AAbsolute

The County can accept and Record at least 10 times as many Lis Pendens as they are currently taking in. The Court Clerk gets the Title locked down usually within 5 minutes of the courier getting to the window.

I have no formal training at all in Economics and am not a licensed Realtor, but I don't think Sowal will see but 20% more Lis Pendens worst case.

traderx

Real estate?

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AAbsolute

A little more euphoric than that.

Bobby J

Just a little...

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AAbsolute

So you thought there'd be waves today huh? I saw ya checking out all that beach front property down from Cypress.

SJ gave us the Public MLS website link the other day. I tried to search Paradise by the Sea today, but I think it was less complete than some other sites. Do you have any search tips for hacks like me?

Bobby J

I didn't just think... Actually, a board meeting occurred down there!

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SHELLY

AA...let me just clue you in on a little Econ 101.

(1) The "Frenzy I" was fueled with borrowed money from China and the Middle East--don't bet on that happening again in your lifetime.

(2) The "Frenzy I" turned lowly realtors; mortgage brokers; retirees on social security; waitresses; landscaping folks; granite top fabricators; and Publix Cart Cowboys into condo-flippin' real estate tycoons overnight with nary a scheckle in the bank to their name--don't bet on that happening again in your lifetime.

(3) A "real and sustainable" housing market is a function of employment opportunities with salaries compatible with the cost of purchasing and carrying a house. Take a look at this site everyday: Layoff Daily

If I were you, I wouldn't go "all in" betting for a return to the frenzy--make sure you hold back enough for the time you're going to have to employ "Plan B."

I, too, have seen the tough times of many years ago--this, and what is still yet to come, is much more grim.

.

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AAbsolute

How many years have you been paying attention to this kind of stuff? (about how old are you) It will help me with your post.

You may well be correct about (1). Japan helped fuel the '80's junket and I don't think they fueled this one.

I'm sorry I can't completely agree with (2) because I was sure that after the late '80's I would not ever see people with 'real' jobs quit them to start acting like real estate developers again, but they did.

I agree with (3) and should note that this past cycle didn't have anything to do with real and sustainable anything.

Last, unfortunately for me, real estate is my profession. I don't count on or require frenzy. It has no relevance to a business plan. When the market was fraudulently hot I was still working my basic plan. I stuck out like a sore thumb.

Joe Mammy

Just as SJ gave us the tip this was coming, here it is:

"The recent change to MLS policy regarding short sale listings under contract has been reversed, and these listings must once again be put in either Contingent or Pending status. ECAR’s Board of Directors rescinded the policy at its January 29, 2009, meeting."

I protested when they changed the rule in Dec and I am happy they changed it back. Who wants to make an offer on a shortie while the seller just keeps collecting offers under an active status? Nobody I know...

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SHELLY

How old? Let's just say I had a driver's license during the "odd-even" gas rationing days.

How long have I been paying attention to this kind of stuff? Let's say my mind started thinkin' about trade, finance and economics while sitting in an "odd-even" gas line.

.

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Bobby J

You make me smile.

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AAbsolute

Uncle Bob, is that you, are you my Uncle Bob?

Bobby J

AA, you make me smile too!

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AAbsolute

There were 18 Lis Pendens filed in Walton County today. Is it easier to finalize a short sale agreement with a bank during foreclosure? Anybody know?

Joe Mammy

I've seen foreclosures while loss mitigation was weighing the shortie. One hand does not necessarily know what the other is doing in the same bank.

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AAbsolute

On Average:

What's recorded from the bank at the closing of a Fannie Mae short? Is it a simple Satisfaction? Have they been recording unsecured notes against the short seller in their primary residence jurisdiction simultaneously? What does it look like on a HUD1? Is there a seperate line on the Seller side for the relief amount, or is the full payoff amount all on one line? Are there 1099's from the lender to Seller issued at the same time? How does Realtor commission get shown on a HUD1 with a deficiency? Are costs of conveyance deducted from the Seller's (Lender) side at closing or do Buyers kick in? Have Lenders been requiring a Florida Rules of Civil Procedure 1.977 from the relieved party at closing? {They Should}

Which of you Realtors has seen any of this and can give us the 411?

AAbsolute

Bump. Any Realtors out there know about the mechanics of a short closing?

Bobby J

Are you trying to make sense of a short sale still? J/K!
Every situation is different. Every short sale I closed last year the details were not worked out with the seller before the actual closing. Very odd. One primary home short sale, the seller received a 1099 for the difference. One received a letter from Country Wide 2 weeks after the closing saying no balance due. One worked out a deficiency of the difference 4 weeks after we closed. It still was considered a short sale at the time but the bank came back around and worked a deal. The commission always get negotiated down a percent it seems but shows up on a HUD like any other transaction.
They are not fun at all but if a buyer can hang on with no reply for 2-12 months they could be a good deal.
On the other hand, it is beginning to look like the foreclosure homes will make short sales look like a waste of time.

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AAbsolute

Does the lender have to sign the HUD too? Does the closing occur in just a day or two like the average conventional? Does the Buyer get to take occupancy immediately after signing the closing doc's? Does the Title Company charge more for being the point guard in all of this?

Bobby J

The lender does not sign the HUD because they still do not own the home. They just approve the Short Sale/HUD. Once the bank approves the sale the closing can occur as soon as funds are in place and title is clear which is normally all handled as the buyer and title company have had months to figure all that out. The buyer can take immediate occupancy. The title company can charge a negotiation fee that the bank will pay. It tends to be the first fee that gets thrown out though. But, they still get their typical fees. When we were real slow the title companies were willing to do whatever to get the deals done. I would imagine with business improving some will be passing on being "point guard" on the deal.

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Smiling JOe

aabsolute, you ask enough questions about short sales that you would probably benefit from taking a few classes on short sales.

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ray

I recently closed on a short sale on 30-a. The bank took a 840k lose. The short sale was already preapproved by the bank but during the time the bank looks at your offer they can entertain all other offers which sucks. For instance if the short sale approved amount is 800k then in the time the bank is looking at your offer then can entertain multiple bids which is what happened to me. You have no idea what anyone else is bidding. Once the bank approves your offer you get a letter saying its approved. A short sale is usally "as is" and the commissions are less as bobby said. But what i had a very hard time finding out is what are the benefits of a short sale for the seller?I never saw the seller but the attorney told me the lose would be 1099'd to the seller. If so whats the point of the seller doing all the work to try to sell it?Your credit is still destroyed. As far as i know the only way a seller can start a short sale is to stop paying there payments and force the banks hand.Does a foreclosure hand the owner a 1099 if its a second home?

MissCritter

When all this started well over a year ago, general consensus was that a short sale dropped your FICO score 100 points; a foreclosure dropped it 200 points. Now I understand that both affect your credit the same way - the worse of the two, I'd guess. Didn't Congress pass something last year eliminating the 1099 on primary residence short sales? I'd think all bets are off for investment/second homes. Correct?

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Bobby J

the new rules are that the short sales with offers on the table have to be pended or contingent. So... Many agents or buyers do not look at inventory in this category. We look at actives when going to show property. Odds of getting a short sale and being the only bidder just increased radically. Not to mention a lot of inventory leaving the market in Feb. if agents abide by the new rules. I actually think at this time this is good for the market.

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Smiling JOe

ray,
Your Realtor can always ask the listing agent if the property is under contract, and as Bobby J states, the listing is required to go into contingent or pending once it is under contract.

What's the point of a short sale? Perhaps less hit on your credit report than a foreclosure. Just because the seller is 1099'd for the "gifted amount," doesn't mean that the seller will have to pay taxes on it. An accountant can better guide you, but the IRS tax rules are pretty easy to understand regarding that particular subject. The seller may or may not have to pay taxes on that deficiency, based upon assets and debt.

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AAbsolute

I wish I had time to take off work. Do you know if they have online guides that are clear, up to date and thorough? Things change fast.

AAbsolute

Maybe if it's a second home that is going nowhere an Owner would short sell to stop the continued interest liability. Maybe they have a capital gain in need of an offset.

Smiling JOe

There is plenty of good information regarding short sales available online. A simple search for short sales should get you endless amounts of information to read at your leisure.

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Joe Mammy

ECAR still needs to do a little more work on shorties. The public is entitled to full disclosure in the listing remarks on sales type. Currently only agents can see the sales type or shortie disclosure in the agent notes.

And as far as a better opportunity to get a solo bid in on a shortie, it was there the whole time until ECAR changed the rule in late Dec. There was only a 5 week period where a listing agent could leave a listing active after they received an offer. Savvy agents would have written into the contract that seller must change the listing status to "contingent" from "active" even while the rule was in effect.

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AAbsolute

Can I continue to make questions and comments about short sale procedures in this Thread?

AAbsolute

Excellent point about making the offer contingent on the Seller's agent showing it as contingent/pending. Either you show it contingent/pending or my offer is not an offer.

Bobby J

Ok. Go ahead.

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SHELLY

Snap!

.

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Smiling JOe

during the approx 5 weeks when the MLS rule was different, that makes sense, but isn't necessary, as the current MLS rules require any contract to go into pending or contingent, unless the contract has a 72 hour (or less) first right of refusal addendum.

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AAbsolute

Would you help me with definition? You noticed I wrote contingent/pending. I don't have a full understanding of the difference. What's the difference between contingent and pending in local MLS rule?

Joe Mammy

If the contract has contingencies for financing, inspections or in the case of a shortie contingent upon the seller's lender granting the short sale. Once contingencies are lifted within the time frames spelled out in the contract then the status should be changed to pending as you count down to closing.

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AAbsolute

Thanks

What does your experience say is the percentage of MLS listings that have current/accurate status entry?

Smiling JOe

Actually, all real estate contracts in the state of FL are contingent, since if one party dies, the contract is voided. The only reason there is a contingency status is because during the boom, Realtors wanted to be able to put in back up offers if a property was contingent upon something like the buyer selling there own home. There were so few active listings on the market for longer than 60 days, that we could maybe also look at the contingent properties as likely potential properties for our buyers. Pending status had the feel of being a more solid contract, though those properties are also contingent.

In today's market, I don't really think there is a need for the two separate categories, because there are so many properties, that I doubt anyone is searching through contingent or pending listings for their buyers.

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AAbsolute

Sounds like it's your opinion that getting the property listed as contingent or pending while a lender mulls their incoming offer removes all the leverage the lenders have been exerting on Buyer's offers.

Smiling JOe

It does remove quite a bit, but not "all." Removing all would likely mean giving the lender only ten days to reply, and not allowing commission to be a negotiable tool. The brokerage is paid by the seller, not the lender, so the lender shouldn't have a say in that.

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AAbsolute

Maybe we could get the MLS rules changed to make the Seller come up with the commission instead of the lender. That should remove the leverage that the Sellers are exerting on the Lenders. Do you think we can force the Sellers to do anything?

MissCritter

AA, you just don't seem to get it. Maybe there are sellers out there with hidden stashes of cash, but my guess is they are definitely a very small minority. Most sellers (again, this is just based on my personal experience with people I know personally or know of through acquaintances) are OUT OF MONEY!!!!!

You seem to think that if only these greedy rich people would just use their hidden cash and pay up on these mortgages, our local real estate market would climb out of the toilet, and things would be just peachy again. Ain't gonna happen.

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AAbsolute

I hate to say it again, but real estate development and all the myriad of related disciplines are my passion and my livelihood. Most of the time my posts are more succinct than they appear at first glance. I get the short sell in a very big way. I compete with builders everyday who start and then short sell properties over and over and over and over.

You probably understand that much business is finding a lucrative opening and then ramming a truck through it. With every new theory that becomes a rule, there are people exploiting the unintended consequence.

One thing is going to fix our market: Full Consequences Must Be Felt. Just as a crop is rolled back into the ground to make the ground fertile for a new and different crop, these hundreds of thousands of fake deals must fully die, be broken down to see new growth. All these efforts to avoid the circle of life are dilutional of renewed fertility.

MissCritter

Uh huh.

(How's that for succinct?)

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Alyoopster

I have a question as a Buyer: I just put in a contract on a "short sale" home. Can anyone tell me the average responce time that they are getting from the lenders?? And what is the sucess rate of them actually closing the deal?? Our offer was more than the listing agent's list price.

I know i need to be patient but geezz....

Joe Mammy

Alyoopster-

Depends on the lender(s)- if there is more than one mortgage your chances of closing severely diminish especially if they are different lenders. A local lender can give you an answer quickly, national banks will take much longer and some are much more inundated with shorties than others (see Countrywide).

Also depends if the seller has submitted all required paperwork- hardship letter, two years financials etc and if they are truly in hardship and insolvent. Plus if the seller's agent or the closing agent have experience in shorties and constantly call the loss mitigation dept to stay on top of things. Establishing a direct human contact is crucial.

Hopefully your agent researched all of this before you submitted your offer.

To answer your question, the success rate is about 10%.

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AAbsolute

Brilliant. I also like E=MC2

MissCritter

Joe M, is the success rate really that abysmally low?? Only 10%? So, 90% of short sales in MLS will (relatively) soon be foreclosure listings. Ouch!

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Joe Mammy

I was using an educated guess for 10%, it is difficult to tell because you may have several different buyers step in before one closes. #1 grew impatient and moved on, #2 stepped in and actually got a counter from the bank and thought it was too high and moved on and then #3 saw the advertised accepted price (a good agent would market this way once they knew the banks magic number) and took it.

Also, when I run numbers going back a year it covers a period when agents were not listing by "sales type" which shows shorties. Now it is much easier to see the numbers as agents are listing correctly. Going forward we will get a more accurate number.

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Bobby J

We tend to lose the buyer before the bank can wrap it up. Then the offers get lower and lower until the bank wakes up and decides what they are going to do. I think an interesting number would be how much money (percent) the bank loses from the first offer to the final closing be it another short sale offer or foreclosure.

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