Why Do Banks Hate Short Sales?
Or do they? This question can often arise when buyer & seller alike are faced with short sale situations, as it sometimes feels like the short sale lenders are “dragging their feet” in approving a short sale. I recently attended the Asian Real Estate Association of America (AREAA) National Convention in San Francisco and heard from top executives at Chase, Wells Fargo and Citibank regarding short sales. All three of them stated that their organizations are actively seeking ways to improve the short sale process and that they definitely prefer short sales as an alternative to foreclosure. The numbers show that banks can lose between 10-45% in a short sale but that loss becomes 50-75% in a foreclosure situation. I also heard a broadcast from Bank of America just this week, stating that they are planning to “increase their short sales next year by 60-70%” and now have over 3000 people in their short sale division.
So if banks want to do short sales, why does it seem so long and difficult to get an approval? That’s a subject for another blog…
Jean Joh
Short Sales & Foreclosure Resource (SFR) Certified – National Association of Realtors
www.jeanjoh.com
Some Bank Websites re: Short Sales
Bank of America: http://tinyurl.com/ssbofa
Wells Fargo: http://tinyurl.com/sswellsfargo
Citibank: http://tinyurl.com/ssciti
Chase: http://tinyurl.com/sschase
Is Foreclosure a Smart Way to Go?
In today’s world I am regularly asked by folks whether they should just give up, walk away and let their home be taken by foreclosure or try to “hang in there” until they can find another solution.
This is a really difficult question to answer. There are so many factors involved. Ethicially and morally, I believe that you should do everything you possibly can to honor the contracts that you entered into when you purchased the property, even if the property is no longer worth what you paid…as long as you can still afford to make the payments.
However, the incredible stress of trying to hold on when you can’t afford to make the payments can be all consuming and emotionally destructive. When all else fails, sometimes the only possible answer is to walk away. Before doing that, however, you should explore all other possible options, such as: Read more
To hire a short sale negotiator or not??
With short sales on the rise is hiring a negotiator worth it? When taking on a short sale listing do you ask yourself if it is money well spent to hire a negotiator? Sure the time you save not having to contact the lenders yourself is money well spent, but how do you truly know if they are contacting them as frequently as they should be and negotiating to the best of their abilities?? The other question that begs to be asked… if you are the one hiring the negotiator to alleviate your work load why in most cases are you asking the buyer to pay for them? If you have decided to take on short sales isn’t part of your job to deal with the lenders and negotiate on behalf of your client? Isn’t that what we do best? I have recently come across a lot of short sale listings on the MLS that are requesting the selling agent to pay 50% of the negotiator fee or the buyer to pay the entire 1%. It seems to be a bit obscure and in most cases makes everyone uncomfortable.
Now don’t get me wrong I agree with the adage time is money, so I am all for Read more
“Sorry, I Don’t Do Short Sales…”
Recently, one of my newer clients asked me, “Do you work with short sales?” Her reason for asking was that one of the other agents she interviewed told her that he did not work with short sales. I was somewhat surprised that there are still agents out there who will not work with a short sale.
Of course, if you asked me a couple years ago before “short sale” became a common household word, I would have said that I’d stay away from them if I could help it. But as an agent, I have a responsibility to my clients to work in their best interests. Read more
My Thoughts for Real Estate in 2009 in San Francisco and the Peninsula
The year began with home prices free falling and no end was in sight. In April we, in the business began seeing the light at the end of the tunnel. Homes in the starting price points began selling and inventory started to stabilize. Banks were pricing their homes on the low range and were receiving multiple offers. I consider single family homes under $700,000 to be the starting price point on the peninsula. Homes over a million dollars were having trouble due to the higher interest rates for loans of that size and the lack of lenders willing to loan. Loans under $729,750 were backed by the government and hovered around all time lows all year. Loans were broken up into different categories. Rates for loans under $417,000 were below 5%; rates for loans between $417,000 and $729,750 were slightly higher. Above that they took a jump. Finally we are now seeing the rates for the larger loans fall into line. Today rates are below 4% fixed for five years for loans under $417,000. That could be the right loan for many people. Read more
Slow & Steady wins the race!
What do you do when you have close personal friends who are in the market to buy, but can’t hire you as their agent out of obligation to a family member? I recently had a situation occur where my friends decided it was time to jump off the rental train and become home owners. I thought it was a great idea and a wonderful way to secure their financial future. The wife would call me and ask me questions and of course I would answer any and all that came my way. I even set them up with a loan agent to get them pre-approved and started sending them automated email alerts for new active properties. Read more
Short sale?
What is the ubiquitous term: short sale mean? Many people may have an idea of what that term means, the following is a condensed version of a short sale. A short sale is when the owner of a property is upside down meaning they owe more than what their property is worth and they cannot refinance for that exact reason. They have fallen behind on there payments in many cases due to a jump in interest rate or loss of job. One option is to short sale the property and attempt to sell it before it goes into foreclosure. A short sale may satisfy a sellers outstanding debt (if the seller did not pull equity) and is not as bad as a foreclosure for their credit. The operative words are ”as bad” I want to be clear it will negatively impact the sellers credit to some degree. Read more
FHA Loans for Distressed Properties?
I’m sure you’ve heard by now that FHA loans are making a huge comeback in the mortage arena. After all, it’s one of the only ways to obtain a loan with a low down payment (only 3.5% which can even be a gift) as well as a less-than-perfect FICO score (currently around 620). One of the main drawbacks, however, has been that the requirements for FHA loans have been a little more stringent regarding the condition of the property. This becomes an even bigger problem when you take into account that many of the more affordable homes now are REOs (bank-owned) or short sales, where the property has not been maintained very well. Well, I just wanted to share with you that THERE’S HOPE! It is possible to get an FHA loan for properties that are in need of some maintenance. How? Read more
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