Short-sales have been a challenge in our market for the last few years. New legislation is supposed to make it better. My personal experience is that, “I’ll believe it when I see it”!! But, of course, I hope that it’s true!! Here is an article from RisMedia:

(MCT)—The short sale process could get a lot quicker starting this summer under new rules that will require lenders to respond to offers within a month.

Fannie Mae and Freddie Mac, the nation’s two largest mortgage backers, will implement the guidelines on June 15. The changes require mortgage servicers to make a decision within 30 days of receiving a short sale offer. They also must consider requests for pre-approved short sales within that same timeframe.

If the lender needs more than 30 days, it must give borrowers weekly status updates and a decision within 60 days of the initial application. This extension gives lenders more time to determine the value of the property or to get the approval of a mortgage insurer.

The moves are aimed at streamlining the short sale process, which often takes months to complete.

Such transactions can get so complicated that many prospective buyers won’t even consider making an offer on a short-sale property. And many of those who bid often walk away from the offer because lenders take so long to make a decision.

“Short sales are more complex than routine home sales since they may involve multiple parties and long-distance negotiating,” says Tracy Mooney, a Freddie Mac senior vice president. The new rules “are intended to help make the decision process more transparent and timely.”

Short sales involve homes that are sold at a price that’s lower than the balance owed.

There are many reasons why such deals are a better alternative to foreclosure, including fewer fees and faster transfer of ownership, eliminating all the problems that arise when a house is left vacant after foreclosure.

Because the lender and investors are being asked to take a loss, the process can get lengthy. All parties with a financial interest negotiate who will take what share of the sale proceeds.

So far, efforts to make that process easier have largely been unsuccessful, but the need has never been more critical.

Chris Willette, a short-sale expert in Edina, Minn., says that such rules are a critical step toward a housing recovery.

“We’re going to get rid of the inventory a lot more quickly,” he says. “And once you do that, you get your pricing back.”

But Willette remains skeptical. His primary concern is that the paperwork problems that currently plague the short sale process will only continue. He said getting all the forms together to complete such a transaction can be a major challenge.

Brad German, a Freddie Mac spokesperson in Virginia, says the organization will provide consistent reviews of lenders and will rank them monthly based on that performance. Those rankings are used to determine their compensation or penalties. Fannie and Freddie will continue to work on other avenues for enforcement.

©2012 the Star Tribune (Minneapolis)
Distributed by MCT Information Services [3]

Article printed from RISMedia: http://rismedia.com

URL to article: http://rismedia.com/2012-04-25/new-rules-aim-to-speed-up-short-sales/

These are some very revealing and interesting historical statistics on mortgage interest rates.  If nothing else dire happens in our very small one-world economy to “rock the boat”, we may look back and see that this is the time span when the market (at least in Portland, Oregon) really began to repair itself.  I know we have a ways to go in completing our economic recovery and regaining some of our lost equity in housing but our local housing market is definitely changing!  We have a shortage of good inventory and a resurgence  of buying interest and the combination will inevitably affect the pricing of homes.  These are all positive signs for our local economy and local attitude (now, if we could just get some sunshine!!!).  These are also signs that is you are thinking of making a move or a purchase or have a higher than current market interest rate, you might want to consider refinancing or making your new housing dreams a reality sooner rather than later.

Click Here for the 30 Year FHLMC Rates On 30-Year Fixed-Rate Mortgage Chart

Click Here for the 200 Year Historical Rates On 30-Year Fixed-Rate Mortgage Chart

Click Here for the Rent vs. Buy Index Chart

Something different is definitely happening in our local Portland Oregon real estate market!!!   And, this is a good thing for our local real estate, our local economy and our local attitude (of course, just a little sunshine might fix that).  However, what is really happening?  I’m still assessing, but it’s definitely not “the sky is falling” environment that we have endured the last few years.   I want to share a story or two, so you can get perspective on just how “finicky” our market might be AND how important it might be to be “priced right”!  I really angst over pricing properties.  #1:  I’m aware that there is no absolute “God of Real Estate” that can (beyond a shadow of a doubt) predict for what price your home will sell (but my “gut” is right more than it’s wrong).  #2:  I don’t want to leave money on the table for my sellers.  #3:  I know that the “real estate adage” I have heard since I began (25+ yrs ago) is true and that is “if you overprice your property, you will most likely get less than you might have had you priced it correctly to begin with” (only it’s MORE true now).

So, why is it possibly more true now?  Our market is totally “value based” at this moment.  What does “value based” mean?  It means, the reason that there is a sudden surge in our local market is a combination of aggressive pricing (because you must incorporate short-sales, foreclosures and ALL market information to price correctly…because the appraisers will) and low interest rates (at or below 4%).  Buyers are looking for the “perfect storm” in value.  I”m not kidding about a “finicky” market.  Recent story:  home price at $309K, lots of showings, no negative feedback about price, drop price to $299k, immediately 3 offers. Really???!!!  Only $10k would make the property seem more attractive???  YES!!  And, remember those “markers”:  $25k, $50k, $75K, $100k DO matter.  It’s not that people won’t see your home, it’s just that possibly the right people WON’T see your home or the right people WILL see it and decide to “wait it out”!  (Buyers:  never a good idea…just make an offer, what’s the worst that could happen?  I’ll tell you:  they say “no”…ok!).  However, in everyday reality, pricing is a psychological barrier.  A sense of urgency needs to be present for current buyers to make a move!!!

Like I shared in my most recent real estate update, our inventory is VERY low.  This will eventually result in appreciation, but it will most likely be slow, slow, slow.  That being said, if you want to get in the market (either as a first-time buyer, investor or move-up buyer), I would try to see if you could make the numbers work.  WHY?  Because interest rates trump price.  And, if the economy continues to improve, interest rates will go up.  If demand continues to absorb supply, pricing is sure to go up.  I am never a big fan of people losing money but if you really need to make a change (move-up, move-down, move-around), if you lose a bit of $$ on your current residence you will most likely make it up on the next purchase (as long as you’re buying and selling in the same market)(especially with the current low interest rates).  Think about it or use the multitude of mortgage calculators on the web (there is one on my web site) or call a trusted mortgage professional and have him/her run the numbers!!!

Contractor Stories…

Similar to Diogenes’ search for an honest man, homeowners want someone to do quality repairs at a fair price.  The task appears reasonably easy but if you’ve ever tried to locate someone to fix something, you know just how difficult it is.  Why is that, I ask???  I think it goes back to supply and demand plus a basic personality type that might opt for that type of work.  If you need handyman, maintenance or renovation-type work completed, you need the contractor more than he/she may need you!

Finding a list of companies from a phone book doesn’t mean they’ll be reasonable and reliable, it just means they have a phone and are willing to pay for an ad.  Searching on the Internet may direct you to a website that appears to be a local company but really is a marketing company who will sell the lead to a repairman or company who will pay a referral fee.

There are consumer organizations like Angie’s list who rate repairmen and contractors but they usually require an annual membership fee to be able to access the information.  There are also services like Renovation Experts or Service Magic that are registries for contractors but they may not be the most competitively priced.

Your best recommendations are going to come from friends, family and neighbors you trust who have actually used the repairmen before and would use them again.  The problem here is that you might have to make multiple calls before you can find a friend who can recommend the type contractor you need.

Repairs are a normal part of selling homes and as part of our job description, Realtors certainly come in contact with lots of contractors.  This experience leads us to understand who is reputable and reasonable as well as who to avoid (most of the time).  As part of a Real Estate Broker’s commitment to helping you be a better homeowner from the time you buy your home until you sell it, we’re more than happy to make a recommendation of good repairmen or other professionals you might need.  Give me a call and I’ll do my best!!

Something different this way comes! I am sensing a change in our local Portland real estate marketplace; in that well-priced, well-staged properties, good condition properties are being snatched up by eager buyers!!

Supply and demand!  This is always an element of what controls economics!  Our local real estate market lacks good inventory thus I have found myself in a multiple offer situation 4 times in the last two months.  So,considering the “state of real estate” in the last few years, why the lack of inventory?  Part of the equation is that due to depressed prices, some who might sell, can’t or choose not to right now because they may owe more than the price the current market will bear! Another element is the lack of “good” inventory!  This refers to the number of short-sales (an unreliable thus unacceptable option for some buyers), the number of properties that are in less than stellar condition (i.e: some foreclosures or poorly staged homes) and finally over-priced properties!  Thus, competitively priced properties are selling relatively quickly.  Certain price points are moving more quickly than others!

Warren Buffet recently wrote that he felt housing was a very attractive investment right now.  Then Donald Trump joined the bandwagon! There has been lots of press regarding our improving economy. Home prices are diminished, interest rates are at record lows and buyers with decent credit and the where-with-all to come up with a down-payment are turning back to real estate (remember it takes as little as a 3.5% down payment to get FHA financing, VA financing for qualified vets = 0% down).  Investors have been rounding out their financial portfolios with real estate purchases with decent ROI (return on investment).  However, this hasn’t yet made a huge impact on over-all local home values!  We are still back down to 2003-2005 pricing (according to the location of the property).  Our market does seem to have begun some of the first steps to recovery but I still believe it will be “slowly, slowly…step-by-step”.  So, as a buyer interest rates still trump price! And, as a seller….yes, properties are selling but “pricing, pricing, pricing” is still the new “location, location, location”!!

FEBRUARY PORTLAND METRO REAL ESTATE UPDATE!!!!

With the holidays, Valentine’s Day (not to mention my birthday) behind us, we can look forward to the 2012 Real Estate Season!!!  2011 ended on a positive note and this year has definitely started off on another positive note.  Closed sales experienced an 18.3% increase if you compare this January to the same month a year ago.  These are the highest numbers for January since 2007 (remember, if you believe the statistics, March 2007 was the height of the market).  The average time on the market has also improved, decreasing from 160 to 136 days.  December 2011 saw 5.3 months of inventory (down from 11.3 months in January 2011 and 12.6 in 2010).  January 2012 came in at 7 months of inventory, but that’s a fairly typical trend that January will be one of the highest (and usually THE HIGHEST) month of the year in housing inventory.  I have been in a multiple offer situation 3 times in the last 6 weeks!  So, well-priced, good condition properties are moving!!!  That speaks volumes to me!

SELLERS:  What does this mean for sellers?  It means if you haven’t already absorbed the market data, get someone you trust to give it to you!  Some properties are harder than others to price correctly; such as those with ethereal value (views, waterfront, etc) or challenged properties (fixers, un-staged, over-stuffed).  None-the-less, you must react quickly to the marketplace.  If you get a “lot” of activity and no offers, it probably sounded good but still has issues (remember price overrides all objections).  I’m telling you that well-placed, well-marketed properties will go fairly quickly.  If your home is not selling, re-visit price, condition, location.  There are no magic potions!

BUYERS:  What does this mean for buyers?  The Fed has claimed they will keep interest rates down until 2014.  If that doesn’t change, then mortgage rates (which still fluctuate daily) should stay very low giving buyers some time to position themselves for the best buy.  However, that being said, like I mentioned in my beginning paragraph the inventory is beginning to be absorbed.  Since pricing is always about “supply and demand”, I have to question that the pricing continuum will continue to go down!

INVESTORS:  What does this mean for investors?  The rental market is very good in the Portland area, generally with vacancy rates less than 4%. You use your down-payment + other people’s money (a Mortgage) to purchase a property. Your tenants pay that mortgage (PITI=principal, interest, taxes, insurance), you realize whatever cash-flow (rents minus PITI & maintenance=cash-flow). So, whether the real estate market appreciates or not, you accrue equity due to the tenants paying down the mortgage on a monthly basis.  It can be a challenge to lay the foundation to be an investor, but “NO PAIN, NO GAIN”!!  Read my recent post on “Preparing to Be a Real Estate Investor”!

Top 5 Supplies for Self-Storage Storage

So you thought you were ready for your move, until you realized that you just don’t have the space needed at your new home to house all of your belongings. What do you do? Sell your stuff, or perhaps give it away? Sounds displeasing. Instead, consider renting a Portland self-storage unit for the safe keeping of those non-essential items you can’t seem to part with.

Self-storage units are the best way to store your excess inventory during what is sure to be a stressful time. And SpareFoot is here to make sure your self-storage experience goes as smoothly as possible, so we have prepared a top 5 list of the most important components of an organized, safe storage unit.

1. Locks. Despite the modern security features in many self-storage facilities, a sturdy lock should be your number one investment to ensure the safety and security of stored belongings. Discuss with your self-storage manager to determine which lock will be best-suited for your needs.

2. Boxes. Not only are boxes easier to stack and stow, but they will create much more usable space within your storage unit. You can find boxes for free at liquor stores and supermarkets (get there early in the week when fresh inventory usually arrives), or you can cough up a few bucks for new, more durable moving boxes available at your self-storage facility and most home improvement stores. Get uniformed sizing to avoid unbalanced mixing and matching, which will help facilitate a more accessible unit.

3. Tape. A good roll of duct and/or clear packaging tape is the perfect tool to seal your boxes. And be sure to stock plenty of it, you never realize how much you need until you run out.

4. Wrapping supplies. When it comes to padding, you can never be too safe. Save newspapers while you plan the move so you don’t have to go searching, and opt for bubble wrap to protect your more precious items. Small bubbles will reduce the shock of a dropped package to fragile items like glass, while larger bubbles are well-suited for protecting antique furniture items.

5. Shelving. An organized shelving system is what separates professional-grade storage spaces from amateur closets. Shelving makes your unit accessible, and facilitates your move by providing a designated spot for each item. Many storage facilities will equip your storage unit with shelving according to your specifications, or you can snag some on the cheap through Craigslist or Ikea. Just make sure to get the correct measurements first.

During your next move, try using the security and convenience of a self-storage facility. These units will have you rest assured that your belongings are safe and ready for you whenever it is you decide that you need them.

This article was written by Matt Schexnayder. Matt is on the SpareFoot marketing team and writes for the SpareFoot blog. SpareFoot is the largest online marketplace for self-storage with more than 5,000 self-storage facilities listed nationwide. SpareFoot offers consumers the most complete comparison shopping experience in the storage industry and has been a big part of the national moving and storage industry for over 3 years.

Despite indications that both the local real estate market and the local economy are ever-so-slowly stabilizing and/or improving, the ridiculous and the sublime often still reign supreme!!  I see two major obstacles to the real estate recovery:  extremely over-reactive mortgage lending practices and our new, revised and “improved” appraisal guidelines!  Of course, I realize that this is the pendulum swinging completely the other direction, as a reaction to the “loosey-goosey” mortgage loan underwriting which helped propel us into this quagmire!!!

Common sense has never necessarily been an element of acquiring a mortgage (not in my 25+ years of real estate sales and service), however some underwriting and appraisal requirements still completely floor me!!

For instance, a very well qualified young couple who are buying their first home and were more than approved for the conservative mortgage they were pursuing, received word the day before signing that closing would be delayed until his next paystub was submitted due to a PAY RAISE!!??  Really???

On the appraisal front, a newer well-maintained home I had listed suffered from a few minor dry-rot repairs (we live in the drippy state of Oregon, by the way, and dry-rot is a “state of mind”).  We were forced to have two re-inspections to get the repairs completed perfectly.  And, even though we supplied a photo of the required CO detector hanging on the wall and the wrapper from which it came, the underwriter had to have a receipt.  Really?  Now compare this to a total fixer property (that had been a drug “grow house” unbeknownst to the out of state estate trustee) and was so filled with trash and discarded furniture that you had to turn sideways to walk through the house, and the appraiser calls nothing/nada/zip! Really???

A seasoned investor, willing to put 30% down (to get the best interest rates) is told that’s not enough. Despite the fact that the duplex appraised for more than the sales price, the appraiser could not verify the new buyer’s proposed rents (since when are appraisers up-to-date on rental prices?).  And, even though the buyer showed multiple examples of current comparable rents, the bank insisted on more $$$ as a down-payment.  Really??? (By the way, the investor did get the rents)!

Regarding inspections and required repairs, I’ve always suggested to my sellers that they not necessarily spend their money for a pre-inspection of the house they are about to put on the market (unless there were extenuating circumstances).  A majority of buyers are going to insist on having their own inspection, for obvious reasons.  However, I recently had a situation that has made me re-think this recommendation.  A very clean, well-maintained house was short a few roof vents and, thus, there was some harmless black mold growing in the attic space.  Mold has become the new “asbestos”, “radon”, “lead-based paint” or “LP siding” (pick your decade).  I know all of these CAN be serious issues, but are often the subject of inspection over-reactions.  What could have been remedied by a spray bottle of clorox, water and a little elbow grease, became a relatively costly repair (as the buyers would not hear of a self-remedy and insisted on a contracted remedy).  Really???

These (unfortunately) are just a few of my most recent experiences.  Note:  I had to “change the names to protect the innocent” and mostly had to wait until these homes all closed and recorded to post this story, so as not to jinx the outcome!!!  :-)

January 2012 Portland Metro Real Estate Update!!!

The “word” for the last several months of market stats has been “improvement”.  And, last month was no different!!  Closed sales saw a 10.3% increase and pending sales saw a growth of 19.3%.  And, get this!!!  We are now at 5.3 months of inventory (there are currently 8,612 active residential listings).  In the last 3 years we have been at a high of 19.2 months of inventory and this is the lowest in that time period!!  The average sale price dropped 6.7% compared to 2010.  So, in some areas pricing is still declining, in other areas we are seeing some stabilization.

BUYERS:  What does this mean for buyers?  I still see a slow recovery, so I don’t believe that interest rates or pricing will improve so suddenly that you need to feel an undue sense of urgency.  That being said, a declining market is going down until it isn’t!  And, interest rates are low until they’re not!  So, not being a gambler I would begin whatever steps you might need to feel comfortable making that purchase.

SELLERS:  What does this mean for sellers?  Well, it at least gives us hope that our market might be moving towards more balance.  When is the market going to improve?  Probably not any time soon, but we are making some progress.  I do believe that we still have a lot of “shadow inventory” of short-sales and foreclosures that haven’t surfaced.  And, pricing is still “King”.  Stay tuned!

INVESTORS:  What does this mean for investors?  It’s a very solid investor market as rents have been rising due to a shortage of rental properties and more renters entering the market that have either lost their home or decided they can’t buy.  The vacancy rates are low.  Well priced, well located smaller plexes sell quickly so investors must be prepared with mortgage pre-approvals or cash.  But, they must also do their homework and make sure the property will cash flow (how much is based on your developed strategy).  Then you rely on the tenant paying down the mortgage every month to increase ROI (return on investment).