A recent closed transaction in which we were involved revealed an interesting twist on a foreclosure sale involving a bankruptcy. The facts are these.
A homeowner filed personal bankruptcy. Because the debtor owed substantially more on his personal residence than its value, the trustee released the property from the bankruptcy proceeding. This is a common practice when an asset has no equity available to satisfy creditors.
Subsequent to the release, the property was the subject of an underbid at the sheriff’s sale. Why the lender made an underbid under these circumstances is unknown. Because of the personal bankruptcy the lender had no ability to later collect on the shortfall.
Due to the acumen of a Coldwell Banker Weir Manuel professional, the homeowner quickly put the property on the market and sold it for substantially more than the underbid, retaining the difference.
This technique is normally used to create the best financial situation possible for the seller with the understanding that the lender may pursue the homeowner at some future point in time for the shortfall. In this case, however, the lender would not be able to do so due to the bankruptcy proceeding.
It is important to point out that the seller was advised to seek outside legal advice in this case as we are neither attorneys nor experts in bankruptcy. Understanding all options available to sellers is critical to creating a selling scenario that is in their best interest.
There is a toll-free hotline that will provide critical information about individual bankruptcy cases. By calling 877-422-3066 one can find out if a person has filed bankruptcy, the names of the attorneys involved, and the name of the judge. This information can be accessed by name or social security number, and is free of charge.
Monday, March 29, 2010
Monday, March 22, 2010
VACANT HOME ORDINANCES COMPLICATE TRANSACTIONS
We are currently witnessing a rash of new municipal ordinances dealing with vacant homes. Some municipalities believe that by regulating vacant homes, their potential negative impact on property values may be avoided.
These ordinances typically feature a registration process, registration fees and inspection fees. In some cases, municipalities are even going so far as to require buyers to acquire certificates of occupancy in order to move into a home which has been vacant for a specified period of time.
The public purpose behind most of these initiatives is to ensure that vacant homes do not become a negative influence to surrounding properties and neighbors. While this is a legitimate goal, it also appears that a few municipalities have chosen to use these ordinances as revenue generators and/or a method by which code inspector salaries can be supported.
Because the requirements under these ordinances vary greatly from town to town, there is no way to summarize the details of each here. It is important, however, for home sellers, home buyers and their real estate agents to be aware of them. The terms and conditions of a purchase agreement may be affected by these ordinance provisions in some cases.
The real estate transaction continues to get more complicated every day. It is our goal at Coldwell Banker Weir Manuel to continue to stay abreast of every new development that affects the sale or purchase of real property and advise our clients accordingly.
These ordinances typically feature a registration process, registration fees and inspection fees. In some cases, municipalities are even going so far as to require buyers to acquire certificates of occupancy in order to move into a home which has been vacant for a specified period of time.
The public purpose behind most of these initiatives is to ensure that vacant homes do not become a negative influence to surrounding properties and neighbors. While this is a legitimate goal, it also appears that a few municipalities have chosen to use these ordinances as revenue generators and/or a method by which code inspector salaries can be supported.
Because the requirements under these ordinances vary greatly from town to town, there is no way to summarize the details of each here. It is important, however, for home sellers, home buyers and their real estate agents to be aware of them. The terms and conditions of a purchase agreement may be affected by these ordinance provisions in some cases.
The real estate transaction continues to get more complicated every day. It is our goal at Coldwell Banker Weir Manuel to continue to stay abreast of every new development that affects the sale or purchase of real property and advise our clients accordingly.
Thursday, March 18, 2010
THE OFFER - MORE THAN JUST THE PRICE (from Realty Times)
Fixating on price in real estate may cost you the deal:
* Sellers who decide that a specific dollar figure will buy their home and won't budge
from that bottom line may sell themselves short.
* Buyers who drop out of a transaction for a property they love because the seller's
counter-offer shocks them may be quitting before they have really started negotiating.
When a buyer makes an offer to purchase a house, condominium unit or commercial
property, the purchase price is a prime consideration, but it represents only part of the
total value offered to the seller. Problems may arise for both sides of the transaction
when this fact is forgotten.
Value Elements in an Offer
The value expressed in a buyer's offer to purchase, or in a seller's offer to sell, involves
5 key elements -- a financial package:
* Purchase Price, the stated amount of dollars offered by the buyer, represents a
significant contributor to value, but there are other important factors which can reduce
the amount the seller receives or which can compromise the transaction. It's not the
purchase price, but the net proceeds of the sale that sellers -- and savvy buyers --
should concentrate on.
* Closing Date, or the day ownership changes hands and the seller receives the
money, can represent cost or value to both parties. Savvy buyers usually attempt to
meet the seller's preferred moving date, especially when the seller has committed to
purchasing another property or needs the proceeds of the sale on a specific date. For
instance, a closing before that date may be expensive because the seller would have
to move out and store everything until they could move into their new home. That
double move and the inconvenience represent out-of-pocket costs and time lost that
make the actual purchase price lower than stated. A closing date later than the seller's
preferred date may leave the seller owning two homes - and paying off two mortgages -
at once. The seller may incur extra costs in arranging bridge financing to meet legal
obligations to close on their new home before they receive proceeds from the sale of
their current home. Choice of closing date may represent costs or value to the buyer as
well. Balancing this reality for both parties is key in negotiation.
* Inclusions and Exclusions to the sale also represent costs and value for both
parties. Appliances, heating systems and draperies are common seller inclusions
designed to boost value for buyers. If warranties for everything from a new roof or solar
panels to new appliances cannot be transferred to a buyer, these items become
"second-hand"and will probably represent less value to buyers. Buyers are also free to
include excluded seller items, like an antique light fixture, in the offer to purchase.
Deals have been lost to disagreements over light fixtures, fireplace accessories and
vintage furnishings, so prudent sellers remove contentious items before listing. A
buyer may offer less than list price and ask for nothing; a seller could sign back for
more money and include items to sweeten the pot. Value is very subjective for these
non-real-estate items and that's where negotiations can get heated.
* Terms and Conditions are clauses in the offer which cover "what if" risks for one
party and the obligations of both parties. These clauses detail what the buyer asks the
seller to do for the purchase price. Arrange a survey or include a treasured light fixture?
Sellers can create conditions in an offer to sell, but usually conditions are of greater
concern to the buyer, particularly if approval of a third partly like a lender or city
planning department is involved in determining the property's suitability. Conditions to
arrange financing or a home inspection are among the "ifs" that define the offer to
purchase. The degree of uncertainty attached to the conditions and the buyer's related
ability to close affect the value of an offer. For instance, a buyer who is pre-approved
for a mortgage of sufficient size offers less risk to a seller. However, if the purchase
price is significantly-above market value, the lender may not approve the mortgage, so
a condition for financing is essential to protect all parties. A full-price offer with
conditions that will be difficult to meet may hold less value than an under-list-price
offer with no conditions. Alternatively, if the conditions are merely formalities, the
conditional offer could represent greater value. Would you recognize the difference if
you were the seller? That's where the expertise of the real estate professionals
involved becomes valuable.
* Intent and Sincerity are vital aspects of an offer although difficult to quantify. How
determined is the buyer to buy, and why? How determined is the seller to sell? If either
party changes their mind after the contract exists and before the closing date, the
injured party has remedies in court. These legal steps may not make up for lost time
and, perhaps, a missed market. An investor or flipper may decide to cut losses and bail
out of the deal if the market drops significantly before closing. A seller may have
second thoughts if their plans to move fall through. For both parties, value should lie in
the certainty that the other party will close in spite of market shifts.
Yes, price matters, but there's a lot more involved in creating an offer that demands to
be accepted. That's why an experienced real estate professional is a valuable
contributor to success. Professionals can calculate, or at least estimate, the seller's net
proceeds after costs related to the offer and deduction of commission. This information
helps the seller accurately evaluate an offer to purchase. Understanding cost and
benefit for all elements of an offer helps a buyer intent on ownership to create the best
financial package possible.
* Sellers who decide that a specific dollar figure will buy their home and won't budge
from that bottom line may sell themselves short.
* Buyers who drop out of a transaction for a property they love because the seller's
counter-offer shocks them may be quitting before they have really started negotiating.
When a buyer makes an offer to purchase a house, condominium unit or commercial
property, the purchase price is a prime consideration, but it represents only part of the
total value offered to the seller. Problems may arise for both sides of the transaction
when this fact is forgotten.
Value Elements in an Offer
The value expressed in a buyer's offer to purchase, or in a seller's offer to sell, involves
5 key elements -- a financial package:
* Purchase Price, the stated amount of dollars offered by the buyer, represents a
significant contributor to value, but there are other important factors which can reduce
the amount the seller receives or which can compromise the transaction. It's not the
purchase price, but the net proceeds of the sale that sellers -- and savvy buyers --
should concentrate on.
* Closing Date, or the day ownership changes hands and the seller receives the
money, can represent cost or value to both parties. Savvy buyers usually attempt to
meet the seller's preferred moving date, especially when the seller has committed to
purchasing another property or needs the proceeds of the sale on a specific date. For
instance, a closing before that date may be expensive because the seller would have
to move out and store everything until they could move into their new home. That
double move and the inconvenience represent out-of-pocket costs and time lost that
make the actual purchase price lower than stated. A closing date later than the seller's
preferred date may leave the seller owning two homes - and paying off two mortgages -
at once. The seller may incur extra costs in arranging bridge financing to meet legal
obligations to close on their new home before they receive proceeds from the sale of
their current home. Choice of closing date may represent costs or value to the buyer as
well. Balancing this reality for both parties is key in negotiation.
* Inclusions and Exclusions to the sale also represent costs and value for both
parties. Appliances, heating systems and draperies are common seller inclusions
designed to boost value for buyers. If warranties for everything from a new roof or solar
panels to new appliances cannot be transferred to a buyer, these items become
"second-hand"and will probably represent less value to buyers. Buyers are also free to
include excluded seller items, like an antique light fixture, in the offer to purchase.
Deals have been lost to disagreements over light fixtures, fireplace accessories and
vintage furnishings, so prudent sellers remove contentious items before listing. A
buyer may offer less than list price and ask for nothing; a seller could sign back for
more money and include items to sweeten the pot. Value is very subjective for these
non-real-estate items and that's where negotiations can get heated.
* Terms and Conditions are clauses in the offer which cover "what if" risks for one
party and the obligations of both parties. These clauses detail what the buyer asks the
seller to do for the purchase price. Arrange a survey or include a treasured light fixture?
Sellers can create conditions in an offer to sell, but usually conditions are of greater
concern to the buyer, particularly if approval of a third partly like a lender or city
planning department is involved in determining the property's suitability. Conditions to
arrange financing or a home inspection are among the "ifs" that define the offer to
purchase. The degree of uncertainty attached to the conditions and the buyer's related
ability to close affect the value of an offer. For instance, a buyer who is pre-approved
for a mortgage of sufficient size offers less risk to a seller. However, if the purchase
price is significantly-above market value, the lender may not approve the mortgage, so
a condition for financing is essential to protect all parties. A full-price offer with
conditions that will be difficult to meet may hold less value than an under-list-price
offer with no conditions. Alternatively, if the conditions are merely formalities, the
conditional offer could represent greater value. Would you recognize the difference if
you were the seller? That's where the expertise of the real estate professionals
involved becomes valuable.
* Intent and Sincerity are vital aspects of an offer although difficult to quantify. How
determined is the buyer to buy, and why? How determined is the seller to sell? If either
party changes their mind after the contract exists and before the closing date, the
injured party has remedies in court. These legal steps may not make up for lost time
and, perhaps, a missed market. An investor or flipper may decide to cut losses and bail
out of the deal if the market drops significantly before closing. A seller may have
second thoughts if their plans to move fall through. For both parties, value should lie in
the certainty that the other party will close in spite of market shifts.
Yes, price matters, but there's a lot more involved in creating an offer that demands to
be accepted. That's why an experienced real estate professional is a valuable
contributor to success. Professionals can calculate, or at least estimate, the seller's net
proceeds after costs related to the offer and deduction of commission. This information
helps the seller accurately evaluate an offer to purchase. Understanding cost and
benefit for all elements of an offer helps a buyer intent on ownership to create the best
financial package possible.
Monday, March 15, 2010
Is Homeownership Still Part of the American Dream?
For some two hundred years, homeownership in this country was a desire of almost every American family. Due to the excesses of the past decade, some are now suggesting that the concept of homeownership should no longer be pursued.
We must be careful as a society that short term economic turmoil does not reset valued long-term thinking. The majority of Americans still hold homeownership sacred. Trulia just did a survey showing seventy seven percent of those questioned still believe that owning a home is a part of the American dream.
Some are questioning the American dream given that housing is in the midst of one of its worst markets ever. But the facts show that the last ten years have not treated the homeowner that badly. Obviously, people who purchased a home during the middle of the last decade have seen their value depreciate over the last several years. But, real estate was never seen as a good short-term investment.
If we look at housing values over the last 10 years, we find that even through these tough times real estate has averaged over fifty percent return as an investment.
Then why this challenge today? Well, at the turn of the century, when prices were appreciating in some areas by as much as 20% annually, many got caught up in the belief that housing values should double every few years for the rest of time. That belief created all sorts of reckless behavior.
Many purchased homes well beyond their financial means. Others decided that they would gamble on future values and interest rates by taking exotic mortgages, thus treating their homes as speculative investments. And others used their homes as ATM machines, continually withdrawing their equity in the form of home equity loans.
For too many, cast aside was the traditional viewpoint that a house was a home first and then a pretty good long-term investment. Traditionally, homeowners may have borrowed against the house to put a child through college, finance a wedding, or pay for medical bills. In recent years spending discipline for some has become more relaxed and home equity savings were spent on things that could only be characterized as frivolous.
While homeownership should certainly be viewed as a long term investment, a home primarily is a place to create a personal lifestyle. When structured properly based on solid advice from a trusted professional, homeownership offers the benefits of security, stability, control over one’s environment, equity buildup and income tax advantages.
For 200-plus years, Americans were eager to purchase property because they knew that on a long-term basis it would create wealth. That concept is alive and well in this country even today.
Tuesday, March 2, 2010
FIVE OPEN HOUSE CONCEPTS
1. Sometimes, they get the job done.
Many agents and homeowners are skeptical about the statistical unlikelihood of actually snaring a buyer who walks in off the street. But the fact is that many properties have been sold via open houses: either the buyer at the open house engages his real estate agent and request a one-on-one appointment, or the buyer will submit an offer the day of the open house, immediately after viewing the property.
Open houses can have a “coattails” effect. Many people who go through open houses are neighbors, which is not necessarily a bad thing. People, especially neighbors, talk. The more exposure a listing is given, the better.
2. Sometimes, home sellers just feel better for holding an open house. Especially in a slow market, it amounts to a tangible effort.
If that effort is coordinated with many other agents in an office and area-wide open house days are scheduled, results can be magnified. By combining efforts, agents can send prospects to other houses that better suit their needs, which are conveniently open at the same time.
3. Even if an open house doesn't produce a sale, it might provide valuable information for the sellers.
Feedback is a valuable resource. Actual market extracted reaction from prospective buyers regarding the condition of the property, its layout, price, etc., will help mold future marketing strategies.
4. The idea is not just to engage consumers, but to engage other real estate agents, too.
Attracting consumers who stop by open houses with their agents in tow creates additional exposure of a different type. Those agents might see the house as attractive to their other clients and arrange future showings.
5. So, what works best to create a successful open house?
Holding a successful open house is part art and part science. Multiple open signs, print and online exposure and direct mail are essential elements of open house pre-marketing. Then it’s up to the hosting agent’s sales skill to engage prospects.
Coldwell Banker Weir Manuel Open House Event March 7
There is still time to sign up your listings for our March 7 Open House Event! Be sure to contact Allison Ferris 248-433-5495 before time runs out March 3 at 9am so your listing can be included in our Detroit News and Free Press Ad and promoted on Facebook and Twitter.
Many agents and homeowners are skeptical about the statistical unlikelihood of actually snaring a buyer who walks in off the street. But the fact is that many properties have been sold via open houses: either the buyer at the open house engages his real estate agent and request a one-on-one appointment, or the buyer will submit an offer the day of the open house, immediately after viewing the property.
Open houses can have a “coattails” effect. Many people who go through open houses are neighbors, which is not necessarily a bad thing. People, especially neighbors, talk. The more exposure a listing is given, the better.
2. Sometimes, home sellers just feel better for holding an open house. Especially in a slow market, it amounts to a tangible effort.
If that effort is coordinated with many other agents in an office and area-wide open house days are scheduled, results can be magnified. By combining efforts, agents can send prospects to other houses that better suit their needs, which are conveniently open at the same time.
3. Even if an open house doesn't produce a sale, it might provide valuable information for the sellers.
Feedback is a valuable resource. Actual market extracted reaction from prospective buyers regarding the condition of the property, its layout, price, etc., will help mold future marketing strategies.
4. The idea is not just to engage consumers, but to engage other real estate agents, too.
Attracting consumers who stop by open houses with their agents in tow creates additional exposure of a different type. Those agents might see the house as attractive to their other clients and arrange future showings.
5. So, what works best to create a successful open house?
Holding a successful open house is part art and part science. Multiple open signs, print and online exposure and direct mail are essential elements of open house pre-marketing. Then it’s up to the hosting agent’s sales skill to engage prospects.
Coldwell Banker Weir Manuel Open House Event March 7
There is still time to sign up your listings for our March 7 Open House Event! Be sure to contact Allison Ferris 248-433-5495 before time runs out March 3 at 9am so your listing can be included in our Detroit News and Free Press Ad and promoted on Facebook and Twitter.
Friday, February 26, 2010
SUCCESSFULLY RESPRESENTING REO BUYERS
Sales associates working with buyers interested in a bank-owned property are well advised to leave some of their traditional thinking behind.
To avoid unmet expectations it is extremely important that the selling agent educates both himself and his clients about the realities of REO brokerage. REO listing brokerages are required to conform to each of their clients’ (banks or third party asset managers) needs and regulations. Each client’s requirements can vary from one extreme to another. And they can be far different from the traditional practices with which selling agents have become comfortable in their markets.
Traditional expectations about gathering information on a property, communicating, negotiating strategies and processing paperwork must be replaced with new thinking.
Some basic questions to which selling agents should seek answers before proceeding:
• How and when are offers presented?
• Can a counteroffer ever be expected or will the highest offer simply be accepted?
• Are offers sent to a special e-mail or fax address?
• What are the specific qualification requirements?
• Are there special forms that need to be included?
• Can communications take place by phone or must everything be done via e-mail?
• Will a single package e-mail submission over 4 MB be accepted?
• What are the office hours of the REO department or listing agent/team?
• If you are the successful selling agent, what time frames
and procedures are expected of the agent and client to return documents, checks, addenda and other documentation?
Understanding that selling bank owned properties is a vastly different process than many agents are used to can help avoid the frustrations involved in the REO process. Knowing these ins and outs is yet another unique skill required today to continue to provide outstanding customer experiences.
To avoid unmet expectations it is extremely important that the selling agent educates both himself and his clients about the realities of REO brokerage. REO listing brokerages are required to conform to each of their clients’ (banks or third party asset managers) needs and regulations. Each client’s requirements can vary from one extreme to another. And they can be far different from the traditional practices with which selling agents have become comfortable in their markets.
Traditional expectations about gathering information on a property, communicating, negotiating strategies and processing paperwork must be replaced with new thinking.
Some basic questions to which selling agents should seek answers before proceeding:
• How and when are offers presented?
• Can a counteroffer ever be expected or will the highest offer simply be accepted?
• Are offers sent to a special e-mail or fax address?
• What are the specific qualification requirements?
• Are there special forms that need to be included?
• Can communications take place by phone or must everything be done via e-mail?
• Will a single package e-mail submission over 4 MB be accepted?
• What are the office hours of the REO department or listing agent/team?
• If you are the successful selling agent, what time frames
and procedures are expected of the agent and client to return documents, checks, addenda and other documentation?
Understanding that selling bank owned properties is a vastly different process than many agents are used to can help avoid the frustrations involved in the REO process. Knowing these ins and outs is yet another unique skill required today to continue to provide outstanding customer experiences.
Monday, February 22, 2010
OPEN HOUSES - SOMETIMES, THEY GET THE JOB DONE
Many agents and homeowners are skeptical about the statistical unlikelihood of actually snaring a buyer who walks in off the street. But the fact is that many properties have been sold via open houses: either the buyer at the open house engages his real estate agent and request a one-on-one appointment, or the buyer will submit an offer the day of the open house, immediately after viewing the property.
Open houses can have a “coattails” effect. Many people who go through open houses are neighbors, which is not necessarily a bad thing. People, especially neighbors, talk. The more exposure a listing is given, the better.
2. Sometimes, home sellers just feel better for holding an open house. Especially in a slow market, it amounts to a tangible effort.
If that effort is coordinated with many other agents in an office and area-wide open house days are scheduled, results can be magnified. By combining efforts, agents can send prospects to other houses that better suit their needs, which are conveniently open at the same time.
3. Even if an open house doesn't produce a sale, it might provide valuable information for the sellers.
Feedback is a valuable resource. Actual market extracted reaction from prospective buyers regarding the condition of the property, its layout, price, etc., will help mold future marketing strategies.
4. The idea is not just to engage consumers, but to engage other real estate agents, too.
Attracting consumers who stop by open houses with their agents in tow creates additional exposure of a different type. Those agents might see the house as attractive to their other clients and arrange future showings.
5. So, what works best to create a successful open house?
Holding a successful open house is part art and part science. Multiple open signs, print and online exposure and direct mail are essential elements of open house pre-marketing. Then it’s up to the hosting agent’s sales skill to engage prospects.
Open houses can have a “coattails” effect. Many people who go through open houses are neighbors, which is not necessarily a bad thing. People, especially neighbors, talk. The more exposure a listing is given, the better.
2. Sometimes, home sellers just feel better for holding an open house. Especially in a slow market, it amounts to a tangible effort.
If that effort is coordinated with many other agents in an office and area-wide open house days are scheduled, results can be magnified. By combining efforts, agents can send prospects to other houses that better suit their needs, which are conveniently open at the same time.
3. Even if an open house doesn't produce a sale, it might provide valuable information for the sellers.
Feedback is a valuable resource. Actual market extracted reaction from prospective buyers regarding the condition of the property, its layout, price, etc., will help mold future marketing strategies.
4. The idea is not just to engage consumers, but to engage other real estate agents, too.
Attracting consumers who stop by open houses with their agents in tow creates additional exposure of a different type. Those agents might see the house as attractive to their other clients and arrange future showings.
5. So, what works best to create a successful open house?
Holding a successful open house is part art and part science. Multiple open signs, print and online exposure and direct mail are essential elements of open house pre-marketing. Then it’s up to the hosting agent’s sales skill to engage prospects.
Monday, February 15, 2010
SHORT SALE TIPS FOR YOU AND YOUR BUYERS
When considering the acquisition of a property that will be a short sale, make sure that you understand the process and set expectations accordingly. One big difference between a short sale and a conventional sale is the approval process. Although many lenders are streamlining their procedures, it can still take 45 days or more from contract acceptance to receive lender approval. Here are some tips to help things go smoothly:
Make as clean an offer as possible, but be sure to include contingencies for inspections, and for appraisal and loan approval. Your contract should also include a short-sale addendum that includes provisions that are uniquely applicable to short sale transactions.
Listing agents often want the buyers' contingencies to begin when the offer is accepted by the seller. However, buyers usually prefer to pay for inspections and the appraisal after lender approval. These items are negotiable.
Your short-sale offer will stand a better chance of lender approval if your client is pre-approved for financing. Include verification of the funds needed for your client’s down payment and closing costs and a preapproval letter from his lender with the offer. In some cases, advise well heeled buyers to eliminate the mortgage contingency altogether to make their offer stand out among other competing offers.
Advise your buyers not to look at a short-sale listing until you have talked with the listing agent to find how much ground work has been done. Does the listing agent have the sellers' written authorization to negotiate on their behalf with the lender? Has the listing agent been in touch with a representative of the lender's loss mitigation department? Have the sellers provided all the documents that will need to be submitted to the lender when an offer is accepted, such as a financial statement, hardship letter, bank statements, pay stubs, etc.
Some listing agents may lack short sale experience. In these cases the you, as selling agent, should tactfully help the listing agent as necessary to ensure that a complete short sale package is submitted to the lender.
As we have said before, short sale properties are not for everyone, but they do represent a large segment of the current listing inventory. With skilled representation on both sides, the process can be made much more palatable.
Make as clean an offer as possible, but be sure to include contingencies for inspections, and for appraisal and loan approval. Your contract should also include a short-sale addendum that includes provisions that are uniquely applicable to short sale transactions.
Listing agents often want the buyers' contingencies to begin when the offer is accepted by the seller. However, buyers usually prefer to pay for inspections and the appraisal after lender approval. These items are negotiable.
Your short-sale offer will stand a better chance of lender approval if your client is pre-approved for financing. Include verification of the funds needed for your client’s down payment and closing costs and a preapproval letter from his lender with the offer. In some cases, advise well heeled buyers to eliminate the mortgage contingency altogether to make their offer stand out among other competing offers.
Advise your buyers not to look at a short-sale listing until you have talked with the listing agent to find how much ground work has been done. Does the listing agent have the sellers' written authorization to negotiate on their behalf with the lender? Has the listing agent been in touch with a representative of the lender's loss mitigation department? Have the sellers provided all the documents that will need to be submitted to the lender when an offer is accepted, such as a financial statement, hardship letter, bank statements, pay stubs, etc.
Some listing agents may lack short sale experience. In these cases the you, as selling agent, should tactfully help the listing agent as necessary to ensure that a complete short sale package is submitted to the lender.
As we have said before, short sale properties are not for everyone, but they do represent a large segment of the current listing inventory. With skilled representation on both sides, the process can be made much more palatable.
BREAKING SHORT SALE NEWS FROM CHASE
Chase Bank has recently adopted a new practice under which it will not approve a short sale containing any kind of document containing language requiring that the seller’s deficiency be forgiven. This has come about as a result of changes in banking accounting practices allowing banks to include short sale losses as assets on their balance sheets, as long as the deficiency has not been forgiven.
We have always attempted to protect our sellers’ interest by negotiating forgiveness of the deficiency. However, this approach appears now to be futile, at least with regard to Chase Bank. Other banks may follow. Short sale sellers should be advised accordingly.
Several local real estate brokerages continue to insist on such an addendum. Short sale buyers and buyer’s agents should be aware that short sale approval will not be forthcoming in those instances.
Friday, February 12, 2010
ARE YOU PAYING WAY TOO MUCH FOR PROPERTY TAXES? (Want to find out?)
Coldwell Banker Weir Manuel, your trusted advisor in all things real estate, will be hosting complimentary property tax seminars to educate tax payers about the appeal process. Homeowners will learn how to read and interpret their assessment notices. We will also explain the difference between State Equalized Value, Capped Value and Taxable Value – and the uncapping process. In short, our seminars will cover virtually everything you want to know about property taxes, including how to reduce them!
Join us at a seminar near you:
7:00pm Tuesday, February 23
The Community House
380 South Bates, Birmingham 48009
7:00pm Wednesday, February 24
VisTaTech Center at Schoolcraft College
18600 Haggerty Road, Livonia 48152
7:00pm Thursday, February 25
University Center 1
Center for Executive & Professional Development
Macomb Community College
44575 Garfield Road, Clinton Township 48038
Tuesday, February 9, 2010
MORTGAGE RATE PREDICTIONS FOR 2010
The affordability of home ownership is affected by many factors including housing prices, interest rates, short term tax incentives and long term tax deductions. Besides housing prices, the single most important factor impacting the out-of-pocket monthly cost of home ownership is interest rates. Where are interest rates headed in 2010?
Here is what some experts are predicting:
HSH & Associates: rates will nudge closer to 6% than 5%
Moody's Economy.com: 6 percent sounds about right
Washington Post: 6 percent by the end of 2010
Barry Habib of Mortgage Market Guide: It could be as high as 6.5%
Morgan Stanley: 7.5 percent to 8 percent
Here is what some experts are predicting:
HSH & Associates: rates will nudge closer to 6% than 5%
Moody's Economy.com: 6 percent sounds about right
Washington Post: 6 percent by the end of 2010
Barry Habib of Mortgage Market Guide: It could be as high as 6.5%
Morgan Stanley: 7.5 percent to 8 percent
Monday, February 1, 2010
CHAIRMAN FRANK SAYS HOUSE PANEL TO SUGGEST ABOLISHING FANNIE, FREDDIE
Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, said on Friday that the government-backed mortgage finance giants Fannie Mae and Freddie Mac are likely to be abolished and replaced with a new system for housing finance.
"The committee will be recommending abolishing Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing finance," said Frank, once a big proponent of the firms. "That's the approach, rather than a piecemeal one."
Fannie Mae and Freddie Mac are two vital cogs in the nation's mortgage market, buying loans from lenders, insuring them against default and supplying fresh cash to make more loans.
The two companies are behind most home loans. Because of mounting losses on those loans that threatened their collapse, District-based Fannie Mae and McLean-based Freddie Mac were seized by the federal government in September 2008 and are now run by regulators.
Frank said no decision has been made about what future model he will propose, and aides said no action is imminent. He has said it's important for the government to continue to play a role in fostering housing affordability.
Treasury Secretary Timothy F. Geithner said Thursday that Congress likely won't be able to take up housing finance reform this year. The administration will release principles for reform next month.
"We are committed to propose a set of detailed reforms beginning this year," Geithner said in an interview on "PBS NewsHour." "I don't think we're going to be able to legislate that until next year, because it's just a complicated thing to get right."
Source: Zachary A. Goldfarb, Washington Post
"The committee will be recommending abolishing Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing finance," said Frank, once a big proponent of the firms. "That's the approach, rather than a piecemeal one."
Fannie Mae and Freddie Mac are two vital cogs in the nation's mortgage market, buying loans from lenders, insuring them against default and supplying fresh cash to make more loans.
The two companies are behind most home loans. Because of mounting losses on those loans that threatened their collapse, District-based Fannie Mae and McLean-based Freddie Mac were seized by the federal government in September 2008 and are now run by regulators.
Frank said no decision has been made about what future model he will propose, and aides said no action is imminent. He has said it's important for the government to continue to play a role in fostering housing affordability.
Treasury Secretary Timothy F. Geithner said Thursday that Congress likely won't be able to take up housing finance reform this year. The administration will release principles for reform next month.
"We are committed to propose a set of detailed reforms beginning this year," Geithner said in an interview on "PBS NewsHour." "I don't think we're going to be able to legislate that until next year, because it's just a complicated thing to get right."
Source: Zachary A. Goldfarb, Washington Post
Monday, January 25, 2010
COLDWELL BANKER WEIR MANUEL TO HOST PROPERTY TAX SEMINARS
It's that time of the year again when homeowners need to begin thinking about their property taxes. Next month, municipalities will be mailing property owners Property Assessment Notices for 2010. Shortly after that, normally about the second week in March, local Boards of Review will hear property tax appeals.
For the third year, Coldwell Banker Weir Manuel will be hosting property tax seminars to educate tax payers about the appeal process. Home owners will learn how to read and interpret their assessment notices. We will also explain the difference between State Equalized Value, Capped Value and Taxable Value. The uncapping process will also be explained.
Taxpayers will also learn about the appeal process, both at the local and state levels. After attending one of these seminars, most taxpayers will have a clear understanding whether or not it makes sense for them to appeal their assessment.
Our seminars will again be held in multiple locations around the tri-county area during the middle of February, which is just about the time taxpayers should be receiving their assessment notices. Dates and locations will be established soon. The sessions will be complimentary and be done as a community service. All past, current and future clients of the firm are welcome.
For the third year, Coldwell Banker Weir Manuel will be hosting property tax seminars to educate tax payers about the appeal process. Home owners will learn how to read and interpret their assessment notices. We will also explain the difference between State Equalized Value, Capped Value and Taxable Value. The uncapping process will also be explained.
Taxpayers will also learn about the appeal process, both at the local and state levels. After attending one of these seminars, most taxpayers will have a clear understanding whether or not it makes sense for them to appeal their assessment.
Our seminars will again be held in multiple locations around the tri-county area during the middle of February, which is just about the time taxpayers should be receiving their assessment notices. Dates and locations will be established soon. The sessions will be complimentary and be done as a community service. All past, current and future clients of the firm are welcome.
Tuesday, January 19, 2010
BIRMINGHAM OFFICES OF CBWM FIND NEW LOCATION
One major initiative in 2010 will be the consolidation of our two Birmingham offices. We have acquired the building at 294 E. Brown Street, a 20,000 square foot facility right across the street from our current Birmingham North location.
The building will be redesigned by noted local architect Victor Saroki and renovated inside and out. The building will feature state-of-the-art technology and communications, a high ratio of private offices and excellent on-site parking for our 115 Birmingham agents.
Work on the building has already begun and occupancy should be available in the spring.
The building will be redesigned by noted local architect Victor Saroki and renovated inside and out. The building will feature state-of-the-art technology and communications, a high ratio of private offices and excellent on-site parking for our 115 Birmingham agents.
Work on the building has already begun and occupancy should be available in the spring.
Monday, January 18, 2010
"EXPECT MORE" IS NEW CBWM THEME FOR 2010
As we enter our first full year as Coldwell Banker Weir Manuel our goal is to build on the foundation created during the second half of 2009. Accordingly, our theme for 2010 is “Expect More”.
This theme is based on the concept of collaboration among the stakeholders of CBWM: ownership, management, the sales team and our employees. I think we can even expect a bit more from the market this year!
“My gut feeling is that 2010 will probably be one of the best years of our lives," said former broker-owner Steve Harney, speaking at Inman NY last week. "I'm not looking through rose-colored glasses ... there is confusion in the market, and a much, much greater need for experts -- with much less competition because of agent attrition.”
CBWM is poised to provide that expertise. Because of the extensive knowledge base of our tenured agents and management team, along with the short sale and REO expertise we have become known for - and the support of bankers Title, we are in an excellent position to counsel our clients on all aspects of their specific real estate needs.
This theme is based on the concept of collaboration among the stakeholders of CBWM: ownership, management, the sales team and our employees. I think we can even expect a bit more from the market this year!
“My gut feeling is that 2010 will probably be one of the best years of our lives," said former broker-owner Steve Harney, speaking at Inman NY last week. "I'm not looking through rose-colored glasses ... there is confusion in the market, and a much, much greater need for experts -- with much less competition because of agent attrition.”
CBWM is poised to provide that expertise. Because of the extensive knowledge base of our tenured agents and management team, along with the short sale and REO expertise we have become known for - and the support of bankers Title, we are in an excellent position to counsel our clients on all aspects of their specific real estate needs.
Monday, January 11, 2010
SIX QUESTIONS YOU SHOULD ASK YOUR LENDER
Consumers are finally learning that there is more to choosing a mortgage than just a low interest rate. A good mortgage planner is more in the advice business than the lowest price business. Borrowers should consider asking these questions before selecting a lender:
1. What type of lender should I use?
There are three basic types of lenders. Mortgage BROKERS promote a broad product menu, competitive pricing, and entrepreneurial approach; however, BROKERS cannot lock, commit, or approve your loan because they are not actual lenders. Banks and Credit Unions rely on financial strength, direct lending capabilities, and stability; however, they sometimes have limited product offerings. Mortgage BANKERS blend the best of both: direct lending ability, financial strength and stability, wide product offerings and competitive pricing.
2. What loan products should I consider?
Make sure your lender offers multiple loan products (Conventional, FHA, VA, MSHDA, etc.). While most people today do choose a 30 year fixed, it is not always the wisest choice. Borrowers need to consider how long they will be staying in the home and any anticipated income changes before settling for the same loan as everyone else. Additionally, buyers acquiring properties in need of repairs may want to consider the FHA 203K Program.
3. Should I lock or float my interest rate?
A knowledgeable mortgage advisor should be able to give you more than historical information. Weighing numerous factors ranging from your projected closing date to upcoming economic reports, look for counsel regarding future interest rate projections. While no one can predict with absolute certainty, you need to reach a comfort level that the lender you choose has the best information and your best interest at heart.
4. What are mortgage rates based on?
There is only one correct answer. It is the pricing of Mortgage Backed Securities. (Unfortunately, too many people answer the 10-year Treasury Bill.) If you get the wrong answer on this basic question, what else don’t they know?
5. What upcoming economic data will impact rates?
How will a Jobs Report, a Fed Board Meeting or Inflation Number affect your home loan? Your mortgage planner should know, explain it to you, and keep you informed.
6. How can I improve my chances of getting approved and at the lowest possible cost?
Sometimes even minor improvements in a credit score, the amount of your down payment, or how you position your assets can make a big difference. During your counseling sessions, your mortgage planner should be advising you on how the little things can make a big difference.
Good advice, whether it’s from your doctor, lawyer, real estate agent or lender, can be invaluable. Finding a lender who is an expert….who has your goals in mind…and who offers creative solutions is one of the most important factors in a successful real estate transaction.
1. What type of lender should I use?
There are three basic types of lenders. Mortgage BROKERS promote a broad product menu, competitive pricing, and entrepreneurial approach; however, BROKERS cannot lock, commit, or approve your loan because they are not actual lenders. Banks and Credit Unions rely on financial strength, direct lending capabilities, and stability; however, they sometimes have limited product offerings. Mortgage BANKERS blend the best of both: direct lending ability, financial strength and stability, wide product offerings and competitive pricing.
2. What loan products should I consider?
Make sure your lender offers multiple loan products (Conventional, FHA, VA, MSHDA, etc.). While most people today do choose a 30 year fixed, it is not always the wisest choice. Borrowers need to consider how long they will be staying in the home and any anticipated income changes before settling for the same loan as everyone else. Additionally, buyers acquiring properties in need of repairs may want to consider the FHA 203K Program.
3. Should I lock or float my interest rate?
A knowledgeable mortgage advisor should be able to give you more than historical information. Weighing numerous factors ranging from your projected closing date to upcoming economic reports, look for counsel regarding future interest rate projections. While no one can predict with absolute certainty, you need to reach a comfort level that the lender you choose has the best information and your best interest at heart.
4. What are mortgage rates based on?
There is only one correct answer. It is the pricing of Mortgage Backed Securities. (Unfortunately, too many people answer the 10-year Treasury Bill.) If you get the wrong answer on this basic question, what else don’t they know?
5. What upcoming economic data will impact rates?
How will a Jobs Report, a Fed Board Meeting or Inflation Number affect your home loan? Your mortgage planner should know, explain it to you, and keep you informed.
6. How can I improve my chances of getting approved and at the lowest possible cost?
Sometimes even minor improvements in a credit score, the amount of your down payment, or how you position your assets can make a big difference. During your counseling sessions, your mortgage planner should be advising you on how the little things can make a big difference.
Good advice, whether it’s from your doctor, lawyer, real estate agent or lender, can be invaluable. Finding a lender who is an expert….who has your goals in mind…and who offers creative solutions is one of the most important factors in a successful real estate transaction.
Monday, December 28, 2009
SALES ARE UP, BUT NOT IN ALL PRICE RANGES
The sales pace for resale homes rose for the third straight month in November, climbing 44.1 percent compared to the same month last year, the National Association of Realtors reported last week.
Sales reached a seasonally adjusted annual rate of 6.54 million, up 7.4 percent compared to October 2009. This rate is a projection of a monthly total over a 12-month period, adjusted to account for typical seasonal fluctuations in sales.
As positive news continues to mount regarding residential home re-sales and falling inventory levels, it is important for sellers to understand current market dynamics. These positive statistics are being primarily driven by sales of homes priced below $300,000 as the tax credit stimulus continues to drive demand in the lower price ranges.
Eventually the increased demand for lower priced homes will impact sales in higher price ranges, but that may take quite some time. Local sellers with properties over $500,000 are well advised to continue to price aggressively to attract the few buyers looking in those price ranges.
In general, there is a feeling that prices are bottoming out, but there is still some room for further compression at the top end of the market.
Sales reached a seasonally adjusted annual rate of 6.54 million, up 7.4 percent compared to October 2009. This rate is a projection of a monthly total over a 12-month period, adjusted to account for typical seasonal fluctuations in sales.
As positive news continues to mount regarding residential home re-sales and falling inventory levels, it is important for sellers to understand current market dynamics. These positive statistics are being primarily driven by sales of homes priced below $300,000 as the tax credit stimulus continues to drive demand in the lower price ranges.
Eventually the increased demand for lower priced homes will impact sales in higher price ranges, but that may take quite some time. Local sellers with properties over $500,000 are well advised to continue to price aggressively to attract the few buyers looking in those price ranges.
In general, there is a feeling that prices are bottoming out, but there is still some room for further compression at the top end of the market.
Monday, December 21, 2009
CBWM ANNOUNCES BANKERS TITLE AGENCY
Coldwell Banker Weir Manuel (CBWM) announced today that it has partnered with Farmington Hills, Michigan-based Attorneys Title Agency (ATA), headed by David Trott, to form Bankers Title Agency, LLC.
“The roll-out of Bankers Title is another step forward in implementing the strategic expansion plan we developed 90 days ago,” said Kelly Sweeney, CBWM CEO. “Bankers Title will provide exclusive, timely and best-in-class support for our agents and their clients. Our ‘client first’ service platform combined with ATA’s financial strength, access to the latest technology and scalability will provide our agents with direct access to the best title services and closing platform in the region.”
“We are looking forward to an outstanding partnership with Coldwell Banker Weir Manuel,” said ATA president William Robinson. “We have an exceptional team of professionals to launch this new company and are confident that our ‘high-touch’ approach will offer Coldwell Banker Weir Manuel’s agents a clear differentiator in a very crowded marketplace.”
Operationally, Bankers Title will employ many of the same point-of- contact personnel previously provided by Seaver Title and Heritage Title. The additional back office and systems support added by Attorney’s Title will result in phenomenal efficiencies and service.
CBWM ANNOUNCES BANKERS TITLE AGENCY
Coldwell Banker Weir Manuel (CBWM) announced today that it has partnered with Farmington Hills, Michigan-based Attorneys Title Agency (ATA), headed by David Trott, to form Bankers Title Agency, LLC.
“The roll-out of Bankers Title is another step forward in implementing the strategic expansion plan we developed 90 days ago,” said Kelly Sweeney, CBWM CEO. “Bankers Title will provide exclusive, timely and best-in-class support for our agents and their clients. Our ‘client first’ service platform combined with ATA’s financial strength, access to the latest technology and scalability will provide our agents with direct access to the best title services and closing platform in the region.”
“We are looking forward to an outstanding partnership with Coldwell Banker Weir Manuel,” said ATA president William Robinson. “We have an exceptional team of professionals to launch this new company and are confident that our ‘high-touch’ approach will offer Coldwell Banker Weir Manuel’s agents a clear differentiator in a very crowded marketplace.”
Operationally, Bankers Title will employ many of the same point-of- contact personnel previously provided by Seaver Title and Heritage Title. The additional back office and systems support added by Attorney’s Title will result in phenomenal efficiencies and service.
“The roll-out of Bankers Title is another step forward in implementing the strategic expansion plan we developed 90 days ago,” said Kelly Sweeney, CBWM CEO. “Bankers Title will provide exclusive, timely and best-in-class support for our agents and their clients. Our ‘client first’ service platform combined with ATA’s financial strength, access to the latest technology and scalability will provide our agents with direct access to the best title services and closing platform in the region.”
“We are looking forward to an outstanding partnership with Coldwell Banker Weir Manuel,” said ATA president William Robinson. “We have an exceptional team of professionals to launch this new company and are confident that our ‘high-touch’ approach will offer Coldwell Banker Weir Manuel’s agents a clear differentiator in a very crowded marketplace.”
Operationally, Bankers Title will employ many of the same point-of- contact personnel previously provided by Seaver Title and Heritage Title. The additional back office and systems support added by Attorney’s Title will result in phenomenal efficiencies and service.
CBWM ANNOUNCES BANKERS TITLE AGENCY
Coldwell Banker Weir Manuel (CBWM) announced today that it has partnered with Farmington Hills, Michigan-based Attorneys Title Agency (ATA), headed by David Trott, to form Bankers Title Agency, LLC.
“The roll-out of Bankers Title is another step forward in implementing the strategic expansion plan we developed 90 days ago,” said Kelly Sweeney, CBWM CEO. “Bankers Title will provide exclusive, timely and best-in-class support for our agents and their clients. Our ‘client first’ service platform combined with ATA’s financial strength, access to the latest technology and scalability will provide our agents with direct access to the best title services and closing platform in the region.”
“We are looking forward to an outstanding partnership with Coldwell Banker Weir Manuel,” said ATA president William Robinson. “We have an exceptional team of professionals to launch this new company and are confident that our ‘high-touch’ approach will offer Coldwell Banker Weir Manuel’s agents a clear differentiator in a very crowded marketplace.”
Operationally, Bankers Title will employ many of the same point-of- contact personnel previously provided by Seaver Title and Heritage Title. The additional back office and systems support added by Attorney’s Title will result in phenomenal efficiencies and service.
Wednesday, December 9, 2009
SHORT SALES ARE ABOUT TO GET EASIER
The biggest mystery to me over the last eighteen months was why banks weren't more receptive to the “short sale” process. Studies have shown that it costs the bank more money if a property was foreclosed upon than if they accepted a “short sale”. For homeowners, a “short sale” makes much more sense for several reasons:
• There is a much higher chance that the deficiency judgment could be negotiated in a short sale versus a foreclosure.
• A short sale would have less of a negative impact on the homeowner's credit rating.
• The homeowner would have at least some control over the timing of his relocation to new living arrangements.
• A “short sale” would allow the homeowner to leave with dignity.
So, if it would be better for both the bank and the homeowner, why were more “short sales” not completed? A recent research study by The National Consumer Law Center (NCLC) has uncovered the mystery behind this dilemma.
In order to understand it, we must first look at the differences in the banking industry over the last ten years. In the past, the banks used to process the loan (take the application, put together the file, etc.), lend you the money, and also service the loan (send the bills, make collection calls, follow-up, etc.). Over the last eight to ten years, the lending of mortgage money has shifted. First Wall Street and then the federal government became the primary lender in the mortgage sector. But, neither Wall Street nor the government had any interest in processing or servicing the mortgage. Mortgage companies continued to process the loans, but a new industry was created to fill the need for the servicing of these loans.
So now, a separate and independent entity is servicing a tremendous portion of existing mortgages. Just ten years ago, 37.4 percent of all mortgage loans were securitized (thus requiring a servicing company). Today, that number is 79.3 percent.
The NCLC study shows that the reason more houses are not available for “short sales” is because these servicing companies actually collected more fees for a foreclosure than they did for a “short sale”. Actually, servicing companies would lose money if they did one. Since they were now in charge of making that decision, it was obvious why foreclosure was the alternative of choice.
The federal government, realizing that modifications were not the answer and banks realizing that the foreclosure process was too expensive, have agreed to change the fee structure to make it more profitable for the servicing companies to lean toward “short sales”.
It's always about the money. This situation was no different. Now that the money will flow to the companies that choose the “short sale” alternative, watch how much easier the process will become.
Source: Steve Harney
• There is a much higher chance that the deficiency judgment could be negotiated in a short sale versus a foreclosure.
• A short sale would have less of a negative impact on the homeowner's credit rating.
• The homeowner would have at least some control over the timing of his relocation to new living arrangements.
• A “short sale” would allow the homeowner to leave with dignity.
So, if it would be better for both the bank and the homeowner, why were more “short sales” not completed? A recent research study by The National Consumer Law Center (NCLC) has uncovered the mystery behind this dilemma.
In order to understand it, we must first look at the differences in the banking industry over the last ten years. In the past, the banks used to process the loan (take the application, put together the file, etc.), lend you the money, and also service the loan (send the bills, make collection calls, follow-up, etc.). Over the last eight to ten years, the lending of mortgage money has shifted. First Wall Street and then the federal government became the primary lender in the mortgage sector. But, neither Wall Street nor the government had any interest in processing or servicing the mortgage. Mortgage companies continued to process the loans, but a new industry was created to fill the need for the servicing of these loans.
So now, a separate and independent entity is servicing a tremendous portion of existing mortgages. Just ten years ago, 37.4 percent of all mortgage loans were securitized (thus requiring a servicing company). Today, that number is 79.3 percent.
The NCLC study shows that the reason more houses are not available for “short sales” is because these servicing companies actually collected more fees for a foreclosure than they did for a “short sale”. Actually, servicing companies would lose money if they did one. Since they were now in charge of making that decision, it was obvious why foreclosure was the alternative of choice.
The federal government, realizing that modifications were not the answer and banks realizing that the foreclosure process was too expensive, have agreed to change the fee structure to make it more profitable for the servicing companies to lean toward “short sales”.
It's always about the money. This situation was no different. Now that the money will flow to the companies that choose the “short sale” alternative, watch how much easier the process will become.
Source: Steve Harney
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