Sep. 19, 2009 - What You Need To Know About Short Sales

While this information can go for any market in the US if you want to know about Las Vegas see http://comehometolasvegas.com  and if you want to know about Summerlin Real Estate see http://realsummerlin.com

If you are considering making an offer on a pre-foreclosure, short sale home. Keep in mind very few can close in 30days or less.

Home buyers wait could be 4 to 6 months to close on a short sale, sometimes longer. I have had clients that have waited as long as a year. This is great if you have no need to move quickly.

A short sale means the seller's lender is accepting a discounted payoff to release an existing mortgage. Just because a property is listed with short sale terms does not mean the lender will accept your offer, even if the seller accepts it.

If there are two loans, this could be a real problem. The seller will have to get permission from both lenders. The second very often loses out all around and may not agree unless the first lender offers something to them.

A lender is unlikely to agree to a short sale unless the seller has no equity and is unable to repay the difference between your sales price and the existing loans.

A lender will not even look at a short sale until there is an offer made on the property. If the home is close to going into default and there are two different departments working on the same property, one might not know what the other is doing. Be sure that your agent checks to make sure everyone is on the same page. I know of one transaction where the short sale was approved but the home still went on the auction block because there was no communication between departments.

Make your offer contingent upon the lender's acceptance. Give the lender a time frame in which to respond, after which, you will be free to cancel. The lender and the selling agent need to be under some pressure to make sure your offer is in the right hands. The hands of someone who can make a decision. Some lenders have to submit to a committee but most can make a decision within two to three weeks and either accept or send a counter offer.

Some short sales are priced ridiculously low. This is partly done to get some offers and the short sale process started. They are usually so low that the lender will NEVER accept them. If this is the home you really want, to get your offer accepted, it will need to be priced near market value. If you're not prepared to pay above a superficial price on a lowball listing then walk away now and save yourself time and frustration.

Mar. 13, 2009 - Las Vegas Short Sales

Las Vegas Short Sales

There are quite a few short sales not only in Las Vegas but all over the United States.  Only 10% of the homes that are listed as short sales will actually close.  That is not a real high number.  Right now today in Las Vegas there are a total of 27,623 properties for sale this includes all pending sales and contingent ( on pending and contingent properties there is an offer) so to break it down more leaving out the pending and contingent there are 19,325 properties and of those 6,789 are short sales.  Of  the contingent properties 5,030  the number of short sales are 2,332, so these properties are sitting there with an offer on them waiting for lender approval.  The pending which are hopefully ready to close there are 3,270 properties and 272 of those are short sales that have gotten approval.

What do you need to know before you try to short sale your home?  You can be up to date on your payments but show by your hardship letter that you can not do it for long.  Your hardship letters should be as detailed as possible.  To do a loan modification you must be 3 months behind in your payments.
This may change as the Obama plan is put into use and MAY is the key word.

You have to have an offer on your home to apply for the short sale with the lender.
 

When you get an offer and your agent puts in for the short sale approval (if you are behind on payments) be sure that your agent not only talks to the loss mitigation department but also the foreclosure department.  They do not always talk to each other and the foreclosure department needs to know there is an offer as it can stop the foreclosure while the negotiations go on.  You do not want a notice of default to be filed.

Lenders expect 3-7% of loans will go bad and investors are also aware of it.  Investors now have lost a lot more than that as figures show 28% of the nation is underwater and upside down.

If you need to sell your home in a short sale be sure you work with an agent that is experienced in short sales as they can be very tricky and an agent that knows and is on good terms with the lenders is much more likely to have the short sale go through.

Feb. 9, 2008 - Short Sale Refi's

Short Refi's

On January 19Th 2008 I read an article written by Jeff Lazerson founder and president of an on line brokerage Mortgage Grader on BankRate.com .  I have put off writing anything about it in hopes that more people would be talking about it.  I have been talking to other Realtors® about this for at least 6 months.  As prices keep going down in the Las Vegas area, my heart aches for the people who are going to lose their homes and because they are behind in their payments, their credit is in the toilet and they can not get refinanced because of that.
In Mr. Lazerson's scenario lenders would refi what the house is worth now forgiving the difference.  The only question I have is what price drops would they use?

I have some clients that paid $790K for a beautiful home.  I ran comparatives for them yesterday and that Max comparison is $649K which is down $141K.  But the median is $550K which is a whopping $240K difference.  WOW.  So what price would the lenders use to refi? If my clients could refi at say 6% for $550,000 they could make the payments and not lose their homes.  If something like this does not happen for them they will lose their home. 

Wait though, are you thinking about the counseling and offers to freeze rates at an introductory rate for 5 years?  Why would anyone do that when their homes are not worth what they paid for them.  Sure real estate has always had their ups and down but $240,000 drop in a year?

Who is to blame for all this?  Greedy lenders?  Builders creating scarcity?  Investors driving up prices?  I really hated that period when a home would only be on the market 5 minutes.  I had to beg a seller once to let us come and look at his house at 7am in the morning and stand in his kitchen to write the offer. 

Even after the foreclosures stop appraised values are going to take many years to go back to where the value is back in these homes.

Read the BankRate.com article and give me your thoughts.