So, What is My House Worth?

The value of the property is the major focus in a short sale process. And there are many opinions to be heard: the listing agent and seller, Fannie Mae or Freddie Mac’s rough estimate, the county government, zillow and other sites, appraisers and agents who do broker price opinions (BPOs) for the seller’s bank, and investors plus appraisers for the buyer’s bank. This is where a short sale savvy agent has to know how to find the right price for listing a short sale that will get everyone on board and heading to a close.

The statistical information in your local market gives clues to the general price range of properties based on what has sold and what is on the market. Ultimately, the value of a house is what a buyer is willing to pay and the seller to accept. That seems pretty straight forward, doesn’t it? But, when I look at pricing of active listings, the prices are all over the map and there is a great divide between active and sold prices. Some sellers and their agents seem to miss the fact that the real estate market is down, seriously down. Not a “little” down. It is 25% or more down – every property, every body, every day for 18 months of DOWN!

Buyers know the economy is shaky so if they are out looking at homes, they are looking for really good deals! The last six months of real estate statistics show sales were few and far between. Most of the properties sold were short sales or properties owned by the banks (REOs) priced for liquidation. In other words, they are what buyers call “really good deals.”

These sold statistics are what appraisers have to use for comparisons whether they are valuing a property for a short sales or a new loan. What this means is: Yesterday’s liquidation prices are “the” prices today! This is a devastating fact and many sellers and agents can’t grasp it. Who can? The buyers!

Now more than ever, you must be priced right to sell your home. The price needs to inspire the buyer, but not be so low the bank disagrees. Figuring out the list price on a short sale is critical. This is where a short sale savvy agent can set up the success of a short sale from the very beginning. This is the make or break point in a short sale either with the bank or the buyers.

As I look at what is ahead in real estate, another issue looms on the horizon: inflation. When (not if) inflation strikes, buyer’s will be gone with the wind. Look at what happened in early June when mortgage interest rates rose from the phenomenally low 4.5% up to the still amazingly low 5.5%. The real estate market slowed down almost to a standstill.

There are many reasons to act now. Be sure you take the right action. Find an experienced, short sale savvy real estate agent with a proven record of multiple, successful, short sales signed, sealed and closed.

I am one and would be delighted to put my skills to work for you so you can move to your future!

Suzanne O’Clair, CSSS

Certified Short Sale Specialist

REALTOR

360-509-6400

 

Windermere Real Estate/West Sound Inc

Poulsbo/North Kitsap/Washington

oclair@windermere.com

www.oclair/mywindermere.com

The Foreclosure Timeline

Do you know what the Foreclosure Timeline is? Do you know how it affects you if you are a seller? Or a buyer? Knowing where a home sits on the foreclosure timeline helps determine how long the short sale will take to complete. 

In a world where the bank processor’s desk is overflowing with short sale files, the foreclosure timeline helps him figure out which file to tackle first. Remember the bank acts in its best interest. The more pain it feels, the faster it works to remove the pain. Between a home that is not behind on payments (no pain), and a home that is behind on payment (pain), the bank processor will work on the file that is behind because that home has a foreclosure date looming. It’s a form of triage. A foreclosure is “critical” to the bank because that is when it must decide whether it will make more money by accepting a short sale or by foreclosing.

If you are a seller or buyer on a short sale, the foreclosure time line tells you how long you will stand in line for service. (You are number 10,257!) If a seller has not missed a mortgage payment yet, his file will be in line longer– until a foreclosure date is set.

There is a sweet spot for short sale processing. Right around the time a notice of default is mailed and the date of the trustee sale is set, the bank gets real interested in your file. Looking at the timeline below, we are talking about day 120 from the last payment on the mortgage.

This explains why many short sales don’t have an answer from the bank for 90 days and the real estate agents, sellers and buyers are freaking out. Once the process gets under way, most of it is centered on determining the actual value of the property. This is where a short sale savvy agent really helps the process come together. If the property is priced very close to “right” when it is listed, the values will line up between the appraisal, the offer and the bank’s expectations. The bank gives you a green light and you are on your way to closing. If the values don’t line up, well, that is a whole other blog.

In a nutshell, here is the foreclosure timeline:

Day one, you make your last payment.  Day 30, you miss your first payment.  Nothing appears to happen until day 90 when you receive a Notice of Default letter.  In another 30 days, (day 120) the bank files a Notice of Trustee Sale with the county.  Day 180 is the foreclosure sale. You must be out of the house 21 days after the foreclosure sale.

You can now make sense of what the heck is going on with the bank. It’s not personal…you’re standing in line. The bank is busy processing short sales on properties that have a Notice of Foreclosure Date filed. If an offer comes in on a home with a foreclosure date, the bank can delay the foreclosure in 30 day increments. (Up to a maximum of 4 times. Then they have to start their foreclosure procedure all over from the beginning. Hint: they probably aren’t going to go that far for you.) 

The take away from all this is that once you decide you must do a short sale, you have approximately 201 days before you have to vacate the property. And, the closer you get to foreclosure, the better! When an offer comes in on the property, the foreclosure timeline will indicate how long until the property comes up for active processing. If buyers, sellers and agents have a realistic view of the timeline, everyone can get on the same page and work together for a successful outcome.

Remember, your best bet is to find an experienced, short sale savvy real estate agent with a proven record of multiple, successful, short sales signed, sealed and closed.

I am one and would be delighted to put my skills to work for you!

 

Suzanne O’Clair, CSSS

• Certified Short Sale Specialist
• REALTOR

360-509-6400

Windermere Real Estate/West Sound IncPoulsbo/North Kitsap/Washington

oclair@windermere.com

www.oclair/mywindermere.com

Take Action

In a previous blog, I said YOU are an asset in a short sale. When you are a pro-active homeowner working with the bank to make the best of an all-around bad situation, you are a responsible owner. You are not walking away from your property, throwing your hands in the air, whining, “What can I do?” or “That’s too hard!” You are doing your part to find a qualified buyer and take care of the home until an agreement is reached. 

 A buyer and a safe, secure, marketable property are huge assets in the eyes of the bank. You cannot do a short sale until you find a buyer, and even banks know the value of qualified buyers in the current marketplace. The fact that you are safeguarding the property shows responsibility and partnership on your part.

From the bank’s point of view, foreclosures are a complicated, expensive legal process fraught with liability. It takes lenders time — months and months — to turn a foreclosure into a viable, listed property. Meanwhile, many of these bank-owned, foreclosed properties are sitting empty having appliances, bath fixtures, lighting and copper wiring, and parts of the landscape vandalized.

 A short sale brings in more money for the bank with less cost and risk. Short sales sustain values in the entire neighborhood and on the bank’s balance sheets as compared to foreclosures which show up as losses. Foreclosures  drive future prices down which puts other loans in jeopardy for the bank. As future prices fall, the banks continue to be at risk as more people decide the “business-like” decision is to simply walk away from their property. Owners who chose foreclosure through lack of action reap no benefit or reward in the long term.

 The very worst action you can take is to dither and do nothing. When YOU look the dragon in the eye and make the decision to do a short sale, you are taking your future back into your hands.  That is the position of a winner – not a whiner — and it will pay off for you in your credit history over the long run.

 The second worst thing you can do is have just any, old real estate agent handle your transaction. This is a time to hire an experienced, short sale savvy real estate agent with a proven record of multiple, successful, short sales signed, sealed and closed.

Find one and get busy reclaiming your future!

Statistics show Success

In a short sale, you have very little negotiating power. Basically, you are going to your bank with your hat in hand asking them, “Please, pretty please, take less money for this loan than what we agreed I would pay.” The fact is the bank paid out money on your behalf and now you want to pay back less than what they paid out. When you look at it that way, the fact that banks are doing short sales at all is a miracle!

What you have going for you are the real conditions of the real estate and stock market and your own sense of responsibility. We’ll talk about that in my next blog.

You still need someone working on your side who understands these situations, who can keep their cool, work with the realities of the moment and who can recognize an order when the bank issues one. That someone is an experienced short sale expert.

I have participated in 17 short sales and closed 16. That is a phenomenal statistic! Most short sales die before the bank makes a response to the offer. In fact, there are countless ways for a short sale to fall short of the goal. My master’s degree in applied communication, plus my 12 years in real estate are valuable tools in short sale processes ending successfully.

Sometimes I feel like a sheep dog nipping at the heels of the seller, the buyers, the buyers’ agent, the lien holders, the appraisers, escrow officers and the buyer’s lenders which are spread all over kingdom come and I am attempting to funnel them into a very small corral. When a short sale comes together, that small corral becomes a winner circle. The sellers win and move on in their lives. The buyer gets a good value on their new home. The lien holder (seller’s bank) avoids the costs of a foreclosure. And the REALTORS make a living.

Short sales are not impossible. Banks are not unrealistic. But it is a process. The process is specific and action oriented. The process is in the hands of the bank, which is uncomfortable because everyone else feels out of control – and none of us are control freaks. (Right?) But, there are benchmarks that light the way and when recognized as markers, can keep all parties informed and apprised of likely outcomes.

All parties involved need to be flexible and working on Plan B, sometimes Plan C, if this or that happens or doesn’t happen. This is where the communication degree goes a long way. A year ago the banks and agents were making it up as we went along, but at this point, the process is a well-worn path. Stay on the path and put one foot in front of the other and you will accomplish your goal.

When foreclosure looms…Sharpen your sword.

If your home is at stake and foreclosure is looming, the last thing you need to know is its happening to others, too. So what? It’s not happening to everyone, and so far the government isn’t bailing us out one by one. Don’t give up hope – there are strategies even in these tough situations.

The biggest danger you face is living in the state of Denial—in a town named Hope. You must face the dragon eye-to-eye as soon as possible. And, frankly, that isn’t an easy thing to do. I mean who wants to face a dragon alone? There are experts out here who have gotten their swords sharpened just so they can protect your back. I am one of them.

There is so much change in the banking and real estate industries, you must be working with a full-time specialist who has experience and can guide you through the fog. You need someone to help you put a strategy together and then execute it. This isn’t a time for good intentions from your ill-equipped comrades. You need experience and results.

When the real estate market started changing, I realized I didn’t have any answers for the homeowner facing a short sale or preforeclosure. So I spent this last year finding strategies for people who are up against hard times. Now I have strategies and experience that can help you take positive action today and start getting your life back.

A lot of agents didn’t want to do short sales/preforeclosures. Now they have been forced into doing them by clients in need but they don’t have the experience to beat the foreclosure time clock. (Hear it? Tick tock?) You need serious help. Together we can do this and probably have a laugh or two along the way. (Don’t you just love dark humor?) Call me. The sooner we talk, the more options you have.