Dave Robison
By Dave Robison
“Who Moved My Cheese?” by Spencer Johnson is an easy but great read. The narrative is a simple story that describes the trials and tribulations of two mice—Sniff and Scurry—who always rely on getting their cheese from the same source. When the cheese source is moved, they wonder why it disappeared and promptly go in search for more. But cheese was easy to find when they knew just where it would be, and Sniff and Scurry had much more trouble locating food once they weren’t sure where to look.
And so it is with the real estate industry, especially as it relates to REO/short sales. We had some mice who were in the right place at the right time and knew exactly where to find the cheese so they could feast. In this case, the mice were some advantageous REALTORS® and the cheese was the REO/short sales market. In my opinion, the REO/short sales industry seems to have come and gone. When the market flourished, the top producers of the REO/short sales boom were certainly finding their cheese, (and why wouldn’t they? They knew exactly where to look). Today, with the boom waning, the REO/short sales top producers are telling me they’re going to have to sell real estate the “normal way.” What’s the lesson learned here? Now that they’re not sure where to find the cheese, they’re having much more trouble making a sale.
What are the clues as to when there will be cheese and when the cheese will be gone? Marilyn Wilson with the WAV Group recently spoke to our Utah Associaiton of REATLORS® and left many clues. The following are statistics she quoted from her research, (mainly conducted in the Houston area):
1. Based on her own survey results, when the general public of Houston was asked about the first company that comes to mind when they hear the words “real estate,” the most common answer was Zillow.
2. Only 12 percent of those surveyed said they would rather work with a REALTOR® instead of a real estate agent.
3. WAV Group called 1,000 listings and only reached 30 percent of agents immediately. Another 30 percent never even returned the phone call.
So, if you’re type of mouse who banks on the fact that cheese—or the latest hot trend in real estate—will never go away, you may say these facts are interesting and move on with your life. However, if you’re the type of mouse who knows the importance of dwindling cheese sources in the real estate industry, you may sense the winds of change from these bits of information. Which type of mouse do you want to be? Where do you see change happening now? What’s the latest real estate trend ready to disappear?
Dave Robison, known as “Utah Dave,” is broker/owner of UtahDave.com Neighborhood Experts.
Tara Owen
By Tara Owen
Mention Home Owner Associations (HOAs) to any Las Vegas home owner and you are sure to get a passionate love them or hate them response. Many home owners I’ve met with are bitter over the fines imposed by HOAs for seemingly trivial violations.
The ongoing controversy of fraudulent practices, excessive assessments, and egregious collection costs of HOA fees on Las Vegas home owners has reached national attention as two local attorneys have filed a federal lawsuit against hundreds of Nevada HOAs and collection agencies.
Attorneys Puoy Premsrirut and James Adams filed the lawsuit under the False Claims Act against 500 Nevada HOAs in a federal court last year. The lawsuit, which can be read in full http://www2.8newsnow.com/docs/hoa_lawsuit.pdf, was unsealed in April to reveal allegations of conspiracy to fraud the United States government by overcharging Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac in excess of $15 million dollars in assessments and collection costs on REO properties.
Strategically getting the U.S. government involved in this recent lawsuit is a brilliant move by Premsrirut and Adams, which falls in a series of lawsuits filed over the years fighting the alleged crime of exorbitant in the HOA collection fees being charged to Las Vegas home owners.
The attorneys insist that under Nevada law NRS 16.3116, in foreclosure situations, the assessments and costs that can be levied against delinquent properties “are limited to nine months immediately preceding institution of an action to enforce the lien unless federal regulations adopted by Fannie Mae or Freddie Mac require a shorter period of priority for the lien in which case the nine month period is reduced to a six month period.” Fannie Mae and Freddie Mac have adopted such underwriting guidelines, which limits the HOA “super priority lien” — a lien superior to the first mortgage — to 6 months in the Federal Loan Mortgage Corporation Act 12 U.S.C 1455.
The HOAs listed in the lawsuit allegedly charged Fannie Mae and Freddie Mac every month the HOA dues went unpaid, along with additional late fees and collection costs for past due obligations. Continue reading »
Laura Rubinchuk
By Laura Rubinchuk
For the past two years, I’ve been able to bury my head in the sand when it comes to distressed properties. It’s just not a huge part of the market in the area I do most of my business. As of this morning, only about 6 percent of the active listings were short sales, and fewer than 3 percent were REOs. However, hearing of the shadow inventory that’s possibly coming on, and that most of the properties that were bought in 2005-2007 around here are underwater (some more than others) I finally pulled my head out of the sand and realized it’s not going anyway any time soon, and probably will increase in market share.
I attended a seminar on “The Truth About Short Sales” this week. The amount of information that I didn’t know, and didn’t know that I SHOULD know made my head spin. It got me wondering… how many “short sale experts” are doing a real disservice to their clients? How many want a quick sale and push a short sale without considering the whole picture? I know that I’m not qualified to tell you whether a short sale, foreclosure, bankruptcy, or using your house as a coffin and continuing to pay is the best option. But I can listen. I can help you make sense of a messy situation and direct you to the resources who can help you get to the right decision for you.
As real estate professionals, we know what the market is doing. Are prices coming up any time soon? If not, you know how to market and sell the property, when/if a short sale is right for the client. If not, direct them to someone who can help. Earning someone’s trust in a very uncertain time is hard, but rewarding. Not only will you feel good about helping someone who desperately needs it, but I bet you they’ll be loyal for life. Be a neighbor, be a friend, first and foremost, by putting their needs ahead of your agenda.
Laura Rubinchuk, GRI, is a real estate practitioner with Keller Williams Realty in McLean, Va. Visit her blog at www.ArlingtonRealEstateNews.com or her Web site at www.TheLJRGroup.com.
By Dave Robison
A short sale would have you think it’s going to be a quick and short closing. The problem is they all have too much Junk in the Trunk. In a race, their tail end is dragging along the ground, which makes the vehicle go about as slow as my kid in a wagon.
Here are two examples of what is going wrong and what you can do about it.
First case involves Aurora. We submit an offer in to the bank on our listing from a buyer. It goes 60 days or so before we get a negotiator from the bank. In the meantime a couple comes in with an offer for higher than what the current offer is. Aurora approves a sale price and we should be good to go right? Wrong!
The bank will only take the offer they reviewed. You can’t switch it out for a higher offer. If you do, you have to cancel the offer, resubmit another offer and guess what …. wait another 60 days for a negotiator. Too much junk in the trunk! All of these policies in their trunk are making the banks lose even more money.
Second case involves Fannie Mae. Banks appraisal at $230,000. FannieMae wouldn’t accept less than $270,000. Really? That’s right, Fannie Mae won’t take anything less than $270,000 when the purchaser owes $255,000. That is just plain silly that they think a buyer is going to come up with $40,000 more than what it appraises for.
This home got foreclosed on. Today, it is on the market for the same price it could have sold for 8 months ago. They could have cut their losses 8 months ago but now their cut is getting deeper and deeper.
Third case from various lenders. They approve the short sale but want the seller to sign a note for the difference. The sellers are going into bankruptcy. This doesn’t make any sense. If they could make payments for the difference, they would rent it out and make payments for the difference.
I have three deals right now with different banks that the banks want a note and the buyer won’t sign. The buyers attorney said don’t do it. We are doing bankruptcy.
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