Short-Sale Process Expected to Speed Up in June

DAILY REAL ESTATE NEWS | TUESDAY, MAY 29, 2012

The short-sale process is expected to get shorter starting June 15. New guidelines issued under the Federal Housing Finance Agency will require Fannie Mae and Freddie Mac to give home buyers of short sales notice of their final decision within 60 days. The new guidelines also will require the mortgage giants to respond to initial short-sale requests within 30 days of receiving an offer from a potential buyer.

The speedier process is expected to be a boost to the housing market, Michael McHugh, president of the Empire State Mortgage Bankers Association, told the New York Times. Home buyers and sellers often have to wait months before they receive a decision from a lender on an offer for a short sale. Some deals fall apart just from the long wait alone. 

Short sales have been increasing in recent months, as many lenders find them more appealing than foreclosures, which can be much more costly and take longer to remove from their books. 

Short sales now outpace foreclosure sales in many parts of the country. Short sales represent more than 14 percent of existing-home sales, according to CoreLogic housing data from March, the most recent month available. 

McHugh says that a faster short-sale process may be particularly helpful in speeding the recovery in judicial states, where foreclosures must go through the courts before they are approved. For example, in New York, judicial foreclosures can take a year or longer to be approved. Now short sales may be viewed by defaulting home owners as more of an option in avoiding foreclosure. 

“There should be a significant improvement in the turnaround,” McHugh said regarding housing markets with judicial foreclosure processes.

Source: “Speeding Up Short Sales,” The New York Times (May 24, 2012)

4 Keys to Distressed Property Sales Success

Great article from realtor.org 

4 Keys to Distressed Property Sales Success

Distressed sales have a well-earned reputation for difficulty. But if you’re thorough in your dealings with consumers, lenders, and other agents, you will find things go much more smoothly.

APRIL 2012 | BY CHRISTINA RORDAM

As real estate professionals, we all know that distressed properties are a huge part of today’s market. And they’re going to be for a while. Whether you’ve dealt with an REO account or find success in short sales, you will probably deal with distressed sales.

Becoming your customer’s ultimate resource in these complicated transactions is easier than you may think. Here are four important tips to aid you in navigating these complex processes.

Know Your Customer

Speaking with real estate professionals who have listed REO and short sales, as well as having listed both myself, I’ve discovered that one thing’s for sure: It’s important to know your customer. Not everyone is a fit for a distressed home. When dealing with REO properties, it’s critical that the buyer’s funds are available immediately for escrow purposes and for the balance to close available within the designated closing period in the contract. Banks do not like to give out extensions when they aren’t necessary.

With regards to short-sale buyers, the renter in need of a home right away with nowhere else to go may be better off not looking at short sales. The bottom line is this: Understand your customer’s needs and financial situation. Once you’ve armed yourself with a complete picture of who your customer is, you can manage their expectations accordingly.

Follow Instructions

This one’s easy. Asset managers will often kick back contracts and paperwork for missed initials, signatures, or dates. Review your paperwork prior to sending all of it to your customer as well as the bank. Your fellow agents and customers will love you for all the time you save everyone involved. A great service for this is DocuSign, which you can use to send over documents electronically to buyers and sellers, with clear notations on where they can sign and date the forms. Your customers sign with a click of the mouse. However, ask questions before doing this, because not all lenders accept electronic signatures.

Put It in Writing

REO agents are bombarded by phone calls. Is the home available? Are there other offers? What is the condition of the home? Limit your communications to e-mail or text unless it is urgent, always read remarks from other real estate pros, and review attachments and showing instructions prior to calling with questions. Most of what you want to know is likely in the MLS. Already submitted your offer and want a status update? Again, e-mail is the best and most considerate way to inquire. The listing agent will appreciate your thoroughness and may even recommend your offer when asked.

Be Complete

This is especially crucial when dealing with short sales. When you meet your seller, bring along a list of required documents or send the list prior to your meeting. When sending over your packet to the lender, be sure it is complete. Days and even weeks can be lost over a missing tax return or paycheck. Being thorough not only saves you time, but the asset manager also will appreciate your preparation and be able to provide you with better information, and sooner. Once your seller’s BPO or appraisal are ordered, it’s helpful to meet the practitioner or appraiser at the home, provide them with comps, and point out any issues not immediately recognizable.

The distressed-sale process is always evolving. Follow these tips and stay abreast of the latest industry changes and you’ll chart a course to short-sale and REO success!

RELATED CONTENT: 

Avoid REO Surprises

The Language of Distress

Short Sales: Coming Up Short

6 Questions Foreclosure Buyers Should Ask

EXTERNAL LINKS: 

REO Sales: Success Requires Ramp Up

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Trulia Housing Barometer

Trulia's Housing Barometer: Recovery Slowly, Steadily Pushes Ahead

+ Comment now

Jed Kolko, Trulia Chief Economist

Trulia’s Chief Economist continues his monthly roundup of new construction starts, existing-home sales and the delinquency-plus-foreclosure rate to see how far away we are from a normal housing market.

Each month Trulia’s Housing Barometer charts how quickly the housing market is moving back to “normal.” We summarize three key housing market indicators: new construction starts (Census), existing-home sales (NAR) and the delinquency-plus-foreclosure rate (LPS First Look). For each indicator, we compare this month’s data to (1) how bad the numbers got at their worst and (2) their pre-bubble “normal” levels.

April data, released over the past few days, showed:

—Construction starts rose. Starts increased from an upwardly revised 699,000 in March to 717,000 in April. Since November starts have been in the 700,000 range. But starts are still the laggard of the housing recovery: they are just 23% of the way back to normal.

—Existing home sales also increased, from 4.47 million to 4.62 million. Home sales are nearly halfway back (49%) to their normal level from their worst point during the bust.

—The delinquency + foreclosure rate stagnated. (Remember, on this measure, lower is better.) In April, 11.26% of mortgages were delinquent or inforeclosure, versus 11.23% in March, which means that this measure remains 37% back to normal.

Averaging these three back-to-normal percentages together, the market is now 37% of the way back to normal, compared with just 20% back to normal a year ago.

Bottom line: Aside from a dip in March, the recovery is slowly but steadily pushing ahead.

Press Release - Keller Williams Realty, Inc. Ranked in America's Top 10 Workplaces

Press Release - Keller Williams Realty, Inc. Ranked in America's Top 10 Workplaces

Press Release - Keller Williams Realty Dominates REAL Trends Rankings, Continues Strong Growth Trajectory

Press Release - Keller Williams Realty Dominates REAL Trends Rankings, Continues Strong Growth Trajectory

This Month in Real Estate (US): May 2012

KW April market

Success in Spite of the Market!

Kelly Hager's 5 Tips for Selling Your Home

April Market Statistics

April Market Statistics for St. Louis County and St. Charles County

St. Louis County :

890 unit sales , up 20.5% MTD & up 15.3% YTD over 2011

5.8 Months of supply based on 90 day average sales.

4694 Active listings were up 3% as of 5/1 compared to 4536 on 4/1.

May was 10.5% of total business for 2011 and June was 11.3% overall.

St. Charles County :

329 unit sales , up 9.7% MTD & up 10.8% YTD over 2011

6.4 Months of supply based on 90 day average sales.

1846 Active listings were down 4.5% as of 5/1 compared to 1931 on 4/1.

May was 9.1% of total business for 2011 and June was 10% overall.

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