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Posts Tagged ‘short sale specialist’

I recall listing my first short sale since the 90’s in 2006. The reaction from both the public and most agents to the term “short sale” was typically one of curiosity and confusion. What is a short sale? How does it work? How long will it take? Is it for real?

Now short sales are so common as to become as normal to real estate vernacular as “appraisal” or “kitchen.” Everyone seems to hear the term, and the explanation now takes 30 seconds instead of 15 minutes. I am currently representing buyers on 1 short sale purchase, have other buyers with a bid on one, and I am brokering almost a dozen on the selling end, which is actually a low number for me. The most expensive is over $700,000; the lowest price is a little over $150,000. Most range between $200,000 and $400,000.

The one thing they all do have in common is financial hardship and an upside down mortgage. Values are falling below mortgage balances and jobs are being lost in this economy. Values will continue to fall as short sales and bank-owned REO foreclosures dominate the sales statistics. If you have a $500,000 house, how can you compete with a $350,000 REO foreclosure down the street? It will be a happy day for this country when short sales become far less common.

For now, however, short sales are as common in New York Real Estate as they have ever been.

J. Philip Faranda is Westchester & the Hudson Valleys’s Premier Short Sale REALTOR. He has listed and sold successful short sales in Westchester, Rockland, Putnam, Dutchess, and Orange County, as well as the boroughs of New York City. Find out more at www.NYShortSaleTeam.com

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May, 2009 will be the first month in recent memory that we did not close on a short sale. Three regular sales closed (interestingly, all were in Putnam County), but no workouts were among them.  Is this a good sign for the economy? Unfortunately, it is an anomaly. One short sale I referred to a colleague in New York City will go under contract this week; 4 short sale listings went on the market in the month of May; and two short sale listings have received strong offers.

The skip of a month is a random event in the cycle. June will have at least one short sale closing, and many more are on the horizon. I have short sale listings in Westchester, Putnam, Dutchess, Queens and Suffolk as of this writing, and a prospective new associate may import 3 more. We are nowhere near being out of the woods.

J. Philip Faranda is Westchester & the Hudson Valleys’s Premier Short Sale REALTOR. He has listed and sold successful short sales in Westchester, Rockland, Putnam, Dutchess, and Orange County, as well as the boroughs of New York City. Find out more at www.NYShortSaleTeam.com

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The government has moved to increase the incentive for lenders to allow short sales on their defaulted loans. I welcome this, although there is nothing specified as to how they’ll hold banks accountable for streamlining the process, which is rife with red tape, bureaucracy and long waits. If they truly want to make short sales happen more frequently to help more distressed homeowners out, they would mandate a maximum of 6 weeks for a short sale approval.

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J. Philip Faranda is Westchester & the Hudson Valleys’s Premier Short Sale REALTOR. He has listed and sold successful short sales in Westchester, Rockland, Putnam, Dutchess, and Orange County, as well as the boroughs of New York City. Find out more at www.NYShortSaleTeam.com

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128 days ago, I sat at a dining room table in Putnam Valley, New York, just north of the Westchester County border with a young couple who were listed 4 times previously with 3 different brokerages in unsuccessful attempts to sell their home. Along the way, they got behind on their payments due to loss of income and had all but lost hope that they could avoid a foreclosure. 

One of my agents, Tom Ricapito, had found these nice people quite by accident, and told them to talk to me before giving up. This was the first time they had ever heard of a short sale. I told them I had closed dozens, and they listed with my company with Tom as their agent. He later told me that our meeting gave them new hope. It is funny how these people found us quite by random chance, and not through our regular marketing. When you specialize in New York short sales, they sometimes find you.

Continued here.

J. Philip Faranda is Westchester & the Hudson Valleys’s Premier Short Sale REALTOR. He has listed and sold successful short sales in Westchester, Rockland, Putnam, Dutchess, and Orange County, as well as the boroughs of New York City. Find out more at www.NYShortSaleTeam.com

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I have blogged previously that lizards who are smart enough to move survive and those that sit still are quickly eaten by any colonies. Both sitting still and moving are survival mechanisms, but depending on the circumstances one can kill you and the other can save your life. In a New York short sale, curling up in a ball might work fine for an armadillo to survive, but it doesn’t help a homeowner avoid a foreclosure. I have often stated that proactive sellers, who help themselves, have far better results. It’s just that simple.

Yesterday, I met with one of my agents and a client who had bought a home with her about 4 years ago. We have known for months that they were having difficulties, and for some reason they delayed meeting with us. In fairness, they were trying to refinance and then for a loan modification, but when that failed they went to an outfit that promised to solve all their problems for a fee. The money for the fee disappeared, but their problems did not.

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J. Philip Faranda is Westchester & the Hudson Valleys’s Premier Short Sale REALTOR. He has listed and sold successful short sales in Westchester, Rockland, Putnam, Dutchess, and Orange County, as well as the boroughs of New York City. Find out more at www.NYShortSaleTeam.com

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Fannie Mae’s recent edict forbidding the cutting down of the broker commission as part of the short sale negotiation is very good for distressed sellers and buyers, not just the agents. I’ll explain.

Naturally, brokers and agents are relieved because it ensures that the considerable time and effort that goes into selling a short sale property will not end with their compensation being raided by the lender in what has always amounted to 11th-hour extortion. In a market like mine in Westchester County, where the typical transaction is 45-60 days, the time to sell a short sale is easily triple that time in some cases.  Sometimes the bank has accepted short sales with the caveat that the brokers get paid less, often with the rationale that something is better than nothing.

This decision is made by an out of state negotiator whose obtuse agenda is to minimnize the loss to the lender, but the consequences are far more damaging than a little pinch, because many brokers and agents are now refusing to show short sales to their buyers. While it may not amount to a blatant boycott, the agents will discourage their buyers with a variety of reasons, such as the long wait, the uncertain nature of the time invested, and the condition of the house. The real reason, however, is that they want to get paid. In this economic climate, that rationale is understandable.

I don’t agree with it, but it is understandable.

The ecology of the agent’s unwillingness to sell short sales is disastrous. Fewer showings mean fewer sales, and that hurts not only the sellers in the short term, it hurts everyone.

  • More unsold short sales mean the market will take longer to adjust.
  • Toxic assets remain on the books longer. Non-performing loans do no one any good.
  • Tax bills are not paid, hurting municipalities.
  • Buyers may be discouraged from buying what may be the perfect home for them.
  • Brokers who take longer to sell a buyer the right home may eventually lose that buyer to another broker, a for sale by owner, or inertia.
  • People who might otherwise benefot from selling their home in a short sale face foreclosure.
  • More foreclosures are the last thing this economy needs.

While Fannie Mae does not hold all loans, it holds enough to influence other entities. My local market of Westchester County has lots of Fannie Mae borrowers who are in negative equity. If brokers have confidence that they will get paid in full for selling a short sale, it will expedite the wringing out of bad loans, helping sellers and lenders alike, and speed an economic recovery.

J. Philip Faranda is Westchester & the Hudson Valleys’s Premier Short Sale REALTOR. He has listed and sold successful short sales in Westchester, Rockland, Putnam, Dutchess, and Orange County, as well as the boroughs of New York City. Find out more at www.NYShortSaleTeam.com

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This short sale closed at the end of this past year. The clients were divorced, and the home they had built while married was incomplete and upside down. The house was listed this past summer.

Divorce cases are in and of themselves difficult. I have to give both clients credit in their dealings with me- they kept it to the transaction. It still was more difficult than with a happily married client, and there were the dicey moments one might expect, but in context we did well in spite of the circumstances.

There were numerous offers on the property, but getting consensus on which one to submit to the lender complicated matters. No offer separated from the pack- price was an issue with one (rather crucial in a short sale), another was an acquaintance of the husband, which the ex wife was reticent to accept, and we were unsure of how to go forward for a time.

Not long after, what appeared to be a tie-breaking offer came in. Price, terms and details did give it a distinct advantage, that is, until the incomplete state of the home came into play. Without a final certificate of occupancy, they reduced the offer by $20,000. A decision had to be made, and with time running short the acquaintances were chosen.

It took another 90 days to get approved. Unfortunately, the buyers then asked for an extension! Given the rigid guideline of the approval we could only grant one brief extension. When another was requested, we had to deny it. We began to get concerned that the buyers might no longer qualify, but the file was cleared to close the day after their extension was denied. They might have been jockeying for a better loan; it might have been a stroke of luck. Because the closing was scheduled in haste for a morning I was already booked, I was unable to be present for the closing.

I later found out that the buyer voiced a complaint about me at the closing. I have never dealt with this person (just his agent), nor was I the source of any of the difficulty on our side. The combination of a short sale and divorce would make any transaction difficult, and perhaps the buyer transferred his frustration to me. I have no way of knowing. I do know that the seller’s attorney advised him that he was mistaken and that I was a good guy. You know you are living right when an attorney sticks out their neck for you and you don’t get a bill!

J. Philip Faranda is Westchester & the Hudson Valleys’s Premier Short Sale REALTOR. Find out more at www.NYShortSaleTeam.com

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