Getting Foreclosures Back on the Market

By Robert Freedman, senior editor, REALTOR® Magazine

Watching the decline of a once vibrant neighborhood is always saddening but its particularly so when the decline is due to a rash of foreclosures that, with a little bit of foresight, could have been prevented. That’s why NAR’s new neighborhood stabilization project comes at an especially important time: it actually gives associations of REALTORS® some resources to help their members do something to restore a neighborhood facing decline before foreclosures turn it into a wasteland.

A couple of weeks ago I got a good look at how NAR’s program works when I spent the morning with Mabel Guzman, ABR, president-elect of the Chicago Association of REALTORS®, who showed me around two neighorhoods that are teetering between success and failure. The neighborhoods are among about two dozen in Chicago that have seen a rise in foreclosures and vacancies, so they’re seeing more homes getting boarded up and at risk of vandalism.

Read more

Will Distressed Sales Slow Tax Credit Deals?

By Robert Freedman, senior editor, REALTOR® Magazine

Congress helped keep home sales on solid ground when it extended and expanded the home buyer tax credit late last year. Given the federal budget deficit, you also have to say it acted reasonably by limiting the tax credit to just six months. (Deals in process by the end of April have until the end of June to close.)

The question markets now face, though, is whether short sales are going to limit the effectiveness of the credit.

When you consider that short sales comprise a significant share of markets today and can take months to close, you have to wonder if these transactions are going to pose a problem as the tax credit deadline nears.

One real estate professional I talked to in California says her market consists almost entirely of distressed sales. Many of these are REOs, which can sell fast, especially when the deal involves investors looking for bargains.

But short sales, despite signs of progress, remain another matter. According to practitioners and others I’ve spoken to, lenders are improving their short-sale processing and more improvements could be in the works as federal guidelines take effect in early April. (More about that.) But the transactions still take a long time. It’s not unusual for buyers, hoping to take advantage of the tax credit, to feel stymied by the uncertainties and delays of short-sale purchases.

To help you explore solutions for the issues at the root of delays, we brought together a real etate professional and a nationally recognized short-sale consultant, Scott Thompson of ServiceLink and Mortgage Resolution Services, for a free webinar on March 25. They won’t have all the answers, of course, but between the two of them they’ve seen enough deals to know of the main sticking points and they’ll have ideas on how to work through them.

The webinar is on Thursday, March 25, at 3 p.m., Eastern Time. To register, click here, and scroll down to the bottom of the page.

Don’t Miss Short Sale Power Hour

By Stacey Moncrieff, Editor in Chief, REALTOR® Magazine

During our Dec. 10 webinar with Bank of America Senior Vice President Dave Sunlin, there were many questions asked about new short-sale tracking software that BOA has rolled out. Essentially,  BOA has taken the REOTrans platform used for REO sales and adapted it for short sales.

Kevin Kauffmann and Fred Weaver of Phoenix actually have some experience with the system (though no closed sales yet), and they’re cautiously optimistic. So if you want the perspective of practitioners with deep knowledge of short sales, I highly recommend you watch their Dec. 17 video, REOTrans … Let’s Go Deeper!

To play back or download any of our 2009 webinars (free of charge), including the Dec. 10 session, visit our REALTOR® Magazine webinar page.

Buyer Reps: Helping Everyone Win in a Short Sale

By Robert Freedman, Senior Editor, REALTOR® Magazine

There’s a temptation among buyers hoping to land a good deal with a short sale to avoid committing themselves with money and effort until the seller’s lender gives its OK, but that’s a sure-fire way to ensure the deal won’t close, short-sales trainer Lynn Madison said Sunday at the 2009 REALTORS® Conference & Expo.

Lenders are too backlogged and have too much to lose to consider offers whose buyers haven’t provided earnest money, had an inspection conducted, or applied for financing, said Madison, who help devise and also teaches classes for NAR’s new Short Sales and Foreclosures Certification Program (SFR).

Doing all of these things—along with submitting a reasonable offer—can improve your client’s chances greatly. This is not the time to low-ball on a property whose value has already deeply plunged, she said. Read more

Take the Distress Out of Distressed Properties

By Wendy Cole, Senior Editor, REALTOR® Magazine

Foreclosure filings have decreased slightly for the past three  months in a row, according to RealtyTrac. While that’s certainly welcome news from a short-term perspective,  the larger picture concerning distressed properties remains grim. October 2009 marked the 45th straight month of year-over-year increases in foreclosure activity. In the third quarter of this year alone, there were still more foreclosures than in all of 2006.

At the RISMedia Power Broker Perspective Panel on Distressed Properties, RealtyTrac’s Rick Sharga noted that the year will end with about 3.3 million households having gone into foreclosure. And because of  rising “shadow inventory” another 4 million properties are expected to hit foreclosure status in 2010.

The Obama Administration’s recent push to accelerate the pace of loan modifications to keep struggling borrowers in their homes also has a dark side.  Some 50-60% of those whose loans are modified are expected to redefault eventually nonetheless.

This massive inventory of distressed properties continues to put significant downward pressure on home prices nationally, and makes it tempting for real estate practitioners to slip into a state of powerlessness and discouragement. That’s a huge mistake. Read more

Top Five Daily News Stories Last Week

By Brian Summerfield, Online Editor, REALTOR® Magazine

Events at this year’s NAR Midyear Legislative Meetings dominated the Daily News last week: Read more

Price Auctions Right

By Katherine Tarbox, Senior Editor, REALTOR® Magazine

“If you start an auction at $50,000 for a property, it will not reach $280,000” said Bill Sheridan (AARE, CAI) chairman of NAR’s Auction Forum Committee at the 2009 Midyear Legislative Meetings & Trade Expo. Read more