First off, let me just say that a short sale is a lesser of two evils. It should be considered as the nuclear option and only available to those with legitimate hardship. Now, with that out of the way, let us talk about the truth behind what a short sale does to your credit.
If you are considering a short sale, then most likely you have fallen behind in your mortgage. This delinquent arrearages has already impacted your credit negatively. So that is the first thing you need to start considering. Any further delinquency on your part will continue to negatively impact your credit.
Now, one of the biggest differences between a short sale and foreclosure is how it's reported to the credit bureaus. If you foreclose you get "debt discharged due to foreclosure" stamped on your report. A recent conversation I had with a credit expert at Experion enlightened me to the fact that Bankruptcy is the worse thing anyone can do to his or her credit and the 2nd worse thing is foreclosure. She also explained that with a foreclosure it could take you up to 3 years to get a mortgage and drop you credit score about 200 pts or more, considering the previous damage you did by the mortgage arrearages. Where as with a short sale, this message isn't there. Instead you get a message that reads, "pre-foreclosure in redemption". This can result in about a 100 credit score drop or LESS! Not to mention, once the home is sold, it may appear as "discharged" on your credit. It's also important to know, that with a short sale, you can qualify for a loan in as little as 18-20 months later.
All in all, if you have a true financial hardship and the mortgage debt burden is too much for you to handle, then the short sale may be a viable and less credit damaging alternative to foreclosure or bankruptcy.
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Hello Everybody,I was at the 5 Star Default Servicing Conference too. My experience at 5 Star was different than many other agents I guess :) I had too much fun and education and got the chance to receive RES.NET and REOTrans certifications.I know it was crowded, I know they tried to teach us the things that we already know, but the Lender/ Servicer Open House was priceless. I met with lots of servicers and lenders that I’m already working with and I was able to tell them “Hey, it’s me, Nesli. What’s up? ” :) Okay, I didn’t exactly say that but I had the chance to talk with them and ask questions. The Asset Managers were so nice and gave out their secrets (lots of little details like what you have to do when you apply with their company) which was like gold to me.One suggestion from me to you, my realtor fellas, if you ever attend these conferences, DO NOT EVER MISS THE LENDER OPEN HOUSE sessions. I was thinking to go there again next year but just for the Lender Open House. I am willing to exchange some info so shoot me an e-mail.Let’s come to the fun part :) There was a concert which was as important as the Lender Open House, the REO Speedwagon concert and I cannot tell you how much fun I had. It was intelligent to bring this group for the concert but I am wondering what does “REO” stand for? Please do not answer my question if you haven’t read all of my blog :) Well my suggestion to all: YES, it was totally worth it to go, show your face there, meet with people and get some education! Even though sometimes you cannot recognize them (like Stacie) they will recognize you :) It was great to have met with you too, Stac.I am a person who always looks at the result, “what did I gain?” I got approved with two big lenders that I have been trying to get approved with their program and this is just a start.Nesli IbrahimRealtor, SRES, e-PRO, CPVRealty Executives Dillonp: 619-254-0037f: 619.656.4500http://www.bestchulavistarealty.commailto:nesli@bestchulavistarealty.com
As many of you know I was at the five star default convention last week and now I am back with my family and animals! I had 4 things on my 5 star to do list and I am glad I got them done and then some!With that being said I am sure you want to hear about my 5 star default conference adventure!! I arrived late Tuesday night. I was elbowed in the head on my plane ride by the man seated behind me but I know something of that nature would happen. Without fail I am a target everywhere of some kind! (wink! wink!) We stayed at the Hilton Anatole. I was impressed by the size of the hotel my husband was not impressed by them not having a shuttle. that's a whole other blog that I am not going to get into.Wednesday in the Am I went down to get my new badge cause mine was wrong. Everyone there had a color coded badge and the people who were wearing red, black or green where being hunted down like deer during hunting season. It scared me a little cause I was stuck on an a full elevator everyone was blue except the guy net to me. He was black and the minute someone spotted him he was attacked. I got off asap and didn't even look back.I ran into some Internet friends by the main info area! Nesli is from San Diego. We have talked several times and exchanged REO info back and forth. I called her looking for her and she was behind me. She was looking for my dark hair and didn't recognize me. No worries I got that all week. She is a great person and I am glad to have met her! There were sooooo many people it was hard to find anyone. I guess it doesn't help that I need a new eye glass prescription and couldn't tell who anyone was till I got close.I did have 1 class that was on my to do list and that was the reo trans class. I needed it to get certified. I have used the system before so most of the information was not new. I did however get to chit chat with the CEO. Very nice man and he helped answer a couple questions that I had that were not answered during the class. If he ever needs to buy in the OC I have a great realtor for him!
Wednesday eve were 2 receptions. I went to the first one and ran into a large group of people I chat with on yahoo groups. They are in my inbox everyday and was glad to meet them. They kept me laughing, entertained, and safe.The second reception was very very crowded and I got lost from everyone I knew and was approached by many interesting parties and was about to leave when I again found my friends. I had a great time! I also got some work done at the show. CA was 2 hours ahead so I was still getting questions asked.
Thursday AM was the awards breakfast. My phone died and I forgot my charger. I had no way of calling anyone and about 4000 people were waiting to get into the breakfast. I have night blindness (it was dark in the breakfast room) and I already told you I need a new prescription so I sat down at the nearest empty table I could. It filled up pretty fast so I was not alone for long. I was chit chatting with everyone. The man next to me and I where talking about Denver and Orange County. He then told me he was the CEO of one of the Asset management companies that was on my to do list. Once he told me who he was....all the agents at the table gave him their card. I wasn't about to give him mine and have him remember me that way. We had a great conversation about his company and he asked me my opinion on a couple things. I felt bad for him cause he kept having people ask him for his card while we were talking. He was very polite and told them to wait till he was in the booth at the expo hall. Anywho.....Breakfast was great and the people who got awards were well deserving! I was impressed!
Expo hall was a zoo!! I walked around and talked to some companies but I waited to come back till it wasn't so crowded. I soon realized that there were a ton of people there to get their foot in the door with REO. Many, many people where cutting in line and pushing and it was not a scene I wanted to be in. I did however get to borrow a iphone charger from a man at REDC. They are an auction company and they had Eric Estrada there taking pictures. I charged my phone and came back down to the expo hall. Less crowded and now I could talk to the people I wanted to without having to worry about someone cutting me off. I was talking to a rep at FirstAM REO and one of my fellow active rain friends recognized who I was. Thanks! It made me smile and the FirstAM guy will probably remember me for that!I was signing up online again w/ FirstAM cause the guy said the software changed. I am with them but he said it couldn't hurt. As I was signing up I had 3 more vendors come talk to me. I even had a auction company want to hire me as a project manager. I am going to stick to REO though...I am kinda good at it. I then moved out of the hall to go find some more Internet friends. As I was waiting I started talking to this man w/ no badge and found out he is w/ another direct lender that I was hoping to talk to. I guess I was at the right place at the right time again!! I soon had to get some work done online and get ready for First Preston Round up.FP was # 3 on my to do list and I was totally impressed by this company. I am so lucky and excited to be a listing agent for them. They are innovative and down to earth. They have a contract in the works with a bank to dramatically change the way short sales are looked at and done. Again, I am so lucky, happy, excited and fortunate to be a part of their local ambassadors.There was a man there that asked 2 really good questions and turns out he is another friend of mine who likes to play in the rain! Jon is a great guy and really nice to be around. He and I got excited about First Preston together!!!Friday was the lender open house and again a crazy mad house! I was so not going in the rooms so I stayed outside and talked to lenders as the passed. I was pretty much over worked at this point and ready to go home. I did have to stay and go to the res.net cert class in the afternoon. I found Jon and his friend Mike and we sat thru the class together. They had a test at the end which was easy if you had used their system before. I was so tired and ready to get out of the hotel since I had been indoors for days i went out to the pool. Another Internet friend of mine from San Diego named Katrina and I chit chatted by the pool. My hubby was pretty tired of hearing about REO and I could tell he was more then ready to go home.I learned a some new things and I met some great contacts. I will defiantly go next year.....as a key note speaker!!! LOL!~Stacie
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Posted by Daniel Ripper on September 21, 2008 at 9:57am
Hey I just got back from the 5 Star Convention and I must say that I wasn't really impressed. It was a madhouse with about 90% agents and the rest being servicers, AMs, etc. I did however make some good contacts, pressed the flesh, and gotten an idea or two that I will put into place. I wanted to get others thoughts on who attended and what their opinons on the whole thing was. Let me know!
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It's great that you are detailing the various conferences and training events that are occurring around the country. Keep up the good work!Michael G.
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The unsecured promissory note is becoming a more commonly used tool to prevent future deficiency judgments. If you haven't experienced this already with a short sale, where you are the listing agent, be prepared because it is coming your way.
Upon bank review of the agreement they will counter the offer to the homeowner requesting them to sign a unsecured promissory note for the remaining short balance. As you can imagine, this type of counter from the bank, can throw a monkey wrench in the entire process and possibly kill the deal.
So how can you prevent the bank from requesting and unsecured promissory note? Well it's all going to revolve around percentages. If the short balance is greater than 15% to 20% of the total amount owed you can most definitely expect the bank to request a unsecured promissory note to be signed by the homeowner. It is important that this possibility be disclosed to your home owner up front when the obtaining the listing so that you don't have any uncomfortable surprises towards the end.
I'm sure your next question is why would the bank make such a demand. The first thing to understand is that the request of a promissory note is the bank's way of telling you and the homeowner they will most likely pursue a deficiency judgment if they agree to the deal. The promissory note is the bank's way of giving your client and out, of sorts. In other words, sign a promissory note today or expect a future deficiency judgment, if they decide to do the deal at all.
Keep in mind this is a business decision the bank is making, they have supposedly done the math, looked at the credit, looked at the assets, read over the hardship and determined the deal may be worth losing. This may sound crazy to you and me however from the bank's financial point of view some deals just aren't worth the paper they're written on and therefore they ask the homeowner to have some type of responsibility and the short sale of their home.
In closing, if you have an experienced a promissory note by now count yourself among the lucky few because I guarantee in this market of uncertainty the unsecured promissory note is going to start appearing more and more often in a short sale situations than it ever has before.
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Posted by Seb Frey on September 10, 2008 at 5:30am
I often wonder, how good am I doing, really? You always hear about how the asset management companies grade and score you. A few of them, you can actually see your score - but the rest? Pfft. Who knows. So long as the listings keep coming, I guess we're doing OK.This morning, I got a broadcast BPO request from a company that also does REOs, but I have never listed an REO with them. The guy who sent the request out mistakenly did not use a "bcc" - blind carbon copy; that is, every recipient got to see all the other recipients. It was interesting to see who else in my area is doing BPOs!One of the recipients did a reply-all back, and said:"The one and only time I did BPO work for your company it took more than 90 days to get paid, and I had to write letters and threaten to sue you to get paid at all. $60 for an interior BPO? Are you sure you want to pay that much? Perhaps you can find someone who will do it free of charge, just to do you a favor."Yeah, $60 is cheap for an interior BPO. But you're missing the point. Even $100 is a trifle, if you value your time. Is not the whole point of slogging thorugh these miserable BPOs to get a crack at the listing? This business is really a lot of work. I guess if you're trying to make a living on BPO fees, I can see the rancor. But that's thinking pretty small, IMO.Also this morning, I got an e-mail from an asset manager questioning one of the BPOs I did for another agent's upcoming listing. There was a big discrepancy in the square footage between me and the other agent - about 1,000 square feet. I had used the actual assessor's data for the square footage figure, which as I understand it, we're only supposed to count legal square footage. So I wrote back to the asset manager, and explained the discrepancy, sent along a copy of the assessor's data sheet, and also mentioned how when the house had sold in 2005, it had sold in-line with prices for 2,000 square foot homes, not 3,000 square foot homes.I am guessing that the listing agent for this property didn't actually look at the assessor's data, but pulled the data off the MLS. But that's not the shocking thing. The shocking thing is the image that was used for the "front view" of the property. This company uses the "front view" image from the BPO as their "thumbnail" image for the property, which they show on their consumer web site of REO listings.What was the biggest thing in the picture? The side-view mirror of the agent's car. The house itself was practically a speck, partially obscured by trees, and the clearest thing in the picture was that side-view mirror.I have a theory. My theory is that most people do a mediocre job of whatever it is they are doing. Surgeons, lawyers, physicists, carpenters, presidents - you name it, the average person in that capacity does mediocre work. Few are truly exceptional. The same is true in the default services side of the real estate business. Actually, that's also true in the traditional "retail" side of residential real estate as well.The lesson here is: don't waste time worrying about how you're doing, especially not compared to how everyone else is doing. Be diligent, apply yourself, be honest, and work like hell. The rest should take care of itself.
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No matter your opinion, is it necessary is it not, the recent government conservatorship of Freddie Mac and Fannie Mac is just another bailout in a long line of recent bailouts that have me wondering, are we still living in a free market society?
Granted, we can go on and on all day about if the government seizure of the 2 mortgage giants was even necessary however, that isn’t my point. I am just wondering why it seems lately that our government has decided to spread the losses of an industry among the people however, when that industry was riding high, the government didn’t step in and spread the wealth. In other words, when a company, giant or small, starts to fail, our government shouldn’t be stepping in and making the population pay for it’s poor decisions. This action sets up a dangerous precedent that has me wondering, do we live in a free market?
If you haven’t heard yet, you will soon but, when this huge bailout of Freedie Mac and Fannie Mae was still just a rumor, the car lobbyist in Washington were all a buz! Swarming around and positioning themselves to be the next in line for their government handout. Oh yes, make no mistake, the automobile industry saw this as a perfect opportunity to remind the government that what is good for the goose is good for the gander. You see, they to have been feeling the pinch of the credit crunch as well as a sluggish economy and not to forget those dreadful high gas prices. The argument they will have is going to be the same as everyone else and that is, “we are too big to let fail.” Well, I say, don’t let the door hit you where the sun don’t shine on the way out. No industry is too big to fail, no company is too large to let go. In my humble opinion, it is the rise and fall of companies that ensues only the best survive, much like a corporate survival of the fittest. Now, Freddie Mac and Fannie Mae are another type of beast, this is true because of the monopolist nature of their current mortgage holdings and yes, that couldn’t go ignored however, this is a prime example of Washington insiders run a muck! High paid lobbyist and close relationships with Congress and the Senate enabled these companies to do something no one has done in a long time and that is create a monopoly that now holds our entire economy hostage due to poor management.
So, lets do what we need to do to de-monopolize this section of the real estate industry, diversify the risk, create some regulation and move forward with a stronger, robust and better equipped yet smaller mortgage guarantor industry versus having 1 or 2 giants that with one mis-step can shake the very foundations of our entire US Economy!
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Back in November of last year, I did an exterior BPO on a rural property. When I do a BPO, I pretty much always do this: find "neighborhood" actives, "neighborhood" solds, and then comparable actives and solds that are ideally within a mile of the subject, but for these rural properties, the distance is often much greater than a mile.I put the "neighborhood" in quotes because out in the sticks like that, it's kind of hard to say where exactly the neighborhood is. In these cases, I generally use at least the nearest half-dozen listings or recently solds to comprise the "neighborhood."The other day, I got an interior BPO request. It turns out, I had done an exterior BPO for this property back in November of last year. This happens from time to time, and what I like to do is go back and look at what happened to the "active" listings I based my previous BPO on.In this case, there were ten listings in the "neighborhood." Of those 10, one sold. The rest all expired or got cancelled. Zoinks. And, the three "active" comparables I used formy BPO - two expired, one cancelled. Double zoinks.Let that be a lesson out there to all you sellers. Need to sell? Get aggressive. There's no time to waste in a market like this.
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Here lately, it seems I have been getting the same question over and over again and that is, “Why do banks have a waiting list to become a REO Agent?”
First of all, let me share some insight with you.
Banks are being bombarded by struggling Realtors who are looking to make fast cash in this back to the fundamentals market. The barrage of request to join the banks REO teams has brought out every type of Real Estate Industry worker, from the novice to the experienced professional. The problem these banks are having is, they really can’t weed out the true professionals and those who are faking it. You would think that a simple interview process would cast out the lackeys however, that isn’t always the case. Simply put, the banks don’t have the resources, time, energy or infrastructure to verify all the resumes, letters of interest and voice mails pleading to be on the REO Team. In fact, the banks have had such a large share of amateur Realtors that now, most have realized it’s best to only work with those they have trained themselves or only with the REO Agents that have verifiable experience through the personal relationship with an Asset Manager or Loss Mitigation Officer. So, the waiting list accomplishes more than just allowing the bank to have a pool of possible Realtors, over time it will weed out those people who aren’t going to last on their own in this fundamental market. The bank’s prospective is, if you can’t last on your own as a Realtor, why would they ever trust you with their clients. It may sound a bit cruel but, if you stop and think about it but, it makes sense. These banks are looking for high quality, high out put Realtors, anything less is just going to cost them money and time. If you are a part time Realtor because this market has forced you to take on a “real” job, then most likely you aren’t going to be the right person to take on a REO business.
Just some food for thought.
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I had to do three Cash for Keys today. And it's labor day. An REO agent's work is never done. The first one went smooth as silk. Exept that the guy didn't actually have the keys. A lot of that going around. "We never lock the doors, I don't know where the keys are." I believe it. That's how it is out here. Bucolic, like.Fortunately, I always bring my locksmith with me when I do my CFK. No keys, no problem, especially when the doors are at least unlocked.I had not actually been able to confirm with the second CFK that I'd be coming by. I'd been calling for a couple of days, but nobody had answered. Still, though, I had been in somewhat frequent communication with the occupant, and we were very clear that the CFK date was today, and he knew what was expected of him.The locksmith and I arrive at the second CFK - the front yard is just full of stuff: furniture, clothes, brick-a-brack. Fortunately, the house is indeed empty, as is the back yard. Unfortunately, the former owners had illegally converted the garage to living space and built an illegal unit in back and an illegal bathroom. Hate it when that happens. Anyway, I said hey, sorry, I can't really give you the money until all your stuff is gone. But do you mind if I have the locks changed now that all your stuff is out?They said sure, no problem, we're done. So I talked for about 30 minutes with the señora in Spanish, while the locksmith went about his business. We agreed I'd come back the next day once all the stuff was gone out of the front yard and I'd give them the check. They gave me six baskets of fresh picked blackberries from a local commercial blackberry grower. Last time they gave me raspberries. Nice folks.Next, on to Cash for Keys #3. This guy was one slippery character during the CFK negotiation. Although we were clear what his responsibilities were (e.g. to leave the place clean and with no debris, trash, or personal property left inside or outside the house) - what did I find? Well, he did a pretty good job on the inside. But the outside was still littered with stuff. Paint. PVC piping. Buckets. Garden tools. Tiles. You get the picture.A heated conversation ensued. Well, the heat was mostly on his end. He wanted me to show him the check. Yeah right! He said he'd sue me for not giving him the check. I said, "Go ahead, you won't get too far, you haven't held up your end of the deal." He said he'd finish cleaning it up today. Alas, the sun was already setting in the west, and I never do a CFK after dark, because it's easy to miss stuff. I told him I'd have to come back tomorrow.And so I shall. Tomorrow's going to be another busy day in the REO business. God bless it.
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I did an interior BPO a week or two ago on a rural property out in a kind of exclusive part of Santa Cruz county. None of the homes are alike, the parcel sizes and qualities are all different, the houses range from brand new estate-type properties to...well, older estate-type properties. There are probably a few normal houses thrown in here and there, tucked away behind different hills and knolls.One thing I sure hate to do is tell a client the asset is worth more than it is. Hate it. So I spent a long time on that BPO, weighing various factors, and came up with a price that I was sure it would sell by in 30 days. This is in a very desirable area, where there have not been any REOs in recent memory.The listing hit the streets today (not mine): $100,000 lower than what I said in my BPO. Yowza. That ought to sell in a matter of days. I expect I'll see it 'pending' here by this time next week, unless they get multiple offers (very possible) and the process drags on a bit.But it's a point well taken. I have another REO listing - big, beautiful, 5-year old house, the kind that everyone in town wants to buy (if they can afford it). I listed it based on the active comps and recent solds - lower than all the active comps, lower than all the recent solds (most of them also REOs - or short sales). Actually, lower than all solds for all time in that subdivision.And then, one after another, new REOs came on up and under-cut my asking price by 10%. And they went into escrow, blip blip blip. And then the short sales in the neighborhood dropped their price. And now, suddenly, in a matter of 3 weeks, the listing goes from the best priced in the neighborhood to practically the highest priced.The lesson here? Get super aggressive with the pricing. The asset manager sets the price, anyway - better to price it a little low then to risk getting stuck with a listing that can turn out to be priced too high and have everyone beat you on a race to the bottom.
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I don't know if you've been hearing the rumors, but there's a gathering consensus that the sub-prime mortgage market was just the beginning of the REO wave, that next up we're going to see more "prime" mortgage defaults and foreclosures. Check out this article from the New York Times, for example.That's my sense of it, surely. Most of the REO listings I've been getting have been in Watsonville, and most of them, I'd guess, were sub-prime borrowers stuffed into loans they couldn't really afford.Now, I think we're going to be seeing lots more prime-borrowers, stuffed into loans that they could barely afford, but with with Americans being profligate spenders and abusers of debt, they have now borrowed themselves into a hole from which the only escape is foreclosure and/or bankruptcy.I kind of went through a blessed dry spell where I was not really getting many BPOs, maybe just 2-3 a week. I have kind of cut back, anyway, ignoring all broadcast requests and accepting just the BPOs from my bread-and-butter companies who also give me listings.This week, though, I have had as many orders as I've ever had - and, interestingly, many of these are higher-end properties. Some of them are very high-end: estate type properties on acreage, or beach properties with ocean views, etc.Time to wax my surf board and get ready for that next wave, I guess.
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Hey, did you get the invite to sign up for IndyMac's new mandatory training at DefaultSchool? I did, and I'm not even an IndyMac-approved broker! My application is pending, and has been for some time now. Fortunately, I am already and REO Default Certified Professional with DefaultSchool, so all I had to do is fork out $399 to take the IndyMac Policies and Procedures course.Of course, right after getting my cert, I e-mailed it off to IndyMac along with my existing RDCPro Certificate from DefaultSchool. Apparently all brokers who want to work wtih IndyMac have only until August 25 to complete the training to remain eligible to list and sell IndyMac properties.I heard a lot of whinging and moaning on various mailing lists and forums and such from people who think it's a waste, a rip-off, a scam, whatever. That, or IndyMac is looking to separate the wheat from the chaff.Me, I'm wheat. OK, I'm either wheat, or I'm just $399 poorer. How about you?
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The other day, I got a new property assignment. "Hmm," I thought, "that address looks familiar." Turns out, I had done an interior BPO on the property back in December of 2007, for a short sale. That was kind of a puzzler - I know I turned in a value higher than the contract price (the seller's agent met me out at the property and said, hey, this is our contract price) - but considering the location and lot size, the value I gave it was fair to all concerned.But OK, say that my valuation was hire than the contract price, and the buyer was not willing to come up. Strangely enough, this property was never listed for sale on the MLS. Incredible. Here you are, facing foreclosure - and you're not going to list the property for sale on the MLS to at least even try to get out from under a foreclosure?The whole strategy of "pocket listings" of short sales kind of confuses me, to be honest. I really think a Realtor is doing a disservice to their client by keeping a short sale a secret. Perhaps in some cases the client insists that nobody know - but c'mon, what shame is there in doing a short sale these days? About 1/3rd of all the listings on the MLS in my area are short sales or straight-out REO properties.Hmmm. Well, I've ended up with what should be a nice listing in a popular area. So thanks for that, but I'm sorry things had to work out this way. Now instead of being the nice Realtor who came to take pictures of your house to help you get out from under this burden, I'm the nice Realtor who's going to negotitate a Cash for Keys to get you out of the house. Sigh. All in a day's work, I guess.
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When you think of a REO Agent, what image pops in your mind? Do you see some well dressed, luxury car driving, wildly sexy, speak with a foreign accent Realtor or is it more of a blue jean and polo wearing, pick up truck driving, only sexy after a few drinks, sounds like they just walked off the farm Realtor?
The reason I ask is because, I recently walked into a group of older, mature no less successful than myself Realtors only to discover, my “image” didn’t fit their crowd. It was obvious to me when I pulled up to the meeting I was attending and saw nothing but, Mercedes, Jaguar and Lexus in the drive that I was going to truly be out of my element but, I was going to face this demon head on.
You see, even though I can afford those things, I have had plenty of success in real estate and, still am. I choose to be much more restrained with my image due to the fact, I purposely want to break the stereotype that surrounds my profession. You know the stereo type, the one about how Realtors don’t work but make lots of money and take ego centric pictures of themselves to put on their business cards………yeah that one. I hate this stereotype with a passion, especially as a REO Agent because, REO’s take much more work than your standard listing.
So, after my meeting, I realized this group just wasn’t my crowd or my cup of tea and, it was time for me to make a gracious but, quick get away, so out the door I headed and, to my surprise, I heard my name bellowed out in the back ground. Ready for a confrontation I turn around and see one of those pretentious rick-a-tarts headed my way. He pulls me to the side and says, can you believe this place? I was ready for my practiced answer and said, “No, it’s beautiful but, not right for me” and he said, “me to!” What, was this possible, did I happen to run into someone who felt like me about all this over done hoopla?
Come to find out, he was in town from Georgia and preparing to move his family up here to Tennessee. He mentioned that after attending this “meeting” we were at he was concerned that he wouldn’t be able to do business up here in Tennessee like he did in Georgia, which to him was more laid back and welcoming. After a tour of my office I changed his perception and now a couple of months later, I am realizing that my perception has changed as well.
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According to a recent report by Managing REO Online Magazine dated July 9, 2008 Volume 3 Issue 8
Link: (http://www.managingreo.com)
“Housing starts in 2008 are expected to be 36% lower than 2007 levels, creating three straight years of decline.”
Contrary to what you may hear from bullish or optimistic real estate industry guru’s the state of our national economy, credit crisis, high housing inventories, fall of the sub-prime market, closing bank lending operations and finally a lack of an effective energy solution to soaring gas prices will continue to plague the minds of credit worthy buyer’s and keep them from purchasing a home.
In most markets we are seeing increased inventories due to continued foreclosure. In Tennessee alone at the start of 2nd quarter 2008 we saw foreclosure housing inventories totaling approximately .66% and at the end of 2nd quarter it was up to 1.53%, which is a dramatic jump. To put this in perspective, this jump equates to almost a third of the entire housing inventory across the state.
As you can imagine, with this much inventory on the market, housing prices are falling. Comparably, Tennessee hasn’t suffered nearly as bad as other states like, California, Florida, Nevada and Arizona however, try telling that to the homeowner here in Tennessee who is out of a job and has found work in another state. Not to mention, if he bought his home in the past 3-5 years, he may not have enough equity in the home to sell it for the amount owed due to falling home values. Short sales or even foreclosure becomes the only solution for many.
So, if you are ready to buy and are credit worthy, deals are out there to be made! Buyer’s can afford more home now than they have been able to in the past 5-7 years. If you plan on staying in the home for at least 5 years, most likely you will be able to weather out of this real estate storm and end up big winner when ready to sell. If you’re looking at purchasing a home now and may end up moving in the next 24-36 months, you might be off better to rent. In my opinion, it is going to take 2-3 more years before we see the light at the end of this tunnel.
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So the other day, I was supposed to do an Interior BPO for a listing that got assigned to another one of them infamous out of town agents. It was over the 4th of July weekend, actually - I had called on Thursday, no answer from the Interior contact (the out-of-area REO agent). So I drove by, because I know that this agent uses pretty much the same combo lockbox code all the time, figured I would see if that worked.But lo and behold, the house was not vacant. Totally occupied. I called again, left another message. Needless to say, I didn't get a call back that weekend, not until Monday. Turns out, they had made a mistake and reported it as vacant when in fact it was inhabited."Any idea when they'll be vacating?" The client wanted to know if the listing agent would somehow be arranging interior access. "Well, no, you see, they don't speak any English, and we don't speak Spanish. We'll need to find a translator to help negotiate a Cash for Keys."Grrrr. I speak Spanish. Me. Me. Give. That. Listing. To. Me. I'll. Handle. It.Thanks. I feel better. :)
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Yesterday, I was assigned a new property out in the country. I drove out there after completing a Cash for Keys with a property closer in to town. I approached the subject property and parked outside the driveway. There was a big truck parked by the side of the house - but it was a commercial vehicle, not a personal vehicle. I went down and knocked on the door - nobody home, but by all appearances, someone was still living there.I went back to my car, grabbed my camara, and took a bunch of pictures. I got back in my car, and saw that a neighbor lady had come out of her house and was kind of standing by the side of the road, looking like she wanted to talk to me. I pulled up to her, opened my window, and said, "Hi!"She asked why I was taking the pictures? "I'm casing the joint," I deadpanned. Ha ha, no, just kidding - I'm a professional, not a comedian, and certainly not a professional comedian. No no, what I really said was, "Well, it looks like your neighbor here lost the house to foreclosure."Thereupon we embarked upon a little friendly conversation about the wave of foreclosures that is going on, how bad the economy is, how this particular neighbor had been having problems for a long time (divorce, apparently), etc. We spoke for a few minutes, and I gave her my card, and said not to worry, the house wouldn't be boarded up, it will probably be sold pretty quickly, and hopefully the property will be sold to some sold owners. I asked her to please call me if she sees anything funny going on over at the house.And with that, I drove away. As sometimes happens, though, I started to wonder - did I get the right house? What if I made a mistake, and that wasn't the right address? I would have just posted an occupancy check notice on the door of some house that wasn't foreclosed on, and told the nieghbor lady that the house had just been lost to foreclosure! D'oh!And then this morning, as I'm sipping my coffee, browsing my RSS New Reader, I see a story in the local newspaper:From [The Santa Cruz Sentinel - Oops! Foreclosure notice in error]Bob Richter was puzzled when a man rushed up to his home in Santa Cruz Gardens one Saturday and posted a foreclosure notice offering him cash to turn in his house keys. The man took a photo of the posted notice, then left.Richter and his wife bought the house in 1977, and the mortgage is paid.It turned out the posting was in error.I hate it when that happens! Actually, it's never happened to me - the occupant of the house did call me a few hours later, and we've already worked out a cash-for-keys deal, so as soon as the lender sends over the task to work it out, I'll reply immediately with the details and get the ball rolling on it. All in a day's work.Happy 4th of July everyone!
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