Real Estate News

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.

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 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

hort sales can represent excellent buying opportunities for certain purchasers. But short sales are quite different than traditional real estate transactions, and they’ve been known to frustrate and disappoint buyers who are unschooled in their complexities.

Five things short-sale buyers ought to know:

1. Short sales are almost never short, so to the patient buyer go the spoils. The process, from making an offer to the closing, can take anywhere from several weeks to more than a year.

The basic reasons for the delays are twofold: One, most lenders are awash in foreclosure and pre-foreclosure properties these days, and they’re just not staffed to process these home sales in volume. Two, many real estate agents are not well trained in this complicated process.

2. Work with an agent who has a track record in short sales. These can be complex transactions with their own rules and etiquette, and they require knowledge of what’s reasonable and customary. A good short sale practitioner is a specialist.

A common mistake is that inexperienced agents unknowingly submit incomplete files and wait for the bank to get back to them. But it doesn’t work that way. With hundreds of pre-foreclosure files on their desks, bank negotiators will simply push the most complete files to the head of the line and improperly documented files fall to the bottom of the stack.

3. Buyers need to impress lenders that they’re serious. Buyers need a very strong preapproval letter from their lender with a solid financial package and proof of funds for their down payment, or cash.

Buyers also should invest in a thorough home inspection before making an offer. Once short sale approval is granted, buyers must be prepared to close.

4. Pricing is critical. The homeowner’s listing price isn’t necessarily a good guideline. And super-lowball offers frequently go nowhere. Short sales can represent great value for the right buyer, but lenders will generally only accept offers which are relatively close to their appraised value or BPO.

5. Be prepared to walk away. Short sales properties can be plagued with all kinds of ancillary issues. They can be encumbered with unpaid taxes or homeowner association liens, second mortgages with other lenders, municipal code violations, not to mention the financial circumstances of the seller. These contribute to the uncertainty of approval and closing delays. Short sale properties should only be considered by buyers with the patience and ability to deal with these unknowns.