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.
By Brian Copeland
I love reading warning labels. One of my favorites is “For external use only,” which has been spotted on numerous curling irons. Another favorite is on a child’s Halloween superman costume that says “Wearing of this garment does not enable you to fly.”
Wouldn’t it be great if homes came with warning signs posted with the true warnings that buyers may need to know? Here are some of the signs I’d recommend.
“Warning! This house is overpriced by $30K because the seller has been under a rock for the past 18 months.” Real estate practitioners carry the power to prevent this label, but find that getting the sign in the yard, getting the bragging rights that he/she “won” the listing, or getting to put it in an internet lead system to get more buyers is more important than being honest with the seller. The same holds true for a buyer’s agent who is too concerned about a paycheck to pull true comparatives for a buyer.
We have the responsibility to point out the pricing warning sign to today’s buyers and sellers. We need to tell sellers, “Oh, and by the way, if you think that you should price it higher because you need negotiation room, you may not see any showings and your home may become stigmatized as a stale home. This could cause buyers to question their ability to resale the home in the future.” As a buyer’s agent we should pull comparatives for every home that has landed in the client’s top five for consideration before going to contract.
“This house is lipstick on a pig.” It’s one of my favorite pulled quotes that the local CBS affiliated pulled out of an interview they did with me when I THOUGHT the camera was off. It holds true though. Some renovated homes are pretty, cosmetic make-up put on a trash of a structure. Be super cautious of renovated homes. If someone is renovating homes in this market, likely they are smart, conscientious and know what they are doing. Only the best try this buy, remodel, resale market of 2009 and 2010. Continue reading »
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.