Discounted Competition About to Enter the Market?

For the past several years, I’ve been hearing about a backlog of homes that were waiting to be released to the market. Most of these homes are banked-owned, and are currently sitting in the banks’ pipelines. The graphic above from The KCM Blog shows you what that situation might look like.

I’ve never been a fan of government interference in the marketplace. Whether it was the $8,000 tax credit or the currently-artificially-low interest rates, the housing market can’t truly recover until Uncle Sam stops trying to ‘fix’ it. In this instance, however, government interference is helping prevent a total market collapse.

Imagine what would happen if the banks were allowed to suddenly flood the market with all those foreclosed homes. Those properties are typically sold at a discount, which works to drive down property values in the surrounding neighborhood. If you were trying to sell your home, and there were two or three similar houses in the area selling for 10-30% less, you would likely have to discount your home’s price in order to get it sold.

I’ve always maintained that we’re extremely blessed here in Lincoln. Our market has slowed, and we haven’t been immune to the recent changes in the housing market, although we haven’t experienced the dramatic drops like some other cities. However, the number of default notices filed in Lancaster County in the past year has risen substantially. I don’t know if there’s a 47-month backlog of homes in our area, but the pipeline is definitely full.

Will the floodgates open anytime soon? I wish I knew! It would surprise me if those properties were all suddenly released to market, simply because current real estate values would plummet. The economy is still fragile, and a sudden influx of foreclosures into the market would be a big push in the wrong direction. Those properties are still there, though, and they’ll need to be sold at some point. The banks won’t hang on to them indefinitely.

If you’re a buyer looking for a good buy in the year ahead, know that there will be opportunities for you. If you’re considering selling, be ready to prepare and price your house to compete, not only with the traditional listings in your area, but also perhaps with some of these bank-owned properties.

Foreclosure freeze a big deal

This week Bank of America announced that it’s stopping all foreclosure sales for the next 30 days. During that time they’ll review the foreclosure process to ensure that their procedures are correct.

Three other banks (PNC Financial, GMAC Mortgage and JP Morgan Chase) have also announced a 30-day moratorium.

Why the freeze? Evidence is mounting that, over the course of the last several years, some homeowners may have been improperly kicked out of their homes. There are a lot of questions about the banks’ procedures, and they’re worried about lawsuits from former owners who feel they may still have a claim to their home – even if it’s already been sold to someone else!

As you probably know, the number of foreclosure properties has risen dramatically in the last couple of years, and banks have struggled to keep up. Turns out that foreclosure papers may have been simply ‘rubber-stamped,’ and not actually reviewed by a real person. If that’s the case, you know that mistakes were bound to happen.

My gut tells me this could be a huge story for a couple of reasons. If it’s discovered that owners lost their homes because the bank acted improperly, you can imagine the lawsuits that will follow. It’s also important to note that, while the bank may not be processing any more foreclosures for the next 30 days, there are still owners struggling to make payments. Some of those owners are abandoning their homes, so the number of houses that will eventually be foreclosures will continue to rise. Picture a pipeline, with more and more properties being stuffed into it. That’s going to create a huge backlog, and at some point that backlog will need to be released.

When that release comes, cities will see a fresh wave of foreclosure houses on the market. Generally speaking, that’s not good for current homeowners, because the sale of the repossessed houses tends to drag down the property values surrounding it.

The banks’ decisions also pose a question to transactions currently in progress – what happens if the bank can’t guarantee clear title? What if the bank won’t sell the property until they determine that their processes were correct? What if their processes weren’t correct? Buyers hoping to close on their new house in the next 30 days might be forced to wait … and they could end up waiting a long time. (Banks tend to work very slowly – I’ve worked with banks before, so I know from experience!)

This story is just beginning to unfold, but I think it’s going to become a big deal.

Help on the way for short sale sellers

We know that more and more of today’s sellers are upside down in their homes. To get out from under the weight, they may need to consider a short sale, which is a term used when the seller owes more than the sale of the house will bring.

Trouble with short sales is that the banks are swamped with them, and getting a response from the bank on a short sale offer usually takes forever (think several months!) With a lack of response like that, it’s easy for the seller to get discouraged, and easier for the seller to make the decision to simply abandon the house or let the bank foreclose.

Today Congress introduced a bill that would offer some relief to those sellers. The bill would require banks to respond to short sale requests within 45 days.

That’s great news … but don’t expect it to happen anytime soon. Congress is considering leaving DC three weeks early, to give its members a chance to return home to campaign for the November election. Anyone else see the irony? Priorities …

Nebraska Foreclosure Activity Falls in April

Courtesy of RealtyTrac

Statewide foreclosure filings down 47 percent from March
Monthly foreclosure activity in Nebraska decreased in April, down 47 percent from the previous month to 277 properties with foreclosure filings. This latest state total also represents a 135 percent year-over-year increase in foreclosure filings from April 2009, according to the latest RealtyTrac® U.S. Foreclosure Market Report.

“Nebraska foreclosures fell nearly 50 percent in April,” said James J. Saccacio, chief executive officer of RealtyTrac. “The largest decline was in default notices, which dropped 68 percent for the month. The state currently holds the third lowest unemployment rate in the country and had higher-than-average home sales during 2009.”

Nebraska ranked 45th in the country in total foreclosures reported for the month. With one in every 2,839 housing units receiving a foreclosure filing, its foreclosure rate ranked 45th among the 50 states.

Saline County posts top foreclosure rate for April
Saline County posted the highest county foreclosure rate in Nebraska for April, with one in every 1,158 housing units receiving a foreclosure filing — 2.5 times the state average. Douglas County came in second, with one in every 1,260 housing units receiving a foreclosure filing — 2.3 times the state average. Saunders County was third, with one in every 1,529 housing units receiving a foreclosure filing — 1.9 times the state average.

Douglas County led the state in total foreclosures for April
Douglas County led the way, reporting 170 properties with foreclosure filings for the month. Lancaster County came in second highest, documenting 27 properties with foreclosure filings. Reporting 17 properties with foreclosure filings for the month, Sarpy County ranked third highest. Cass County was fourth, reporting six properties with foreclosure filings, while Saunders County came in fifth, reporting 6 properties with foreclosure filings.

State contributes less than 1 percent to nation’s month foreclosure total
Nebraska accounted for less than 1 percent of the 333,837 properties with foreclosure filings reported nationwide in April. Total U.S. activity declined more than 9 percent from the previous month and was 2 percent below the level reported in April 2009. One in every 387 U.S. housing units received a foreclosure filing during the month.

Report methodology
The RealtyTrac U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing entered into the RealtyTrac database during the month — broken out by type of filing by state, county and metropolitan statistical area. Some foreclosure filings entered into the database during the month may have been recorded in previous months. Data is collected from more than 2,200 counties nationwide, and those counties account for more than 90 percent of the U.S. population. RealtyTrac’s report incorporates documents filed in all three phases of foreclosure: Default
Notice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). If more than one foreclosure document is received for a property during the month, only the most recent filing is counted in the report. The report also checks if the same type of document was filed against a property in a previous month. If so, and if that previous filing occurred within the estimated foreclosure timeframe for the state the property is in, the report does not count the property in the current month.
For more information and entire article, click here.

Karalyn Hoefer earns CRS, foreclosure designations

Karalyn Hoefer
Karalyn Hoefer

Woods Bros Realtor Karalyn Hoefer has been awarded the prestigious Certified Residential Specialist (CRS) Designation by the Council of Residential Specialists, the largest not-for-profit affiliate of the National Association of Realtors®.

Realtors who receive the CRS Designation have completed advanced courses and have demonstrated professional expertise in the field of residential real estate. Fewer than 40,000 Realtors® nationwide have earned the credential.

Home buyers and sellers can be assured that CRS Designees subscribe to the strict Realtors® code of ethics, have access to the latest technology and are specialists in helping clients maximize profits and minimize costs when buying or selling a home. For more information about the Council of Residential Specialists, visit www.crs.com.

In addition, Hoefer has also earned the nationally recognized Short Sales and Foreclosure Resource certification. The National Association of REALTORS® offers the SFR certification to REALTORS® who want to help both buyers and sellers navigate these complicated transactions, as demand for professional expertise with distressed sales grows.

According to a recent NAR survey, nearly one-third of all existing homes sold recently were either short sales or foreclosures. REALTORS® who have earned the SFR certification know how to help sellers maneuver the complexities of short sales as well as help buyers pursue short sale and foreclosure opportunities.

The certification program includes training on how to qualify sellers for short sales, negotiate with lenders, protect buyers, and limit risk, and provides resources to help REALTORS® stay current on national and state-specific information as the market for these distressed properties evolves. To earn the SFR certification, REALTORS® are required to take one core course and three Webinars. For more information about the SFR certification, visit www.REALTORSFR.org  or call 1-877-510-7855.

Hoefer has been with the Woods Bros Realty SouthPointe office for 9 years, is the immediate past president of the Women’s Council of Realtors® Lincoln chapter and is a Board Member of the Realtors Association of Lincoln. Hoefer can be reached at 402-450-1355 or KaralynHoefer.WoodsBros.com.

Mesloh Earns NAR Short Sales and Foreclosure Certification

Brenda Mesloh
Brenda Mesloh

Brenda Mesloh with the Woods Bros Realty SouthPointe office has earned the nationally recognized Short Sales and Foreclosure Resource certification. The National Association of REALTORS® offers the SFR certification to REALTORS® who want to help both buyers and sellers navigate these complicated transactions, as demand for professional expertise with distressed sales grows.

According to a recent NAR survey, nearly one-third of all existing homes sold recently were either short sales or foreclosures. REALTORS® who have earned the SFR certification know how to help sellers maneuver the complexities of short sales as well as help buyers pursue short sale and foreclosure opportunities.

The certification program includes training on how to qualify sellers for short sales, negotiate with lenders, protect buyers, and limit risk, and provides resources to help REALTORS® stay current on national and state-specific information as the market for these distressed properties evolves. To earn the SFR certification, REALTORS® are required to take one core course and three Webinars. For more information about the SFR certification, visitwww.REALTORSFR.org or call 1-877-510-7855.

Francis earns foreclosure certification, service award

Wendy Francis
Wendy Francis

Wendy Francis with Woods Bros Realty has earned the nationally recognized Short Sales and Foreclosure Resource certification. The National Association of REALTORS® offers the SFR certification to REALTORS® who want to help both buyers and sellers navigate these complicated transactions, as demand for professional expertise with distressed sales grows.

According to a recent NAR survey, nearly one-third of all existing homes sold recently were either short sales or foreclosures. REALTORS® who have earned the SFR certification know how to help sellers maneuver the complexities of short sales as well as help buyers pursue short sale and foreclosure opportunities.

The certification program includes training on how to qualify sellers for short sales, negotiate with lenders, protect buyers, and limit risk, and provides resources to help REALTORS® stay current on national and state-specific information as the market for these distressed properties evolves. To earn the SFR certification, REALTORS® are required to take one core course and three Webinars. For more information about the SFR certification, visit www.REALTORSFR.org or call 1-877-510-7855.

In addition to the SFR certification, Francis has again been granted the highest level of service achievement in the real estate industry, Quality Service Certified® Platinum. The award is in recognition of earning 100% client service satisfaction in 2009 as measured by Leading Research Corporation (LRC).

A Quality Service Certified (QSC) award status is the only recognition in the real estate industry based on independently validated customer satisfaction survey results. After the conclusion of real estate transactions, clients of QSC agents receive a survey, asking them to rate the agent on various aspects of the service process. The surveys are administered and the results are received and compiled by LRC.

Client feedback from the surveys becomes part of the agent’s credentials. An overall satisfaction rating is displayed on a consumer website (www.QualityService.org) where sellers and buyers have the ability to select a real estate professional based upon each agent’s validated record of service satisfaction.

Lincoln named second best city for housing recovery

Forbes recently named Lincoln, Neb. as the second best city for a housing recovery.

Forbes compiled the list by looking at 161 metro areas showing sales growth and a low percentage of foreclosure sales in an attempt to forecast which markets are on their way to recovery.

Forbes stated that Lincoln metro sales are 15 percent higher this year over last year, with only 3.6 percent of them as a result of foreclosure. Miami ranked first in the study with 27 percent increase in sales, and 3.5 percent foreclosure resales.

The Rankings
1. Miami-Ft. Lauderdale, Fla.
2. Lincoln, Neb.
3. Colorado Springs, Colo.
4. Salem, Ore.
5. San Luis Obispo, Calif.
6. Bremerton, Wash.
7. Denver, Colo. 
8. Redding, Calif. 
9. Santa Barbara, Calif. 
10. San Jose, Calif. 

Read the entire article here.

AHS Warranties on Foreclosed/REO homes

It’s a familiar scenario these days in neighborhoods across the country.
A financially distressed home goes on the market.
It might be a short sale situation or a foreclosed/REO home.
It’s likely a good deal for a prospective buyer, but the property has been vacant for while, the utilities have been cut off and the home does not look like it’s been well maintained. Should a home warranty be included in this transaction?

The answer, according to many experienced real estate professionals, is a resounding yes. Many experts agree that home warranties are particularly advantageous for foreclosure, REO and short sell transactions for numerous reasons. When the condition of home appliances and systems is unknown or questionable, an American Home Shield Home Warranty can add protection from expensive and time-consuming breakdowns for the buyer. An AHS Home Warranty can also be a powerful service component and marketing tool, differentiating properties from others on the market, attracting interest and giving buyers the necessary confidence to proceed with the purchase.

Complete and thorough home inspections on such properties may not be possible without access to utilities, making the condition of home systems even more uncertain. It’s also a well-known, unfortunate fact that owners anticipating foreclosure may stop caring for and maintaining the property, leaving systems and appliances in precarious shape. In fact, buyers express more concern regarding financially distressed properties than any other type of property. An AHS Home Warranty alleviates many of these worries, and can offer budget protection to the buyer as well as to future resale buyers under the term of the contract. In short, an AHS Home Warranty is one of the best, most cost effective investments a buyer can make to help preserve the value of an REO property.

Continue reading “AHS Warranties on Foreclosed/REO homes”

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