Representing The Buyer In An Atlanta Short Sale Epilogue

Posted by Doug Quance on April 27th, 2010

A Look At The Short Sale As A Work In Progress

Two weeks ago, I posted the second entry to this subject of representing the buyer in a short sale transaction. We have discussed the aspects of this transaction up until the seller’s lender had approved the short pay settlement.

In our contract, we agreed to deliver the earnest money deposit to the listing broker within 72 hours of the bank’s approval.- The first thing I did was call the buyer to let him know that our offer had been accepted – and to remind him that he needed to deliver the earnest money to the listing broker.

Acceptance by the lender of our offer also triggered the due diligence contingency which gave us seven days to perform any tests and inspections. In some instances, I would have made this contingency for ten days, but in this case it was unnecessary. I advised the buyer to pay for a professional home inspection – and referred Charlie Thompson of Attics and Under Home Inspections as the man I would recommend.

I delivered the earnest money to the listing agent, and the buyer scheduled an inspection with Charlie Thompson. A few days later, we got together at the townhome to meet Charlie and find out what was right and wrong with the dwelling. As usual, Charlie found several items that needed to be addressed – but nothing of great import that would cause us to terminate or attempt to renegotiate our agreement. All in all, he liked the unit and felt the buyer was buying a good unit.

Meanwhile, I forwarded the bank’s approval letter to the closing attorney so that he could begin his title examination. A few days later, the attorney informed me of a small title problem regarding the chain of title. I gave him the contact information for the asset manager at the bank, and let him earn his money.

The attorney resolved our title issue in a few days, and sent us a copy of the preliminary HUD-1 settlement statement for our review. After a minor change, we approved the HUD-1 to be sent to the lender for approval. Once again, the lender gave us speedy service and quickly approved the HUD-1.

At this point, we were ready to close. We set the closing for the following Monday, and notified all parties.

Closing was quick and painless for the buyer and seller. We were in and out in twenty minutes, as this was a cash transaction.

I must admit, this short sale has really encouraged me – and I hope we see more like this.


As always, if you have any questions regarding real estate in the greater Atlanta area, feel free to contact me here.

 

Representing The Buyer In An Atlanta Short Sale Part 2

Posted by Doug Quance on April 9th, 2010

A Look At The Short Sale As A Work In Progress

Two weeks ago, I posted the first entry to this subject of representing the buyer in a short sale transaction. We prepared the short sale package and submitted it on March 23rd; and provided a missing document the next day.

On March 25th, we verified that the bank received the missing document – and also learned that the file had been assigned to a Loss Mitigator. At that time, they would only provide us with the Loss Mitigator’s name, email acheter cialis france address and fax number – no phone number. That’s okay – I don’t like trying to call these guys, anyways.

On March 30th, the bank informed us that the loan’s investor would not agree to pay any HOA transfer fees or Third-party Negotiator fees – but there was no notation as to who the investor is. To keep things simple, we started to work on revising the package to reflect the investor’s position on these issues.

In war and short sales – you have to pick your battles carefully, and you must keep in mind that the other side wants to feel like they gained some ground, too.

We also inquired as to whether our request for a Broker’s Price Opinion had been ordered – and we were told that a BPO was performed last December 22nd, but they were uncertain whether a new BPO had been ordered. Keep in mind that we’re still dealing with the lower level at the bank – and NOT the Loss Mitigator.

At this point, we also noticed that the property had been scheduled for foreclosure auction on April 6th.

On March 31st, the Loss Mitigator emailed us back indicating that our offer was in line with their value on file – and informing us that there were three additional bank-specific documents that they needed to be completed. The funny thing is that these new documents simply reformat information that we already provided. He also reinterated the fees that the investor would not pay.

So we sharpened our pencils and revised our numbers for the Preliminary HUD-1 and Short Sale vs REO Asset Retention Comparison Analysis – as well as updated our package with the additional requested documents. We rewrote our Proposal Letter; updated the Index and Cover; and created a new pdf file to transmit to the Loss Mitigator.

Our updated package was uploaded to a private area on our website, and a link sent to the Loss Mitigator on April 1st. In our package, we reminded the Loss Mitigator of the impending date of the foreclosure, as this would severely curtail our prospects for success.

The Loss Mitigator acknowledged receipt the next day and promised to get a review completed ASAP.

At this point, we don’t want to be a nuisance to the lender. They have been very good with their handling of our file – and the last thing we want to do is create a situation where our file gets pushed to the back burner – especially since the property is scheduled for auction in a few days.

So our next task is to ensure the auction has been put on hold – so we call the attorney handling the foreclosure  the morning of the auction to inquire as to the status of the property. Fortunately, the bank has instructed the attorney to put the foreclosure on hold.

The next day, the Loss Mitigator informed us that our short pay settlement had been approved – and simply needed to know if we could close by the end of the month as stated in our contract.

With the banks approval in hand, we created a package to transmit to the attorney so that he could get started with his title work. We also let the buyers know that it was time to get a home inspection so they could truly ascertain what they were buying.

I must confess that the speed by which the lender and investor have responded is both welcome and heartening. Last year, I witnessed several instances where the sellers could no longer wait for their short sales to be approved – and filed for bankruptcy protection. Needless to say – this tends to kill short sales.

Yesterday, I participated in a webinar hosted by Bank Of America where they were explaining their new system for getting short sales processed in a timely manner – and I must admit, I am encouraged by this development. BofA has not been a  trusted friend to the short-seller in the past – and their stated commitment to "People, Process and Technology" should improve the speed by which the short sales can be accomplished.


As always, if you have any questions regarding real estate in the greater Atlanta area, feel free to contact me here. 

 

Representing The Buyer In An Atlanta Short Sale

Posted by Doug Quance on March 25th, 2010

A Look At The Short Sale As A Work In Progress

While I usually assist sellers (and their agents) who need to sell their homes by way of short sale, there are times where I am asked to represent a buyer in the short sale transaction.

As a rule – I’m not interested in representing buyers who wish to waste their time trying to buy a short sale. It’s not that short sales can’t be done – they can. It’s just that most listing agents have no clue as to how to do a short sale – and will not allow me and my short sale specialists to negotiate with the seller’s lender. If I can’t be in the position to create and submit the short sale package, I don’t know if I’m wasting my time – or more importantly – that of my client.

For openers, I need to know that the seller qualifies to be considered for a short pay settlement. I hate to break this to you, but there are quite a few folks out there who can afford to keep their homes – yet simply don’t want to pay for a home that isn’t worth as much as they owe. No matter how good your offer might be, the lender can derail your plans if the seller is jerking them around. You just have to accept that in some cases, the lender is going to foreclose – and there’s nothing you can do about it.

Over the next few weeks, I am going to document the journey of this short sale purchase so that you can appreciate how these sales work. As with all real estate transactions, it may or may not end up closing – though we feel fairly comfortable with our chances for success. For obvious reasons, I will have to limit certain details since this transaction is a pending transaction.

We executed our contract for a townhouse on March 9th. Included in our signed papers was a Letter of Authorization (LOA) which authorizes me and my negotiator to speak with the seller’s lender. We faxed the LOA over to the seller’s lender on the following day.

On March 12th, the lender verified that the LOA had been received, but not yet entered into their system.

On March 15th, the lender acknowledged receipt of the LOA. They also supplied us with the list of documents they needed for the short sale package. The items requested include:

  • Hardship Letter
  • Financial Worksheet
  • Executed Purchase and Sale Agreement
  • HUD-1
  • Listing Agreement
  • Seller’s Pay Stubs or Proof of Income for previous 30 days
  • Seller’s Bank Statements for previous two months
  • First Two Pages of Seller’s IRS form 1040
  • Purchaser’s Proof of Funds

The lender also informed me that their current turnaround time on short sales is 30 to 45 days, which is perfect for us, as we want to close by the end of April – and we’ve got a good, solid, clean package.

I communicated the list to the listing agent, and told her that I needed a FInancial Worksheet (which I supplied the new HUD version), a copy of the listing agreement, the seller’s pay stubs, the seller’s bank statements, and the first two pages of the seller’s IRS form 1040.

When representing the seller, I explain what will be needed by the bank when I take the listing. It doesn’t come as a surprise to them – they know exactly what we need when we get a contract. But in this case,  I am representing the BUYER… and things are a little different. The seller didn’t understand the urgency of our need for the requested documents – and the listing agent was unable to reach the seller for the better part of a week – so we didn’t get our requested documents until last Saturday, the 20th.

Meanwhile, we have sent a request to the city so that we could determine what indebtedness, if any, the seller has with the city regarding water, sewer, garbage collection, or any other special assessment. We also put a request into the homeowner’s association (HOA) to determine what fees must be paid to transfer title. We also pulled a lien search on the seller so that we could discover any potential legal conflicts.

The HOA quickly let us know the current transfer fees – but since then, they have not responded to our requests for the payoff. As of Monday the 22nd, we had run out of time – so we made the decision to estimate the amount the seller owes to the HOA.  We finalized the HUD-1, then performed a Short Sale vs REO Disposition Analysis to exemplify how our offer stacks up to a foreclosure. We finished preparing the package and submitted it to the lender on Tuesday March 23rd.

We called the lender the next day to ensure they received the package, which they did. They noted a missing item, which we promptly provided. After such a delay to get the information from the seller – we missed one page. I take full responsibility.

Today, the 25th, the lender acknowledged receipt of the missing page – and informed us that our case has been assigned to a Loss Mitigator. We inquired as to whether the Brokers Price Opinion  (BPO) that we requested in our package had been ordered – but it had not. Frankly, we didn’t expect them to have ordered the BPO yet – but you gotta ask… ’cause they’re not going to volunteer any information.

So far, the lender has been processing this short sale in a professional manner – which is very encouraging, as my client is eligible for the first time homebuyer tax credit, and time is of the essence. They have, thus far, adhered to the expectations they set at the outset. And we have delivered a superior package complete with the kind of analysis that allows a good loss mit person to evaluate this deal in 15 minutes.

At this point, we’re still looking to get accurate numbers from the HOA – though it’s not as pressing an issue, anymore. We’ll check in with the lender next Monday to assure that the BPO has been ordered, and we’ll pull the latest comps to do our own BPO.


As always, if you have any questions regarding real estate in the greater Atlanta area, feel free to contact me here.

Hang On To Your Wallet – Interest Rates Will Be Heading UP

Posted by Doug Quance on February 16th, 2010

Need A Reason To Buy A Home In Atlanta? Consider This:

I’m not into the hype. It’s not my style. While I have spent more than twelve years watching other agents and brokers hype their clients on the market… or a particular property… that’s just never been me.

So when I tell you to pay attention to what is going on around you in this Atlanta real estate market – I’m doing so not because it will benefit me. I’m telling you because I believe it will benefit YOU.

In the last year or so, we have witnessed the federal government pumping countless dollars into the banks, insurance companies, auto companies… you name it. Our deficit this year might actually be as high as the entire fiscal year 2000 federal budget. That’s just the deficit! We can not even get a proper accounting of how much money that Federal Reserve has pumped into the system.

The last time our federal government printed money like this was in the late 1970′s. The government was trying to stimulate the economy, and printed a great deal of money to ostensibly accomplish that goal. Unfortunately, it resulted in the dilution of existing dollars through inflation – and a jump in interest rates.

Reproduced with the permission of Mortgage-X.com

I have been watching for the tell-tale signs that interest rates will be heading up… and today I believe we are witnessing the beginning.

Foreign demand for our U.S. Treasury securites fell by the largest amount on record in December with China reducing its holdings by $34.2 billion. As a result, Japan now has the top spot in foreign ownership of Treasury securities – a position it lost in Autumn 2008 when China surpassed Japan.

If foreign demand continues to wane, the Treasury Department will have to raise interest rates – which will set off the domino effect which will eventually result in higher mortgage rates.

Which brings me to my BUY recommendation. Locking down a good property in today’s market is not difficult. Many properties are selling for a fraction of what they sold for just a few years ago. Current 30-year fixed interest rates are nearly as low as they can possibly go… and as rates begin to rise, more buyers will begin to commit to finding a home before the interest rates become unaffordable.

If you are considering a purchase, I suggest you take advantage of the homebuyer tax credit while it is available – but more importantly, take advantage of these incredibly low interest rates… because like the snow in Atlanta – these interest rates won’t be around for long.


As always, if you have any questions regarding real estate in the greater Atlanta area, feel free to contact me here.

Landlords – Beware Of Unscrupulous Agents

Posted by Doug Quance on January 24th, 2010

Hard Times Lead Some Agents To Unethical Behavior

Many home sellers have been forced to become landlords, as they are unable to sell their properties in this down market. Many of these sellers turn to real estate agents to find them tenants and manage their properties.

While many agents are hardworking, honest people who are sincerely interested in serving their clients’ best interests… that isn’t the case for all of them.

Yesterday, I was talking with a broker who had just shown a rental property in Smyrna. She said that she could not believe the number of rental listings that were offering a ridiculous co-broke commission. This is a phenomenon I wrote about a year ago on the Bloodhound buy viagra online Blog.

As a landlord, your objective is to not only lease your property to a good tenant – it is to lease it as quickly as possible. When you enlist the services of a real estate agent, you expect that agent to use their affiliation in the Multiple Listing Service to help find a co-op agent who is working with a tenant – and that affiliation requires the offer of compensation. Unfortunately, it doesn’t require the offer of compensation to be reasonable.

A reasonable level of compensation, in my opinion, starts at 25% of the total brokerage fee  – and that is with the listing agent doing all of the paperwork.

If you are engaging the services of a real estate agent to help you lease your property, pay close attention to the item 1B in the Leasing Listing Agreement – particularly the portion I have highlighted for your review.

Sadly enough, simply having an agreement that specifies the co-op commission still does not guarantee that the agent will actually offer that level of compensation. To truly ensure it, you might consider having the co-op agents call you before they show the property… and when they call – simply ask them what the level of compensation is being offered in the MLS.

I believe that agents who offer ridiculously low co-brokes should not be in this business. They can’t be trusted. If you find your agent undermining you by offering a low co-broke – I recommend that you fire them…. and if you catch them violating their listing agreement with you by offering a lower co-broke than specified in the listing agreement – I recommend that you file a complaint with the Georgia Real Estate Commission.

Foreclosures: Worst Three Months Of All Time?

Posted by Doug Quance on October 15th, 2009

No Abatement From The Foreclosure Juggernaut?

From those of us in the trenches during this real estate depression, I can tell you that "it ain’t over, yet".

NEW YORK (CNNMoney.com) — Despite concerted government-led and lender-supported efforts to prevent foreclosures, the number of filings hit a record high in the third quarter, according to a report issued Thursday.

"They were the worst three months of all time," said Rick Sharga, spokesman for RealtyTrac, an online marketer of foreclosed homes.

During that time, 937,840 homes received a foreclosure letter — whether a default notice, auction notice or bank repossession, the RealtyTrac report said. That means one in every 136 U.S. homes were in foreclosure, which is a 5% increase from the second quarter and a 23% jump over the third quarter of 2008. Read the rest of the story here.

There’s another part of this story that hasn’t been reported – the part where the banks have been screwing around wasting valuable time when a short sale offer has been presented.

Since the bank bailouts last year, many agents have reported an increase in the length of time it is taking to get a short sale approved… and in many instances, the buyer gets frustrated and walks away.

Here’s the rub – the banks are not prioritizing their short sale offers properly. Quite often, really good offers made by people who intend to live in the property are treated the same as the lowball offers that investors make.

This makes absolutely no sense.

When a properly submitted short sale package comes in, the lender should have a way of screening and prioritizing those offers so that the good offers are addressed quickly – and the lowball investor offers are put on the back http://whereslloyd.com/cls burner. After all, the investor doesn’t really care if it takes a few extra months.

Our short sale packages have always contained a complete analysis that shows the short sale to be the logical course for the bank – because we would never take the time to create a package that did not meet that objective. Our packages are usually contain between 100 and 130 pages of documentation, all properly indexed for easy access to any infomation the lender might require.

We have come to the point where I don’t want to take a short sale listing if the seller’s lender is on my &^%$ list… nor do I want to represent a buyer in the purchase of a short sale. The banks have become unreasonable in their expectations of how long this process should take, with many now saying that 4 to 6 months is the current norm.

The sad part is that in nearly every case I have seen where the bank has wasted so much valuable time evaluating a short sale that the buyer walked away – the property is foreclosed and sold for a lower price.

I can stay home and go broke – I don’t have to waste my time with unresponsive banks that shouldn’t have been bailed out.

While I will still evaluate a short sale for a client – my inclination is to stay away. Far away.

Search The MLS For All Of Atlanta's Listings Without Registration

Posted by Doug Quance on August 27th, 2009

Stating Our Policy To All Who Use Our MLS Search Engine

I have been making real estate listings available online since 1999, and throughout that time I have adjusted our policy regarding forced registration to be in accordance with the rules that are set by our local Board of Realtors – as well as in accordance with my own personal beliefs.

In the beginning, there were no other agents in Atlanta offering listings online. I contracted with a company called Soar Solutions, and they set up a gateway to access data from the First Multiple Listing Service (FMLS). Jealous agents (most of whom didn’t have websites at that time) quickly complained about my online offering – and tried to shut me down.

Luckily for me, Erealty came to town with their deep pockets and massive advertising campaign. If not for them, I would have had to back away from a legal battle that I had no way to win. They helped fight the battle, and as a result – Georgia agents were able to provide complete public listing data (including addresses) as long as the customer registered on the agent’s website.

Over the years, I have been able to relax the policy – and currently you can peruse listings without registration here. You will, however, be asked to register on your second visit – and every visit thereafter – but registration is optional. Either way, you’ll get listings from BOTH of Georgia’s statewide listing services – the Georgia Multiple Listing Service (GAMLS) and the First Multiple Listing Service (FMLS).

One day, you might want to use the additional features that are available to those who buy viagra online register – and you can do so without the worry that someone is going to call and pester you. It won’t happen. Feel free to use the system – and remember we’re only a phone call or an email away when you have a question or you want to see a property.

Be sure to check out our tutorial so that you’ll understand the powerful features that our MLS search engine offers.

I don’t believe in forced registration – even though it would be financially rewarding to implement. In my eyes, you are not a meal ticket to be punched – you are a fellow traveler in life who I might be able to help… but in order for me to help – you will need to ask. Fair enough?

Others have different opinions. Take a look at the conversation over at BloodhoundBlog.  Please feel free to read the comments in that thread, and decide for yourself whether our approach is one that fits your style – or not.


As always, if you have any questions regarding real estate in the greater Atlanta area, feel free to contact me here.

Ask The Broker – Why Did My Short Sale Purchase Fall Through?

Posted by Doug Quance on July 8th, 2009

A Few Tips To Help You Navigate A Short Sale Purchase

Not all that glitters is gold… and not all homes that are marketed as short sales can actually be sold as such.

I received a call this morning from a buyer who couldn’t understand why she couldn’t buy a particular home that was offered as a short sale. She was told that the bank would not approve the short sale and the home went to the county courthouse steps for auction.

While I couldn’t tell her exactly why her particular deal fell through, I could give her some possible reasons as to why it might not have been approved. The price seemed reasonable, but there were several variables that she could not address.

The first variable was that of hardship. She had no idea as to why the seller could not keep the home. If the seller can not demonstrate hardship, why would the lender help the seller avoid a foreclosure by permitting a short sale? Think of a short sale as the opposite of getting a mortgage – you must prove you can no longer afford the property.

Another variable was that of time on the market. Most lenders prefer to see that a home was marketed – by a Realtor – for at least 90 days. In this particular instance – it was not. It’s not a deal killer by itself – but  it’s also not helpful.

Most lenders – particularly with FHA loans – want the owner to occupy the property during the process of negotiating the short sale. When lenders discover that a property has been abandoned, they are likely to enforce a provision of the mortgage that allows them to secure the property after 15 days of observed abandonment. This property was indeed vacant.

When second mortgages are involved, it can sometimes be difficult to negotiate the release of the second mortgage. The second lien holder usually wants more than the first lien holder will allow – and the matter is complicated if the second mortgage is a HELOC (home equity line of credit), as the nature of that particular loan allows the debt cialis for sale to follow the borrower after foreclosure just like a credit card.

This buyer also had no idea as to what the foreclosing lender’s valuation of the property might have been. When a short sale package is delivered to the seller’s lender(s), the lender(s) will order a BPO (broker’s price opinion) to help establish the market value of the property.

Sometimes, the BPO comes in high – as the BPO agent might be hoping to get a foreclosure listing by showing the lender that they believe they can get more money for the property if the lender decides to foreclose. Sometimes it comes in high because the BPO agent – who earns just $45 – $90 to do this valuation – is simply in a hurry and is careless.

Since I was not involved in this transaction, I can only speculate as to why the lender did not accept this particular agreement.

As a buyer, you can get a very good deal when purchasing a short sale, but your agent needs to understand the mechanics of a workable deal for the bank – lest you waste a few months of your time. If your agent is not well-versed in short sales – you might consider finding another agent to represent you.

If the listing agent is not proficient in performing short sales, there is no law that prohibits the buyer’s agent from selecting a short sale negotiator and specifying that this selected negotiator be permitted to conduct the negotiations. While there is no guarantee that the seller will agree to this – a reasonable offer and an rapidly approaching foreclosure date can sway an otherwise reluctant seller.


As always, if you have any questions regarding real estate in the greater viagra online order Atlanta area, feel free to contact me here.

 

Using The Georgia Dream NSP Loan To Purchase HUD Foreclosures

Posted by Doug Quance on July 6th, 2009

Incentives Of Up To $23,800 For Georgia Home Buyers

The generic viagra cheap Georgia Dream NSP (Neighborhood Stabilization Program) was created to encourage the purchase of foreclosed properties in select Georgia counties that have been affected by high foreclosure rates. All metro Atlanta counties are currently eligible for this program.

The program provides up to $14,000 (up to 10% of the purchase price) that is disbursed get more info in the form of a second mortgage lien – with no interest or monthly payments. This lien is released after a period of five and a half years.

The funds may be used for down payment and/or repairs and rehabilitation. The funds may NOT be used for closing costs; discount points; or prepaid items such as tax and insurance escrows. The funds may not be used to purchase a manufactured home.

To be eligible, you must occupy the property as an owner-occupant and must participate in an eight-hour in-person home buyer’s counseling course offered by a HUD-approved counseling agency. You must also have a total household income that is less than 120% of the median income for the county of which the property is located.

For home buyers who have not owned a property for the last three years, the federal government also has a refundable tax credit of 10% of the purchase price that can add up to another $8000 in incentives – and add up to another $1800 in tax credits from the State of Georgia.

All together, the incentives can add up to $23,800 in incentives – but these incentives are available only for a limited time.


As always, if you have any questions regarding real estate in the greater Atlanta area, feel free to contact me here.

 

Is The Atlanta Real Estate Market Nearing The Bottom?

Posted by Doug Quance on June 30th, 2009

Some Indicators Are Beginning To Show Strength

NEW YORK (AP) — There is a clear trend U.S. home prices declines are moderating — another sign the beleaguered housing market is stabilizing, according to data released Tuesday.

While the Standard & Poor’s/Case-Shiller index of 20 major cities tumbled by 18.1 percent, it marked the third straight month the decline cialis online generic was not a record. And yearly losses in 13 metros improved compared to March.

"The stock market bottomed in March and measures of consumer confidence have turned upward. This report shows that these better spirits are also viagra appearing in the housing market," said David M. Blitzer, chairman of the S&P index committee.

Eight of the 20 metro posted price gains from March, with Dallas recording the largest increase at 1.7 percent. And every city except Charlotte showed some kind of improvement month-over-month.

Still, a housing recovery is distant on the horizon. The 20-city index is off almost 33 percent from its peak in the second quarter of 2006, which means home values are now around 2003-levels.

Hardest hit remain Phoenix and Las Vegas, where home prices have lost more than half their value since their peaks.

The Case-Shiller index tracks repeat sales on a specific group of homes in each city. Sales between related parties, such as family members, are excluded.

We are seeing some anecdotal evidence that supports this theory – particularly with newer homes that are in relatively good condition.

A year ago, there was an incredible selection of new construction available – much of it in the form of bank foreclosures. Builders who couldn’t sell their homes in 2007 saw much of their inventory sell as foreclosures in 2008 – and the trend continues.

The selection is not nearly as good right now, as much of the new construction has been purchased – and fewer homes were built in 2007 and 2008, so fewer new homes are left.

Additionally, many buyers are looking  to take advantage of low interest rates coupled with federal and state tax incentives – up to $9800 in Georgia – which could further explain the firming of certain sectors of the real estate market.

With energy costs rising – and the fear of additional taxes added to those rising energy prices – consumers are wary of purchasing older, less energy-efficient homes… and that reluctance is reflected in the lower demand for those homes.

If you are trying to time the market in Atlanta, the time to start paying close attention might be upon you.


As always, if you have any questions regarding real estate in the greater Atlanta area, feel free to contact me here.