The housing market is beginning to pick up. Houses are at their lowest in 5 years! Sellers have finally realized that they have to come down in their prices. Interest rates are at an all time low! First time buyers- who haven't owned a house in the past 3 years, will be given $8000 dollars- from the government...just for buying a house! And there are lots and lots of Short Sales and bank owned homes in every part of the city and suburbs.
Just 2 months ago, Short Sales actually started moving. Before that, we would write offers and the offers would sit and sit and sit....for months! Now, since the Obama Administration has made certain changes, banks are ready willing and able to get the Short Sales off their books. Many are closing in just a month! Houses that foreclosed and returned to the bank, are out there at ridiculously low prices! People are getting awesome deals all over the city and close in suburbs. This won't last- the time to buy is now!
What is a Short Sale? A Short Sale is when the lender or bank, has to take a Short- in other words, they don't get paid what the borrower owes them. Many times there are two or even three lenders on one house- the first lender usually gets most of what is owed them, the one holding the 2nd mortgage may only get 10% or 20%, and if there is another lien, they may only get $1500. How did this happen?
The market was HOT for 2 or 3 years. People were grabbing houses as fast as they could. I would list a house, and if it lasted 30 days, we all knew there must be something wrong with it! To have that going on, month after month, pushed prices up, month after month! We all expected it. Many thought it would go on forever. But it didn't! prices finally reached a level way beyond what the ordinary buyer could afford. Californians, New Yorkers, and people from higher priced markets, kept flooding into Portland- because houses were still affordable. This pushed prices up past what our economy could support.
But people kept buying.....until the crash in September- prompted by Bear Stearns. Everyone was in shock, afraid to move. What was going on? How could this have happened?
As we have learned since, people wanted to buy houses, banks wanted to sell loans, appraisers wanted to continue to get business, so appraised a house at whatever the sales or refinance price was at- and the prices kept going up. It had to stop somewhere...and it did.
What has the President done to get things going again? Three specific things:
1. Toxic Assets are what destroyed Bear Stearns and all the other banks. What is a Toxic Asset? The best way I can explain it is like this. Take 1000 real estate sales flyers and put them in a stack-glue each one together so you have a huge block of flyers- or houses. Cut the whole stack straight down through all the flyers- into 100 little squares. Then sell that little square to an investor. Does he know what he has? Can he figure out what houses are in those squares, what is owed on them, who holds the loan on them...or anything else? No- it's impossible to tell. That is what lenders did to all their loans. They packaged them all up, cut them into a million pieces and sold them to investors. No one can tell what they have. Everyone knows houses went down. So no one wants to buy them!
The government pushed through a bill that guarantees these toxic assets. If you buy one, and it loses money, the government will pay you back! If it makes money, you split the profit with the governement! Wow! Pretty good deal. Now the banks want money so they can buy these assets. They are leveraged 12 to 1- which means if they can get their hands on $1,000,000- they can buy $12,000,000 of Toxic Assets that are fully guaranteed! Would you want to invest?
2. The governement also decreed, with much resistance, that the banks can value their assets at their future value- not their unknown low value of today. Because of that, the banks do not have to hold as much money in reserve- because the percentages look different! So they can now buy and lend more legally.
This all just happened about a month ago. Before that, banks were just holding onto their Short Sales, not letting them close- some going into foreclosure and returning to the bank. Now, they need cash so they can get on with business! So they are overturning their Short Sales - selling them as quickly as they can. I've seen a complete turnaround! Instead of running away when I see a listing is a Short Sale, I go after it for my clients. Because the banks are willing to take losses now- this time period will only last until the Short Sales are all sold- the opportunity is short lived and going on right now! People are beginning to realize it- and some of the lower priced short sales are actually getting multiple offers. We have dealt with many ourselves in our company.
I am a Certified Short Sales Specialist- took a 50 hour seminar and passed a final exam. Alot of realtors haven't dealt with Short Sales- they are complex and have to be done the way the bank decrees. If you know what you are doing- you can win. If you don't, the bank won't work with you- and you will lose the house! I've done many- and if you are looking for a good deal in buying a house in Portland, Oregon-and you need a realtor who can help you- I'd love to help! Just go to my website at www.PortlandCreativeRealtors.com and email me or call me! I'll help you get started!
If you have a house to sell, and you are afraid it might be a short sale, I can help you there too! Just contact me, and I'll walk you through the steps!
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