While the Las Vegas Market continues to see large amounts of foreclosures, lately there has been lots of good news as of late. Currently many reports are coming out that are stating that Las Vegas is the #1 fastest recovering market in the nation, and a recent report on CNN was stating that Las Vegas is the most undervalued market in the nation. Obviously all of this is good news, some of the best news we have received in some time is the “Price Per Square Foot” statistics recently reported by Sales Traq in regards to Las Vegas existing home price stabilization. Prices appear to have stabilized at around $75-$80 per square foot over the past six months, with the exception of Hi Rise condos, which may be bottoming out around the $200-$300 per square foot range.
The National Association of Realtors have also reported that the nation as a whole is seeing higher and higher numbers of homes sold each month. While no one can guarantee the reasons for this turn around, many: real estate professionals, governmental housing authorities, etc. are contributing this turn around to the continued record low interest rates along with the tax credit that was extended till April 30, 2010 and also expanded to include even more home buyers (initially the tax credit was only offered to First Time Home Buyers).
Although many local Real Estate markets are showing signs of improvement, there is still a long way to go to stabilize the Real Estate Market as a whole.
Las Vegas Market Conditions 2/12/10 - Part of a recent e-mail to one of our clients on the current market conditions in Las Vegas, NV.
Dear XXXXXX,
At this time Las Vegas is the number one fastest recovering market in the nation. I tell you this so that you are aware of what is happening in our market. In the resale market, most properties listed for sale are in one of two categories - Short Sales or REO’s (Bank Foreclosures) with the bulk of the listings being Short Sales. In case you are unaware, here are some facts and descriptions of the two different scenarios, and other options available:
The Goad Team Link to CNN Clip on Las Vegas Market Conditions.
Sorry for the long response but I want you to know what our market is doing and let you decide which direction is best for you and your husband.
John Goad, Jr. of The Goad Team
Realty ONE Group
(702) 586-2772 Ext: 702
www.GoadTeam.com
•1. That one loan short sales are easier to obtain short sale approval on than those with more than one loan. That is not to say that sometimes it is indeed easier, but no guarantee.
•2. That some banks are faster at approving short sales than others. Sometimes this is in fact the case but rarely. Most of the time it depends on how busy the bank negotiator is that your file is assigned to. We get calls from agents wanting to know who the banks are, and if for example we say Countrywide (now Bank of America) the agents response many times will be "they are the worst". The fastest short sale approval we have ever received was in 2 weeks and the longest it has ever taken for us to receive short sale approval was 13 months. Both of those were with Countrywide. I will state this, that our experiences with Ocwen over the last year have been fruitless. Ocwen has outsourced their short sale department overseas and ever since we have found it impossible to get short sale approvals from Ocwen. If anyone has had different experiences with Ocwen and have been able to obtain short sale approvals from them, please share any tips or advice that can help us.
•3. If a trustee sale has been scheduled it is to late to try and conduct a short sale. See our Line 8 of our blog post Short Sales - What to ask the listing agent before making an offer.
•4. Sellers are not allowed to receive any money on a short sale. While 99% of the time this is true, we have had slim occasions where the bank has given our clients what they refer to as "Relocation Funds." Again this is very rare.
•5. Pre-approved short sales. While sometimes these do indeed exist, more often agents are referring to these as "Pre-approved Short Sales" because the bank has previously approved a short sale on another offer. Just because the bank approved a short sale for a previous buyer that fell through, does not mean that the short sale will be approved for the next buyer...even if that buyers offer the same price and terms that the previous buyer had submitted. Most often the banks will make you start the short sale process all over again if a new offer is presented.
•6. That the listing agent has already submitted the short sale package to the bank and now just needs an offer. Most banks will not accept a short sale package without an offer, so even if the listing agent has submitted all of the other required documentation to the bank other than the offer, most of the time the banks will dispose of it as they do not want it without an offer included.
Thank you for reading our post and please keep in mind we are real estate professionals in the State of Nevada, and that the short sale processes can vary from state to state. So please keep this in mind when commenting. Also recent regulations that the government has imposed on banks will require that banks provide the listing agent with prices and terms they will accept for the property and if all goes well this will take alot of the guess work out of trying to submit an offer to the bank that will be accepted, thereby allowing the listing agent to list a TRUE pre-approved short sale.
The Goad Team of Realty ONE Group
More often than not short sales are a long, frustrating, stressful and aggravating process for all involved. The Goad Team collectively has over 15 years of short sale experience and has successfully closed hundreds of short sales. Below are some questions we recommend asking the listing agent before making an offer on a short sale listing to help ensure that you are working with an experienced short sale agent that has a reasonablechance of getting your short sale offer approved by the bank. We have also included a section to help clear up some of the common short sale misconceptions.
This is not fair! We hear this statement made on a daily basis when it comes to short sale. Whether it is the buyer or buyer's agent saying "This is not fair that I have to wait so long for an answer back on my short sale offer." or the seller who is saying "It is not fair that they have had our short sale package and offer for months NOW they want me to update all my pay-stubs, bank statements, etc. and they want it in 24 hours or they will close out my file...this is not fair." Everyone involved in the short sale process is always stating "This is not Fair." And everyone is RIGHT, it is not fair. However lets keep in mind the whole "Fair Factor" for everyone involved....
This list could go on forever, but the fact of the matter is that the short sale process is not fair for anyone involved in it. Another fact is that short sales are a real estate reality and will be for some time to come. Many experts are estimating that 40-60% of those who have obtained mortgage loan modifications will still ultimately end up in default and be forced into a short sale or foreclosure, due to job losses, pay cut backs, etc. So the realities are that short sales and foreclosures will remain a real estate reality for some time to come. We all need to face the fact that short sales (and life in general) is not all that fair, and get down to the business of saving our clients from foreclosure, getting our clients into homes, and do what we can to help end the real estate crisis that has affected most of the country.
If you are a home buyer or buyer's agent and would like more information on how to quiz the listing agent before making an offer on a short sale, please see some of our other blog posts for valuable infomation you should know before making an offer on a short sale listing.
If you are in default or strugling to make your mortgage payments, please call us and we will happy to help you explore the various options that may be available to you.
(702) 586-2772 Ext: 2
Why is my Bank of America/Countywide Short Sale taking so long to get approved?This is a very good question and unfortunately there are almost as many answers to this question as there are homes on the market. The following is but one example of why it can take so long for an answer to a short sale offer. Recently Bank of America/Countrywide (hereinafter referred to as bank) put a new system in place (actually it is not a new system, it is a system that has been used by many banks for years on their REO/Foreclosures) to "speed up the short sale process". According to a supervisor at the bank all short sales must now be submitted via this new system, rather than a short sale package being faxed or mailed into them, which has been the process for years. If the short sale package was mailed, faxed, etc. to the bank then they are no longer working on that short sale if it has not been submitted via their new system. This means that if you submitted a short sale package to them before they started using the new system then they are NOT WORKING on the short sale until such time as the short sale package is submitted via the new system, more often than not real estate agents are not being informed of this fact until after months have gone by, if ever. But the fun does not stop there...any work that may have been done by the bank before is now useless, as once submitted through the new system as the process starts all over. Best of all when you call to check on the status of the short sale, unless you get a representative or supervisor on the line that knows what they are doing you may or may not be informed of any of this.
Here is an actual example… Back in September of 2009 we submitted a short sale package/offer to the bank on one of our short sale listings. Each week we call to get updates on the status of the short sale offer, and every week we are told that it is being processed. However it was not until after nearly 4 months of being told that the short sale offer is being processed that we were informed that the file was still in a “Loan Modification Status” and that nothing can, or has, been done with the short sale offer due to the fact that there is an open “Loan Modification” even though the bank had turned our client down for a loan modification months ago. Extremely frustrating right? Well this mismanagement on the part of the bank is far from over. Once we were informed at the beginning of January, 2010 that the file was still in an Open Loan Modification status and that they would not work on the short sale until the Loan Modification was closed out, we explained to the bank that they had turned our client down for a Loan Modification months ago and that they need to close this status and begin processing the short sale offer. We were told that they would close out the Loan Modification status and begin processing the short sale (we did this on 2 separate occasions). Toward the middle of January, 2010 during a status update phone call to the bank, once again they informed us that the file is in a Loan Modification status and that our client would have to be the one to call and cancel the loan modification, which our client did. So now here we are on February 8th, 2010 and things are finally moving along with the short sale right? WRONG!!! Once again we are informed that it is still in a Loan Modification status, but a supervisor has stepped in and we are now assured that the Loan Modification will be closed out. HOWEVER at this time we are also informed that “ALL SHORT SALES MUST NOW BE SUBMITTED VIA THE NEW SYSTEM”, so even though we have submitted the short sale package and offer almost 5 months ago nothing will be done until we submit the short sale package and offer via the new system, which will be done tomorrow.
After 9 years of short sale experience and hundreds of completed short sales you would think we have seen every way in which a bank can mismanage their loss mitigation departments, however we are continuously amazed at this sort of incompetence. The above example is just the “tip of the ice berg” on how not only this bank but many others have mismanaged their loss mitigation departments. The banks loss mitigation departments’ primary obligation is to seek out alternatives to foreclosure through such processes as: Loan Modifications, short sales, etc. thereby cutting back on the banks losses. For years banks have been lobbying to be allowed to, in essence become their own real estate agents and be allowed to sell the properties they have foreclosed on. National, State and Local Realtor Associations have fought against this for many years and rightfully so. Over the years banks have clearly demonstrated an inability to adequately manage mortgages and mitigate their losses; which has helped contribute to a national real estate crisis, forced millions of people into bankruptcy and have cost taxpayers billions of dollars. It is important that the public and real estate professional alike continue to support the Association of Realtors and help keep banks out of real estate.
The Goad Team welcomes your comments or if you are facing foreclosure call (702) 586-2772 Ext: 2 and we will be happy to help you explore the options that are available to you.
Foreclosures (aka: Bank Owned, REO’s) vs Short SalesMost articles you'll find about Foreclosures and Short Sales are focused on sellers who may be losing their home to foreclosure. However, if you're a buyer looking for information on what you should purchase, we've made it easy to understand the differences between Short Sales and Foreclosures!Aren't Foreclosures and Short Sales the Same?At first glance, a Foreclosure and a Short Sale (or pre-foreclosure) would seem almost the same. Both of them are being sold for much less than they were last purchased, the bank gets all the money from the sale and has final say as to how much they'll accept, and both are very abundant in this market. There are some major differences between Foreclosures and Short Sales. We have given you some of the important differences buyers should know before making any offers.The Short Sale A short sale is still owned by a private entity and may still be occupied, either by the owner or a tenant. The current owner is no longer able or no longer willing to make the payments, and they are probably unable to sell their home because the value of the home is now much lower than what they currently owe on their mortgage(s). In this situation, one option the owner has is to try to negotiate a "Short Sale" with their bank. In a Short Sale, the bank allows the seller to sell their home either at or below the current market value and "forgive" the difference. For example, Sally Seller purchased her home 2 years ago for $350,000, and she currently owes $300,000. But because of the rapid decline of the market in the last year, her home is only worth $200,000, so she is unable to sell it. The bank may allow her to sell her home for $200,000 and forgive the difference of $100,000 so that she may avoid foreclosure. She can still be involved in the selling process by hiring The Goad Team of Century 21 Infinity to market the property, procure offers, etc. However, because the bank is granting her the opportunity to sell her home through the Short Sale process, the sale of her home is still subject to the bank's approval. The bank will look at factors such as the seller's financial situation and the home's current market value, and they will determine whether or not they will accept any offers that have been made on the property. So, in essence, you can make an offer on a home that is “subject to short sale approval” and wait for the bank to answer.
"SHORT" sale Time FrameThese days, a "Short Sale" can be anything but short. The time that it takes for this process varies from bank to bank, loan to loan, investor to investor, however be prepared for an average wait time of 30 to 60 Days. Because so many homes are going into foreclosure, bankshave to hire negotiators, who are inundated with files (many are handling over 100 files at a time). It can be extremely difficult for a listing agent to get in contact with their negotiator. Since the negotiator is such a crucial part of the Short Sale process, it is imperative for the listing agent to be contacting the negotiator on a regular basis so that all necessary parts of the ShortSale can be completed. Here's how a Short Sale works:Sally Seller hires The Goad Team of Century 21Infinity and puts her home on the market. After she receives an offer, the offer is submitted to the bank, along with documentation that Sally’s bank wants to review in order for Sally to demonstrate that Sally indeed has a Hardship and can no longer afford to make the monthly mortgage payments, NOT that Sally simply no longer wants to make the payments. The bank(s) will obtain an appraisal or BPO to find out the properties approximate value. The Negotiator will then prepare an analysis of how much will be lost by agreeing to conduct a Short Sale vs Foreclosing on the Property. Once the bank or the investor decide if it is in their best interest they will either issue a “Short Sale Approval Letter” or Negotiate the Terms by which they will agree to a Short Sale. However it may not end there, if the loan is “backed” by a governmental organization (such as Fannie Mae or Freddie Mac) OR the loan has Mortgage Insurance then the Short Sale must be approved by the governmental organization or Mortgage Insurance Company as well.
The Short Sale process is very complicated, and takes time for approval before you can start making plans to move in! In today’s market many times a buyer is able to get a “better deal” on a Short Sale vs a Foreclosure, however keep in mind as with most other things in life, the better deal comes at a cost such as: longer wait times for approval of offers, not knowing for sure whether the bank will approve of the price or terms until after waiting for some time, etc.Something else to keep in mind when looking at Short Sale properties, is that the listing price for a property is set by the listing agent, and in most cases has not yet been approved by the bank. So until the bank issues the Short Sale Approval Letter, it is not known by anyone just what price the bank will agree to sell the property for. If the listing agent has done their job the listing price SHOULD be at, or close to what the bank(s) can “realistically” expect to get for the property.The Foreclosure (aka Bank Owned or REO’s)A Foreclosure (or REO) property is completely owned by the bank. It has gone through the entire foreclosure process and is now fully controlled by the bank. The property generally will be vacant, there are no negotiators to deal with. Instead, you deal directly with the listing agent that the bankchose as its representative. The bank has already done the ground work and has come to a bottom line price that they find acceptable. There is usually less waiting time for an answer, and once your offer is accepted, you are able to begin the escrow process. REO’s do not need to go through all of the steps for approval that Short Sales do, so it is usually a much easier process to work with. You make an offer, and if accepted you are on your way to moving in.
However in today’s market there is HIGH DEMAND for Foreclosures, as a result, the listing agent many times receives several offers and may put out a "Multiple Counter Offer" to all the parties who made offers. The Multiple Counter Offer will state that there are several offers on the property and will ask everyone to submit their “Highest and Best Offer”. So, after all is said and done, the offers many times end up being much higher than what they were originally asking for the property.
Thank you for reading our blog about Foreclosures and Short Sales. We hope you find this information valuable, and of course if your are interest in buying or selling a property, please give a member of The Goad Team of Century 21 Infinity a call at (702) 586-2772.
With out a doubt...YES. Prime example, we recently had a client who's home we were selling, we will call them the "Smith's Family". The Smith Family did not have a home inspection completed when they purchased, as after all it was Brand New, nothing could be wrong with a Brand New Home right? WRONG
There was indeed something wrong with the home, and it was a severly damaged roof joist. The Smith Family was unaware of the problem, until we procured a buyer for the house, and the buyer of the home had a home inspection conducted. The home inspector found and noted this broken roof joist, and stated that this was obviouly a builder defect and had been this way since it was new. Of course the buyer would not purchase the home unless it was fixed. Because the roof was sagging, from the broken joist, this turned out to be a costly repair to fix the problem ($3,950.00). Had the Smith Family paid about $400.00 for a home inspection, that would have caught the problem, this would have been the builders issue to fix at that time, rather than the sellers problem to fix later on. The builders warranty had run out long before we were selling the house, so of course the builder refused to do anything about it.
Bottom line...Always have a Home Inspection conducted on any home you intend to purchase. Do not purchase a home "blindly" as you never know what you may be getting into.
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