November 21st, 2011 by Harvey Blankfeld
Short sales are unique in a lot of ways. One way they aren’t unique here in Las Vegas is that the bank holding the lien will want fair market value for the home. The lien holder will recognize that they need to offer some discount for the inconvenience, but that discount is usually in the form of buyer closing costs or a couple of percentage points off the fair market value.
When we receive a low offer on our listings, we will counter back to a price that we deem a good value to the buyer and reasonable to the lien holder. We also counter out the costs that we know the lien holder will not allow and we counter with information to the buyer and buyer’s agent that enables us to know that the buyer fully understands the nature of short sales. Sometimes the buyer decides to reject our counter. That’s OK because it’s likely that buyer wasn’t going to be patient enough to endure the process. We would rather leave the home on the market to attract another buyer that will endure and help us to close the escrow. If the buyer agrees to our counter offer, then we know we have a quality buyer that will be there when we get an approval from the lien holder.
When I’m working with a buyer that chooses to make an offer on a short sale, I will pull the comparable sales to evaluate the fair market value just like the lien holder will do upon receiving the offer. This gives my buyer the information well ahead of a counter we may get later in the process. My buyer will be prepared for the idea that the lien holder will likely counter back at a number that is close to fair market value and my buyer is prepared to accept that counter and proceed. If the lien holder doesn’t counter and accepts my buyer’s offer, even better! My buyer gets the great deal!
Tags: banks, buyers, buying homes, downward market, economy, foreclosure, hardship, inventory, las vegas, lenders, market, negotiate, negotiator, North Las Vegas, opinions, real estate, realtors, sellers, selling homes, short sales
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February 16th, 2011 by Harvey Blankfeld
Available inventory remains stable. Prices remain stable for listings under $200,000. Listings above that are still experiencing some small drops. Short sales dominate our market but traditional sellers are making up a bigger portion of our current inventory than we’ve seen in recent years. We’ve seen some small improvement in appraisals where the appraisers seem to be giving value to the condition of the property.
Tags: banks, buying homes, home appraisals, inventory, las vegas, market, negotiate, real estate, sellers, selling homes, short sales, trends
Posted in Las Vegas Home Appraisals, Las Vegas Home Sales, Las Vegas Short Sales | No Comments »
October 15th, 2010 by Harvey Blankfeld
We are seeing a recurring issue in trying to close deals when there is a third party approval required (Short Sale). The lender (servicer, investor, MI company, etc) is countering the offer with an inflated value on the property. When we challenge the counter by pointing out that the comparable properties don’t support their inflated counter offer the lender invariably replies that the value was based on their appraisal. I find that reply to be somewhat insulting, but I can’t challenge it. I also believe that more times than not it’s actually not an appraisal but a BPO (Broker’s Price Opinion). That means the bank asked another Real Estate agent about the value and paid a minimal amount to get it. Then again, the bank might just be pulling a number out of thin air and claiming it’s an appraisal as we would never actually see the appraisal.
The way we have succesfully moved forward under these circumstances is to encourage the buyer to accept the counter and invest in an appraisal from their own lender. We sometimes extend the buyers additional diligence so they don’t have to spend money on an inspection if they don’t go forward on the deal. What this does is gives us an actual appraised value on the home and the lender that has to approve the short sale is faced with the reality of that appraisal. The short sale lender has reduced to the appraised value each time we have done this and the buyer has been able to close the deal at a true value.
There is some risk on behalf of the buyer, because if the appraisal comes in at the inflated number, then the buyer has to choose whether to move forward or not. I would point out that if an appraiser brought in the value, it is most likely accurate as most appraisers these days find it very easy to bring values in low.
Just another twist in our ever evolving real estate market!
Tags: banks, buyers, home appraisals, las vegas, lenders, negotiate, real estate, short sales, trends
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October 8th, 2010 by Harvey Blankfeld
While I believe this a question for someone’s attorney, I believe that the answer is very often going to be yes. I have lately been listing homes for clients that have come out of bankruptcy and decided to sell their homes through a short sale. The reasons vary but mainly they came to the conclusion with the advice of their attorney that they had little to loose and the a short sale will look better on their credit report long term than a foreclosure. It turns out that a foreclosure is more negative on a credit report than a bankruptcy. Furthermore, a short sale will look better than foreclosure as well.
Each state has different rules regarding deficiency judgements, but here in Nevada, the banks can file deficiency judgements on either a foreclosure or a short sale. They have more time on first trust deeds when you do a short sale but the time they have on seconds or HELOCs is the same with either a short sale or a foreclosure.
Ultimately each individual homeowner must evaluate their own circumstances to make the correct decision, but remember that just because you go through bankruptcy doesn’t mean that foreclosure is your best option. Please consult with your attorney and remember you can choose your own Realtor to do the sale and you should select someone with good experience at short sales and someone that has a good record of success with short sales.
I heard a statement from an attorney friend of mine recently and I thought it quite poignant: “Short Sales aren’t about homes or about mortgages, they are about life and moving forward”.
Tags: bankruptcy, economy, foreclosure, hardship, las vegas, lenders, negotiate, real estate, sellers, selling homes, short sales
Posted in Las Vegas Foreclosures, Las Vegas Home Sales, Las Vegas Short Sales | No Comments »
March 25th, 2010 by Shelley Brown
Years ago, when the world was in balance and real estate agents were in step with each other, an offer was written for a client and then presented to the seller. The offer was either accepted, rejected, or countered in a timely manner. Everyone knew what was going on and the clients viewed the agents as professional, responsive, and knowledgeable.
Now that banks control a large portion of our market, the agents have educated the buyers to know that it may be weeks for a reply or you may never hear at all! (The listing status may just be changed to “no longer available” in the computer). Why are we dealing with short sales in the same manner which is disrespectful to other agents and their clients?????
In a short sale, the seller of the property (NOT the bank with the mortgage!) signs the offer. Have we not prepared our sellers to be available to accept an offer?? The seller should be encouraged to sign an offer with a buyer that has these important qualifications:
1. Time to wait for the short sale to be approved.
2. Education that some of the costs they ask for may be turned down by the bank approving the short sale.
3. An “at list” offer- not a crazy bidding war offer. The bank with the short sale may ask for more so the buyer’s agent needs to prepare the buyers that they may have to increase their offer.
4. A professional agent that addresses the above items in the letter accompanying the offer.
5. An investor’s offer may not be the best offer because generally, they are making more than one offer.
6. Finally, EARNEST money with the offer and a willingness to place it in escrow!
Let’s answer (in a timely manner), the buyers that are willing to give us an offer that comes closest to meeting the criteria above! Let’s see some professionalism in real estate in cases where we have some control.
Tags: agents, banks, buyers, buying homes, downward market, las vegas, market, mortgage, negotiate, real estate, sellers, selling homes, short sales, trends
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January 25th, 2010 by Harvey Blankfeld
Today I find myself writing this blog to relieve the stress of dealing with a bank on a short sale. Now I believe that just about everyone understands that Short Sales are difficult. They are difficult on sellers, buyers and agents. This short sale however is not only difficult, it just won’t go away.
In May of last year we took a listing. It was a short sale and the owner was very concerned about the time it would take and the toll it would take on her life. We received an offer in June and submitted the package to the bank for approval. We toiled for 5 months with the bank and got re-routed, re-started, re-negotiated and just regurgitated until in December we caught a break.
My client, the seller, met a lady that knew someone that knew someone else that might be able to help us. At first I thought it was just a hoax to get my client to send a check to someone, but it wasn’t. The man we found out was a big shot at the bank and he looked into the deal and got it approved in about 48 hours.
We proceeded to closing with great haste as we thought we were just dreaming and didn’t want the bank to re-something to us again. The good news is the deal closed in December. You would hope this story would end at this happy albeit drawn out point. Unfortunately it doesn’t end here.
Just today 1/25/2010, I get a call from the buyer’s agent. She is panicked and doesn’t know what to do. The buyers have received a letter from the bank telling them that the home is going to be auctioned on the courthouse steps on February 12, 2010. The buyers naturally told the bank that they had just purchased this home from them and they paid cash. The bank told the buyers, they must be mistaken and they should bring the account current or suffer the consequences of a foreclosure. The buyers spend the better part of the day talking to various people at the bank and trying to get them to understand that they are making a horrible mistake. The bank continually reminds them that they need to get the balance paid or suffer the ordeal of being put out on the street.
When the buyers agent called me to tell me this story, I let her know that I wasn’t sure what we could do, but we would certainly try to explain the situation to the bank and get them to understand. I had heard of a similar circumstance from a colleague, but I wasn’t really certain what to do. We called earlier today and they sent my assistant on a wild goose chase of transfers and disconnects. I then called the bank myself and was subjected to the same typical re-routing. I eventually got a person to actually listen to the situation. She then, to her credit, got her supervisor involved and I got to have a civil conversation with a person that would save them from terrible embarrassment, not to mention potential litigation.
The supervisor dug into the file and discovered that the negotiator that was handling the Short Sale never closed the file. She never let anyone else know that the money was received and the home had been recorded in the new buyers name. This is the same negotiator that dragged the process on for more than 5 months with no progress. I know the banks have it tough with so many people attempting to sell their homes as short sales, but they must be more professional, and they must be at least efficient enough to actually close a file properly and not subject a buyer to this kind of scare.
The buyer is very relieved and actually having a good chuckle about it now, but I would be willing to bet the bank wouldn’t be laughing had they actually sold the home again and put this owner out. I bet the bank would have been subjected to a significant financial hardship of their own.
Tags: banks, buyers, ethics, foreclosure, hardship, las vegas, lenders, negotiate, real estate, sellers, short sales
Posted in Las Vegas Short Sales | 1 Comment »
January 24th, 2010 by Shelley Brown
A fable according to Webster’s Dictionary is “a fictitious story meant to teach a moral lesson”. Aesop is the best known fable writer and most of us are familiar with his stories such as “The Tortoise and The Hare”. A lesser known fable is “The Wolf and The Crane”. For the purpose of my fable, the leading roles will be played by The Homeowner (the Crane) and The Big Bad Bank (the Wolf).
The homeowner purchased her home at the height of the Las Vegas boom. She scraped together her down payment and stretched her budget to the max. Times were good and it seemed like the right way to go before the prices got higher and homes were out of her reach. She was able to afford a $250,000 home. Her mortgage was adjustable and the payment barely affordable, but with both her and her husband’s salaries, they could make it. Of course, her credit was spotless. The American dream was realized.
After they settled into their home, they worked hard on finishing it with backyard landscaping, a covered patio, and all the things they felt they needed to make it a home. Things were going great. Then, WHAM! Las Vegas was changing- times were tough, business was off, and consequently, her husband was laid off. She was lucky – she had a great boss who cut everything else but kept her at her current salary. In addition to her husband’s layoff, her loan rate adjusted and her payment went up. Her neighbors also hit on hard times and abandoned their homes. The average $250,000 price in her neighborhood dropped to $95,000.
She was in a quandary. Should she join the group of neighbors and go into foreclosure or try to do the “right thing”? She had heard about this new thing called a “loan modification”. She contacted The Big Bad Bank and the process began. She filled out all the paperwork and had the right qualifications. It looked like a sure thing.
After several months, lo and behold, her loan modification was approved! Her payment was reduced $500!! Now, remember her loan period was extended another ten years, but it still seemed like the right thing to do. She began to pay the lower payment as they instructed. Being a vigilant person with regard to her credit, she decided to check her credit report after three months. The Big Bad Bank had reported her late to the credit bureau THREE TIMES!
When she called, she was told that her loan modification was a “trial” or “temporary” modification. She said, “But I paid what you asked!” The Big Bad Bank said, “But you paid less than your original agreement. We accepted it but it was not what you agreed to when you bought the house.” The homeowner is disputing the late payments with the credit bureau and is hoping for the best.
This homeowner was trying to do the right thing. The moral of the fable “The Wolf and The Crane” is “In serving the wicked, expect no reward, and be thankful if you escape injury for your pains”. The moral of my story is “When you try to do the right thing, the wolf still may eat you”.
By the way, This story is NOT fiction…
Tags: banks, downward market, ethics, hardship, lenders, loan modification, market, mortgage, negotiate, negotiator, trends
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January 11th, 2010 by Shelley Brown
My mother was a teacher. She always made sure her children did their homework every night- NO EXCUSES! However, I do remember kids who never had their homework done and always had some sort of an excuse such as “I couldn’t find a pencil”, “No one at home would help me”, etc. It was never believed or tolerated by any savvy teacher. The teacher was in control, not the students.
We are in an era of a new kind of real estate where we ask for the cooperation of a mortgage holder to allow us to sell a house (that has dropped so much in value) for less than the homeowner owes on the property. The homeowner is put through a grueling process and must provide detailed financial information as well as a hardship letter about why he needs to sell. At best, the process is difficult for all parties involved. The real estate agent spends hours on the phone (many of them “on hold”), the seller never knows when he has to move, and the buyer doesn’t know if he is even getting the house!!! Patience, patience, patience is required.
The banks have taken a difficult process (like homework) and made it a ridiculous farce. I have decided to write what I believe to be are the Top Ten Reasons Why A Short Sale Takes So Long. I am using some of the exact quotes we have been given by negotiators, customer service representatives, and any idiot at the mortgage company who happens to answer the phone.
#10. “We are missing the authorization to speak to you and we have to start over again”. (Even though we have faxed it 10 times and have the confirmations to prove it)
#9. “The computer crashed and we lost the file. We have to start over again”.
#8. “You have been assigned a new negotiator and we have to start over again.”
#7 “Our phone system is having problems and you are talking to someone in Texas when you need to speak to someone in California. Call next week and start over again.”
#6. “We converted the files to a new computer system and we have to start over again.”
#5. “We closed our company and transferred the file to another mortgage company and we have to start over again.”
#4 “We changed the loan number and we have to start over again.”
#3 “We merged with another company and formed a third servicing company and we have to start over again.”
#2 “We never got access to get in to do the appraisal and we need to start over again.” (Access to vacant land? Where is the front door?)
And the NUMBER ONE REASON short sales take so long…
#1 “The dog ate the short sale package and we have to start over again!”
Seriously, we really have heard most of the reasons above. We cannot understand why the banks are making the process so difficult and often buyers and sellers take their frustrations out on their agents. We all have to be patient and graciously “start over again” when the banks ask us. The banks are in control, not the agents. Remember the race with the tortoise and the hare? We all need to act like the tortoise and just keep moving to the finish line of the race and have a successful closing for both the buyer and the seller. In essence, short sales are never really “short”!
Tags: agents, banks, buyers, downward market, hardship, las vegas, lenders, mortgage, negotiate, negotiator, real estate, sellers, short sales
Posted in Las Vegas Short Sales | 1 Comment »
