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Posts Tagged ‘short sale’

Oakland County MI Real Estate

A short sale is when the house is offered for sale by the owner (person as opposed to a bank) who owes more than what is owed. Once an offer is accepted, the bank has to agree to reduce the mortgage payoff. Usually some of the leg work has been done before the house ever hits the market, but there’s only so much that can be done prior to getting an offer. I have had answers back on short sale offers as quickly as a few days (this is VERY rare), but typically it takes 3-6 months to get an answer back on an offer, and sometimes that answer is just “no” with no counter.

If you need to get into your Oakland County home right away, looking at short sale listings is probably a bad idea. If you have time (and patience) you can usually get a pretty good deal on a short sale listing. It benefits the bank to take their loss now rather than wait and incur the costs of foreclosing. Short sale is also a searchable field in the multiple listing service (MLS) I belong to. Oakland County MI short sale listings can be searched or excluded from searches.

WARNING:

  • Short sales are not for the faint of heart
  • There is no guarantee the short sale will be approved
  • There is no guarantee if the short sale IS approved that it will be at the price agreed upon by you and the seller- SO be prepared for a counter offer
  • Do not even look at short sales if you are under any kind of time constraints!!

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What to Expect From Your Oakland County Buyer’s Agent

Financing Your Oakland County Home Purchase

Buying an Oakland County Foreclosure or Short Sale

Jackie Hawley, Realtor
ReMax Encore, Clarkston MI

Cell: 248-736-6407

Jackie@JackieHawley.com

www.MiRelocation.com

www.MacedayLake.com

www.OaklandCountyMichiganLakes.com

www.LakeOaklandHomes.com

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Making an Offer on an Oakland County Michigan Short Sale Listing? The Asking Price Means Nothing!

First a quick run down about how the short sale process works. Owner lists a house with a real estate agent. The owner owes more on the house than he can sell it for and is either unable or unwilling to bring the short fall to the closing, so it is listed subject to short sale approval. The banks do not pre-approve houses for short sale and the banks do not set the asking price.

The point is, the seller and his agent set a price to ask for sale and it has nothing to do with what the bank (or banks) will take for a pay off. I know how I price a short sale listing, but every agent is going to have their own ideas of what works best. Some agents appear to have no rhyme or reason behind their pricing. When considering buying a short sale listing, one of the factors to consider is the abilities of the listing agent. He or she is a major component to getting a favorable approval.

One of the myths floating around out there is that the banks will approve anything. There are some great deals, but they exist in all types of sales: short sales, foreclosures and regular sales. But I can honestly tell you that is a rare to non-existent happening that a bank will approve a payoff of $50K for a house worth $150K in this market and owes $300K. Something IS NOT necessarily better than nothing. The banks aren’t going to just forgive debts because it’s the easiest thing for sellers and real estate agents. In Michigan the banks have 10 years to come after the deficiency, and if they don’t release the seller from that deficiency there isn’t much incentive for the seller to approve the short sale and continue to closing.

Short sale listings tend to sell at the low end of fair market value and even slightly under today’s fair market value. And they should if you consider a 6 month wait on the part of the buyer to even find out if they can buy the house. I like to equate that wait and uncertainty to sweat equity. But the current asking price has absolutely nothing to do with the final sale price. It is very possible/likely that you will wait it out and the short sale gets flat out rejected. Or you may get a counter offer. During that time you hope interest rates don’t go up.

Before we make an offer on a short sale listing, I will do a detailed market analysis on the house. There’s no need to make a low offer that you can’t or won’t move off of if the bank won’t accept that low of a pay off. There’s also no need to make an offer so high that your lender won’t approve the mortgage due to a probable low appraisal.

I have a series of blog posts about buying a short sale listing. Some about the downfalls as well as the perks to buying a short sale listing. After reading the posts outlining the good and the bad, if you are willing and able to still pursue possible short sale listings, there are more posts about negotiating with a short sale seller. The incentives for a short sale seller are very different than those of a traditional seller.

Jackie Hawley Keller Williams Realty, Clarkston MI

Cell: (248) 736-6407

Jackie@JackieHawley.com

Buying Real Estate In Oakland County Michigan

Writing the Offer

Financing

The Home Inspection

Foreclosures and Short Sales 

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Southeast Michigan Short Sales- Why You Should Avoid Many Of The So Called “Short Sale Specialists”

I will preface this post with a kind of anti-disclaimer: If you have to sell via short sale, I DO NOT WANT TO LIST YOUR HOUSE. If you are a past client or a friend, I will list your house if selling via short sale is the best option for you, and you agree to my rules. So this post is NOT to get your short sale business.

I have my own reasons for not listing short sales, one of them being the success rate to close. In just general MLS searches for buyers and for market anlaysis’ for listings, it appears that about 1/3 of the houses that go pending short sale approval, end up back on the market or foreclosed. I personally never saw the benefits of a business model that has a 1/3 failure rate built into it.

Then today, one of my associates received an e-newsletter from a local “short sale team.” They bragged a bit about having closed over 100 short sale transactions in the past year. They then go on to crow about the fact they “process on average 75 active short sales daily…” Hmmmm. I was never a math genius, but I do own a calculator and that comes out to 100 closings for every 27,000+ clients they take on. So about one third of one percent of their business actually closes.

Since I can’t convince all my buyer clients to avoid short sale listings, PLEASE PLEASE PLEASE hire a good, experienced, successful agent to handle your short sale. Someone who was a good and successful agent BEFORE short sales became such a big business. To me it looks like many of the “specialists”, whether they are attorneys or real estate agents, specialize in listing a high volume of distressed homes with a small success rate. From a seller’s perspective, you may want to consider quality over quantity.

What Makes a Good Short Sale Agent?

Short Sale Approval is Subject to Seller Approval of the Terms

Bad Advise From Your Realtor? From Your “Short Sale Specialist”? What Are Our Responsibilities? Where Does The Buck Stop?

Jackie Hawley

Keller Williams Realty, Clarkston MI

Cell: (248) 736-6407

Jackie@JackieHawley.com

Buying Real Estate In Oakland County Michigan

Writing the Offer

Financing

The Home Inspection

Foreclosures and Short Sales 

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Buying an Oakland County MI Short Sale Listing- What to Expect

Between what I’ve heard on TV and radio, read and from conversations I’ve had with clients, potential clients, other agents, relatives, friends… I have learned that there are a whole host of definitions for the term “short sale.” And most of them not very accurate.

A short sale is when the house is offered for sale by the owner (person as opposed to a bank) who owes more than what the house is worth and can’t, or isn’t willing to, pay the difference themselves. Any offer that home owner would accept would be subject to the bank agreeing to reduce the mortgage payoff. Selling short. Short sale.

Short sale listings can be some of the best bargains available in Oakland County Michigan, but there are things about short sales that the Oakland County Michigan home buyer should be aware of prior to even looking at houses.

  • Be prepared to wait 3-6 months (sometimes longer) for short sale approval
  • Be aware the lien holders may not agree to the payoff required to proceed with your offer. After 3-6+ months your offer may be countered or outright rejected
  • Don’t expect appliances to stay
  • Don’t expect the seller to pay for repairs
  • Don’t expect your closing costs to be covered in the form of seller concessions- sometimes they’re capped at 3% and sometimes they won’t be covered at all
  • DO expect to close pretty quickly once the short sale is approved

One of the first things everybody involved in a short sale needs to understand is that the banks are under no obligation to approve a short sale. You would think it would be in the banks best interest to approve a short sale when the offer is reasonable, but often times the actions of many of these banks seem to defy logic. Also, the more lien holders involved in the transaction the more difficult it is to complete and the higher the probability that it won’t close.

Buyers need to realize that there are factors beyond the control of the buyer or buyer’s agent.

  • We can’t control how cooperative the seller will be with the bank’s demands addressed in more detail here
  • We can’t control how knowledgeable or diligent the listing agent is
  • We don’t know from day-to-day what financial incentives the government will offer the banks which can determine what short sales they approve
  • When there are multiple mortgages we don’t know how well the negotiators for the first and the second will play together or the abilities of the listing agent to ref them
  • The seller can also reject the terms of the short sale which will be addressed in detail in another article

In a nut shell– short sales can be a good bargain but for the right buyer. You need to have the patience of a saint and the ability to move on someone else’s schedule.

What if the Appraisal is Low?

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Property Taxes and Your Home Purchase

Is the Appraisal for Your Protection?

Jackie Hawley
Keller Williams Realty
Cell: (248) 736-6407
Email: Jackie@JackieHawley.com
www.MiRelocation.com

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Thinking of Buying a Short Sale Listing? A Few Things to Consider

oakland county mi short saleThe amount of short sale listings in the North Oakland County and Lapeer MI area have been on the rise over the past several months. I believe this is happening for a variety of reasons. More agents and attorneys are pushing the benefits of selling via the short sale route over allowing a home to go into foreclosure. Homeowners are hearing the term more often and assume it’s better for them in the long run. Unemployment in Michigan is still high and people are still losing their homes, and for whatever reason more are opting to sell short rather than allowing the house to go into foreclosure.

What does this mean for you, the home buyer? Short sale listings tend to be in better condition than bank owned homes- not always but often. Short sales tend to be good deals, but honestly everything that is selling is a good deal. The regular homeowner/seller has to price their homes like a foreclosure or short sale in order to 1) find a buyer and 2) appraise for that buyer’s mortgage.

The easiest transaction tends to be with the regular homeowner/seller. Bank owned sales tend to be fairly easy to deal with. You may have to wait a little longer for an answer than with a normal seller and you will need to sign a bunch of addenda from the bank/seller and you DO have to sign them and you CANNOT change them.

Short sales– They are a unique animal unto themselves. First you make an offer to a homeowner who will accept, reject or counter. Once you come to terms, that seller will submit the offer to the bank(s) that has the current mortgage(s) on the house and ask for them to reduce the payoff amount(s) to match your offer amount. There is quite a bit more the seller needs to do, but from your perspective this is what basically happens.

Now you wait for 3-6 months. At the end of that time frame the following can happen:

  • your offer is outright rejected
  • your offer price is countered
  • if you asked for the seller to pay some or all of your closing costs those may be countered
  • if you asked for the seller to pay some or all of your closing costs those may be eliminated
  • the offer may be accepted but the seller may need some cash in order to be able to go through with the sale

When it comes to closing costs the banks, in my experience, rarely/never allow more than 3% of your costs to be covered. Often times they eliminate that part of the offer entirely. If you NEED to have your closing costs covered you shouldn’t look at short sales. We aren’t dealing with a logical being at the other end of the transaction. I know that you are really mortgaging those costs. I know that you would have offered 3% or 6% less if you weren’t asking for those costs to be covered by the seller. You can even offer to raise your offer amount and you will probably get shot down.

Sometimes the short sale will be approved but ask for the seller to bring cash to the closing- cash they probably don’t have. The seller may offer to sell you appliances, lawn tractor, etc to cover that cash needed to close. If you are tight on cash to close, you probably shouldn’t look at short sale listings.

How will you feel if you wait 6 months only to have your offer rejected or countered in a manner that keeps you from being able to buy the home and in the meantime the interest rates go up? What if in 6 months the interest rates are 1/2% higher? Or 1% higher? Do you know how much buying power you just lost with that size of a hit?

For More About the Home Buying Process Please Contact

Jackie Hawley
ReMax Encore, Clarkston MI
cell: (248)736-6407
email: Jackie@JackieHawley.com

Buying a Short Sale Listing

For Buyers

Homes for Sale in Lake Orion MI

Homes for Sale in Oxford MI

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Photo courtesy Kate Ter Haar, Flickr Creative Commons

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short sale listing agentWhether buying or selling a short sale in North Oakland County or Lapeer Michigan, the abilities of the listing agent are very important. From the seller’s perspective, they need an agent who is very careful and precise with pricing. The seller needs an agent who knows which offer should be accepted and which should not. An agent who will not only get the short sale approved with the first offer, but approved with terms that are acceptable to the seller.

From the buyer’s perspective the seller needs that same agent I just described above. With a lesser agent your offer may never make it to the closing table and you can wait 5 or 6 months only to be told “too bad, so sad you’re not getting the house.”

So- back to the question in the title of this post. What makes a good short sale agent?

The same things that have always made an agent a good agent. A short sale is just another contingency that needs to be cleared in order to make it to the closing table, albeit more difficult to accomplish than most contingencies. In the past, the sellers didn’t always know they were being short changed when they hired an incompetent agent. And the buyers were ecstatic if they could pit their good agent against a lousy listing agent; it just meant better price or terms for them. Now, the abilities of the listing agent are much more determinant to the outcome of the transaction- whether the closing happens or not.

A good agent in any market is detailed oriented, full time, knowledgeable, honest, available (not 24/7short sale listing agent experience counts available, but a person who answers their phone or returns calls and emails in a timely fashion). Experience helps immensely but a newer agent can also be a good agent. But all things being equal except for the experience factor, experience should trump new. And beware! Short sale designations DO NOT make an agent a good agent. Designations are easy to get and even if an agent had a PHD in short sales (if one existed) that doesn’t mean they are detail oriented, full time, honest or available. It doesn’t even necessarily make them knowledgeable. It means that sat through some classes.

Oakland and Lapeer County seller: If you need to sell and include a short sale contingency, please please please carefully choose the agent who will represent you. There is no need to go through the motions and take up a half  year of your life to just face foreclosure.

short sale agent honesty is importantOakland and Lapeer County buyer: If you are willing to put looking at homes on hold for 5 or 6 months while you wait for lender AND seller approval of the short sale, don’t you think the ability of the listing agent affects you almost as much as it affects the seller? If the sale fails you won’t be looking at a foreclosure like the seller might, but you could be looking at rising interest rates and rising home prices which could be a significant amount of money to you in the long run. Are you willing to put that much of your financial future into the hands of a listing agent who doesn’t fill in the lake name or the acreage search field? Are you willing to put your financial future into the hands of an agent who fills out the MLS remarks with something along the lines of “subj to short sale approval. commission 50-50” and no mention of the professionally finished walkout or the custom kitchen or the heated pole barn. Are you willing to put your financial future into the hands of an agent you you have not met nor had an opportunity to interview, but an agent who only puts 1 or 2 photos in the MLS when we are able to put 25 photos in the MLS? If that agent is that sloppy or non-committed to getting the listing sold during the easy part of the transaction- inputting into the MLS- what kind of a job is that person going to do when it comes to the actual work of negotiating the short sale. And remember- that is a short sale with terms acceptable to BOTH the lender and seller.

Buyers- The Importance of a Good Buyers Agent

Sellers- The Nuts and Bolts of Selling Your Home

Sellers- Marketing Your Home

Buyers- Everything You Need to Know About Short Sales

Seach the MLS 

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lying rat media

lying rat media

Lake Orion Michigan 3rd Quarter Home Sales- Cold Hard Facts Refute Media Reports Regarding Foreclosures. Which is a fairly nice way of stating that, again, the main stream media is full of shit and spreading alarmist and untruthful information regarding the state of housing sales. I kept hearing all day how foreclosures in Michigan are not only up for the 3rd quarter compared to the 3rd quarter of 2009; I was hearing reports about how foreclosures in Michigan were hitting record highs.

First of all, at least one of the sources quoted counts foreclosure notices as a foreclosure. Many of those houses will never go to foreclosure sale. Secondly, you can’t take Detroit statistics and claim that is reflective of the rest of the state. The way I was raised this is the same as lying. If you are of a more forgiving nature this is at a minimum misleading.

You need to look at individual communities to gage the recovery of the real estate market. This blog post will discuss the sales trends for Lake Orion Michigan– both the township and the Village.

The facts are:

Lake Orion Michigan unit sales for the 3rd quarter of 2010 were down from last year but are still up over last year through the first 3 quarters.

The Lake Orion Michigan median sale price for the 3rd quarter of 2010 was up 12.8% – $158,250 vs $138,000 in 2009.

The median monthly sale price in Lake Orion Michigan was up over last year for the last 5 months in a row and 6 of the past 9 months. 

lake orion michigan monthly median sale prices

2010=yellow 2009=blue

There were 27 foreclosure sales in the 3rd quarter of 2010 (or 33% of total sales) vs 56 foreclosure sales for the same period in 2009 (or 46% of total 3rd quarter sales).

Short sales made up 22% of total sales for the 3rd quarter of 2010 and only 4% of total 3rd quarter sales in 2009. The decrease in foreclosure sales and increase in short sales are probably a huge factor in the increase in median sale price.

Also the decrease in inventory is a contributing factor for the increase in sales price.all is not rosy in the lake orion michigan housing market

All is not rosy in the Lake Orion Michigan housing market, but it is much better than the media would have you believe. Have we hit rock bottom? Who knows? Only time will tell; we won’t know where the bottom is until we’ve passed it. But facts are facts and the bilge the media has been spewing is far from factual.

Lake Orion Michigan Detailed Sales Data

Neighborhood Sales Data

Lakefront Sales Data by Lake   

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