As a real estate agent, what do you think is the most important thing to find in a lender?
A lender is his or her own brand. The moment I see a pre-approval letter, I know many things in one instance: Whether or not the deal will close; whether or not the deal will close on time; and whether it will close without hiccups—all because of the person behind the letter. It’s about trust and doing what it takes to get the job done and going above and beyond to be sure it happens!
To do what you say you are going to do is a very important aspect in a lender, especially in this economy where at times it’s hard to get a loan through. It’s about calls, emails, follow up, action- communicating the status of the loan to all parties in the transaction is very important! Also, always be loyal to your lender!
Foreclosure Rate Drops For The 12th Straight Month
Foreclosure activity continues to slow throughout the United States.
According to data from RealtyTrac, a national foreclosure-tracking firm, the number of foreclosure filings dipped below 215,000 in September 2011, a 6 percent decrease from August.
A “foreclosure filing” is defined as any foreclosure-related action including Notice of Default, Scheduled Auction, or Bank Repossession.
September marks the 12th straight month in which foreclosure filings fell year-over-year.
There are several reasons why foreclosure filings are down, including an increase in the amount of time it takes banks to move a foreclosure through its pipeline. It now takes a nationwide average of 336 days from the date of initial default notice to bank repossession.
Some states work quicker than others, however, because of a combination of state law and personnel.
Homes in New York take an average of 986 days to foreclose, for example, the longest in the country. Homes in Texas foreclose the quickest, registering just 86 days.
As in prior months, bank repossessions remain concentrated by state. Just 6 states accounted for half of the country’s REO last month:
- California : 16.6 percent
- Georgia : 8.5 percent
- Florida : 8.3 percent
- Texas : 6.2 percent
- Michigan : 6.1 percent
- Illinois : 5.2 percent
Collectively, these 6 states represent just 36 percent of the nation’s population.
By contrast, the bottom 6 states were home to just 192 repossessions last month — 0.3% of the national total. Those 6 states were Alaska, Wyoming, District of Columbia, North Dakota, South Dakota, and Vermont.
For home buyers , shopping for foreclosed properties can be an excellent way to get “a deal”. Foreclosed homes typically sell at discounts as compared to “non-foreclosed” homes, but are often sold “as-is”. This means that homes listed for sale may be defective or out-of-code.
Before placing a bid on a foreclosed home, make sure that you’re represented by an experienced real estate professional.
What should one consider when placing an offer on a short sale property?
Short Sales have come a long way, especially with so many on the market right now, the process has refined as the number has grown. One of the first items to consider with a short sale is how many banks are involved. There may be up to 3 different banks on any one home! Obviously the more banks there are, the more challenging it can be to close escrow. Also consider which bank(s) are involved is important as well. Each bank has its own criteria which can be a moving target during the process of trying to close the home. Always ask if the listing agent is a trained short sale specialist. There is an art to handling short sales and having a great listing agent who is qualified makes all the difference in the world. If you happen to be first time buyers, my best advice is to stay away from short sales. It’s better to go for a regular sale or perhaps a bank owned property for your first home buying experience!
What exactly is a short sale and how do I know if it’s right for me?
Short sales happen when the loans that are existing on a property do not add up to the current value of the home. When the values in the housing market dropped dramatically many people found that they owed more on their property than it was worth, which is why there are so many short sales on the market currently.
Fortunately, short sales are slowing down; however, it will still take some more time to cycle through as the market recovers. We are very lucky on the Peninsula to not have a high percentage of inventory that are short sales!
Buying a Short Sale — The Need for Speed
Short sales offer not just a lifeline to homeowners in over their heads, but an opportunity for homebuyers seeking an amazing deal. Better yet, thanks to new regulations, the once lengthy process has recently become considerably more streamlined.
In a short sale, a homeowner that cannot afford to pay the mortgage and the lender that loaned them the money enter into an agreement in which the home will be sold for less than the balance of the loan. This is generally because the homeowner has incurred a financial hardship — such as unemployment, an unforeseen medical expense or divorce — that is going to make it impossible to continue paying the loan.
So, the homeowner and the lender enter a short sale agreement as a win-win, and the buyer makes that a triple win. For the seller, a short sale enables them to start rebuilding their credit rating sooner than a foreclosure would allow. For the lender, a short sale lets them sidestep the often-sizable costs that they must bear in a foreclosure. And, of course, for the buyer, they benefit with a price often below market value.
However, short sales differ from standard real estate transactions. Buyers should understand the elements of a short sale so that they know what to expect and how to work with the seller. Cooperation is key between all parties in the short sale: the seller, the lender and the buyer, so you want to know the ins and outs.
Short Sale Process
A short sale involves an agreement between a lender and a borrower to sell the home for a price below the loan amount. Every lender has its process for a short sale, and it also has its own criteria for approving a short sale agreement.
The initial stages of a short sale will seem very much like a regular real estate process. You will want to get pre-approved for your loan, work with a real estate agent to find the short sale opportunities in your area, view the properties, research the ones you like, and begin negotiating with the sellers. But at a certain point, the lender will need to be brought into the process to approve the short sale terms. In other words, not only is the seller negotiating with you, but he or she must then negotiate with his or her lender to get its blessing on the deal.
Because of that negotiation with the lender, the seller will work with a real estate agent that is qualified to work on his or her behalf. The seller’s agent often holds a short sales certification from the National Association of REALTORS®. This agent will be an expert in shaping the agreement with the seller’s lender, and his or her expertise will help ensure that both the seller and you succeed in making a deal that the lender will be happy with and approve.
The short sale process used to be lengthy, and could go on for many months, while ultimately ending in disappointment. Thanks to new rules that recently went into effect under the Department of Treasury’s Home Affordable Foreclosure Alternatives Program (HAFA), the process has become more streamlined, which works to everyone’s advantage.
Previously, the lender could take months to review and consider offers put in by potential homebuyers. Under HAFA, sellers are now required to respond to a bid within 10 days. However, be warned that lenders will generally counteroffer your bid, which will stretch out the approval process. They can also take their time when accepting the final offer and completing the paperwork, which means a short sale can still take months to complete. When you consider the great deal you’re getting, though, that extra time may be well worth it.
Sometimes a property may be listed as an approved short sale on the MLS. This means the lender has agreed to a selling price that is lower that the balance of the loan. In general, the approved short sale price is non-negotiable; however, you can reasonably expect an approved short sale to move faster than the other type of short sale.
As you can see, the short sale process offers homebuyers a tremendous opportunity to get into a good property at a bargain price. Better yet, HAFA has eased the process considerably and streamlined an ordeal that previously took up to a year into a realistic process for all parties concerned.
If you or any of your friends or family are looking to find out more about the short sale process, I’d be happy to provide you with more information, as well as put you in contact with a real estate agent that can help you explore the short sales opportunities in your area. With home prices and interest rates still low, now is a great time to consider buying a new home. You may be able to afford a bigger home than you thought possible.
Contact me today to learn more.
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Why have home sales gone down in December, January, and February while the median price has gone up?
First, is what is selling. The foreclosure market in the Bay Area makes up about 37% of sales. While this is a lot, it is down from the peak in February 2009 where foreclosures made up 52% of sales. This decline translates into a lower number of sales. In fact, in many hot foreclosure/short sale markets, inventory is down to one to two months.
Second, many buyers front-loaded their purchases in September, October, and November 2009 because they thought the first-time buyers credit would expire by November 30, 2009. This left fewer buyers in December, January, and February to buy homes.
Third, the middle tier of the market is becoming active with many areas seeing multiple offers. The result is that inventory is being bought up faster than new inventory is coming to replace it.
Fourth, many of these multiple offer situations are all cash deals (27% of all sales in February 2010). This means that the median price across the Bay Area is up over 20% from a year ago. Just remember that is not real appreciation – its simply the higher end markets selling again versus mostly the lower end last year. Yet, we can say that prices are really up in the Bay Area – not 20%, but 3-4% in real terms. Real estate is definitely looking better.
This is an excerpt from Carole’s monthly newsletter which contains great information on the Real Estate market of the Bay area and other helpful tips. Check out her site to sign up to receive her newsletter!
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What is the market like in the San Bruno Area?
There is not one particular market within San Bruno. There are several difference neighborhoods that each have their own unique feel and different market conditions. Depending on if you’re looking to buy for your own use, investment, or fix and flip– there’s a neighborhood in San Bruno that will have what you’re looking for.
There are many thriving “move-up” neighborhoods that have a very nice micro-climate and attract many buyers. These listings tend to experiencing multiple offers, and a lot of interest. Acting fast in these neighborhoods is essential if you’re competing for a home and having your paperwork, including loan pre-approval in place will help you look even more attractive to the sellers.
Then, as there is everywhere nowadays, there are the neighborhoods that are saturated with short sales and foreclosures. These neighborhoods have a lot of charm and are excellent opportunities for investors and first time buyers. If you’re looking for a great deal in a great area, these are the neighborhoods to check out.
For more information contact me at stephan@stephanmarshall.com or 650.455.1528. I’m a San Bruno native and can give you the information you need about the area and show you around.
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