Great minds, great information…

Between Freddie and Fannie there are still 218,000 foreclosures set to come on the market.  As reported in Creative Real Estate Daily, in terms of Fannie, just as we were so surprised and pleased that Freddie Mac had actually turned a profit in the first quarter of this year (see the article, “Did I Miss the Freddie Mac Bake Sale?” posted last week), Fannie Mae comes out with its first quarter numbers. The GSE had a loss to the tune of $8.7 billion in the 2011 first quarter! It’s enough to make you want to do a Donald Trump on the agency—you’re fired!

Fannie Mae says this was mainly because of declining home prices in that quarter. Really? Would that be the only reason?

With needing to draw additional funds to cover these losses, Fannie Mae’s draw on the government piggy bank (since the government seized control of Fannie in late 2008) has now reached nearly $100 billion.

Fannie Mae’s first quarter production numbers look like this:

  • 51,043 loan modifications
  • 78,000 single-family loan workouts  (including  60,000+ home retention solutions)
  • 17,120 short sales and deeds-in-lieu of foreclosure
  • 53,549 REO properties gained through foreclosure  (up nearly 8,000 from the 2010 first quarter)
  • Total single-family REO inventory (as of Mar. 31, 2011): 153,224 with a value of $14.1 billion.

Dave Liniger mentioned at the Catalyst Conference that Bank of America is holding 700,000 properties that are 90 days late – not sure what other banks are holding.

The big question is – how many are here locally?  How will it affect our market?  How will it affect our prices?

RealtyTrac has released the results of its statistical study on which U.S. cities are the best places to buy foreclosures in 2011. It started with the 100 most highly populated metropolitan areas, and then used a 10-category criteria of things like unemployment rates, foreclosure activity, and sales prices to narrow the field. The result is the 10 best cities to buy and invest in foreclosures this year:

  1. Akron, OH
  2. Rochester, NY
  3. Buffalo, NY
  4. Cleveland, OH
  5. Portland, ME
  6. Milwaukee, WI
  7. San Jose, CA
  8. Memphis, TN
  9. San Diego, CA
  10. Durham, NC

Guess what, we aren’t in here which is good for us!  Thanks for the update Creative Real Estate Daily!

Microsoft bought Skype for $8.5B – Wow! EBay Inc. bought Skype in 2005 for around $3.1 billion but took a $1.4 billion charge for the transaction in 2007 after it failed to produce.  Regardless, jump on board Skype – 107 million users Skyped 207 billion minutes.  Also, when communicating with people 55% of communication is physiological, 38% is tonality and 7% is words.  Emails and texts can get misconstrued, get in front of your clients or get them on Skype – it’s free!

State attorneys general are holding meetings with the nation's largest mortgage servicers this week to negotiate a settlement agreement for the robo-signing issues that surfaced last fall.  Speculation on the combined fine amount ranges from $5 billion to $20 billion.  The services include Bank of America and Wells Fargo among other banks.  Stay tuned for more details.

Mark Zuckerman of Facebook looks to have purchased a $7,000,000 home in California.  Not too shabby for a 26 year old!

Online real estate brokerage Redfin has removed 42 agents from its partner referral program due to mixed customer reviews, the company announced in a blog post Friday.  Redfin also axed eight partner agents for creating fake customer reviews – integrity counts.  We just have to get them to not rebate back to buyers off the HUD!!

Home Alone house is on the market for $2.4 million!  Great house, great neighborhood, bratty kid not included!

Mortgage rates are at this year’s lows, purchase mortgage loans are up and I know Leslie Wish will tell us all about it and MARS has reared its head again and I know Sadaf Saberi and Ryan Koppel will cover this topic for us as well.

You now have great information to help you with your business and to talk with clients about to show you are the expert.  Get it?  Got it?  Good!

Now, go sell something!

 

Tips for a smoother settlement!

We had our regularly scheduled training on Friday to discuss the Northern Virginia Real  Estate market and have Champion Title discuss worst case scenarios for closing and even a few other disasters to be aware of in today’s sales environment.  As is the case in any sales situation, it is your job as a professional to manage your client’s expectations of what is going to happen at the walk-through and closing.  Here are a few tips!

Tips for a Smoother Settlement

  1. Try not to Close on last day of the month
  2. Know the difference between a home inspection item and a walk-through, and know what it means to be in normal working order?  This is extremely important when discussing age appropriate items.
  3. Disclose fees/additional costs upfront (e.g., admin fees, FHA/VA fees),Initial  all changes to the original sales contract (“meeting of the minds “), initials/signatures on all pages on the contract – do your damn job!
  4. Work with service providers you know and trust, its all about the team being in place with all the changes going on with RESPA and the mortgage market.
  5. Confirm closing cost credits with the lender prior to ratification of your contract so there are no last minute surprises.
  6. Make sure termite inspection has been ordered and conducted. If treatment was necessary, make sure all parties are aware of treatment prior to closing
  7. Keep utilities on through the settlement date
  8. Contact the settlement company if you know you have any walk-through issues and conduct your walk-through the day BEFORE closing – not minutes before.
  9. Avoid escrowing funds  if possible, lenders are tougher on this issue of allowing escrows
  10. Bring certified funds to the table or wire money prior to closing
  11. Know your client (e.g. reader, needs a POA, etc.) and what they will expect to happen at closing.
  12. Read the REO contract and know its details.
  13. Read the short sale approval letter, know and understand its terms
  14. Have sellers keep hazard insurance in place until a few days after closing

 

 

Now, you can’t prepare for every situation and we haven’t experienced everything we are going to experience but here are some recent situations that arose at settlements:

Dealing with the Unknowns

  1. Unexpected liens – IRS, HOA, etc. – are filed against the property.
  2. Bankruptcy – will not kill the deal but will take time because trustee must release the property and this can and will take time.  Find out the seller’s situation in advance.
  3. More than 1 ratified contract – be smart, know your listings and only ratify one contract.
  4. Improper foreclosure – people added to title after settlement with no knowledge of bank, then property forecloses, proper notification or no notification  was not given to person added to title – bank must re-foreclose and this is a lengthy process.
  5. Unilateral default – not closing because…

 

As always we discussed what our agents are finding out in the marketplace today when working with both buyers and sellers.  Here are some comments on the conditions of our current market:

There is no inventory out there and houses are selling fast.

There are multiple contracts on a lot of listings throughout the area.  Price points that are in the low $200’s are where we are seeing the most activity…

Some buyers are not aggressive enough on their first few offers and therefore are losing contracts.

Pricing is critical for listing prices – do not price a little high as there continue to be appraisal issues.

Agents are writing backup contracts on under contract properties – even foreclosure and regular sales.

An agent recently read that 70% of first offer short sale contracts fall out as buyers lose patience waiting on the process.  It is a good idea to write back up contracts on short sales today.

We continue to have appraisal problems as there are not enough comparable sales for appraisers to utilize in their appraisal therefore they are claiming market is declining.  One agent had an appraisal come in $100,000 low – they made buyers change lenders and verify qualifications of the new appraisal with the second appraiser.  It is imperative to do your homework, know the market and present this to the appraisers.

Ethics are slipping with agents – keeping listings off market (coming soon) then selling them before they go on the market.  The lack of returned phone calls, promptly responding to offers, etc. are the issues we continue to experience.  And what is really scary is contracts and earnest money checks are being deposit after VREB regulations and even closing!  Agents need to stay on top of their game or get out!

Rates continue to be great – we expected them to increase and they did for a short time but they have come back down – we are still below 5%.

You have heard it before – the more you learn, the more you earn so come to training!  Get it?  Got it?  Good!

Now, go sell something!