Losing your home to foreclosure

I was asked by my representative at the Idaho Statehouse to tell stories of hardship.  The stories are real and the names have been changed:

John

I listed the home in February 2008. It is probably what drove me to my run for Congress. It made me mad enough to run. It was a short sale with Wells Fargo. John is a school teacher.  He and his wife took out a second mortgage on his home. The home appraised for $30K more then the home was ever worth.  Five months later, his wife left him.  He didn’t know he was upside down until he tried to refinance according to the divorce decree. He tried to pay the mortgage but released that he was selling everything he owned make the payments.  Without his wife’s income he could not make the payment.

I listed the home and dropped the price to $185K.  In April I had a good offer at asking price.  The bank would not let me call in and talk to a negotiator.  In the end they rejected the offer even though it appraised for 98% of the offer.  That is very good for a short sale.  They didn’t tell me they canceled the file for over a month.  Everyone I talked to gave me a different story.  One person said it was that the second wouldn’t settle.  My client would have settled a bit  of money to make the deal go fast (we were within the 3 month window of nonpayment of the mortgage).  We upped the price and never got another offer.  My seller was so upset that he moved before the foreclosure.   The home foreclosed in February of 2009 and the bank sold the home in May of 2009 at $165K.  During the summer a company called him asking for a $70,000 deficiency judgment.  At this point I became involved again.  The company was willing to settle for $7000 but John didn’t have the money.  We went and saw a bankruptcy lawyer.  We offered the bank $3000 at the end of summer school.  They said they needed the money right then.  I explained that he wouldn’t have the money until he got his summer pay.

In the end John, who only had the mortgage against him, had to declare bankruptcy.

Contingent short sale? What is it?

So we know a short sale is when the seller owes more then the house is worth….. So the third party the lender needs to approve or even renegotiate the deal….. We have all seen this…..

 

So the short sale listing gets an offer the buyers and the sellers come to terms….. Now the package is sent to the bank… If the buyer and seller are lucky the bank has given the listing agent an idea where the house should be listed…. More likely they told the agent they wouldn’t talk until the agent had an offer….

At this stage the sale is marked as a contingent short sale… The sale is contingent on the bank agreeing to the terms or renegotiating the contract.  The bank can take as long as they want….They never seem to care what the timeframe of the offer is…. The classic question of the buyer is when can we move in?  The answer is 30 days to never.   All rules of ethics seems to go out in a short sale situation.  Unless the listing agent sets rules position doesn’t matter very much…If more offers are sent to the bank they just reject the lower offer no matter when it comes in…   The sale is still active in the multiple listing service (CSS) but venders like Zillow don’t seem to have this information… Also some buyers are insistant on seeing them… Once in while you get the news that they welcome backup offers because the buyer is about to walk…Or the offer is to low….

I ask my buyer why would you want to look at a contingent short sale?  It’s mostly like a pending without bank approval… During the time the a property is a contingent short sale everyone waits…. No money is spent and all timelines are suspended while bank approval is sought..  The bank will either say yes, no or renegotiate…. Often the bank will let the home go to foreclosure (especially if the offer is low)…

Many times a buyer walks (they actually do want to buy something) and the agents lists the home as active and seeks another buyer to slip into the spot.  These are better for the new buyer because the process is started…

If you need to settle a deal quickly it important to stay away from most short sales and contingent short sales…Once in a while the buyer walked as the bank came back… Those are the safe short sales to buy in a timely manner…Your real estate agent knows the lingo to indicate that a short sale can settle quickly.

After the bank comes to terms with the buyer and the seller the listing status changes from contingent short sale to pending…. I hope this helps…

  Debbie Holmes

Gold Key Real Estate    

(208)761-2551 Email: d5holmes@msn.com

To search Boise Homes visit my website

I know it’s a short sale but…….

I just took my buyers into a home….I called the listing agent and she informed me that the seller was taking the dishwasher…..I know they do sometimes but when you see it there you expect it to be there…..I suggested that she had better put that it excludes the dishwasher since most people would expect it stay since it was there….I talked about agents who had to supply appliances…  I suggested that she excludes the dishawasher…Oh well we want to see the home…..I should have been suspicious when the pictures were from the last sale 1.5 years ago….

 

We walked in and the house reeked of cat urine….There was also some cat poop right in the living room….The house was absoultely filthy….The cat itself was adorable but obviously not well behaved…They had a sex book out on a dresser or table… Basically the home was in not at all showable condition.  Now the seller is moving by Dec. 1….It makes me wonder why the listing agent didn’t wait until they left and did the rugs….The price was OK but not great….The house itself might be OK but my buyers were grossed out…

 

Remember first impression mean a lot in our business.  This house was as bad as any rental I have seen when the tenant is being obnoxious.  I don’t gross out easily but I was disturbed…Guess which house we didn’t write an offer on?

Housing affordability and the market

I am reposting with permission some thought from one of my loan officers…. These are from the CEO of Sterling Savings bank.

Foreclosures: RealtyTrac data indicates that sales of homes

in foreclosure or bank owned accounted for 31% of all US

residential sales (vs. 36% in Q1 and 24% for 2010).

Interesting Thought:

Bank owned homes are now being sought after due to fact borrowers feel that they are the best priced and they won’t have to deal with a short sale. It wasn’t too long ago a bank marketing a REO didn’t want the consumer to know that it was a bank owned property.

Housing Affordability: Analysis indicates it takes only about

16% or so of the average person’s income to make payments

on a 30Y mortgage for the average priced home. The last time

the ratio was this good was back in the 1960’s.

Thought:

Very healthy for our long range economy. People are buying within their means. When you combine this fact with the move towards 10 and 15 year mortgages people are much more conservative in acquiring debt. It also makes our job easier J.

I played golf with a top agent out of Portland this week. His theory is the lack of new construction is slowing down overall sales. Here is his reasoning:

1) Borrowers who own a home like to trade up to new homes. ( Same thought as a car owner)

2) It isn’t as exciting for a borrower to sell their current 10 year old 2000 sq ft home to purchase another 10 year old home with 2500 sq ft. This borrower really wants to trade up to a new 2500 sq ft home.

3) There is a lack of quality inventory for move up buyers due to the shortage of new construction in areas they want to live in. ( Maybe this is why the 1st time and investment buyers are such a large part of the market.

4) People are willing to pay more for new construction.

Dona Jeka
Sterling Savings Bank – Home Loan Division
Team Manager,
Direct: 208-375-1080, Cell: 208-794-3371, Fax: 888-650-7277
Dona.Jeka@sterlingsavings.com

Hello world!

Hello this is my new blog intended for mostly Real Estate.  This will be my third blog.  My first is hosted on active rain (started in 2007)  as a Real Estate Blog.  The second is on 43ed state blues which is a political blog that I wrote while I ran for political office in 2008.  Now I am back to selling homes.   First a bit about me…

Hello, My name is Debbie Holmes, and I want to help you with all your real estate needs. My family has enjoyed living in Boise since 1991, and I know the community and neighborhoods. I will make the process of selling and/or buying real estate as simple as possible. I can handle to normal problems to the difficult. I have experience with short sales and bank negotiations. I will help you from finding the home, the loan officer, the buyer, contractors, etc… I will take it from the beginning of the process through closing. Call me at (208)761-2551 to see if buying or selling is right for you. I work in Ada and Canyon counties. As a factoid ran for Congress in the 2008 election as a Democrat in District 2.

This is me      I am married     and have 3 boys  (why I work)

We live in Boise with 2 dogs, 2 cats and a British Exchange student who is my age, Annie..

I am sometimes political but mostly sell houses…  One kid has graduated college, One is at Cambridge and the last is starting the College of Idaho in the fall.  I love what I do and want to share it with you.

Today this real estate agent needs to work on 2 pendings (deals under contract), one out of town buyer.  I also need to meet my handyman Bill at one of my rentals….. We will talk more later.