High-end Seller's may finally have something to smile about with regards to sales in the $1 million-plus-market. Everyone has been waiting for some good news and it seems that the tide has started to turn...slowly, at least. Sales in the higher end showed a 42 percent increase from August to September and were up a whopping 170% over the same time last year as reported by MSC.
The market has also seen the number of pending contracts increase, too. Nearly a 77% increase from last year.
What is also interesting is that home sales are down 23% from last year. This suggests that the market is continuing to find its balance. If these numbers hold true, we are likely to see small increases in property values.
With a strong inventory of homes over $1 million dollars, Sarasota is primed to move a large number of homes during the upcoming season. And with rates hovering around 4%, there may not be a better time. People will look back in 5 years and will look like geniuses.
Thursday, October 20, 2011
Monday, October 17, 2011
Importnat Information about Bank Of America Short Sales
Both Buyer's and Seller's are always looking for more information about the short sale process and how they work so that they can have their eyes wide open when they choose to sell their home as a short sale or what they need to know when entering into a contract to purchase a short sale. In either case, you may sometimes need the patience of Job. I have had a short sale take as long as 16 months, or I have seen approvals in less than a month.
Here are some details as it regards to Bank of America Short Sales:
1. They want to know there is a TRUE hardship and the net proceeds are very important.
2. Investors do not care if it is a cash transaction or financed.
3. Case loads, at the height of the crisis, were nearly 600 per agent assigned to a file. that number has dropped to just over 100 cases per negotiator.
4. People want to know how long the process will take. The average number of days from start to an approval is about 50 days. HAFA (Home Affordability Federal Assistance) can take almost twice as long or longer.
5. Borrowers in the HAFA program usually receive $3,000 for relocation. Those funds can now be used to pay off 2nd liens, HOA fees, money used towards the deficiency, etc.
6. BOA has a new program that they have rolled out where they are offering $20,000 for the Seller to move out of the house. You must not have an offer on the house and you must apply between 9/26-11/30/11. It is a short window of opportunity, but it is a great incentive to move.
7. A great number of people are not aware that most banks are not the investor with a loan. They are the SERVICER of the loan and really stop making money once the loan has stopped being paid. A loan may have more than one investor. It could be a pension fund in Australia that only meets quarterly and therefore, it take a great deal of time to get these transactions completed. Some investors cannot agree on an acceptable amount for the short sale. Once you counter on an offer, it may involve several parties that need to agree in order to get a final approval.
8. Structural damage to a property requires that the Seller file a claim with their insurance company in order to have repairs completed prior to a sale.
9. A BPO (Broker's Price Opinion) is completed once a contract is in place. These will normally be valid for 90-120 days. Banks will also complete full appraisals on certain properties. As a Buyer or Buyer's agent, the BPO is the property of the banks and will not be released.
As I have seen over the past few years, these rules are always in flux. They can change daily. But, if you are patient enough, there are some very good deals in the Sarasota market.
Here are some details as it regards to Bank of America Short Sales:
1. They want to know there is a TRUE hardship and the net proceeds are very important.
2. Investors do not care if it is a cash transaction or financed.
3. Case loads, at the height of the crisis, were nearly 600 per agent assigned to a file. that number has dropped to just over 100 cases per negotiator.
4. People want to know how long the process will take. The average number of days from start to an approval is about 50 days. HAFA (Home Affordability Federal Assistance) can take almost twice as long or longer.
5. Borrowers in the HAFA program usually receive $3,000 for relocation. Those funds can now be used to pay off 2nd liens, HOA fees, money used towards the deficiency, etc.
6. BOA has a new program that they have rolled out where they are offering $20,000 for the Seller to move out of the house. You must not have an offer on the house and you must apply between 9/26-11/30/11. It is a short window of opportunity, but it is a great incentive to move.
7. A great number of people are not aware that most banks are not the investor with a loan. They are the SERVICER of the loan and really stop making money once the loan has stopped being paid. A loan may have more than one investor. It could be a pension fund in Australia that only meets quarterly and therefore, it take a great deal of time to get these transactions completed. Some investors cannot agree on an acceptable amount for the short sale. Once you counter on an offer, it may involve several parties that need to agree in order to get a final approval.
8. Structural damage to a property requires that the Seller file a claim with their insurance company in order to have repairs completed prior to a sale.
9. A BPO (Broker's Price Opinion) is completed once a contract is in place. These will normally be valid for 90-120 days. Banks will also complete full appraisals on certain properties. As a Buyer or Buyer's agent, the BPO is the property of the banks and will not be released.
As I have seen over the past few years, these rules are always in flux. They can change daily. But, if you are patient enough, there are some very good deals in the Sarasota market.
Thursday, October 13, 2011
Inventory of Homes on the Decrease
I remember the year well. It was September of 2007. I had gone to do some research for a client in the realtor's MLX system, a system that lets us track information about the number of listings that are on the market. It was a quiet morning until I hit the button that showed me how many total listings there were in Sarasota County. the search included all active listings of single family homes, vacant land, condos, etc. The number that appeared was so unbelievable that I started my search over again in the hopes that I had been tricked by the data I had inserted. Same data had the same results: 17,823 listings. The numbers were so staggering that I turned off my computer. At that rate, the time that it would take to sell all the inventory at the rate of absorption for 2007, it would have taken over 3 years to sell all the inventory. That would have to take into account that no other listing would come on the market during that same time.
Fast forward to September 2011. In Sarasota County, there are 6,305 homes for sale verses almost 9,000 last year at the same time. In Manatee County, there are 4,348 houses for sale versus 6,200 last year. In other words, the inventories in our area continue to drop. These numbers are starting to tell us that we are almost at a 6 month supply of homes, a level that is considered healthy. the biggest drops took place in Lakewood Ranch and Siesta Key.
I can;t speak to the number of houses that banks are holding back from the market, but one does get that feeling that housing is finding its footing in Sarasota.
Fast forward to September 2011. In Sarasota County, there are 6,305 homes for sale verses almost 9,000 last year at the same time. In Manatee County, there are 4,348 houses for sale versus 6,200 last year. In other words, the inventories in our area continue to drop. These numbers are starting to tell us that we are almost at a 6 month supply of homes, a level that is considered healthy. the biggest drops took place in Lakewood Ranch and Siesta Key.
I can;t speak to the number of houses that banks are holding back from the market, but one does get that feeling that housing is finding its footing in Sarasota.
Wednesday, October 5, 2011
Shortsale or Foreclosure for the Seller?
Many people today are asking whether they should continue making their payments on their homes. We are tied into the idea that it is the right and honorable thing to do and so much of our identities and sense of self-worth are connected to our credit score. Having a great credit score enables people to negotiate rates and determine what classification of Buyers they wish to be. At the other end of the spectrum, people with lower scores are typically going to pay more for certain items.
Putting all that aside, the question for many people should be: Is a Short Sale of a Foreclosure better for me? The answer seems obvious, but I see so many people ignore the sensible answer. A recent article helped solidify my feeling that if you are able to do a Short Sale, you should. Now, I know everyone has a different set of circumstances, but for the average person, the answer is clear: Short Sale.
Below is an article about this very topic. I hope you enjoy and think twice before just walking away from your mortgage.
Putting all that aside, the question for many people should be: Is a Short Sale of a Foreclosure better for me? The answer seems obvious, but I see so many people ignore the sensible answer. A recent article helped solidify my feeling that if you are able to do a Short Sale, you should. Now, I know everyone has a different set of circumstances, but for the average person, the answer is clear: Short Sale.
Below is an article about this very topic. I hope you enjoy and think twice before just walking away from your mortgage.
Short Sale vs. Foreclosure: A Short Sale Always Wins
We are again honored to have Christopher Reale, Director of Short Sale Operations at Lepizzera and Laprocina Title and Escrow Services, as today’s guest blogger. He is an expert on the short sale process and will share his knowledge with us on a regular basis. – The KCM Crew
Today’s ever changing real estate industry has brought upon some very challenging questions from our clients. We as counselors, want to put forth the best, non-emotional advice that we can, in hopes that we can help our clients and their families navigate the rough waters of the short sale process.
The most prevalent question and one that continues to permeate the industry is:
“Why should a seller go through the short sale process rather than letting their house be foreclosed upon?”
While we cannot speak to every client circumstance, we can say one thing with complete conviction. In almost all instances in which a potential seller is contemplating whether they should short sell their house or let it go through the foreclosure process, a short sale is the better option. The following are examples to consider:
Example A- Short Sale
Mr. Smith owns a home in which he has a mortgage balance of $220,000 and a current market value of $150,000. Mr. Smith has elected to short sell his property. His Realtor successfully obtains a buyer who puts forth an offer price of $120,000 (80% current market value according to Realty Trac Foreclosure Report 5/26/2011). After reviewing the buyers offer and the financial hardship information from Mr. Smith, Mr Smith’s bank agrees to accept the short payoff of $120,000 which would leave a deficiency balance of $100,000.
The transaction closes and is final. Mr. Smith then pulls his credit report 30 days after the transaction takes place. On the report he notices that the mortgage trade line states “Mortgage debt was settled for less than full” and the balance on the mortgage is $0. Mr. Smith is now on the road to financial recovery.
Example B- Foreclosure
For the ease of illustration we will use the same value and mortgage debt amounts as in Example A. However, Mr. Smith has elected to forgo the short sale process and let the bank foreclose on the property. The bank holding his mortgage facilitates the proper legal procedures to foreclose on the property, all of which are costly. Mr. Smith is notified and his property foreclosed upon of which is taken back by the bank to sell as an REO.
Six months later, the bank finally sells Mr. Smith’s home only they sell it for $90,000 (60% of current market value according to Realty Trac Foreclosure report dated 5/26/2011). Remember, as a short sale, the home would have sold for $120,000 keeping the deficiency to $100,000. In addition to the deficiency now being $130,000, the bank has elected to add on legal costs of $15,000 and asset preservation costs of another $5000 for a total deficiency liability of $150,000. Mr. Smith pulls his credit report 30 days after being notified that the bank has sold his property and of his liability.
On the report he notices that the mortgage trade line states “Foreclosure” and the balance is $150,000. Because of Mr Smith’s choice to choose foreclosure vs. short sale his road to financial recovery has taken a major detour. He not only has a foreclosure on his credit report but now has a much larger deficiency balance in which the bank, in most cases, will report on his credit report as a balance owed.
The Best Option is Clear
While the financial and credit advantages are clear when choosing a short sale over a foreclosure, other advantages are sometimes overlooked. The most important of all of them is maintaining the seller’s dignity and peace of mind. We have heard too many stories of families having to leave their homes because of a Sheriff’s order or some other type of legal action. The short sale process alleviates this negative social impact. The process puts the control back in the seller’s hands so that they can get back on the road to financial recovery and start providing for their families. In the battle of the two evils, a short sale always wins!!!
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