Blog

The Short Sale Tsunami.

If you have been waiting for the REO Tsunami since 2008 - 2009 but have been a little down that no "Tsunami" ever surfaced...well, you're not alone. In fact, many of us (Experienced REO Agents) would say it's not a Tsunami we are waiting for, it's the end of the REO Drought that we are hoping for.

Well, I wrote a blog yesterday about some chatter I have been hearing about banks wanting to create a preferred short sale agent list and don't exactly know how to go about it and this blog is a follow up to the one yesterday.

Banks and other default real estate portfolio holders are burdened with so much government regulation that they are almost completely abandoning REO. Now, I am not saying REO is dead, let's face it, it will always be with us but, it isn't going to look like anything any of us will be able to recognize in early 2013. This is because these banks are being told that if they don't "save" more homes or at least give the impression that they are truly trying to "save" more homes from foreclosure, they can expect more stress testing, more political demonization and possibly a closer look from the FDIC. Now, this may sound like something straight out of cold war Russia or Eastern Germany but, it's a fact and scary enough, it's backed up by law. Now, I won't go much into that at the moment because this blog isn't focused on that but, look it up yourself, study the Community Reinvestment Act and you will get the point.

What we end up with is a stressed, overwhelmed banking industry who is settling multi-million dollar lawsuits, from all over this country, trying to bow to political regulation (Note I didn't say government regulation) while trying to make a profit.

One of the biggest contributors to why REO has dried up is because of the moral hazard this country has been playing with since the housing bubble burst and that is, "how do we save people from foreclosure?" Yes, I called it as I see it and that is a moral hazard. The truth is, you can't "save" someone from foreclosure unless you plan on paying their mortgage for them. Otherwise, the mortgage holder is going to have to have an income, prioritize his debts and start paying them off. If he can't do that because of whatever reason......then foreclosure is the hard, stark reality.

Granted, in a normal market place, foreclosure would be fine, in fact, here in Tennessee, we have laws that specifically protect former owner occupant equity in foreclosure action however, we aren't in a "normal" market in the fact many of us are upside down and thus, no money to be had in foreclosure...only expenses. This is what brings banks to the bargaining table because now they are forced into loss mitigation regardless if they want to or not. Hence, short sales.

What many people just don't get is that a short sale is simply the most cost effective disposition of a non-performing asset in a negative equity market place. For this reason,  and others previously discussed banks are holding back REO.

Now I have painted the picture, you should understand that the REO drought is from...

1. Political Pressure

2. Government Regulation

3. High Unemployment

4. High Cost of Foreclosure

5. Negative Equity Marketplace

6. Loss Mitigation Strategies Implemented by Banks (keeping people in their homes even though they haven't made a payment in 12+ months or better yet, putting them on temporary loan modifications that are supposed to be only 3 months but end up being 24+ months or better yet, holding onto vacant abandoned properties and not proceeding to foreclosure.)

So, what is the solution, how do we get banks and agents together to dispose of these homes? Well, it seems no one really knows...

 (Refer to my earlier blog: http://reopro.ning.com/profiles/blogs/the-liability-of-a-preferred-short-sale-agent?commentId=2122473%3AComment%3A252605&xg_source=msg_com_blogpost)

Now, I do have a suggestion and that is because it's working for me here in my service area.

I work very closely with local non-profit housing crisis centers who sole responsibility is to "save" people's homes. These non-profits are contacted daily by ready, willing and able defaulted owner occupants who need help. These non-profits do all they can to help but, about 73-76% of the time, the people they work with either default off their programs or just can't qualify for help due to lack of income and as such, are sent to me for short sale.

Granted, my cooperating non-profits can't come out and just say, we recommend Jesse but, they do give the struggling homeowner about 3 preferred Realtors and on that sheet of paper, we provide our service areas and then the homeowner gives us a call accordingly. After that, it's on us to make the best impression and win the listing.

From that point, we work very closely with the housing counselor over at the non-profit because most of the time, they have collected all the necessary paperwork I need for the short sale and in fact, have already contacted the bank telling them that the homeowner will be short selling. This way, the bank is informed, knows exactly what is going on, expect to hear from me and by the time I call, it's all good.

Using a non-profit is a great way to reduce agent liability, manage risk, educate the defaulted homeowner and keep in the good graces of the bank. Yes, we have some unique challenges in the area of risk and liability in our cooperation but, nothing we were able to conquer or reduce by disclosing in writing and getting all appropriate signatures.

None the less, this industry does have very specific needs and I truly feel that some companies out there who specialize in default customer contact (if you don't understand what I am hinting at, let me know, I will be more clear in a reply) will likely lead the way but, even these procedures can be umbrellaed under a legitimate non-profit.

All in all, my point is, I really think we are going to start seeing the development of non-profits to truly reach out and initiate short sales. This will be a strange but, positive movement for our industry and I think it will really have a great impact on homeowners. Now, I know some of you are already doing this in your local areas and are seeing a lot of success. In fact, some of you have even created very robust networks of professionals, much like I have done here locally so, when this industry shifts, we are ready. For those of you who didn't see this coming or even now, can't imagine this every happening....I challenge you to keep a very open mind because, it's a great business plan, with or without bank participation, you still end up making really good money, helping out your community and offering a free market solution to a crisis that already has too much government / political regulation.

The Liability of a Preferred Short Sale Agent.

I had a conversation with a friend and colleague today that I want to share with you. As always, all of my conversations are confidential so, the names and vital details will be changed in order to protect the identity of everyone involved....except myself, of course.

So, she calls me up to tell me that she has been speaking with executives from the top banks, GSE's and largest default real estate portfolios holders in the country and as a result of those conversations, she had some questions for me. Flattered of course, I obliged and let her know I would answer any questions she had to the best of my knowledge and experience.

She starts by telling me what she was doing and why she was talking with these executives and as I am following along, I begin to understand why she is calling and realize, flattery is far from her mind and she needs real answers. She begins telling me that out of these conversations she was having, she has gotten the impression that many banks, GSE's and holders of default real estate portfolios are not only have trepidations about developing a "preferred short sale agent" list, much like how they have a "preferred or REO agent" list....they have outright hostility to the idea.

In order to further my understanding and get a better sense of the fear they have, I asked some probing questions and fortunately, I got some good answers...of which, I want to share with you. In no specific order, here is what I go....

Question 1: Why wouldn't the bank want a preferred short sale agent they can recommend to their default occupants / homeowners?

Answer 1: Liability.....too much liability.

Well, as you can imagine this answer wasn't good enough for me so, I had to break it down a little. Now, our conversation was nearly 2 hours long and I didn't record it so, I am going to summarize here for you.

The banks issues of liability revolves around some key problems that they can't seem to correct, fix or better yet, feel that they want to even be involved in fixing, those are...

1. Lack of Quality Agent Training:

From what I took away, I was impressed that many banks (let's use the word "bank" to refer to all of them....banks, GSE's and Default Real estate Holders, alike) know our industry has developed good education however, they have a few problems and they are...

                A. OUTDATED: Current education always seems to be outdated or not updated timely enough to positively impact the quality of the actual work completed by the agents.

                B. NO RETENTION: Even though the education may be good on paper, the retention of the agent is poor and by the time they need to use what they learned...they lost it.

                C. NO QUALITY ASSURANCE: You may have an agent who took the course, passed the exam but, has such poor operating processes and procedures that they fail to implement the best practices they were taught.

2. Severe Inexperience:

Now, for many of us who do short sales regularly, this was a bit of a surprise but, after I really thought about I came to accept that sure, a lot of agents out there just don't know how to do a short sale. What got me thinking was how this breaks down from a banks point of view.

                A. INCREASED PROCESSINGTIME: Due to lack of experience errors like, documents that aren't fully executed or not doing a preliminary title report, it ends up creating increased processing times, waiting for corrections.

                B. UNECESSARY ESCALATIONS: Because the agent hasn't completed enough short sales, they haven't worked through the common practices, procedures and processes of the bank or the short sale in general and end up getting frustrated and escalating which creates a back log for the bank.

                C. LACK OF PROMPT AND OR ACCURATE COMMUNICATION: Agents who don't understand the jargon or worse, set unrealistic expectations due to simply not communicating or not knowing how to effectively communicate cause delays and end up resulting in lost deals.

3. Fraud - Nepotism:

Sometimes it's not what you know or how well you work but, who you know and what they can do for you. Sad but, its true and yes, the banks see this as a problem they want to conquer however, not as easy as you may think.

                A. SAME DAY / SHORT SALE FLIPS: Regardless of how you come down on the same day short sale flip, the reality is the bank know this is happening and consider this a fraudulent act. I am not going to get into the details just why this is fraud however, its a problem for the banks and they are afraid that having a preferred agent list, they may open themselves up to this happening more often.

                B. UNQUALIFIED AGENTS: Have you ever wondered how that agent got that REO when you now beyond a shadow of a doubt they never worked a REO in their life? Well, it's likely because they made a great connection through a friend or at a conference and BAM, fast tracked to becoming a REO agent. This wouldn't be allowed but, not exactly sure how to stop it or prevent it seems to be the issue.

4. Severe Incompetence:

You can be the most trained and you can even be experienced but, we have all met those agents who just simply don't get it, completely, utterly incompetent and we are left scratching our heads and asking ourselves, "Who did they pay off?"

                A. BEST INTERSEST OF THE CLIENT: The banks have found that many agents just don't know what is truly in the best interest of the client or better yet, they don't know the law requirement or risk management strategy that will protect their client from any future liability.

All in all, my conversation was a good one however, it seemed to me to be a little late because for those of us who have been doing short sales for at least 4-5 years now, we have had these issues ourselves dealing with other Realtors or the banks themselves.

I don't really know what has spurred the action by many of these banks to finally look a little closer however, I am all for it. The reality is, this business is all about change and the moment you can't or don't change, you die. Truth is, I thrive in the changing environment because I have built my business around conservative fundamentals that have kept me nimble and flexible while others have retired early or simply gone bankrupt. Granted, I do believe competition is good and in a free market necessary but, I also believe a free market competitive environment gets rid of the wasteful, lazy, and propels the hungry and innovative to the top.....so, let's bring it.

Not sure what the result of my conversation will be but, I have a feeling you may end up seeing a survey from me shortly and if that is the case...please respond, let's us know your thoughts because, we may be able to effect some change.

Call Carl SanFilippo (888) 445-8880 for a FREE AND CONFIDENTIAL phone consultation.

Short Sale Versus Foreclosure – which should I do?

Getting fired from your job usually means the power source of income is cut off, and being of the first things to get sidelined when this occurs are mortgage payments. Paying for a house to live in might come off to be a little costly especially if you can just opt to rent an apartment. While it is easier to just walk away from your monthly mortgage payments and let the bank take your home, you might want to consider the route of a short sale. So, what is the dissimilarity in the advantages of a short sale VS a foreclosure?

Benefits of a Short-sale – doing something about it

A short sale home specialist describes a short-sale as the lesser of the two evils. If you are concerned on how to Short Sale a home, then the first thing you need to be informed of is that it enables you tons of options that foreclosure doesn’t provide you, such as

• Leave when you want to leave – opting a short sale grants you the ability to stay in your home longer, as the bank will give you notice when the short sale deal is approved for close. A short sale waiting period can go on for up to 2 to 3 months.

• A clean slate –generally while your personal credit and bank records are your own responsibility, a short sale does not impact your credit in the same way as a foreclosure. That means you can do a lot of things that you wouldn’t have the ability to do if you had a foreclosure showing up on your credit. Not only mentioning a clean slate, but on top of this and upon a successful completion of your short sale you may qualify for the HAFA Program. A program that could offer up to $ 3,000.00 CASH BACK towards your relocation! A borrower can be worthy of purchasing a property in only two years after a foreclosure.

• Control over the price – in opposition to foreclosures, short-sales give you the ability to control the price of the sale due to the fact that you still altogether own your home as the bank has not seized ownership of it yet. Granted, short-sale prices are still a lot lower at market value than the property value, but you’d much rather be selling at a loss than letting the bank do all the selling for you. Even though the bank must have the final say so in a short sale offer, prices generally are higher than foreclosed homes. This will do your neighbors a favor by helping to preserve community property values.

Benefits of a Foreclosure – the art of walking away

Foreclosure is the easy way out. Basically, foreclosure is simply turning your back on your property until the bank decides to foreclose on it. This is a little known fact, but foreclosure potentially could be the worst thing that you can do. Contemplate it – after the bank forces you to turn over your property, they get to clean it up, put it on sale for a reduced price and whoever gets the property will either: (a) renovate it and try to sell it at a very high premium; (b) sell it as being and the seller can still get a respectable profit out of it or; (c) whomever gets the property can just live in it, still getting the better end of the deal because of the bargain price that he or she bought it for.

Foreclosed properties can sell pretty rapidly as compared to a short sale. While this sounds pretty good on paper, remember that it is the bank that already owns the foreclosed property, they are the ones who profit the most from a fast transaction, so please, take this time to read further into abstaining or preventing foreclosure.

Also, while it may seem really easy to just walk away from your property and let the bank acquire it, you may want to acknowledge the following consequences:

• Waiting period before you can buy – records of foreclosure can affect even the period when you can purchase your next home. Generally speaking, banks select more responsible and trustworthy people without any sort of negative records to approve a home loan application. The current waiting timeframe for anybody to be granted by a bank or an institution to mortgage a home again is 5 years most likely. In addition, do you think a bank will let you purchase a home if records show that you already failed in maintaining a previous mortgage?

• A foreclosure record can leave a lasting impression – records of a previously foreclosed property may appear on your personal credit for up to 7 years. That is a lot of time to consider especially if you want to apply for something that is bank or credit related in the upcoming seven years. While most people will believe that they wouldn’t mind this kind of record because they are not planning on doing anything bank related, consider this: any type of foreclosed property records can severely affect your job applications. Why? Some employers look at your credit background to see if you are responsible in your credit, and a foreclosure blemish may cause them to conclude that you are delinquent if you have a foreclosure on your record.

• It shows up on your credit records – managing your credit rating and record should by far be more critical than anything else you should contemplate before taking the easy way out. It is noted that your credit rating can plunge as low as 160 to 105 points depending on the manner of foreclosure or on your credit history. This is especially important to consider if you have an active business or you are looking into bank loans for business or other concerns. A foreclosure can at times be read as a severe negligence on the part of the person. It is important to note that banks do not consider any type of personal issues that is on your plate during the time of foreclosure: it’s either your payments are made on time or they are not.

• It affects your loan applications – similar to most of the reasons above: why would you think any bank will give you a loan if your records reveal that you had trouble paying for one before? Even if the intention might be very different from that of a home purchase, like a school loan, car loan or business loan, it is still the same thing.

• You get evicted immediately – unlike if you put your home up for a short sale; eviction usually is very quick if your property is being foreclosed on. Generally, a notice period of 30 days is given to the person with a foreclosed property, but any other extensions might not be considered by the lending institution, person with a foreclosed property, but any other extensions might not be considered by the lending institution.

So, which is the better option? A short sale or a foreclosure?

Deciding a short sale over foreclosure may be the best option by far. The mere fact that you have control over the price and the time when you can sell your home is a better alternative than being forced to hand over your house and being ordered to leave the premises as soon as possible.

While it is ultimately up to the person to choose either a short sale or a foreclosure, what is substantial is that options are weighed first and think of how it may affect your ability to buy a home in the future and affect your credit rating. Researching is a job well done. Now, your next step is to contact one of our highly trained Short Sale Specialists, so they can get your short sale on started and successfully completed!

Carl SanFilippo

Nj Short Sale Agent

www.njshortsalesspecialist.com

In Los Altos from Jan 1, 2012 until June 30, 2012 there were:

3 closed short sales

3 closed bank owned homes

Total sales during this time period were 192

Total % Short Sales: 1.5%

Total % REO Sales: 1.5 %

Total Percentage  Los Altos Distressed Properties: 3%

Again, we have a high priced neighborhood and almost no distressed property sales. Values are appreciating and there are more pople trying to buy homes than there are homes available. Additionally, there is very little new contruction before the crash, so there is not a big group of people who bought into a large development and are now underwater.

If you have any questions about short sales or foreclosures in Santa Clara County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

In Los Altos Hills from Jan 1, 2012 until June 30, 2012 there were:

1 closed short sales

0 closed bank owned homes

Total sales during this time period were 45

Total % Short Sales: 2.2%

Total % REO Sales: 0%

Total Percentage  Los Altos Hills Distressed Properties: 2.2%

The low number of distressed property sales in Los Altos Hills is consistant with the other high prices neighborhoods in Silicon Valley. These areas are showing strong sales, good appreciation, and plenty of buyers with enough cash and income to purchase. Compared to the same time period in 2011 there were 2 closed short sales and 5 foreclosures with 52 sales for a total of 13.5% sales being distressed. 2012 is definatley different.

If you have any questions about short sales or foreclosures in Santa Clara County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

In Woodside  from Jan 1, 2012 until June 30, 2012 there were:

3 closed short sales

4 closed bank owned homes

Total sales during this time period were 51

Total % Short Sales: 5.8%

Total % REO Sales: 7.8%

Total Percentage  Woodside Distressed Properties: 13.6%

These numbers do not tell the whole story. 3 of the 4 foreslosures and 2 of the 3 short sales were in the Skyline area which is always a harder sell than closer to town, so given that information again, there are almost no distressed property sales in Woodside. There are currently 47 active listings in Woodside, about the same number as in Palo Alto, but without the incredible competition for homes like in the Palo Alto market. Maybe it is worth giving Woodside a look if you are having trouble finding what you want in Palo Alto.

If you have any questions about short sales or foreclosures in San Mateo County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

In Portola Valley from Jan 1, 2012 until June 30, 2012 there were:

0 closed short sales

1 closed bank owned homes

Total sales during this time period were 32

Total % Short Sales: 0%

Total % REO Sales: 3.2%

Total Percentage  Portola Valley Distressed Properties: 3.2%

Obviously Portola Valley is not a hotbed of distressed property activity. The one foreclosure was on a small house on Aliso in Ladera which sold for $1,075,000, a great price for that neighborhood. It is however a fabulous place to look for a home if you want a large lot, an incredible community feel, and plenty of local services as well as recreational activities.

If you have any questions about short sales or foreclosures in San Mateo County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

Marcy Moyer Keller Williams Realty Palo Alto, Ca. Specialist in Short Sales and Trust and Probate Sales

In Palo Alto from Jan 1, 2012 until June 30, 2012 there were:

1 closed short sales

3 closed bank owned homes

Total sales during this time period were 284

Total % Short Sales: .3%

Total % REO Sales: .9%

Total Percentage  Palo Alto Distressed Properties: 1.2%

1.2% of all Palo Alto sales being distressed properties is not enough to even comment on. The price of homes have in Palo Alto is now up to pre 2008 prices in the $2,500,000 price range and the homes over $2,500,000 usually do not have loans that are a very high percentage of their value so anyone who is having financial problems can generally sell and be made whole. So if you are looking for a bargain, look outside of Palo Alto.

If you have any questions about short sales or foreclosures in Santa Clara County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

Marcy Moyer Keller Williams Realty Palo Alto, Ca. Specialist in Short Sales and Trust and Probate Sales

In Santa Clara from Jan 1, 2012 until June 30, 2012 there were:

97 closed short sales

47 closed bank owned homes

Total sales during this time period were 491

Total % Short Sales: 19.8%

Total % REO Sales: 9.6%

Total Percentage  Santa Clara Distressed Properties: 29.4%

29.4% of all Santa Clara sales being distressed is enough to have an effect on the overall market. However, as inventory is still so low, unless these homes are truly physically distressed, which is more common with bank owned homes at this level, most homes will not sell for much less than fair market value. There are twice as many short sales as foreclosures in this time period which is what we are seeing in many other cities. 

If you have any questions about short sales or foreclosures in Santa Clara County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

In Mountain View from Jan 1, 2012 until June 30, 2012 there were:

16 closed short sales

22 closed bank owned homes

Total sales during this time period were 349

Total % Short Sales: 4.58%

Total % REO Sales: 6 %

Total Percentage  Mountain View Distressed Properties: 10.58%

10.58% of all Mountain View sales being distressed is not enough to have a major effect on the overall market. Additionally, as inventory is still so low unless these homes are truly physically distressed, which is more common with bank owned homes at this level, it probably will not have much effect at all. Ther are so many employed people looking for homes near Google, Apple, and other high tech companies, that homes are getting multiple offers, selling at appreciating prices, and are almost always in high demand. It is interesting to see there are more foreclosures than short sales which we have not seen in other cities. 

If you have any questions about short sales or foreclosures in Santa Clara County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

Call Carl SanFiliipo toll FREE (888) 445-8880 for a FREE phone consultation!!!

New Jersey has been facing one of the most challenging economies in its history. The housing market has been decreasing at such a rapid pace that one out of three homeowners owe more on their mortgage then their home is worth. Some parts of the country one out of every five homeowners are behind on their mortgage payments. You might be in a similar position that you need to sell but owe more on your home then its worth. You might have a ARM mortgage which is due to change and change your payment making it unaffordable. You do have options to avoid foreclosure in New Jersey.

I have been in real estate with Century21 Worden and Green since 2006. As i came into the business the market started to change. Home values started to decrease slowly while by 2008 prices began rapidly dropping. I have been dealing with foreclosure homes since 2006 and have closed hundreds of foreclosure properties and have educated homeowners regarding their options. As a New Jersey Short Sale Specialist I strive to help as many homeowners who need my service as possible.

Why Should I Short Sale My Home in New Jersey?

Doing a short sale in New Jersey could save your credit long term. A short sale is better for your credit then a foreclosure and has numerous other benefits. See the comparison of a SHORT SALE VS FORECLOSURE. and check out the Wall Street Journalarticle explaining why a short sale in New Jersey can be the right answer for you.

Why do I need a New Jersey Realtor to Short Sale My Home?

Most lenders will not consider a short sale in New Jersey unless your home has been on the MLS and is being marketed through a Realtor. A New Jersey short sale specialist can also help navigate the short sale process, letting you know what forms the lender will require for the sale. If you are eligible for the HAFA program in New Jersey, CLICK HEREto see if you might be eligible, you will be required to work with a Realtor.

How much does it cost to Short Sale my Home in New Jersey?

Absolutely NOTHING! My services are 100% completely FREE!!! I can refer you attorneys who will also provide service to you for FREE!!! Sound to good to be true? The lender will pay all commissions as well as legal fee. Contact mefor more details and for a FREE phone consultation.

The New Jersey Short Sale Process!

Step 1: Call me toll free (888) 445-8880 we will discuss your current situation and all your options. If it appears you have all the qualifications needed for a short sale in New Jersey there will be forms you need to fill out and documents you must provide before we begin marketing your home.

Step 2: Marketing, I will come to your home take pictures and begin aggressively marketing your home in order to get offers.

Step 3: Get an offer to be submitted to the lender. This part can be the most lengthy part of the transactionwaiting for an answer from the lender. However, recently this process has sped up.

Step 4: Approval and closing! We obtain approval from the lender and have all the legal fees and commissions paid by the lender. We also fight hard with the lender to to ensure you are forgiven of all past debt, and you have avoided foreclosure in NJ and can move on with the rest of your life.

May 2012 Could Signal a Turn Around for Housing Market

There is some hope for the real estate market. According to a report published by the Commerce Department the number of homes purchased in May of 2012 was the highest number in over two years. The number of purchases increased from April to May by 7.6%. That number is the best increase since April of 2010 when the tax credit for purchasing a home was still in effect.

Areas of Highest Growth

The places that saw the largest increases were the South and Northeast. The number of homes purchased in the South grew by 12.7% while the growth in the Northeast was 36.7%

Although the total number of sales across the country seems to be off pace from the 700,000 transactions favored by economists, the market is showing other signs of improvement.

Strong Signals from the Market

First and foremost, builders have begun to increase production. More construction is always a positive sign, no matter how small the increase. Second, interest rates for mortgages are still at historically low levels making it easy to afford a home. Third, and this is important too, is the stabilization of home values. Most regions around the country have noticed home values finally holding steady. All of these factors have lead to people buying up existing homes, paving the way to build more properties.

More than Just Statistics

The main reason why economists and financial analysts pay so much attention to new construction comes from their overall economic impact. Building a new home normally produces about three new year-long jobs. It also leads to an increase in taxable revenue by an average of $90,000. Although new homes are only 20% of the entire housing market, the numbers above show how constructions helps the economy thrive.

Supply is Down

At the end of May it was reported that a total of 145,000 new homes were on the market throughout the entire country. Based on current sales numbers the market should go through the existing inventory of new homes in about 4.5 months. Economic experts feel that a 6 month supply of new homes keeps the economy healthy. With a lower than average supply it is possible that home prices could go up simply because demand will be higher.

Prices Already Higher

Speaking in general averages, the price of a home bought in May of 2012 was down ever so slightly from the average price in April. However, when looking at sales from one year ago shows that average prices have gone up by 5.6%.

In East Palo Alto  from Jan 1, 2012 until June 30, 2012 there were:

36 closed short sales

20 closed bank owned homes

Total sales during this time period were 96

Total % Short Sales: 37.5%

Total % REO Sales: 20.8 %

Total Percentage  East Palo Alto Distressed Properties: 60.7%

60.7% of all East Palo Alto sales being distressed is enough to still have major effect on the overall market. However, as inventory is still so low unless these homes are truly physically distressed, which is more common with bank owned homes at this level, it probably will not have a long lived effect. It is interesting to see there are almost twice as many short sales as bank owned sales which has also happened in other cities. 

If you have any questions about short sales or foreclosures in San Mateo County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

In Sunnyvale from Jan 1, 2012 until June 30, 2012 there were:

58 closed short sales

32 closed bank owned homes

Total sales during this time period were 447

Total % Short Sales: 12.9%

Total % REO Sales: 7.1%

Total Percentage  Sunnyvale Distressed Properties: 20%

20% of all Redwood City sales being distressed is enough to still have some effect on the overall market. However, as inventory is still so low unless these homes are truly physically distressed, which is more common with bank owned homes at this level, it probably will not have a long lived effect. It is interesting to see there are almost twice as many short sales as bank owned sales.

If you have any questions about short sales or foreclosures in San Mateo Clara County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

In Redwood City from Jan 1, 2012 until June 30, 2012 there were:

46 closed short sales

22 closed bank owned homes

Total sales during this time period were 363

Total % Short Sales: 12.6%

Total % REO Sales: 6%

Total Percentage  Redwood City Distressed Properties: 18.6%

18.6% of all Redwood City sales being distressed is enough to still haves some effect on the overall market. However, as inventory is still so low unless these homes are truly physically distressed, which is more common with bank owned homes at this level it probably will not have a long lived effect. It is interesting to see there are twice as many short sales as bank owned sales.

If you have any questions about short sales or foreclosures in San Mateo Clara County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

I have been working on a Redwood City short sale with Chase since last September. Now if this were 2009 this would be more like dog bites man rather than man bites dog. But it is 2012 and most short sales do not take so long. However, this one has a 3rd loan for a lot of money and it slowed the process down.

Selling the property at market value was not that hard, despite being on a fairly busy street. We got an offer for $510,000 and a BPO for $510,000 so it started out ok. By December I had approval on the first and second with a payoff of 6K to the third who had previously owned the home and had a $120K note on the property.

Third lender said no way. He wanted 65K as a note from the seller or cash from the buyer.

Buyer and seller said no. Buyer walked.

House went back on the market and we got another offer right away. This was February.

Chase did a new BPO and said the value had increased to $560,000. New buyer agreed to pay the 3rd loan 50K plus $560,000 to chase. After several months Chase said no, they were not going to allow the third lender to get so much money. That was May.

We were then told to try submitting a new offer to see if we could get a different answer. Well that sounded like the definition of insanity to me, but we tried. So we submitted a new offer of $562K plus $50K going to the third lender. Keep in mind that every month during all of this we had to get Chase to postpone the trustee sale.

So several weeks ago the new offer for the Redwood City Short Sale got to the new negotiator who ordered a new BPO. She said the BPO's value had not changed again and the offer was fine as it was. I asked about the issue of the third lender getting so much money and she said she thought it would be fine.

I was doubtful, but she was right. Today we got a Short Sale Approval Letter!!!!!  I never believed this would happen but I persisted anyway and it was worth it.

So now my Redwood City Short Sale has Chase Approval, my sellers can get on with their life, the buyer has the home of his dreams, the third lender who is a human, not a big bank has at least a good portion of his money back, and Chase can get a bad performing asset of their books as well as market value for the home. We all won on this one.

If you have any questions about buying or selling a short sale in San Mateo or Santa Clara County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E. 01191194

Anyone with experience in short sales and REO's know the bank requires proof in writing that the buyer has the necessary funds for the purchase of the property. If the buyer is paying cash I have always advised them to obtain a letter from their bank stating they have the necessary funds for the transaction.

In a recent short sale where I had the listing, the buyer submitted a letter from his bank signed by the Vice President of Banking which included his contact number and email.

The negotiator with the bank would not accept the letter as proof of funds and asked for a copy of the buyer's account statment. His reason was the wording "access to cash currently on deposit". He said the buyer could move these funds from this account into another account at any time. I responded by saying the buyer could still move funds from an account after he gets a copy of the bank statement. He simply said "A bank statement would be different".

I understand an actual copy of the bank statement is a harder proof of funds, but if there is any issue, the negotiator could call the Vice President and get clarification. If the letter was truly a fraud then what would be the end game? Not closing? I don't understand why banks are making the process more difficult than it has to be. In this case, it ended up being an acceptable offer and went to closing.

Rock Realty Client Testimonials

"Mike Collins helped us sell our home, he was a very nice guy and always there when we had any questions or concerns! Mike went above and beyond and even helped paint the house when there was a time crunch for the inspection. We appreciated all that Mike did!"

Katy K.(Janesville, WI)
Rock Realty Client

In Menlo Park from Jan 1, 2012 until June 30, 2012 there were:

9 closed short sales

9 closed bank owned homes

Total sales during this time period were 227

Total % Short Sales: 4%

Total % REO Sales: 4%

Total Percentage  Menlo Park Distressed Properties: 8%

8% of all Menlo Park sales being distressed is not enough to have any effect on the overall market. This is evidenced by the appreciation and high activity level of the market.

If you have any questions about short sales or foreclosures in San Mateo Clara County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

Rock Realty Client Testimonials

"My first listing contract (with another agency) expired without a single showing. I contacted Mike Collins hoping to get some straight advice about whether he thought the property would ever sell versus letting the lender foreclose on the property and save my mortgage payments for legal counsel. He was upfront from day one. He told me that it would take a while and that I'd probably have to hold it through the winter (I called him in September) but it would probably sell in the spring. His honesty made me immediately willing to hire him. He found a buyer in May and worked with my lender to close the sale in record time."

Drew V.(Marshall, WI)
Rock Realty Client