Archive for the ‘short sales’ Category

What can you expect in twenty twelve?

| January 5th, 2012 | 4 Comments »

Cara in the HouseWell I’m sure there are a lot of things you can expect this year but since I’m in charge let’s narrow it down to just real estate. Will home prices keep falling? Will interest rates go back up? Will home sales rise?  I just shook my magic 8 ball and here is what it says: things are looking up.

Yes, prices have been steadily falling but the general consensus for those of us in the biz is that they may decline a bit more but most likely they will stay about the same. Foreclosures and short sales will continue to drive prices down a bit which is good and bad, depending on who you are. If you are looking to buy this year, good for you! If this is the year you plan to sell, maybe not so great. But interest rates are once again at historic lows so it will bring buyers out of the woodwork, making home sales rise and hopefully decreasing the amount of time homes will sit on the market.

Should you buy or wait? My advice is buy. If you already own a home, buy an investment home. If you are renting, take advantage of the low interest rates…you will probably save money.  Will waiting another year ensure that prices will drop even more? They might, but what if interest rates go back up? Then it won’t matter. Take advantage of low rates and pretty low home prices. As long as you don’t have to turn around and sell your home in the immediate future, it’s a smart choice.

As for me, my goal is once again to do better than I did the year before, continue to make Cara in the House a recognizable brand and improve the real estate market, one happy client at a time!

 

Checking in on what’s up. Or checking up on what’s in.

| September 12th, 2011 | No Comments »

It’s always good to know what’s happening in the real estate market regardless of whether or not you’re in the market. As I’ve learned over the years, there is sometimes a very quick transition from being out of the market to being in. I’ve literally had clients that were on a drive, saw a neighborhood they liked and put their house on the market 2 weeks later. So this brings me back to my point that it’s always good to know what’s up in real estate.

Here are a couple facts that you might find interesting. In our area (King, Pierce and Snohomish County) 1 out of every 8 sales is a short sale. In King County, 1 out of 4 is a bank owned sale; slightly more in Snohomish and Pierce County (1 out of every 3). What does this mean? Well obviously it means you need to go back and read my post titled Pop Quiz for a great explanation of short sales and bank owned properties because the chances are great that you will come across one of the two during your home search. Are they bad? Not necessarily, just different.

You also need to know that there has been a drop in inventory; homes are selling faster. Don’t be surprised if you have your heart set on a home, think you have plenty of time to make the offer and the home goes pending while you are still hemming and hawing. Having to tell your clients that their dream home was already snatched up is on my list of top 5 worst things you can experience as an agent (that is going to make a great future post…stay tuned!) It also means that prices are stabilizing. I repeat, less inventory leads to price stability.

While of course there are other happenings in real estate, I felt these two were the least boring to the majority of people. If I get too real estate-specific, I will lose those in my audience who are definitely not in the market. I like to stick to the generic events in real estate so everyone can enjoy my blog!

If you are dying to know more real estate news or simply want more clarification on anything I’ve just shared, you know that I’m always available! And that friends, is what’s up. Or what’s in. Either way.

Pop Quiz

| August 24th, 2011 | No Comments »

The more I work in real estate the more I learn. Actually the more I work in real estate the more I learn what people need to learn. Did I lose you yet? I have come to the conclusion that there are two aspects of real estate that I find most people either don’t know or aren’t entirely sure about. They are: bank owned properties vs. short sales and listing agent vs. selling agent.

Bank owned properties vs. short sales: A lot of folks think they are one in the same. Nope. Pretty different and here’s why. Short sales (or preforeclosures) are homes that are being sold for less than what is owed on the mortgage. The owner may or may not still be living in the home and the home may or may not be in good condition. Short sales are often priced low to entice offers because without an offer, a short sale is stagnant and runs the risk of foreclosure if too many months of missed payments go by. There are 2 problems with short sales. The first is that the list price is not necessarily the price the bank is willing to accept. The second is that there could be a long wait from the time the offer is submitted to the time the bank responds. And not long as in weeks but long as in months. When the bank finally does respond they may either accept the offer, raise the price or decide that foreclosing on the home is a better option. Bank owned homes have already gone through the foreclosure process and are owned by the bank. They are vacant and may or may not be in good condition. The price is still usually low but the list price is ultimately is the price the bank is willing to accept although there is sometimes room for negotiating a lower price. There is no lengthy wait time and other than having to use the bank’s forms to write the offer, they typically proceed like a normal sale. That’s bank owned vs. short sales in a nutshell.

Listing agent vs. selling agent: It still surprises me how many consumers don’t realize there are two agents in a transaction or that there is a difference between the two. Ok, let’s review. The listing agent is the agent that lists the property for sale; they represent the seller and their name is on the sign in the yard. The selling agent brings in the buyer to purchase the property; they represent the buyer only. The commission is split between the two agents. Can you use one agent for both? Yes, but think of it this way: can one agent have the best interest of the seller AND the buyer in mind? Impossible but it does happen. So if you are a buyer, don’t call the name on the sign (unless its mine!) Instead, get your own agent (me) to represent you! And just so you are all clear, a listing agent can also be called a “seller’s” agent and a selling agent can also be called a “buyer’s” agent.

Now that you’re all up to speed, take out your number 2 pencils and let’s begin the quiz…

25 days

| July 3rd, 2011 | 1 Comment »

Forgive me; it’s been 25 days since my last blog post. Where did the time go? Well if I had to blame it on something I’m going to go with baseball games. And that’s not a complaint! I’ve enjoyed every {long} inning of my 9 year old’s baseball games and countless practices! So now here I sit racking my brain trying to think of a blog post and have been thinking so intently that I just noticed I was starting the second episode of The Joy of Fishing.

I decided to blog about something I’ve been giving a lot of thought to and something that is not based on any statistics or research, just my own hard work in the trenches. And if you’re burnt out on the topic of short sales I will apologize now. It’s just something I face a lot in my biz.

So here’s my groundbreaking statement: they are getting better. Banks are not quite well-oiled machines when it comes to short sales but I do think there is definitely more of a process in place. Submitting a short sale offer in the past was like throwing it off the top of the Space Needle; it might eventually come down or it might just get caught in the wind. Now when you talk to certain banks they actually give you a time line on when you might hear back. Imagine that! This isn’t always the case but its a huge step forward for mankind! And the “waiting for a response from the bank during a short sale” is almost always the most frustrating part. If buyers know they will be getting a response within a certain time frame, they are much more likely to hang in there. In the past, buyer’s would usually bail after about 2 months of not hearing anything.
Short sales are still challenging but I don’t feel like they are such a lost cause anymore. Yes, there is still a chance you will deal with a non-responsive bank or that the listing price is WAY off from the price the bank will actually accept but with each short sale banks are starting to figure it out. Also a good agent (I happen to know one!) will know what questions to ask to get a feel for whether or not a short sale is worth waiting for. So if you are a buyer that wants to make an offer on one or a seller that needs to be involved in one, give me a call. I’ll help you through it and hopefully keep your short sale from getting caught in the wind. And by the way, I’ve now moved on from The Joy of Fishing to The Best of Championship Bull Riding.

Short sales…light at the end of the tunnel

| May 9th, 2011 | 1 Comment »

Short sales are almost always looked at in a negative light. It’s tough on the seller, it can be stressful for a buyer who hopes to purchase one and it can be a lot of work for agents. I have never met a seller who is excited about having to short sell their home or a buyer who has breezed through the purchase of a short sale offer. And I can tell you that there has not been one single agent that I’ve spoken with about short sales that likes doing them. That being said, I did hear something positive today.

A client of someone in my office who short sold their home a little more than 2 years ago (in another state) was able to purchase a home! {crowd cheers} Here is the very important criteria of how this was able to occur. First of all, the seller had not stopped making payments up until the time the bank gave approval on their short sale. That means they didn’t sustain a huge hit to their credit by having late payments on their mortgage. Secondly, it had been a little over 2 years since the short sale which is sort of the rule when a buyer short sells but has not missed payments. Third (or would you say “thirdly”), the buyer had good credit (above 700) and lastly, the reason for short selling was justified. The buyer had a job transfer to Washington from California at the time when California’s housing market was in a sad state. They had an offer on the home that fell through and were not able to get any more offers at a price that would’ve prevented them from being short on the balance of their mortgage. Because all four of these criteria were in place, they were able to purchase a home!

The bad news: if you’ve stopped making payments on your home, your wait time is going to be more than 2 years. Consequently, this will lower your credit score making it harder for you to obtain another loan. If you’ve strategically defaulted (meaning you had the means to continue to pay your mortgage but chose not to), you will not have as a easy of a time purchasing another home. And as always, it’s best to consult with an attorney before making any financial decisions regarding a mortgage. And here is where I need the voice over from a pharmaceutical commercial that excludes me from any liability (Cara Erdman is not a practicing attorney or loan officer. Please consult a professional before taking her advice. If her blog posts cause a headache lasting more than 4 hours, please see your physician.)

If you have done your research and decided that a short sale is your best option, I can help you through the process. Give me a call today to get your home on the market!