Short Sale Help?

Word is that the federal government will soon be coming out with guidelines meant to standardize and streamline how short sales work.

For the record, nothing could make most real estate agents (and short sale buyers and sellers) happier than a better process.

Unfortunately, I have absolutely no faith that it will happen. The guidelines, like most of the government plans around foreclosures thus far, is going to take a carrot approach, with incentives for banks to cooperate. I'd be willing to wager a fair amount of money that the banks could care less about any incentive offered. The money involved is likely to be miniscule from the banks' perspective.

Let me also say that I'm a little offended by the concept. So these banks have billions of our tax dollars to save them from their own stupidity (and to keep us from going over the cliff with them) and now we have to bribe them to play nice?!

Seems to me California has a better idea here. They've passed new regulations that a bank that has gotten all the documents on a short sale, including the draft HUD1, must produce an answer in four days! And, if they don't there are penalties.

To give you some sense of perspective, if I get a response from a lender within 6 weeks, I do a dance of joy! Everyone has stories of banks that didn't respond for well over four or five or six months!

There has to be a better way. And I'd love to believe that the Federal Government is about to roll that out. I'm just not that gullible any more!

Property Management Dilemna

I was talking to another agent about a potential property management opportunity this week. The potential client has seen an ad for another agency here in Virginia that guarantees to pay them rent, whether they actually rent out the property or not! What a deal! She wanted to talk about how I would compete against that kind of offer.

It's an interesting question both on a macro and a micro level.

First of all, I really thought that one of the lessons we've all learned over the last year or two of the markets melting down, is that things that seem too good to be true probably are. Seriously, if someone is giving you money without receiving anything in return, there's a problem!

Looking at this particular case, here is what I'd be concerned about.

First of all, trust me, there's some fine print here. You should read very carefully anything you sign. Specifically you should look at who decides what the rent will be. Can they cut the rent so they can get someone in there quickly and they can stop paying you without any income coming in? Who decides whether a tenant gets accepted, you or the property management company?

Think for a minute about the incentives that are now driving this property management company. When I help my clients find tenants it is definitely in my best interest to get them a tenant who will pay the rent every month and take good care of the property. Because if those things don't happen, they're going to be my headaches.

But if this company is paying out rent every month without a tenant paying anything, their biggest incentive is to get someone, anyone in there as quickly as possible. They need to stop the bleeding. No business survives with a negative cash flow for any length of time.

I believe it also shifts the property management company's focus off of their clients. It's hard to be focused on protecting your clients when you're bleeding red ink.

I don't like this business model and suspect it's not really in anyone's best interest. But they've created a nice, shiny, pretty package if you're a property owner looking to rent out your property.

Again, if it looks too good to be true, be very, very careful! A lot of people who have lost their homes to foreclosure in the last few years would echo that advice.

Don't Take No For an Answer

As this story today on NPR's Morning Edition makes clear, the banks still don't seem to have the hang of this whole loan modification, even after a couple of years.

The key take away for me is that you should never assume that the answer is "no" until you've heard it multiple times.

If you're in danger of losing your home, fight and then fight some more! You never know when the person at the other end of the phone simply got it wrong or was too lazy to do the work to get it right.

Keep asking, escalate to a supervisor, ask for help from other organizations.

Don't give up!

Starting Over

In a year when there is so much hardship, personally and financially, it's good to be reminded that failure is just a temporary state of affairs. I ran across this blog post and had to share it with you all!

I hope it lifts and encourages you!

The Bad Old Days

Once upon a time, if you could fog a mirror a lender would give you a pre-approval letter. Heck they'd probably even give you an approval letter. Now that letter wasn't worth the paper it was written on. But that didn't stop anyone.

No one is a fan of the real estate collapse, certainly not me. But I was very glad to see the end of worthless lender letters.

But...they're back! I've experienced this first hand myself and also started to hear the stories again from other agents.

So, if you're a buyer, be careful who you're doing business with! A lender who leaves you standing at the altar within a few days of closing can cost you serious money or even lose you the house you're trying to buy!

Call me if you want some help with a list of good, local lenders. (I have a strong preference for local so I can hunt them down if something goes wrong!)

We're in The Money!

I wish I was writing to tell you all I won the Mega Millions this last week. No such luck! But Fauquier & Culpeper county are a little richer thanks to the Neighborhood Stabilization Program. Fauquier County was awarded $1.5 million. Culpeper got $1.2 million. The money will be used to buy, rehab and resell foreclosures in neighborhoods hard hit by the real estate downturn.

In Fauquier that means the southern end of the county. In Culpeper think Lakeview for sure.

I got one thing wrong in my earlier blog about this. I thought it would be too late in the process for them to get the money. They met the deadline but given the money already awarded and the competition I really didn't think Fauquier & Culpeper would get any.

It's too soon to know if I was right about my other reservation. The foreclosures are getting fewer and fewer and almost always involve bidding wars these days. It'll be interesting to see what the counties are actually able to purchase with this money.  There are plenty of short sales, just not so many foreclosures these days.