Monday, April 29, 2013

Short Sale Parameters



I have been asked recently by several Realtors questions in regards to taking on the right short sale listings. Below you will find a list of parameters I compiled awhile back. I hope you find this helpful. Though short sales have slowed down they are still a part of our market and knowing the right ones to take on will save you alot of time and energy. Please let me know if you any questions.


Parameters for a successful short sale transaction



 
** Help to guarantee a quick and successful short sale by implementing these guidelines**

**Foreclosure Radar is a great source to prospect homeowners defaulting on their mortgage**
Go to www.ForeclosureRadar.com

1. First, if there is a sale date on the property, it should be a month or more in the future.

2. Since you have the ability to choose through foreclosure radar I would stay within loan amounts $450,000 and above

3. Maximum of two liens on the property

4. The property must be in a marketable area

5. Seller Questionnaire must be used to determine if you have a pre-qualified short sale

6. There must be a notable hardship: ( See the following examples)

a) Change in income/loss of job

b) Divorce

c) Relocation

d) Death

e) Insurmountable damages to the property

f) Client is still current but living off their savings. They will not be able to maintain payments much longer. The client sees a train wreck coming and is preparing to stop the bleeding now before they face foreclosure.

g) Expenses exceed their income. They are either negative monthly or it’s a wash.

h) If it is an investment property; negative rents, unable to find renters and the properties remain vacant and the investor is unable to carry a negative property would be grounds for a hardship.

7. Advise clients to speak to a Real Estate attorney and CPA


8. Clients must be cooperative and realistic.


9. Property should be marketed for a substantial amount of time.


10. You must have a complete Listing Agent packet and Homeowner packet submitted to Lotus Realty Group with all applicable documents in a reasonable time frame.


Call Lotus Realty Group for a copy of the Listing Agent packet to assist you in pre-qualifying your short sale client and gathering the appropriate documents.


I suggest this gets done first and sent over to us at Lotus Realty Group so we can assist you with any additional information or financial packets for your homeowner to fill out. This depends on who the lender is. If I know up front all the pertinent information I will be able to save your client from filling out redundant paperwork.


Please contact us for further information. The goal is to get all the important information upfront in order to successfully structure the transaction, minimize any pitfalls that may occur and have a tight stream lined systematic approach to ensure we close in a controlled and timely manner.


REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?


Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.

LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS


At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are

Monday, April 22, 2013

3 reasons the housing recovery may not last



I wanted to share an article from last week on CNN Money. I believe that it is great to remain optimistic especially in our economy to date however; I also feel that it is equally important to remain realistic and grounded. Anything can happen. That is the one thing I have learned well in my life and in my career. I feel very strongly that it is best to be prepared for the best and worst case scenarios and make the best choices with the information we have right now while remaining positive for the future.

It is common knowledge that the short sale market has slowed quite a bit but that does not mean we are out of the woods yet. I still feel we may see a surge of homeowners wanting to short sale their property for various hardship purposes. I still have clients who want to take advantage of the mortgage debt relief act that is set to expire by the end of the year. If you have clients who you believe need to short sale but they are on the fence I would urge them to make a choice sooner rather than later in hopes to take advantage of the tax relief. We are already close to half the year gone. Only 6 months left. Be sure to have them speak to an attorney and CPA to gather all the proper information in this regard before making a decision.

Feel free to reach out with any questions or short sale scenarios you would like to discuss or help with any of the following:

- Pre Qualifying

- Pricing

- Marketing

- Short sale listing appointments

- Handling objections

- Short sale updates

- Negotiating

NEW YORK (CNN Money)

The housing market has made a big comeback over the past year; home prices have surged some 8% and home buyers can't seem to buy up properties fast enough.


But just as quickly as the market is gaining ground, some industry experts worry it will come crashing back to Earth. Here are three reasons the housing market recovery may not last:
 
1. The housing recovery is being led by investors. One problem is that investors are leading the latest surge in home prices, said Dean Baker, co-director of the Center for Economic and Policy Research. They are taking advantage of low interest rates and depressed home prices and when those rates and prices rise, they'll likely pull back, he said.
"An investor-driven boom is likely to end badly," said Baker. "I'm worried that some of the big jumps in prices are driven by the same sort of speculation that drove the [original] housing bubble."
And while institutional investors and small but experienced mom-and-pop outfits have been buying many of the properties, there are a growing number of inexperienced "armchair investors" now buying into the boom -- a sign that demand may be peaking, Baker said.

In some hot markets, home prices should start slowing or even reverse gains. In Phoenix, where selling prices were up 23% year-over-year in January, many investors planned to rent out the properties they bought. "Yet, there was no comparable increase in rents and the rental vacancy rate in Phoenix is very high," said BakerAs investors realize a low rate of return on their investments, demand will soften, he said.

2. The economic recovery is just not strong enough yet. "These days, I worry more about the economy hurting housing than housing hurting the economy," said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities, a Washington D.C.-based think tank.
He's especially concerned about employment. Hiring slowed significantly in March, with just 88,000 jobs added -- the weakest showing since last June.

Meanwhile, half a million Americans withdrew from the workforce during the month; either because they stopped looking for work or retired and stopped drawing unemployment. Many were discouraged workers, a sign that the economy remains weakened.

While Bernstein thinks the housing recovery will continue, he believes it will do so at a much slower pace. Once the jobs picture improves, he said strong pent-up demand for homes should emerge.

3. Government cuts will hurt homeowners. Headwinds from the current round of government
spending cuts -- $85 billion worth -- could also curb the housing market's recovery.
"The spending cuts from the sequestration [will] hit their apex this summer," said Mark Zandi, the chief economist for Moody's Analytics.
The cuts, including unpaid days off for federal workers, cuts in unemployment compensation and decreased military spending, combined with the expiration of payroll tax breaks earlier this year, will lead to job and income losses that could strip about a percentage point off the GDP this year, according to Bernstein.

And while current mortgage rates remain extremely low, about 3.5% for a 30-year, fixed-rate loan, they're bound to go up, the industry experts said, making it a lot more costly for people to afford homes.

"I'm worried that it's too tough for many people to make the family budget, including the mortgage payment," said Bernstein. To top of page

REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?


Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.

LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS

At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...



Wednesday, April 10, 2013

Short Sale Updates With Lotus Realty Group



It has always been a goal of mine to help educate agents when dealing with short sales. Especially since I work with so many of them negotiating their transactions. A common thread I have seen is the anxiety created by giving up control of the transaction to a short sale negotiating team such as mine. Agents question what they do not know and second guess the advice given by the professionals. I have noticed for myself, painfully so; that when I am doubtful of others I am really doubting myself. Sometimes when we fall short in one area of our lives and give up control to another its normal to have fear that the job will not get done. In my experience those are just your thoughts and fears, no one else's. That doesn't make the fear true. Those thoughts are projected on to people that are really just trying to help us out. Professionals who have gotten results time and time again.

Typically when an agent sends us short sale transactions to negotiate it is because they either do not have the time or they do not have the knowledge to facilitate a short sale effectively. So I would like you to try an experiment with me. When you are in a position that you have to give up control in an area of your life that you your self cannot do alone whether it is business or personal. I want you to pay attention to your thoughts about the circumstance and the fear you are attaching too. For example; " My transaction probably wont get approved and I am waisting my time". "The short sale team is not going to make my transaction a priority". Notice how these thoughts are making you feel. Is it causing you anxiety? Are you panicking? Are you stressed out? Then ask your self " Is it true? Who would I be and how would I feel with out those thoughts?


What if you turned it around and said " The short sale team IS going to make my file a priority and it will close. I guarantee you that feels alot better. I think you will find that those thoughts have nothing to do with anyone else. You may not be an expert in short sales. You may not know how to effectively qualify your client. You may not have the time or the ability to facilitate a short sale and it is for that reason that those thoughts and fears are created. Not because you have evidence that they are true. There is nothing wrong with asking for help. There is nothing wrong with asking questions and stating your concerns and setting your expectations so the other person knows whats most important to you and will be able to help you in a way that will calm any fear you may have however; trusting the process is the ultimate goal.

Here are some issues we have seen recently and some tips to help you with future transactions

1. The HAFA relocation assistance money that is granted by a lender in a short sale transaction has a very important condition that you need to be aware of. The seller has to be out of the property at close of escrow in order to receive those funds. If a seller is in contract and has started the short sale process I would make sure they understand they should start searching for a place to live sooner rather than later. Waiting to the last minute will put them at risk of losing their relocation assistance and put you at risk of losing the deal.

2. If you started a short sale and it was pre qualified for HAFA per the negotiator but you do not get a HAFA approval it is because the negotiator has to send the file to the investor for final approval. The investor has the final say whether or not they will participate. Again, this is another circumstance where you need to be able to set that expectation with your client. Don't give them false hopes.

3. Please keep in mind that when your seller decides to call their lender to check on their short sale status they are talking to random customer care representatives on the other end and they give your clients hopes that they can qualify for certain programs. We should be advising clients that are considering to short sale to call their lender FIRST and explore all their options upfront. A short sale should be last on the bucket list.

4. Please check all documents , especially closing documents to make sure you have signed your portions whether you are escrow, buyers or listing agents. You will run the risk of wires getting sent back. We are ALL responsible to make sure this gets done.


I truly hope you find this information useful. Please feel free to contact me with any questions, concerns or short sale scenarios. Thank you for your continued support.


REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?

Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.

LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS


At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...

Tuesday, April 9, 2013

Housing is back! Best moves for homebuyers-CNN Money

 

Housing is back! Best moves for homebuyers-CNN Money

Housing is back! Best moves for homebuyers
By Beth Braverman @MoneyApril 8, 2013: 4:39 PM ET
To get an idea of a neighborhood's prospects, ask local brokers if cash-only offers dominate.
NEW YORK (Money Magazine)

Six years after prices collapsed, housing has begun to climb out of its hole. So what are the best moves to make now? In a three-part series, we offer smart strategies for buyers, sellers, and owners in today's market.

Real estate has finally started to bounce back across the country -- even roar back in some places.
Low mortgage rates and pent-up demand have coaxed buyers back into the market, and homeowners who list their houses are seeing more traffic. That quaint relic of the bubble, the bidding war, has even started to reemerge in some cities.
Consider the mounting evidence that the long national real estate nightmare is over: During the past year, home prices increased in 92 of the country's 100 largest metropolitan areas, according to data provider CoreLogic, with prices rising as high as 23% in Phoenix and 17% in San Francisco. Sales volume rose in 69 of the top 100 markets, and 35 of those showed double-digit gains.

Yet while most economists agree that the bottom is behind us and the five-year outlook for housing is on solid footing, the shorter term is shakier. "Two thousand thirteen and 2014 are going to be transition years," says Mark Fleming, CoreLogic's chief economist. "The market's improving, but it's not totally healed."
BUYERS
Thinking about buying a home? For the first time in more than half a decade, the economics of the market are working against you in most places.
Inventory is tight, and bidding wars are back in some parts of the country. To snag your dream home, you'll have to pay up and contend with continuing strict loan requirements. The bright side: Despite rising prices and mortgage rates that are edging upward, buying a home is still cheaper than renting in the majority of the top 100 markets.
Don't waste time with a low-ball offer.
Yes, home prices are still way down from their highs, but the days when you could scoop up a house for 20% less than the list price are long gone. The typical home sells for pretty close to what the owners asked for, and even in shaky markets, sellers have gotten more realistic about pricing.
The median sales-to-list-price ratio in Detroit, for example, is 98%; the national number is 97%. (To find the figure for your market, go to zillow.com/local-info and click on "More metrics.")

Here's how to figure out how much to offer initially: In places where homes are still selling below list price but deals are being made in less than two months, come in no more than 2% to 3% below the asking price, says Michael Murphree, a realtor in Birmingham, Ala. Where homes are selling above the listing price, make your first offer the asking price.
Be the winner in a bidding war.
In January and February, 73% of agents with broker Redfin said their clients' offers faced rival bids, up from 56% who said so in the fall of 2011.
You win bidding wars, of course, by raising your price; it also helps to have few contingencies and to move quickly, since today's sellers don't want multiple go-rounds. "You have to give your best offer," says Dallas real estate agent Mary Beth Harrison. "Step up to the plate or walk away."

Be flexible about closing too: Quick deals -- the median time on the market for homes is 71 days, down from 99 a year ago -- have left many sellers scrambling for alternative housing. Leave the closing date blank on your contract for the seller to fill in, or negotiate a leaseback if the seller needs to stay put for a while.
Outsmart the pros who bring cash.
Thinking about investing in a rental property in a downtrodden market before prices there really start to take off?
To beat out the professional investors who have scooped up houses in these areas by offering all-cash deals, lead with your best offer; investors count on nabbing properties at a big discount and are unlikely to boost their bid by more than 5% to 10%. "They'll just move on to another house," Harrison says. Also include a bank prequalification letter or statement of funds to show that your money is as reliable as investors' cash.
Assess the risk in your local market.
Though prices have revived in most areas of the country, they don't all have the same staying power. In markets that bounced back last year merely because prices had fallen so far, you can't assume a continued streak; once investors clear out, demand will die down.
"In rebounding markets, recent price gains might not last," says Trulia chief economist Jed Kolko. Some near-term value setbacks may not be a problem if you plan to stick around for a long time, but a short time horizon calls for greater caution.
To get an idea of a neighborhood's prospects, start with the foreclosure rate heat map at RealtyTrac.com (click on "Stats & Trends" at the top). The deeper the color you see, the weaker the market's fundamentals. A broker should also be able to tell you whether cash-only offers dominate -- a sure sign of an investor-driven market.
Play bankers off one another.
While it's old news that credit unions and small banks tend to offer lower rates, they also can be less rigid about their underwriting, says Guy Cecala, publisher of Inside Mortgage Finance. To obtain your best deal, says Cecala, get a good-faith estimate from one lender (you'll have to shell out for a credit check). Then show the offer to other lenders and ask if they'll beat it.
Tactics like this will work, he says, because market conditions have changed: "Some lenders want to build up market share and are willing to offer more aggressive pricing than their competitors." In the past two months, he says, a few have sliced their profit margins on loans.

Friday, April 5, 2013

The home bidding wars are back! CNN Money







NEW YORK (CNNMoney)

The bidding wars are back. Seemingly overnight, many of the nation's major housing markets have gone from stagnant to sizzling, with for-sale listings drawing offers from a large number of house hunters.



The competition has been most intense in California, where 9 out of 10 homes sold in San Francisco, Sacramento and cities in Southern California have been drawing competing bids.


In March, 75% of agents with broker Redfin said their clients' offers were countered by rival bids, up from 56% who said so in late 2011.
The competition has been most intense in California, where 9 out of 10 homes sold in San Francisco, Sacramento and cities in Southern California drew competing bids during the month. And at least two-third of listings in Boston, Washington D.C., Seattle and New York generated bidding wars.
"The only question is not whether a new listing will get multiple bids but how many it will get," said Kris Vogt, who manages 14 Coldwell Banker offices in the Sacramento area. One home in an Elk Grove, Calif., subdivision recently received 62 separate bids. The final sale price was for more than $150,000, well above its $129,000 asking price.
In Cambridge, Mass., two condos that could be combined into one large home hit the market two weeks ago for $800,000 each, according to Pat Villani, president of Coldwell Banker Residential Brokerage in New England.
"The brokers stopped taking names after the number of bidders reached 250," she said. The winning bidder offered $2 million for both units.
Homebuyers eager to purchase before home prices and mortgage rates rise are finding few homes for sale as sellers hold out for better deals, said Glenn Kelman, Redfin's CEO.
Many homeowners are still underwater, owing more on their mortgages than their homes are worth, and they want to wait until selling becomes profitable again. By doing so, they can avoid short sales, which carry 85 to 160 points, according to FICO.
"Many people have been holding on for a profit and they're just now getting their heads above water," said Kelman.
Those who want to sell and buy a new home are encountering a market where it's difficult to find a new place of their own, said Vogt.

Over the past few months, Jackie and Cliff Kaufman have bid on four different homes in St. Petersburg, Fla., including one short sale and a foreclosure.
The pair, who have two adult children and run an online jewelry business, said they bid $5,000 more than the $495,000 asking price on the first home they had their eye on and never heard back from the seller's agent. They were later told the house sold for nearly $550,000.
Next, they bid on a short sale listed for $600,000. This time, they came in $10,000 above the asking price and again, they were beaten out. The house was only on the market for two days.
The third attempt to make an offer on a bank-owned property was also met with silence.

"It was very frustrating," said Jackie Kaufman. "We felt we were always on the outside of the loop and that people who won the homes had the inside track."
By the fourth try, the couple successfully bid through a listing agent, who they believe pushed their bid harder in order to earn a double commission since she was representing both the buyer and seller in the deal. And they managed to get the place for $30,000 less than the asking price.
They were lucky. Inventories of homes for sale continue to shrink. In February, the National Association of Realtors reported a 19.2% decline in inventory year-over-year. While the number of homes for sale should rise with the onset of the spring selling season, housing inventory is expected to remain low, pushing prices higher.

And new home construction, especially in markets hit hard by the housing bust, is still moving forward at a snail's pace, since the cost to build the homes is often more than what the property ends up selling for, said Jeff Culbertson, president of Coldwell Banker's Southern California operations.
Even though home prices are on the rise, the balance between buyers and sellers has been thrown off balance, said Kelman.
"With buyers out in force and sellers cautious, the market is in an awkward 'tweener' phase," he said.