Phoenix Housing Prices Up - But Use Caution (Maricopa: mortgage, credit)

[Captain Bill]

Originally Posted by ReconJohn

Captain Bill...what's the impact on a new buyer (relocating to AZ) of a "short sale"..not sure I under all the issues. Would you recommend buying a short sale?

The previous posters painted a pretty accurate picture of the short sale situation for you. I have a buyer who waited about 8 months on a short sale and the bank sold it at foreclosure. So we've been trying to find another one for several months now, and actually trying to stay away from short sales.

A short sale is where a seller owes more than the current value, so the seller is trying to sell the house and ask the lender to accept an amount "short" of the mortgage amount. Hence the name "short" sale.

The purchase contract includes a short sale addendum which states that the sale of the property is contingent on the bank accepting the purchase price agreed on between the buyer and seller. The lender can take 2-3 months, or in many cases greater than 6 months to respond. They can respond with an approval letter at that price; a complete rejection; or a counter offer of a higher price. The seller can accept or reject the banks approval. If the seller accepts the banks approval, then it's up to the buyer to accept or reject, or counter. If the buyer counters, then there can be another few months delay, or a complete rejection of the short sale, and the lender will just foreclose.

The number of short sales is rapidly declining. Today we have 50% fewer "Notices of Foreclosure" than we did in March. Today we have only 75 per day, based on a 90 day average, and in 2003 we had 50 per day. So we are getting pretty close to normal, and may reach that normal status with a year or two.

How difficult it will be for you to win a bid on a short sale will depend on the price range. Any short sale below $150k that is listed below market value will have multiple offers and sell above list price.

Any home, traditional or distressed, under $200k priced at the market value for the condition and location will sell with multiple offers.

Above $200k the competition gets a little less.

If you're in the $500+ range then you have much less competition.

[Ponderosa]

Originally Posted by Captain Bill

The previous posters painted a pretty accurate picture of the short sale situation for you. I have a buyer who waited about 8 months on a short sale and the bank sold it at foreclosure. So we've been trying to find another one for several months now, and actually trying to stay away from short sales.

A short sale is where a seller owes more than the current value, so the seller is trying to sell the house and ask the lender to accept an amount "short" of the mortgage amount. Hence the name "short" sale.

The purchase contract includes a short sale addendum which states that the sale of the property is contingent on the bank accepting the purchase price agreed on between the buyer and seller. The lender can take 2-3 months, or in many cases greater than 6 months to respond. They can respond with an approval letter at that price; a complete rejection; or a counter offer of a higher price. The seller can accept or reject the banks approval. If the seller accepts the banks approval, then it's up to the buyer to accept or reject, or counter. If the buyer counters, then there can be another few months delay, or a complete rejection of the short sale, and the lender will just foreclose.

The number of short sales is rapidly declining. Today we have 50% fewer "Notices of Foreclosure" than we did in March. Today we have only 75 per day, based on a 90 day average, and in 2003 we had 50 per day. So we are getting pretty close to normal, and may reach that normal status with a year or two.

How difficult it will be for you to win a bid on a short sale will depend on the price range. Any short sale below $150k that is listed below market value will have multiple offers and sell above list price.

Any home, traditional or distressed, under $200k priced at the market value for the condition and location will sell with multiple offers.

Above $200k the competition gets a little less.

If you're in the $500+ range then you have much less competition.

Hey Bill, quick question. Can a subordinate lien holder reject a short sale or is the decision solely up to the first?

[S. Chris Webb]

"Hey Bill, quick question. Can a subordinate lien holder reject a short sale or is the decision solely up to the first?"

I'm not Bill, nor do I play him on TV. But I can answer this. Either lien holder can reject a short sale. Approval must be given by all lien holders or the sale can not close.

[Captain Bill]

Originally Posted by Ponderosa

Hey Bill, quick question. Can a subordinate lien holder reject a short sale or is the decision solely up to the first?

Chris answered the question for you. So I'll just add a little more information. The 1st lien holder will usually offer the 2nd holder something on the order of $2,000 to sign off. Some will accept that right away, and others will play hard ball. They may hold out for $10,000 or some other amount.

The listing agent, or person who is negotiating the short sale for the listing agent, will be negotiating with both the 1st and 2nd lenders to strike a deal. The 2nd knows that all the other players want the short sale to be successful, and that's why they can elect to play hard ball.

However, if no deal is struck, and the home goes to foreclosure, then all the subordinate loans are wiped out and they get nothing. So a good short sale negotiator is usually able get some agreement.

Yesterday, I tried to stay off line as much as possible because I'm writing an autobiography with an inspirational theme, and I have to really concentrate, and stay away from multi-tasking if I want to get the book finished.

Happy new year to everyone

[Captain Bill]

There weren't as many listings added in December 2012 (6,021) as there were in Dec 2011 (7,451).

In December 2008 there were 11,785 new listings.

It'll be interesting to compare the January listings to last year. I'll report those at the end of January. I know of 5 homes in the area that will be listed by mid January.

[jimj]

So since we've drifted a bit into foreclosure talk I've got a quick question for y'all. The house across the street from me was rented by a friend of ours. He just moved out and told us the owner had just told him the house was 2 weeks away from the foreclosure process and I'm wondering if between now and then I could snap it up? I looked at Zillow (I know not the best source) and it showed she paid $124k for it in 2009 so unless she refinanced the heck out of it it'd most likely be well under that. I also know she's about $5k behind at this point.
If I could pull this out for a decent price it'd certainly be worth doing.
Suggestions???

[john3232]

Originally Posted by jimj

So since we've drifted a bit into foreclosure talk I've got a quick question for y'all. The house across the street from me was rented by a friend of ours. He just moved out and told us the owner had just told him the house was 2 weeks away from the foreclosure process and I'm wondering if between now and then I could snap it up? I looked at Zillow (I know not the best source) and it showed she paid $124k for it in 2009 so unless she refinanced the heck out of it it'd most likely be well under that. I also know she's about $5k behind at this point.
If I could pull this out for a decent price it'd certainly be worth doing.
Suggestions???

My experience tells me you won't be able to snap it up. If the owner continues to fall behind the bank will take back the home and the process of what happens next starts there.

I think it would be almost impossible to find anyone at the bank who would be able to sign-off on a sale. The property is just another home which will need to go through the foreclosure process before hitting the market.

The sweetheart deal come when the RE agent assigned to sell the property accepts your bid on the home before anyone else has a chance to see it.

[Captain Bill]

Originally Posted by jimj

So since we've drifted a bit into foreclosure talk I've got a quick question for y'all. The house across the street from me was rented by a friend of ours. He just moved out and told us the owner had just told him the house was 2 weeks away from the foreclosure process and I'm wondering if between now and then I could snap it up? I looked at Zillow (I know not the best source) and it showed she paid $124k for it in 2009 so unless she refinanced the heck out of it it'd most likely be well under that. I also know she's about $5k behind at this point.
If I could pull this out for a decent price it'd certainly be worth doing.
Suggestions???

In order to do that, the home must be listed by an agent. If you could convince the owner to list the home immediately with an experienced short sale agent, the agent could immediately submit your offer to the lender and request they extend the foreclosure date. It may be too late but won't cost anything. Because the listing agent will have an offer in hand, s/he will have to do minimal work to get it on the mls, and make the contact with the bank, after getting written permission from the seller.

Give it a try; nothing to lose.

[Zippyman]

Fyi, even if it was purchased in 2009, many lenders are terrible about adding junk fees to defaulting loans. "Legal" fees, even though no legal action has been taken yet, "force placed insurance" that covers nothing but fire, yet costs 10x+ what normal home insurance costs, "inspection" fees, etc.

It isnt unusual for some lenders to tack $50k onto a $100k loan in junk expenses. A judge might not allow that, but (lucky for the banker!) , judges dont supervise trustees sales in Az.

Homeowners in default are often confused about the process, and the letters sent by the lenders can be confusing, but if the home is actually scheduled for a trustees sale in a few days, you can know that for sure because the notice is a public record, and its listed on the county recorders website under the legal owners name. No notice = no sale.

[jimj]

What if it was brought current then sold? Just tossing out an idea.