Updates from May, 2012

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• Short Sales Will Increase Dramatically in 2012

  MSC Marketing 8:49 am on May 10, 2012 | Comments:0
  Tags: Buyer (24), consumer (3), mortgage (61), seller (24), Short Sales (9)   Filed under: Buyer Info, Consumer news and advice, Finance, mortgage, Seller Info, Short Sale

  by The KCM Crew on May 7, 2012

  We believe that short sales will be a major part of the real estate market in 2012. That is why we have dedicated this entire week to posts exclusively on this subject. We hope that by the end of the week you have a better handle on the need for short sales and a better understanding of the process. – the KCM Crew

  It seems that the banks have finally realized that a short sale is a better option than foreclosure for them, the homeowner and the neighborhood. It is for this reason we believe that 2012 will come to be known as the year of the short sale. CNN Money reported on this exact point:

  “We believe 2012 could be a record year for short sales,” said Daren Blomquist, vice president at RealtyTrac.

  Banks are showing signs of being more open and willing to approve the deals — even if it means accepting less money. The average sales price for a short sale was $174,120 in January, down 4% from December and 10% year-over-year.

  Market Watch also addressed the short sale situation recently: (More …)

  
   
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• New Foreclosures Slow in Foreclosure Hot Spots

  MSC Marketing 3:31 pm on March 29, 2012 | Comments:0
  Tags: bank owned, Buyer (24), foreclosure (18), NAR (40), seller (24)   Filed under: Agent information, Buyer Info, Consumer news and advice, Foreclosure, National Association of Realtors, Seller Info, Short Sale, The Economy

  Markets that experienced the biggest boom in foreclosures in 2009 and 2010 today are experiencing a decline in new foreclosures.

  New data from the National Association of REALTORS®’ Local Market reports shows that the national foreclosure rate eased from 2.8 percent in June of 2011 to 2.7 percent by December, with 113 of the 163 markets surveyed experiencing a decline in their foreclosure rate over this period.

  While the improvement was widespread, the largest aggregate declines occurred in markets where the rate had ballooned in 2009 and 2010. Markets in Florida and Nevada dominated the top 10 in declines, but Seattle and Spokane, Wash., also made the top 10 despite having a small overall foreclosure rate, (More …)

  
   
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• Do Appraisers Use Distressed Properties as Comparables?

  MSC Marketing 5:14 pm on February 8, 2012 | Comments:0
  Tags: appraisal (3), Buyer (24), comparables (2), foreclosure (18), pricing (37), property appraiser (3), seller (24), Short Sales (9)   Filed under: Agent information, Buyer Info, Consumer news and advice, Foreclosure, Home owner information, pricing, Property Appraisal, Seller Info, Short Sale, Short sales

  

   

  Many of our readers ask us if appraisers use distressed properties (short sales and foreclosures) as comparables when doing an appraisal on non-distressed properties. We have posted on this issue on several occasions (examples: here and here). Last month, the Appraisal Institute issued a paper on the subject. In the paper, the Institute explained that:

  “Foreclosures and short sales can provide important information for appraisers, who develop valuations based on market data and market forces.”

  On whether an appraiser should use distressed properties as comparables, the Institute was very direct (all items in bold were shown as bold in the original paper):

  “An appraiser should not ignore foreclosure sales and short sales if consideration of such sales is necessary to develop a credible value opinion.”
  And they explained the possible differences between short sales and foreclosures:

  “A short sale … might have involved atypical seller motivations and so might not be an ideal comp…

  A sale of a bank-owned property might have involved typical motivations, so the fact that it was a foreclosed property would not render it ineligible as a comp.”

  Bottom Line

  Some will argue that distressed properties should not be used when appraising non-distressed properties. However, there is no longer any doubt that they will be.

  http://www.kcmblog.com/2012/02/07/do-appraisers-use-distressed-properties-as-comparables/

  
   
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• Short Sales: Has Their Time Finally Arrived?

  MSC Marketing 9:29 am on August 31, 2011 | Comments:0
  Tags: Buyer information (36), mortgage (61), Seller information (41), Short Sales (9)   Filed under: Buyer Info, Consumer news and advice, Credit, mortgage, Seller Info, Short Sale

  by The KCM Crew on August 29, 2011

   

  Last week, RealtyTrac released its Q2 2011 U.S. Foreclosure Sales Report.

   

  The report confirmed what we are hearing in the marketplace – banks are beginning to look more favorably on short sales as option to foreclosure.

   

  The report dissected the sales of distressed properties in the second quarter of 2011. Here are several of their findings:

  • Sales of homes that were in some stage of foreclosure or bank owned accounted for 31 percent of all U.S. residential sales in the second quarter of 2011, down from nearly 36 percent of all sales in the first quarter.
  • A total of 102,407 pre-foreclosure homes (short sales) sold in the second quarter, an increase of 19 percent from the previous quarter.
  • A total of 162,680 REO homes (foreclosures) sold in the second quarter, virtually unchanged from the first quarter.
  • Short sales on average sold for a discount of 21 percentbelow the average sales price of non-foreclosure homes.
  • REOs on average sold at a discount of nearly 40 percent below the average sales price of non-foreclosure homes.

  This could be a great sign that banks are finally realizing the advantages of short sales over foreclosures.

  Bloomberg.com quoted Rick Sharga, senior vice president of RealtyTrac, in an article covering the report:

  “This is a glimmer of hope that lenders are getting more realistic. It’s a win for borrowers who avoid foreclosure, buyers who get a house in better condition and banks that lose less money, which is also a win for taxpayers.”

  Bottom Line

  Banks are beginning to do more short sales. It is time for everyone involved to help in this endeavor. Tomorrow, we will have a short sale expert, Christopher Reale, blog on gaining the right mindset to do just that.

  http://kcmblog.com/2011/08/29/short-sales-has-their-time-finally-arrived/#more-8881

  
   
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• Industry Opinions Weigh In on Extended Forecast for Short Sales

  MSC Marketing 10:51 am on August 18, 2011 | Comments:0
  Tags: Buyer information (36), foreclosure (18), housing market (53), mortgage (61), Short Sales (9)   Filed under: Buyer Info, Consumer news and advice, Credit, economy, Foreclosure, mortgage, Short Sale, The Housing Market

  Short sales will remain strong for the next several years as foreclosure inventories timelines grow even longer, according to the chief operating officer of Equator, a software platform for default servicers.

  “Short sales will be very prominent over the next 2-3 years as foreclosure inventories increase and remain somewhat stagnant. The elongated foreclosure timelines coupled with improved processes and technology will lead to more short sales closing,” says John Vella, COO of Equator.

  Equator reports some 775,000 real estate agents handling an average of 250,000 transactions per day access its platform.

  Last week LPS reported the median foreclosure timeline now is 587 days. In May, CoreLogic predicted the number of short sales will increase 25 percent next year after tripling over the past two years.

  New federal regulations that took effect April 10 are expected to add to the interest in short sales by removing barriers involving second liens. Prior to this change, secondary lien holders were unlikely to receive any portion of the proceeds of the sale. This likelihood was increased if the property was in a state of negative equity. The secondary lien holder could block the approval of the short sale by refusing signoff on zero pay-off.

  Due to the change in the laws regulating short sales there are now incentives for secondary lien holders to approve the sales. There is also an incentive for the seller to pursue this option. Secondary lien holders will receive a portion of the sale proceeds; an amount of at least $3,000. They will also receive an additional $1,000 from the federal government and sellers will receive an incentive of $3,000 for relocation expenses.

  For more information visit http://www.realestateeconomywatch.com.

  http://rismedia.com/2011-08-16/industry-opinions-weigh-in-on-extended-forecast-for-short-sales/