Real Estate News & Updates from the Monadnock Region
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Homes Sales Reported to Drop 3% Last Month What Does that Mean to Me?

October 24th, 2011 | Posted by Dick Thackston in Buying Tips | Mortgage News | News | Selling Tips - (0 Comments)

By Dick Thackston CRB, ABRM, ABR

The actual answer to the question in our title is very little.

From the street level- were you and I both are as buyers, sellers and REALTORS – mostly what it tells us is it’s not our imagination the people who make up these statistics only give a portion of the story or leave large parts of the story out.

I have absolutely no doubt that Home Sales Dropped 3%! In fact I’m sure of it!

But here’s what I think happened. The majority of sales at this point are in fact bank owned properties and Short Sales. For the last several months a large percentage of REO’s have been tied up either with Title Problems and/or litigation. The stream of buyers in the market while not as large as it once was seems constant at this point. Since early this summer there has been a decline in available REO inventory for these two reasons. Value Conscious Home Buyers have been out looking but have not been able to find satisfactory properties or the properties they have found have been snarled up with Title Problems.

Why, you may ask, did these buyers just not buy regular retail properties on the market from non-REO sources? The simple answer is they are waiting. They are waiting for REO inventory to become available, they know it’s coming and they are VERY PRICE CONCIOUS. The majority of retail home sellers and their agents still have an unrealistic expectation about pricing and many have had their properties on and off the market at the same or very nearly the same price for several years. It’s just not going to happen. Home Buyers in this market have lots of information, most of it good, some of it bad, but it’s more information than any other group of Home Buyers has had in history before making a decision to purchase, and Home Buyers are not betting the market changes anytime soon.

The good news is that as the litigation and Title Problems now seem to be clearing more inventory is coming on the market and lenders have started to embrace the short sale process rather than fight it so Short Sales are becoming more far more viable then they were even a year or so ago. To be sure lenders are not going to leave money on the table or sell for less than current fair market value but the approach they are taking now seems like a good thing for everybody and that doesn’t get picked up in the statistics.

Bottom line is the viability of the inventory is improving and buyers are responding even though we are likely years out from an actual fix in the housing market.

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Short Sale Success Stories

October 19th, 2011 | Posted by Dick Thackston in Buying Tips | Mortgage News | News | Real Estate News | Selling Tips - (0 Comments)

By Dick Thackston CRB, ABRM, ABR

Since the down turn started in the third quarter of 2005, (yes that’s right it’s actually been over six years if your benchmark is real estate brokerage), and the economic seizures started happening almost daily after November 2008, I’ve actually had some excellent experiences helping sellers and lenders work out a short sale.

Initially mortgage lenders were less likely to work out a short sale for a number of reasons: they didn’t believe the property was upside down, mortgage insurance would cover their losses if it went to foreclosure and/or they were simply too overwhelmed with the volume of business collapse that they couldn’t function efficiently and make decisions.

In 2007 I began the process of helping people work out a Short Sales on their homes if they were over mortgaged. One of the most successful short sales I’ve done was a house inKeene,New Hampshire. The owner had purchased the home about twenty years before he called me. He had tried selling the home himself and tried a Virtual Real Estate brokerage from outside the area with no local support. All the time he tried this, his home was sinking in value.

Why, one might wonder, if he had owned this home for over twenty years would he owe more than he paid? Well, actually what he had done was borrow money incrementally over the years to put his children through collage and purchase each of them cars when they graduated. He literally used his home as a savings account.

The biggest hurdle in the transaction was the owner, he just couldn’t believe that his home would be worth the loan balances plus and additional ten thousand dollars so that he could start his life over again someplace else. Once I was able to get him to understand that the value just wasn’t there, and he agreed to price the house to the market comparable prices in his neighborhood at the time, we got some OK sales traffic and ultimately an offer. I presented the offer to both the owner and his lender. I obtained the owners detailed financial information and the bank agreed to accept the short sale. Little or no emotion, very rational, and very efficient successful transaction.

The entire transaction from day of listing to day of closing the short sale, including negotiating with lender, was about five months or one hundred fifty days to closing.

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How I got Started Doing Short Sales.

October 17th, 2011 | Posted by Dick Thackston in Buying Tips | Real Estate News | Selling Tips - (0 Comments)

By Dick Thackston CRB, ABRM, ABR

Short Sale Success Story:

Short sales have become a major part of my companys business.

In 2007 I realized that more and more of the owners I interviewed during listing appointments were helplessly under water on the loan on their home.

During the Savings & Loan crisis of the late 80s and early 90s I first experienced short sales. Back then, it was mostly small business owners who had second business loans against their home and as the economy slowed, their businesses slowed or failed, and the bank came after their houses. This is where I learned to do short sales. Up until then, personally, I had never even imagined not being able to sell a house and not clear the loan balances and I had been in the business over ten years at that point.

So I learned to negotiate with lenders to help them understand Fair Market Value and accept the reality of the situation – not the ideal for anyone, but half a loaf is better than none.

So when I started to see homeowners under water again four years ago I felt it would be important to start trying to negotiate short sales – again. Unfortunately both home owners and lenders were still stubbornly unrealistic about the situation at that time. Many of the homeowners I initially advised to consider a short sale ultimately lost the property singing the “I need, I own, I won’t” chorus regardless of market realities, or they spent valuable months and years following the market down. Needlessly doing needless damage to their credit by loosing their home to foreclosure, most had they followed my initial advice would have in fact walked away from a sales with some money, less than they had expected but some money – far better than a short sale or total loss through foreclosure.

Some of the short sales I initially proposed to banks wound up going to foreclosure as well. Costing the lender $50,000 to $100,000 in equity that could have preserved for their company, however banks had a problem too because many had just done refinances or made new loans they would say something like “we have an appraisal that is only six months old” not recognizing how quickly the market was changing in those days. What a tragedy! What a tragedy for all parties!

So now Short Sales are commonly accepted as better than foreclosure and few, if any, lenders are waiting for the market to recover. The biggest issue with Short Sales remains sellers that are too slow to take action. I got a call today from a seller that is schedule for foreclosure sale in ten days. He turned down a short sale about a year and a half ago and now he wants to try and find a buyer and complete a short sale negotiation in ten days? Not going to happen. I suggested that he simply needs to plan on the foreclosure and arrange to move out of the house. Banks at this point are far more realistic than sellers and far more prone to look realistically upon a short sale and work on it realistically. Bank of America and Citibank have made tremendous improvements in their systems for handling short sales. In both cases they have gotten to be the best in the business to deal with, when a few years ago I really don’t think they allocated any serious resources to the Short Sale process.

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Top Ten Things to Think About When Buying A Home Today.

October 3rd, 2011 | Posted by Dick Thackston in Buying Tips | Real Estate News - (0 Comments)

The Great Recession that has shaken the American Economy and Housing Market over the last five years has taken many would be home buyers out of the market and loaded the Home Buyer psyche with skepticism however it has not generated an increase in the demand for buyer brokers. In fact if anything the willingness of buyers to contract with Buyer Brokers appears to be in decline and the willingness of agents and agencies to provide buyer brokerage services appears to have declined.

 

Buyer Brokerage, properly understood by the consumer and properly handled by the Buyer Broker is an excellent program and an excellent service for any home buyer in today’s market.

 

The top ten things when getting involved in Buyer Brokerage follow:

 

# 1. Find a Buyer Broker that you feel you can know like and trust. This person is going to need to have both your attention and confidence. Remember you’re not hiring them to be your best friend you’re hiring them to help you make solid business decisions.

# 2. Understand that you are HIRING the Buyer Broker which means you will be responsible for PAYING the Buyer Broker. Most agents will be happy to accept as compensation whatever fee is offered through their local MLS however sometimes listing brokers will not pay a fee or will not pay a reasonable fee and it will be your responsibility to handle this cost. Discuss this in detail when you hire the Buyer Broker.

#3. ONLY HIRE A BUYER BROKER WITH TRAINING IN BUYER BROKERAGE. Lots of agents and agencies will agree to be paid as a buyer broker but very few have actually training in Buyer Brokerage. The top level of training for a Buyer Broker is an Accredited Buyer Representative Manager a designation offered exclusively through the National Association of Realtors, Real Estate Buyer Agent Council.

#4. Have some idea of what you want and were you want to live. It’s the Buyer Broker’s job to help you figure out the best value for you but you need to understand your own needs and wants so the Buyer Broker can help you figure things out.

#5. Listen to the Buyer Broker. Most Buyer Brokers can send you to good service providers: Loan Officer’s, Title Companies, Home Inspectors etc and do so to help you get good service – no other reason, really.

#6. Find out if your chosen Buyer Broker requires a retainer and how that’s handled. Many Buyer Broker’s require a retainer when you contract for services. Most refund that after a successful closing, some do not establish how this item is handled when you sign your contract.

#7. Establish the level of service you expect and the level of service your Buyer Broker is ready willing and able to provide. Some buyer brokers will check zoning, building permits and title issues; some will not work with For Sale by Owner and non-MLS listings be clear about how these issues are handled.

#8. Establish an exit plan. Sometimes relationships just don’t work out or sometimes your situation will just change. Be clear at the beginning of your relationship with the Buyer Broker how things can be ended if you don’t feel the relationship is working out.

#9. Understand the agency laws in your state. Every state has different rules governing the actions and relationships of the real estate agents with the public – no two are exactly the same.

#10. Make sure you know who the boss is. When contracting any licensed professional for services make sure you know who they report to and who regulates Buyer Brokerage in your state. There is NO STATE where Buyer Brokerage is regulated by the REALTORS.

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