Archive for December, 2009

Take up the Cross and Follow

December 18, 2009 · Filed under Real Estate Market

Pick up your real estate cross and follow the bad real estate market. Just like the old gospel song states take up the cross and follow me this song is telling Christians that if they follow the suffering of Jesus they will receive salvation. Well it is the same for us real estate professionals now. We have to continue in the path that we have chosen as a career. Real Estate Brokers and Agents must prepare themselves for the long battle ahead fighting it one war at a time, one deal at a time.

Brokers and Agents are the front line soldiers in this real estate economic war. Prior to the bubble busting it was the prevailing thought that real estate was the way to go. This market has now become a heavy burden to bear for, real estate persons and small investors who are over extended in real estate; locked in with high mortgage balances in a depressed real estate market. Property rich and cash strapped. Sales are now a fraction of what it once was.

The front line soldiers in this war will tell you that it is not easy making a living in the real estate market today. However we are hearing report that the real estate market is showing signs of upward movement in price. I am not a believer in statistics because often times they do not reflect the actuality of the market as it is impacting on the participants.

However I must say that it was welcome news when I heard from recent data, (data release from the Standard and Poor Indices) released that shows that the housing market is slowly growing and home values are leveling off and perched to go upwards. Hope that the front line soldiers will find this data agreeable.

This indices shows that some cities like San Francisco and Washington DC have seen an upswing in the last six months of growth in the value of real estate. Cities like Las Vegas is still showing the negative growth and others are still logging behind. These are statistics provided by standard and Poors. To access the full data visit http://www.homeprice.standardandpoors.com.

With the extension of the First Time Home Buyer’s credit let us all hope that we can see an increase in sales soon. The FTHBC, (First Time Home Buyers Credit) might be the basis on which the data is based on. With the difficulties still exist with the job market still in a downward spin and job creation still not where we would like it to be. Ways must be found to get those FTHB, (First Time Home Buyers) to get off the fence and see the potential of home ownership in this over stocked and over flowing market of Bank Owned Properties. It is now a buyers’ paradise.

Real Estate Agents need to make sure the mind, body and soul are prepared to work hard to find these FTHB. The new wave of sale will still be, FTHB. However it will now be FTHB with verifiable affordability of mortgage. Now we can use the tax credit in place of the Down Payment Assistance Programs. Whatever become of the, DPAPs?

Here are a few tips for the struggling agents;

Take responsibility for your life and circumstances.

Set clear and achievable goals.

Be specific about what you want to achieve from the market.

Be realistic about what you want to achieve from the market.

Focus on the dream that brought you into real estate.

Take regular exercise, to keep you body active and mind Sharpe for the demanding and challenging days ahead.

Take up your cross and carry it to the end and you will see your rainbow and rewards.

Eddie Edwards is a Real Estate Broker licensed in New York and Georgia you can reach him at; eddie@eddieedwardsrealestate.com

www.Eddieedwardsrealestate.com

www.Daesonrealestate.com

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Impact of the new short sale rules

December 11, 2009 · Filed under Uncategorized

Realtors know how difficult it can be to get a short sale completed. Time burn, lot of paper work, many phone calls to lenders and servicers with little results. Short sales of real estate has always been around but only came to the consciousness of the public due to the failure of the Mortgage Market. We saw the Federal Government having to bail out the big players in the secondary mortgage market.

With the wave of foreclosure still expecting to climb close to the 10 million mark and putting pressure on property values. Professional in the real estate industry all has realized that more action by the regulatory body is necessary.

The Obama administration has boldly taken the step to enhance and cajoled the major mortgage lenders and servicers to agree to a stream line and smooth flow for the negotiations of short sales and deed in lieu of foreclosures. February, March and April 2009 it was announced that plans was a foot to try to make the real estate market stable. The first phase of the plan was to try to save about 7 to 9 million homeowners who were unable to support their mortgage obligations; reducing mortgage payments to a more sustainable level for them.

The second phase of the plan was to ask for and engage the servicers to begin the modifying and streamline of mortgages set on the brink of default or was already defaulted. Fifteen servicers including the five largest servicers agreed to take part in the changing of mortgage terms and interest rate. 

The third phase of the plan called for the cooperation from the second mortgage lien holders and give new strength for the Hope for Homeownership program. 

Between February and now we have heard many complain that very few homeowners mortgage are being modified as the servicers were only collection financial data from current home owner with the view of collecting all the monies they can. Eliminating many home owners. This new phase is to help make the mortgage modification process smoother. View the full report here.

This directive addresses the short sale process and the decline in property value as it affects the short sale process. Servicers can no longer cut the real estate broker’s commission to facilitate them netting a greater amount from the short sale. This is good news for struggling Realtors. It also set the guideline for deed in lieu of foreclosure for those home owners who were not able to keep up their modification trial period payments. They are hoping that with the deed in lieu of foreclosure alternative will decrease the number of foreclosure and save on the legal cost of foreclosures to both the borrowers and the mortgage lender.

Borrowers who do not qualify for the modification can opt for the short sale option. However the property must be listed on the market for at least 90 days and must be actively marketed by a Licensed Realtor. The transaction must be an arm’s length transaction. If the property is actively marketed and no sale is made during the initial marketing period the servicers can extend the marketing time to another 90 days to a one year maximum marketing time.

The Making Home Affordable is attempting to streamline, simplify and standardize the short sale and deed in lieu of foreclosure process. This is long overdue. For far too long different servicers apply an ad hoc approach and rules to the short sale and Deed in Lieu of foreclosure process. I am thinking that this standardization of the process will help to cut the amount of time it takes to close a short sale transaction and a Deed in Lieu transaction. Only the future will tell how well it will impact on the stabilization of future real estate value.

All the parties involved in the short sale transaction- appraisers, borrowers, purchasers, real estate brokers, title agents, second mortgage holders and other junior lien holders have to work in harmony to see the successful completion of the process.

Incentive compensation will also be paid to the Borrowers, Servicers and junior lien holders. The Borrowers will receive up to $1,500 to aid with relocation expenses. The Servicers will receive up to $1,000 for each successful completion of a Short Sale or DIL transaction. Junior lien holders will receive up to $1,000 for the release of their lien.

All the emphasis is placed on primary residence only. Borrowers will have to prove that the home is their primary residence and not an investment property. How will this assist those homes owners who have second homes is yet to be explained.

No provision is in place for people who have several investment properties. No help is on the Horizon from the Obama Administration for them. How can the real estate market stabilize without any help to real estate investors? It is about time the Obama Administration put forth a plan to aid real estate investors. There can be no proper stabilization of the real estate market until all the owners of real estate are offer help. Many small real estate investors who had a long term strategy for holding real estate for future appreciation of value are at their wits end. With the contraction of the credit market they have seen the withdrawal of credit lines. The inability to refinance current mortgages is forcing many to just sit and wait for the real estate market to stabilize. Many of the real estate investors association has seen an almost 50% lost in membership and are also themselves fighting the tide of the bad real estate market. May be this new Making Home Affordable will impact on their ability to sell some of their properties soon.  

Eddie Edwards is a Licensed Real Estate Broker in New York and Georgia. Contact at eddie@eddieedwardsreal.com

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