Where are all the REOs and when will the banks FINALLY RELEASE them?
Certain things in life are simply meant to be mysteries. There are age-old philosophical questions that have kept philosophers busy for millennia: What is the sound of one hand clapping? If a tree falls in the forest and no one is there, does it still make a sound? Other mysteries hang heavy with intrigue: What really happened to Amelia Earhart? And who really kidnapped the Lindbergh baby? And still others simply defy logic: If Denny’s is open 24 hours a day, 365 days a year, why are there locks on the doors?
Now we can add another question to the list of ongoing mysteries: With foreclosure activity breaking records nearly every month, where are all the REOs?
It’s a fair question. In normal market situations, a bank will repossess a home and usually process it through to a listing agent to put on the MLS within 30 days. In a relatively short period of time, virtually every marketable REO property finds itself listed for sale on the local MLS. Today, that’s simply not the case; it’s likely that between 450,000 and 500,000 properties repossessed over the past year are still not on the market. And with buyers hungry for housing bargains, and agents and brokers champing at the bit ready to sell the properties, it begs for a reasonable answer.
Lenders and servicers admit that it’s taking longer to process REOs than it has in the past, and they offer a number of legitimate reasons:
-Many of the properties have title issues that need to be resolved
-Many of the properties are in states of utter disrepair
-A number of states have strict redemption rights periods, which prevents the lender from reselling the property
-A few states have extended the length of eviction proceedings
-The sheer volume of REO activity has created a “pig in the python” phenomena, (to put this in perspective, there will be roughly four times the number of REOs this year as in the last “normal” year, 2005)
What else could be slowing things down? A popular theory is that many banks are holding the properties off the market in order to defer losses. There is some accounting logic to this theory, as in most cases banks aren’t required to adjust asset prices until the actual resale of the property. Another idea is that the industry is holding back the inventory to create leverage with the government in order to force the creation of a “toxic bank” or RTC-like entity that would buy the distressed assets at 50 to 60 cents on the dollar rather than the 30 to 35 cents available on the market today. This theory suggests that, seeing the threat of a massive inventory of distressed homes being released all at once, the government would “blink” rather than risk another housing market meltdown.
I will add…the various government programs have served to delay the inevitable. How many months (years?) are added to the foreclosure process now…If someone missed payment..maybe missed 1 – 2 years of payments…..applies for HAMP (Loan Mod)…then, when that doesn’t work out…lists their home as a short sale…..(if they don’t list it with an agent who knows how to sell short sales)….off to foreclosure. How long would that whole protracted process take…years…and years.
Whatever the reason — process issues or conspiracies — we’re going to continue to see record-breaking numbers of REOs for at least the next year, and will all be watching to see when these sought-after homes finally make their way to the market.
For those of you who are thinking that the Great Housing Crash is over…and a housing boom will soon return… Another CNBC Video featuring Yale Shiller (of Case/ Shiller Housing Index fame)
I'm not sure what your market is like, but my market here in SW Riverside County/Inland Empire is primarily short sales taking up about 80% of the listings. Another 10% are bank owned properties with the rest being "standard" sales many of which are corporate flips from trustee's sales.
With that being said, the competition for buyers to be able to land a bank owned property are slim. We are seeing 20+ offers on good properties. The pecking order starts with cash offers (and there are a LOT of cash buyers in our market right now) then conventional, then FHA and VA buyers. Many agents are still leary of getting into a short sale even though that is a majority of our market.
So when a client is able to open the escrow on the bank owned property it seems it is cause for celebration. Well, maybe not. Wait a minute.
Unfortunately we agents know, the name of the game is its my way or the highway with the bank, hurry up and wait for the bank, and pay up or shut up with the bank. Its a bit like wheeling and dealing with the mafia in my opinion.
Its my way or the highway: Bank owned assets are sold with little regard to our state laws and forms. Every bank owned property that is sold has their own "addendum" that basically superscedes any other contract and voids many of the terms that is generally accepted. One of the terms that is generally changed is the amount of time a buyer has to do inspections which is shortened from 17days to 10 days or less. Sometimes a bank refuses to pay for items that are reasonable and customary in our market such as termite or appraisal repairs. Another issue is that the bank expects their escrow company to be used in order to get an offer accepted. We as agents know that many times the escrow company that gets the bank's business bid may not be the ideal company with which to work. Just because they are cheaper for the bank (the seller) does not mean they are efficient and have time to help you with your file.
Hurry up and wait: So you send the offer in, the listing agent tells you the bank is responding to you offer. You get their addendum signed and back to the agent, and finally the property goes into pending when the you get the addendum signed by the asset manager. You open escrow, the buyer sends their funds in, and ..... guess what? You can't close. Why? Because the bank is taking their time approving the final HUD 1 estimate of proceeds from the sale.
Pay up or shut up: In our current lending climate we have many FHA and VA buyers. This also translates into having many last minute conditions and verifications by the lending underwriters. What many buyers may not be aware of is that an extension of time may end up costing them. In the bank's addendum, a per diem is agreed to be paid if an extension is needed. Sometimes a bank's closing asset manager may balk at an extension even if it isn't the buyer's fault. Its important to clarify the reason for the need for the extension and keep your fingers crossed that there will not be any additional charges.
Purchasing a bank owned listing may seem like an opportunity for many buyers in our market. Its important to know that a bank owned transaction is not like a typical arm's length transaction with a real person for a seller. Make sure you have an agent who knows the rules and will explain them to you during your transaction. Otherwise you could find yourself taking a long walk on a short bank plank with some cement shoes on. Look out!
This week I had a new client tell me about his horrific experience waiting for a short sale that he thought he had an offer on only to see that the property was a pending sale with no communication or returned phone calls from the listing agent or broker after waiting for about five months for a response.
Unbelieveable. But is it?
Most buyers in our market here in SW Riverside County who have been looking for a house for any length of time realize that it's tough getting an offer accepted and into escrow. But wait, isn't it a buyer's market? Well, not really. This is a conversation that many of us agents have. What kind of market is it? Well of course it depends on if you are a buyer, seller, investor, or looking for a place to rent. But in any case its super important that you have an experienced agent who knows what is going on the market, can represent you in the best light possible, but most importantly who doesn't waste anyone's time.
So what am I getting at? Well, my point is this: A buyer's agent should be prequalifying the listings before you even start to look. Especially when it comes to short sales.
What questions should they be asking? Well, why don't you start with a few of these: Do you have the complete package from the seller ready to be presented to the bank? What banks are they? How many banks/loans/liens are on the property? Do you have offers on the property? How many offers will you be presenting to the bank? If the seller accepts our offer, will they be willing to take the property off as an Active listing and put it into Backup status? Has the property had a bank approval previously? Has a termite inspection or any other inspections been done on the property? Is the seller currently paying on their HOA dues?
All of these questions are important to find out either before the property is shown or before an offer is written. Something you as a buyer must consider is whether or not you want to waste your time on a property that the listing agent is going to keep open as an active listing and treat it like an auction or rather move on to a property where you know that after waiting for approval from the bank, your offer will be the one that is being considered. Honestly I feel the listing agent is working for themselves and the bank rather than the seller which is the party they have the contract with when they auction the property in this manner. Who's interest are they serving when they do this?
Its unclear to me where our MLS board stands on this issue and its a debate that is a hot topic in our market here in Temecula Valley. I would love to hear your feedback and comments on your short sale experiences as a buyer out there. Thank you for stopping to read my blog, I appreciate it!
Have you ever tried doing something nice just "because"? What was the reaction you received? Don't most people want something in return for good deeds?
Well, in my real estate business this happens a lot. Sometimes I will try helping someone not expecting a return at that moment. Like sharing information on loan modifications (I don't get paid a dime for helping clients with this), or sharing information on how to deal with creditors while going through a short sale. Sometimes it is just spending time with someone and listening to the situation they are going through with a sympathetic ear.
This is a really tough lesson in life. To give without expecting anything back. Give because that is who you are. Give because that is a part of your purpose here on the planet.
I truly do believe we live in a global community and each action we take (or don't take) does have an effect on our lives, our community, and the world around us.
Today, take a moment and think about what action you can contribute to the purpose of your life. Give and don't expect a darn thing back. Don't tell a soul. What happens? Maybe nothing. But maybe something unexpected might happen too. Maybe you will be able to connect not only with your inner self but greater self as well. You might just find it in the face of a stranger or a very close friend or family member. None the less you are creating a world that strives to be just a little bit happier and better for that one moment. And isn't that what its all about anyway?
I have a lot of tips that I can share with others about Countrywide Short Sales, BUT the one thing that I do not have is an address to mail in the package.
Of course Countrywide (now BAC) only has one fax line to send the package in. No email. No address to give out. I need to get my package in and acknowledged ASAP!! I have sent packages in and it has taken 40+ days for them to acknowledge receipt.
I'm needing a favor from whoever out there has this inside info! Trustee's Sale is just around the corner and I've got my one true buyer willing to wait this one out! Help!!
I have been telling all kinds of people, customers, fellow agents, you name it about this incredible nursery. You have to make an appointment to purchase so be sure to call ahead and make sure someone is going to be there. I love this lady's motto, "If we don't have it, you don't need it." Honestly this is so true. They have 30 acres of organic plants and their son apparently has another 30 adjacent. Make sure you have good shoes on and plan to spend a good couple of hours making your way through the fields. You cannot beat the deals here though. Fruit, flowers, ground cover, you name it. Have fun!! Thanks!! Susan Manning, Realty Executives
Does anyone else out there know what Mercury Retrograde is? It happens about three times a year and it lasts for about three weeks. It seems like I always find out when this is happening and I wonder if this makes a difference in my perception of what is happening.
Basically Mercury, the planet of communications and trasportation looks like it is traveling backwards in the sky. It even gives off a different color from our perception. During this time all communication and transportation seems to have real hiccups. Basically, its life's way of saying - "Haha! Thought you were in control? Now I'm going to let you see what it means to review and recoperate and re-do things you thought were done. Many people won't sign contracts during this time because they feel that they will have to go back and re-do the agreement at some point.
Today, our internet server has been making any work on the computer and email extremely slow. I've had to fax and re-fax and reschedule way too many things today! My cell phone has been acting up where I can't answer a call when I'm on one already. I'm just waiting to see what else is going to happen...!!! Oh, of course I've had clients be inches away from purchasing a home and then at the last minute decide to reneg on their offer.
I was excited to get a call from Mark to Market to do one of their rush BPO orders. Normally by the time I log in to see one of their orders, someone has already logged in a picked up the bid.
Well, guess what? The reason why the original agent couldn't do the job was because they had car troubles. Hmmm...
Cut to me in my little Ford Escape. Yes, I've got 4x4. Thank God. I'm listening to the GPS tell me I have two miles to drive to the landmark intersection. A previous listing tells the reader to head south from Arcola and Powerline until you can see Vail Lake. Take the first dirt road and parcel is on the left.
About a mile and a half into the trek on the dirt road, I began to have a panic attack. The sweet little dirt road suddenly turned into an obstacle course that went up and down and over corners where I couldn't see around. I was scared to death.
I'm coming down a very steep hill probably about the length of a football field, AND THEN I see another car coming up toward me! What? I can't stop!?! What is this guy going to do????
So finally I come close, very close to my destination. I come to a road where I cannot see over the road and I cannot see the road after that drop off. I'm super close.
Guess what, I'm tenacious, but not stupid. I got out of the car, snapped my shots and decided to call it quits. Besides, I have to drive all the way back to get to solid ground.
On my drive back, I'm wondering....hmmm....I wonder how many Realtor's cars are at the bottom of that hill???I mean, come on! There's no way that 9 out of 10 agents would have even considered going that far to do a bpo order. The photo embedded is only a reinactment of what I felt like I was doing today, but seriously, its pretty close! Not kidding!!!
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Normally by the time I log in to see one of their orders, someone has already logged in a picked up the bid. 
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