Random Clapper

On St. Patrick's Day morning our office held a short sale "roundtable" and I wanted to share some of the conversation with you.  With over 400 Short Sales Closed, there are some real experts in this roundtable at Remerica Hometown One!

The Subject:  What Will Short Sales "Climate" Be in Southeastern Michigan in 2010?

-We all agreed that short sales will be around for at least another 3-4 years, representing about 35% of the market as a high and ranging downward to 10% in 48 months.

-The new incentives being put in place April 5, giving $1000 to First Mortgage, up to $3000 to the Second Mortgage and $1500 to the Seller upon short sale work out should help! (Look up Home Affordable Foreclosure Alternatives, HAFA)

-We all think that Realtors need to review the HAFA plan.  Here is an explanation; please review and check with a Realtor and your own mortgage company for details and updates.    https://www.hmpadmin.com/portal/programs/foreclosure_alternatives.html

-Inventory in Western Wayne, Oakland and Washtenaw Counties is diminishing and will continue to.  Buyer pressure on homes has increased measurably.  Bank owned, short sales and "normal' transaction listings that are in good condition are met with multiple offers, some for over asking price.

-Low appraisals despite the multiple offers and diminishing inventory are still an issue with short sales.  Mortgage companies need to stop pressuring for lower appraisals in Southeastern Michigan.  Let the natural "organic market" take shape.  The result will be a steady, healthy, slow ticking up of values.

-Slow bank response time to short sale offers, and slow processing time still hampers the market, causing buyer huge "buyer drop out" rates on these transactions. Replacing the buyer takes additional time and may damage a Seller's chance of a short sale as time might be running out towards foreclosure in many cases.

-Third Party short sale companies to assist in the short sale work out (charging the lender for the service) have been met with mixed reviews.  Realtors have been using these services to save themselves time and resources.  Unfortunately, if the success rate is lower with the Third Party Vendor, many Realtors are disappointed with the outcome.  You don't save time if the transaction never closes.  Realtors mentioned that it is the inconsistency of the lenders that cause the process to break down, and these inconsistencies are still in play with the third party vendors.  Most Realtors are choosing to become proficient at the short sale process themselves.  We will keep monitoring, and look forward to feedback from the Realtors at Remerica Hometown One as to the effectiveness of some of the Third Party vendors. 

-Improper uses of the status of "Contingent Continue to Show (CCS)" on the local multiple listing service was a heated conversation.  If a home is sold, signed by Seller, contingent upon Seller's mortgage company approval of the short sale, it would seem to be under a status of "pending" as the buyer and seller have come to terms.  Too many agents are using CCS as a way to keep a property active on Realtor.com and other sites, as well as to continue to collect leads.  Our suggestion is to have the MLS Service create a status called "Short Sale Contingent (SSC)" that would give an accurate description of the status, and allow SSC to be considered "active" so the home would remain in MLS as active, on Realtor.com and other sites, but with "SSC" so Realtors and the public have accurate information.

-The number of times a Realtor needs to call a short sale "loss mitigator" on behalf of the Seller is; once a week at the onset of the short sale, escalating to 3 times a week two weeks before short sale approval and closing.

-A cool tip to create short sale efficiency was to create label sheets with the Seller name, property address, and loan number and stick the label on every document sent to the short sale mortgage company.  This little tip has led to some time shortening for the Seller client.

In closing, the frustration by the Realtors as to the lack of efficiency and standardization by the mortgage companies continues.  Resourceful Realtors will always find a way to help their clients, and the short sale process is no exception.  There are many success stories with short sales.  All of them involve a burning desire to "not give up"!  This desire has to be there for the Seller as well as the Realtor.  Sellers who cooperate and complete all the bureaucratic steps have a tremendous advantage over Sellers who remain "inactive" in the process.  Realtors have found that they are capable of handling short sales when they take the time to learn the process, stick to the process and never give up!  Many have been able to keep real estate as their career by mastering the short sale process.  As home owners or Realtors, wherever you work, or live in Michigan, Remerica Hometown One would be glad to help you with short sale questions.  The better we all become, the better the real estate world becomes!