As I was looking for some comparable sales for a property that my client wants to purchase, I found one short sale was listed in Grover Beach for $460,000 and sold for $360,000, and closed escrow within 60 days.
I know that the listing price was correct, because i did the BPO (Broker's Price Opinion) for the bank.
A Broker's Price Opinion is when a homeowner is late on their paymants, the bank hires a Realtor to give them an estimate of value, so that they know how screwed they will be when they foreclose.
I'm going to go out on a limb and say that the success of your short sale, depends on the quality and knowledgeability of the listing agent who is selling the home and negotiating with the bank.
But you still need thick skin, patience and the knowledge that after two months of negotiating or being in escrow, that the home will never close.
Friday, August 22, 2008
Monday, July 28, 2008
Short Sale Comment
Just heard a funny saying....
"Why take the lion a piece of meat if he is going to bite your hand off?"
That was in reference to working on a short sale. Realtors do all of this work to bring an option to the bank to unload the loan, but the banks aren't willing to cooperate at a capacity that is required.
I perceive bringing a seller an offer on a short sale is like the lottery. You do the work, get it the offer accepted, then when it is time for the bank to accept it and it is out of my hands, there is a 1 in a million chance of them of to either: respond, accept, or acknowledge the offer.
"Why take the lion a piece of meat if he is going to bite your hand off?"
That was in reference to working on a short sale. Realtors do all of this work to bring an option to the bank to unload the loan, but the banks aren't willing to cooperate at a capacity that is required.
I perceive bringing a seller an offer on a short sale is like the lottery. You do the work, get it the offer accepted, then when it is time for the bank to accept it and it is out of my hands, there is a 1 in a million chance of them of to either: respond, accept, or acknowledge the offer.
Sunday, July 27, 2008
Mortgage Relief
The U.S. is bailing out the people who can’t afford their mortgages and banks. It’s funny as I write this, I just remembered that as I was watching the congressional hearing on the credit crisis. Someone spoke of the “government bailout.” Then whoever he was talking to said, “who is the government?” Then there was a long pause, and then the response was “The taxpayers.”
Most people, I know I did until a minute ago, when they hear that the government is doing this and that, like going to war, they think of the U.S. as a total different entity then them. But it’s really us. I am at war, I enforced the cell phone law, etc...
We should think of ourselves as a partner in our government and nation.
Ok, so I got way off topic.
Another thing interesting at the congressional hearing is that all of these people are coming out now that the economy is bad and asking how this could happen. My question is where were they when the market was hot? Everybody was enjoying their wealth and a prosperous economy. I can admit that I was one of them.
In my generation, since I have been out of college, we have experienced the tech boom and fall, the housing boom and fall, now the oil boom for some which coincides with a fall in the economy from way too high gas prices.
I remember a highly intelligent person who made a fortune in housing tell me that it is inevitable and cyclical that the bubble would burst in the housing market. It was hard to believe then because the market was so hot. But moving on now, I say that as individuals it is silly to not to have a “stop loss” like we do when we own a stock. Not get greedy, but have incremental growth with a safety net.
Back to the mortgage relief, it’s too soon to know how this will help, but we will be following it along the way. But I am not sure if it will help the people who are in trouble now, because with anything that the government does, it is not a quick fix. It takes time to incorporate..
From USA today….
We're not getting enough for our money," says John Vogel, an adjunct professor at Tuck School of Business at Dartmouth. "Sure, some number of families — 100,000 or 200,000 — will be helped, and that's not insignificant. But it will not address the problem as fully as we have liked."
Vogel notes that those in danger of foreclosure won't benefit unless their lender agrees to reduce the balance on their mortgage; for the lenders, it's purely voluntary.
The bill pledges $300 billion in federally insured mortgages to help an estimated 400,000 homeowners avoid foreclosure by refinancing into lower-cost mortgages insured by the Federal Housing Administration. People can benefit if their lenders agree to reduce their mortgage principal. The borrowers must meet certain income caps and share any profit with the government on a sale of the home.
This is interesting for first time home buyers….
First-time buyers are already able to take advantage of low housing prices. Now, if they qualify, they can also receive a tax benefit of $7,500 or 10% of the home's purchase price, whichever is less. (The income caps for the full benefit are adjusted gross income of $75,000 for single people and $150,000 for couples who file taxes jointly.)
Congress approved mortgage relief for 400,000 struggling homeowners Saturday as part of an election-year housing plan that also aims to calm jittery financial markets and bolster the sagging economy. President Bush said he would sign it promptly, despite reservations.
….lets homeowners who cannot afford their payments refinance into more affordable government-backed loans rather than losing their homes.
Bush had withdrawn his veto threat earlier in the week over $3.9 billion in neighborhood grants. He contended the money would benefit lenders who helped cause the mortgage meltdown, encouraging them to foreclose rather than work with borrowers.
Because of the Democratic Congress' delays and the need for action now, President Bush will sign this bill when he receives it, despite our concerns with some provisions, including nearly $4 billion to help lenders, not the homeowners this legislation is intended to serve," said Tony Fratto, deputy White House press secretary.
Still, Republicans weren't eager to celebrate. Bush was not expected to hold a White House signing ceremony, and Senate GOP leaders didn't mention it at a news conference following the vote. In the House, more than three-quarters of Republicans voted against the bill.
It aims to spare an estimated 400,000 debt-strapped homeowners, many of whom owe more than their houses are worth, from foreclosure by allowing them to get more affordable mortgages backed by the Federal Housing Administration.
The FHA could insure $300 billion in such mortgages, which would be available to homeowners who showed they could afford a new loan. Banks would first have to agree to take a large loss on the existing loans in exchange for avoiding an often-costly foreclosure.
Conservative Republicans were vehemently opposed to the bill, particularly the help for Fannie Mae and Freddie Mac. Critics charge the companies enjoy lavish profits in good times and wield their outsized political clout to resist regulation while depending on the government to bail them out should they falter.
You can find the complete article here and here
Most people, I know I did until a minute ago, when they hear that the government is doing this and that, like going to war, they think of the U.S. as a total different entity then them. But it’s really us. I am at war, I enforced the cell phone law, etc...
We should think of ourselves as a partner in our government and nation.
Ok, so I got way off topic.
Another thing interesting at the congressional hearing is that all of these people are coming out now that the economy is bad and asking how this could happen. My question is where were they when the market was hot? Everybody was enjoying their wealth and a prosperous economy. I can admit that I was one of them.
In my generation, since I have been out of college, we have experienced the tech boom and fall, the housing boom and fall, now the oil boom for some which coincides with a fall in the economy from way too high gas prices.
I remember a highly intelligent person who made a fortune in housing tell me that it is inevitable and cyclical that the bubble would burst in the housing market. It was hard to believe then because the market was so hot. But moving on now, I say that as individuals it is silly to not to have a “stop loss” like we do when we own a stock. Not get greedy, but have incremental growth with a safety net.
Back to the mortgage relief, it’s too soon to know how this will help, but we will be following it along the way. But I am not sure if it will help the people who are in trouble now, because with anything that the government does, it is not a quick fix. It takes time to incorporate..
From USA today….
We're not getting enough for our money," says John Vogel, an adjunct professor at Tuck School of Business at Dartmouth. "Sure, some number of families — 100,000 or 200,000 — will be helped, and that's not insignificant. But it will not address the problem as fully as we have liked."
Vogel notes that those in danger of foreclosure won't benefit unless their lender agrees to reduce the balance on their mortgage; for the lenders, it's purely voluntary.
The bill pledges $300 billion in federally insured mortgages to help an estimated 400,000 homeowners avoid foreclosure by refinancing into lower-cost mortgages insured by the Federal Housing Administration. People can benefit if their lenders agree to reduce their mortgage principal. The borrowers must meet certain income caps and share any profit with the government on a sale of the home.
This is interesting for first time home buyers….
First-time buyers are already able to take advantage of low housing prices. Now, if they qualify, they can also receive a tax benefit of $7,500 or 10% of the home's purchase price, whichever is less. (The income caps for the full benefit are adjusted gross income of $75,000 for single people and $150,000 for couples who file taxes jointly.)
Congress approved mortgage relief for 400,000 struggling homeowners Saturday as part of an election-year housing plan that also aims to calm jittery financial markets and bolster the sagging economy. President Bush said he would sign it promptly, despite reservations.
….lets homeowners who cannot afford their payments refinance into more affordable government-backed loans rather than losing their homes.
Bush had withdrawn his veto threat earlier in the week over $3.9 billion in neighborhood grants. He contended the money would benefit lenders who helped cause the mortgage meltdown, encouraging them to foreclose rather than work with borrowers.
Because of the Democratic Congress' delays and the need for action now, President Bush will sign this bill when he receives it, despite our concerns with some provisions, including nearly $4 billion to help lenders, not the homeowners this legislation is intended to serve," said Tony Fratto, deputy White House press secretary.
Still, Republicans weren't eager to celebrate. Bush was not expected to hold a White House signing ceremony, and Senate GOP leaders didn't mention it at a news conference following the vote. In the House, more than three-quarters of Republicans voted against the bill.
It aims to spare an estimated 400,000 debt-strapped homeowners, many of whom owe more than their houses are worth, from foreclosure by allowing them to get more affordable mortgages backed by the Federal Housing Administration.
The FHA could insure $300 billion in such mortgages, which would be available to homeowners who showed they could afford a new loan. Banks would first have to agree to take a large loss on the existing loans in exchange for avoiding an often-costly foreclosure.
Conservative Republicans were vehemently opposed to the bill, particularly the help for Fannie Mae and Freddie Mac. Critics charge the companies enjoy lavish profits in good times and wield their outsized political clout to resist regulation while depending on the government to bail them out should they falter.
You can find the complete article here and here
Tuesday, July 22, 2008
Termite Reports
Key Termite from Atascadero, 805-466-2451 came to our office meeting today to talk about providing thorough reports. They are a great company as Western Exterminators are too.
A lot of companies overlook termite and water damage, but these guys go through properties with a fine tooth comb. That is good for both the buyer and the seller.
We live near the ocean, so termites are going to cause damage to our homes and it needs to be fixed before lenders will give the buyers money to purchase it.
The best thing agents can do is get a termite report when taking a listing so there are no surprises in escrow.
A lot of companies overlook termite and water damage, but these guys go through properties with a fine tooth comb. That is good for both the buyer and the seller.
We live near the ocean, so termites are going to cause damage to our homes and it needs to be fixed before lenders will give the buyers money to purchase it.
The best thing agents can do is get a termite report when taking a listing so there are no surprises in escrow.
Monday, July 21, 2008
Agent's version of Short Sales
A "short sale" is when a person is behind on their mortgage payment and owes more on the house than it's worth. They are upside down.
So what happens is they list then home for sale, and when the seller accepts an offer, which is short of the full loan amount, they hand it off to the lender and see if they will be willing to take less for the home. This is pre-foreclosure, before the bank takes ownership of the home again.
This is an absolute pain for real estate agents and buyers.
I was representing a buyer on a short sale home in San Luis Obispo. Weeks went by with no response from the bank or the seller's agent. Then the bank doesn't negotiate in writing, it's all verbal. the banks are so understaffed.
The last communication I had with the seller's agent was that they were resubmitting our offer and never heard back from her. Then weeks later I seen the listing get cancelled from the MLS, which means that it will probably show up in 3 months as an REO - Bank Owned.
Buyer's don't really understand the process either and get frustrated.
So what happens is they list then home for sale, and when the seller accepts an offer, which is short of the full loan amount, they hand it off to the lender and see if they will be willing to take less for the home. This is pre-foreclosure, before the bank takes ownership of the home again.
This is an absolute pain for real estate agents and buyers.
I was representing a buyer on a short sale home in San Luis Obispo. Weeks went by with no response from the bank or the seller's agent. Then the bank doesn't negotiate in writing, it's all verbal. the banks are so understaffed.
The last communication I had with the seller's agent was that they were resubmitting our offer and never heard back from her. Then weeks later I seen the listing get cancelled from the MLS, which means that it will probably show up in 3 months as an REO - Bank Owned.
Buyer's don't really understand the process either and get frustrated.
Pictures in the MLS
Agents need to provide as much information to the public as they can to make a sale for their client (a seller in this case). This is called Marketing and one of the things we get paid for. To create as much exposure as we can for the seller's real estate.
A client called me yesterday on a home they found online. Being that they are 120 miles away, they were interested, but needed more information. The only photos the agent posted online were: 1. The front of the home (which is rightly so the #1 picture that should be posted). 2. The kitchen, with most of the cabinetry cut out. 3. The middle of a street that the home is not even on (trying to show the faint view of the ocean).
So I spent 45 minutes this morning going to the property, taking photos, and sending them to the client. Which is my job as a buyers agent. But I work hard for my clients. A lot of agents wouldn't do this, and a lot of agents still don't know how to send pictures... though a lot of the veteran agents have been making advancements in technology.
If this buyer didn't have a relationship with a hard working agent, they may be more interested in a home that shows more photos and sells itself better.
Some homes don't have many photos for a reason. Because some photos may hurt the sale instead of improving the sale, which is understandable.
But on this property, I shot 11 great photos that showed the quality that this home possesses. And it's a condominium for $489,000. Huge sale.
A client called me yesterday on a home they found online. Being that they are 120 miles away, they were interested, but needed more information. The only photos the agent posted online were: 1. The front of the home (which is rightly so the #1 picture that should be posted). 2. The kitchen, with most of the cabinetry cut out. 3. The middle of a street that the home is not even on (trying to show the faint view of the ocean).
So I spent 45 minutes this morning going to the property, taking photos, and sending them to the client. Which is my job as a buyers agent. But I work hard for my clients. A lot of agents wouldn't do this, and a lot of agents still don't know how to send pictures... though a lot of the veteran agents have been making advancements in technology.
If this buyer didn't have a relationship with a hard working agent, they may be more interested in a home that shows more photos and sells itself better.
Some homes don't have many photos for a reason. Because some photos may hurt the sale instead of improving the sale, which is understandable.
But on this property, I shot 11 great photos that showed the quality that this home possesses. And it's a condominium for $489,000. Huge sale.
Thursday, July 17, 2008
Short Sales and Foreclosures in Santa Maria
So I was showing homes on Monday in the lowest price range of Santa Maria, which is below $250,000. My client and I looked at 14 homes (all of them either bank owned or short sales) and every one of them had some serious deferred maintenance. And the majority of them had extra rooms built into the garage for additional people to live. Almost all of them has poor remodeling or uncraftsmenlike upgrades(downgrades) done to it.
It wasn't the most exciting day of showing homes.
The worst one was a bank owned home in the Westgate area off of Bettaravia (a nice, newer subdivision). The garage had two shoddy built rooms inside of it and the walls were made out of pallets. The sad thing is that the home was once quite nice and still had potential, but the rooms in the garage were so creepy, like it was a cult house, that my client got the creeps and didn't want to consider it.
A lot of people think that short sales or foreclosures are great deals, even steals. But when a person does the maintenance to fix everything that was deferred, you may as well purchase a home from someone who has been able to make the payments, and upkeep the home.
It wasn't the most exciting day of showing homes.
The worst one was a bank owned home in the Westgate area off of Bettaravia (a nice, newer subdivision). The garage had two shoddy built rooms inside of it and the walls were made out of pallets. The sad thing is that the home was once quite nice and still had potential, but the rooms in the garage were so creepy, like it was a cult house, that my client got the creeps and didn't want to consider it.
A lot of people think that short sales or foreclosures are great deals, even steals. But when a person does the maintenance to fix everything that was deferred, you may as well purchase a home from someone who has been able to make the payments, and upkeep the home.
Wednesday, July 9, 2008
Total Real Estate Licensees Decline
January 2000 - total licensee population was 303,000.
December 2007 - total licensee population at 578,959
Department of Real Estate administered 22,000 exams for would be brokers and salespersons in the month of April 2005 alone.
First quarter 2008, less than 2,500 licensses have sat for the real esatte examination.
January 2008 marked the first time in 84 months that the population licensee declined, continuing downward today.
According to California Real Estate Magazine- June/July 2008
What could this mean for the consumer and real estate agents? The tougher and more experienced agents are staying in the business.
December 2007 - total licensee population at 578,959
Department of Real Estate administered 22,000 exams for would be brokers and salespersons in the month of April 2005 alone.
First quarter 2008, less than 2,500 licensses have sat for the real esatte examination.
January 2008 marked the first time in 84 months that the population licensee declined, continuing downward today.
According to California Real Estate Magazine- June/July 2008
What could this mean for the consumer and real estate agents? The tougher and more experienced agents are staying in the business.
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