If you are under the 3 year mark and would like to repurchase when time allows, you may want to consider visiting with a credit counselor to gauge where your credit is at this time and what you might need to work on.  I recommend Consumer Credit Affiliates .  They can assess your situation and help you formulate a plan to get back on the path to home ownership.   

If you are planning to purchase you will need to save a minimum of 3.5% for an FHA down payment and money for closing costs.  In some cases you can get assistance from the seller with your closing costs which typically are about 3% of the purchase price.  If you need a recommendation to a good local lender contact me.

Amy Shocket, Broker-Salesperson ABR, CRS, GRI, PMN

The broker-salesperson basically says that I have met the same licensing requirements as a broker but I have chosen to be a sales person rather than a broker owner/manager.

ABR stands for Accredited Buyer's Representative.  This is a designation awarded by the National Association of REALTORS through is Real Estate Buyer's Agent Council.  It requires an agent to take several courses on buyer representation.  Visit rebac.net for more information.

CRS is short for Certified Residential Specialist.  This is also a designation, awarded by the Council of Residential Specialist, but the requirements to earn it are more intensive.  Not only do you have to take courses, but you have to reach a minimum dollar sales volume in order to earn the designation.  Vist crs.com for more information.

GRI are the initials for Graduate of the REALTOR Institute.  This was the first designation that I earned and it is awarded by the National Association of REALTORS.   This designation also involved education courses to provide knowlege on working with both buyers and sellers.  Visit the following link for more info http://www.realtor.org/education/gri/value

Lastly, the PMN stands for Performance Management Network.  This designation is awarded by the National Women's Council of REALTORS.  One of the largest women's organizations in the United States this designation is earned by taking a series of courses.  I am pleased to be a member of this organization as both Northern Nevada Chapter President 2008 & 2011 and Nevada State President Elect for 2011.  Visit wcr.org for more information.

I also hold a couple other designations but don't post those after my name.  They are the Certified Distressed Property Expert or CDPE (Visit cdpe.com) and the Short Sale Foreclosure Resource Certification (Visit realtorsfr.org).  These are both extensive education programs that have expanded my knowledge base in the area of short sales and REO properties.

What does this mean?  I am committed to getting the highest quality education available in my field in order to offer top notch service to my clients. 

Many of the banks have continued to work on their short sale process and make improvements to speed the process.  Many are also starting to roll out new programs where sellers can get "pre-approved" short sales prior to listing the property so that once the property is listed the timeline is significantly reduced which greatly benefits the buyers.   (These are programs in additon to the Government HAFA program.)

We still see obstacles when there are multiple liens, mortgage insurance and bond program loans.   It is important to know what type of loan you have and if your lender took out mortgage insurance on your loan.  Homeowners also need to know that banks are still looking for you to be in default or in danger of default in the immediate future.  There has to be a hardship or reason that you can no longer afford your payments. 

There appears to be a trend toward more deficiency waivers from servicers, but in some cases it doesn't come without a cash contribution or promissory note on the part of the homeowner.  Many servicers are looking at the seller's overall financial picture - credit score, other debts, monthly income, other assets etc. to determine if the seller might be required to contribute.

The key is still to seek the assistance of an experienced short sale listing agent as early in the process as possible.   It's best not to wait until a Notice of Default is filed to consider short sale as an option.

From the bank's perspective, the homeowners who are delinquent have the most immediate need to receive their assistance.   In addition, if you are able to continue making your payments they may request a cash contribution or promissory note from you at the closing of the short sale in order to approve the short sale.   Your lender will consider your entire financial situation when making this determination. 

There is an exception.  If you have an FHA loan on your home and you want to do a short sale you will be required to be 31 or more days delinquent at the closingof the short sale.  You do not have to be delinquent at the time you apply to the FHA Pre-Foreclosure Sale Program. 

Working with an knowlegable short sale listing agent is key.

The benefits is that once a buyer has made an offer they no longer will wait 60-90 days to get an answer as the underlying approval process was completed prior to listing the property for sale.   This will greatly increase the stigma that has been placed on short sales and make these listing more attractive to buyers. 

There are several other programs that follow a similar model.  The HAFA program designed by the US Treasury is available to borrowers who qualify and provides for an upfront approval.  Also, if your mortgage is FHA insured the FHA Pre-Foreclosure Sale Program requires homeowners to get approved into the program and sets the list price prior to the marketing/listing of the property. 

The key for homeowners in the Reno-Sparks market is to contact an experience agent who can make you aware of all your options when facing a possible foreclosure.  When a short sale is the best solution for a homeowner, hiring an agent who is knowledgable about all the programs available to them is crucial. 

For more information on the Bank of America Cooperative Short Sale please contact me.

Sellers should be receiving a copy of the form when they list their property so that the form can then be provided to the buyer.  The form can be waived if agreed upon by both the buyer and the seller.

Here are the key changes:

1. Monthly Gross Income Requirements- Servicers are no longer required to verify any financial information to determine if the borrower's total monthly mortgage payment exceeds 31% of the borrower's monthly gross income.  This being said, the servicer is still required to verify the borrower's hardship and may request financial documents to evaluate the hardship.
2. Vacant Property Requirements - Properties can now be vacant or rented up to 12 months prior to the Short Sale Agreement as long as the borrower can prove that the residence was their primary residence and they have not bought another home in that time.  Relocation no longer is limited to work related relocation and the relocation distance requirement has been removed.
3. Release of Subordinate Liens (Paying Off Second/Junior Liens) -  the 6% cap to pay off junior liens has been eliminated.  The servicer determines the percentage going to each junior, but the $6,000 cap is still in place.
4. Timing For Issuance of Short Sale Agreement - now for both HAFA short sales initiated by the servicer  and those requested by the borrower, the time line for the servicer to respond to the borrower is 30 calendar days. (Please note that many servicers are not adhering to this guideline simply because of the volume of HAFA requests.  There does not appear to be any penalty to the servicer for not meeting this timeline.)
5. Timing For Response To Alternative Request For Approval of Short Sale - if the borrower submits an executed sales contract, Alternative RASS and signed Hardship Affidavit or RMA, the servicer must communicate approval or disapproval, or a counter within 30 calendar days. 
6. Real Estate Commissions - the 6% cap remains, but servicers must now include a statement in the Short Sale Agreement that they will not deduct 3rd party vendor fees from any agent commission.
7. Alternative Deed-In-Lieu (Deed for Lease) Programs - these programs did not previously qualify for the borrower to receive relocation incentives.  They now are included but only when the DIL is final.
8. Borrower Notices - Servicers can now consider a borrower for HAFA while the borrower is considering HAMP.

Servicers are not required to, but may re-evaluate borrowers who were previously ineligble before the guideline were changed. 

For more information contact me for the full Supplemental Directive 10-18.

1. Can you explain the short sale process?
2. Do you have prior short sale experience and more importantly, success?
3. Can you tell me if my property qualifies for a short sale?
4. Do you know what information I'll need to provide my lender?
5. Can you tell me what hardships qualify for a short sale?
6. Do you have an effective short sale strategy?
7. Do you know how to effectively market my home in a timely manner?
8. Do you know how to strategically price my home?
9. Do you have an effective pricing and marketing campaign for 15, 30, and 45 days?
10. Will you be negotiating my short sale or do you use a 3rd party company?
11. Why are you the right agent to sell my home?

If the agent you are considering can't answer these basic questions and thoroughly explain the process of a short sale you may want to consider moving on.  Short sales require an agent who is actively engaged and experienced in getting short sales approved and closed.

Please contact me if you have questions about short sales and whether or not you might qualify to do a short sale.  A short sale is just one of the options to avoid foreclosure, and one of the best options if you are unable to retain your home.

Being a REALTOR has taken on a whole new meaning for me.    I have gone from a salesperson who specialized the marketing of property for sale and helping buyers find their new home, to so much more than that.   Helping homeowners avoid foreclosure by successfully finding alternatives such as short sale has made me so much more than a salesperson.  I am a problem solver, listener, helper, and facilitator.    I am genuinely helping people and making a real difference in their lives.  For buyers I am assisting them in navigating the more complicated web of purchasing short sales and REOs.  Helping them avoid the obstacles that arise in these types of purchases.  It has become harder than ever to be a buyer with tighter lending standards, distressed properties and long wait times. 

We look around in this industry and are often hard pressed to find positives and things to be thankful for.   But, there is plenty that I am thankful for.  The challenges of this market have made me a better REALTOR.  I have been given the opportunity to not only help my neighbors buy and sell homes, but help them improve thier lives.  By necessity I have been motivated to learn more, so I can help more. 

This REALTOR is thankful... 

Happy Thanksgiving to Everyone!

Bank owned or REO sales accounted for 32% of the sales in October.  The median was signifcantly lower at $1390,950.  These properties saw the fewest days on the market with an average of 96 days.  These listing received on average 99% of asking price.  The median sales price wasn't helped much which only 3 homes sold over the $500,000 mark and almost 80% of the sales at the $200,000 or below price point.

Short sales accounted for 27.9% of the sales in October.  They brought in a higher median sales price than the REO properties at $161,000.  They unfortunately average the longest market times of 199 days.  Short sale listings received an average of 99.1% of their asking price.  The short sale median sales price was definitely bolstered by a $1,200,000 sale.  There were 4 sales over the $500,000 mark.  70% of the short sales were under the $200,000 price point.

What does all this mean???  Sellers with equity can successfully sell their homes in a distressed market given that they have realistic expectations of the price.     Bank owned/REO sales net the banks less than short sales, a continued argument that banks seem to be getting finally.  And lastly, short sales aren't just for homes in the lower price points.  You can do a short sale on a $1 million home.  You just have to prove to the bank that you have a hardship and that it's in their best interest to not take the property back onto their books.  It can be done.

Does this mean that homeowners are completely off the hook and won’t have any costs?  No, in some cases depending on your financial situation the lender may ask the homeowner to contribute to the loss with a cash contribution or promissory note.  An experienced short sale real estate agent can assist you in minimizing these and working on a win-win solution for both the homeowner and the lender.  In some cases the cash contribution or promissory note can be the key to having the lender release the homeowner from any future liability.

How can you afford not to do a short sale?  When the alternative is foreclosure which can be devastaing to your credit, your future ability to purchase a home again, and result in larger tax consequences – how could you afford not to consider a short sale?

If you are a homeowner facing difficulties making your mortgage payment, consult an experienced short sale agent as soon as possible.

FHA Preforeclosure Sales  if listed correctly will be "pre-approved".  FHA requires homeowners to get approval into their system prior to listing thier property.  FHA sets the price and the net proceeds.  Once an offer is received the seller's lien holder is supposed to respond to the offer within 5 business days.  If the offer meets the FHA requirements as set forth in the "Approval to Participate" that the seller is given when approved into the system then this is truly a "pre-approved" short sale.

HAFA Short Sales - This is a newer short sale program that is set up in a similar fashion to FHA short sales.  Sellers can be approved for a HAFA short sale prior to listing the property, given a sales price and net amount.  In this case the short sale is truly "pre-approved".    The seller is provided with a Short Sale Agreement (SSA) which outlines the terms required for the short sale. 

Previously approved short sales are just that - previously approved under another buyer's name.  Most lien holders provide short sale approval letters with the specifics of the buyer who made the offer.  If the property is being advertised as "pre-approved" but the approval letter has another buyer's name on it, it won't do you much good.  At that point if you make an offer, your offer and all the pertinent documents will need to be re-submitted to the lien holder in order to issue a new approval letter in your name.  This process may be shorter than the timeline the previous buyer waited, but there are no guarantees. 

Key is to work with a buyer's agent that knows the short sale process and can inquire about the specifics of the property you are interested in.

These freezes do not mean that homeowners are going to get off the hook.  It simply means that you may have a bit more time to pursue alternative options, such as a short sale.   Don’t be fooled into thinking that you can hold off until after the holidays to look into your options.  If you are facing difficulty paying your mortgage please seek help of a qualified real estate professional as soon as possible.  The one thing you don’t have is TIME. 

Over the past several years we have seen the lenders institute foreclosure freezes in the 4th quarter simply because it is not good press to foreclose on homeowners during the holiday season.  Although the issues seems to be more focused on “robo-signing” for the current freezes, historically this isn’t uncommon. 

Again, call me today as acting quickly is the key…

Sound too good to be true?  Well there is a catch.  The homeowner must get their lender (servicer) and the investor who owns the mortgage to take a short payoff of the loan.  Many lenders and investors are reluctent to do this.  So although the program looks great to homeowners it may be easier said than done.

Who qualifies?

1. Homeowner must be in a negative equity position (underwater).
2. Must be current on the existing mortgage.
3. Homeowner must occupy the property.
4. Homeowner must qualify for new FHA loan and have a minimum FICO score of 500.
5. The existing loan cannot be an FHA loan. 
6. The existing lien holder (lender) must agree to write down at least 10% of the unpaid balance.
7. The new re-financed FHA first mortgage cannot have a loan-to-value greater than 97.75%.
8. If there is a second lien it can be re-subordinated to the new loan, but the 2 loans combined cannot be great than 115% loan to value.

Interested homeowners should contact their servicer for more information.  When I looked on Bank of America's website, my servicer, I found mention of the program but that they had not worked out the details and to keep checking back.  With the program scheduled to roll out in early September, you may find this to be the case with many lenders.

If you would like a copy of the FHA Mortgagee Letter that details the program, please feel free to contact me.

The site is available in both English and Spanish and includes tools like educational videos, mortgage calculators, financial forms and checklists.   A virtual assistant will walk you through the site. 

Not all mortgages are insured by Fannie Mae, but this is a great general resource.  The site does provide a Fannie Mae Look-up Tool so you can find out if your mortgage is insured by Fannie Mae so you can take advantage of the Fannie Mae specific programs that are detailed on the site.

Again the key for anyone homeowner who is facing difficulties or anticpates that they may have an issue in the near future is to seek help as early as possible.  This website is a great first step.

The median price of  all sales in June in this category was $170,000.  Median prices for traditional listings topped the charts at $219,950.  Median for short sales was $151,000 and REO's was $148,000.    The average days on market for all lisitng types was 146 days.  REO's were on the market the least amount of time with an average of 85 days on market.  Traditional sales averaged 109 days and short sales averaged 208 days. 

Short sales have become very significant in our market.  In June 2009 only 103 short sales closed, that is a 240% increase in the number of short sales that have closed this June over last June.    Unfortunately the number of days on the market for short sales has not improved year over year - 204 days average last year compared to 208 days average this year.  Although we would all like to see this improve, the complex nature of short sales may continue to keep these market times high. 

Short sales are definitely a major part of our market.  Working with an "experienced" short sale agent is key to the success of a transaction when either buying or selling a home today.  Prospective buyers and sellers should ask their agent to show them how many transactions they have closed on either the buy or sell side of the transaction.

Active Listings  - There are currently 411 active listings.  The median list price for these listings is $194,900.  The average days on market is 105 days.  Of these active lisitngs,  57 are bank/corporate owned (13.86%), 194 are short sales (47.20%) and the balance are traditional sales. 

Pending Listings - There are currently 607 pending listings.  The median list price for these listings is $165,000.  Average days on market for pending sales is 131 days.  Of the pending sales 63 are bank owned (10.37%) and 449 are short sales (73.97%) and the balance are traditional sales.

Sold listings - So far in the second quarter of 2010 there have been 203 sales.  The median list price for sold listings was $165,000 and the actual median sold price was $168,000.  The average days on the market for sold listings was 138 days.  Of the sold listings 60 were bank owned (29.55%) and 70 were short sales (34.48%) with the balance (35.96%) were traditional sales. 

Looking at these statistics, we have a relatively low inventory.  Of the available inventory almost 50% is short sales.  Buyers have to be prepared to deal with long waits if considering this half of the market.  The amount of pending inventory is very high, and with 73.47% of the pending sales being short sales we could see some time before these sales close.  Many buyers that are waiting on these sales are hoping to close by June 30th for the tax credit and it will be interesting to see how many can actually close by that date given the track record banks have closing these.

Short sales are out pacing the bank owned sales so far in the second quarter.  One would think this indicates an improvement in the short sale process, but I think it stems from lower bank owned inventory and over priced traditional sales.  Again, it will be interesting to see how the quarter finishes out at the end of June with buyers rushing to close for the tax credit.

FHA guidelines require a seller to get their home approved into the FHA Pre-Foreclosure Program prior to listing the property.  Sellers should work with thier REALTOR to contact the servicer (the company you pay the mortgage to) and request to be considered for a short sale.  The servicer will provide the necessary documentation and complete an FHA appraisal on the property.

If you would like more informaiton on the HUD Pre-Foreclosure (Short Sale) Program, please contact me for a complete guide.

You can determine if your loan is FHA by looking at the bottom of  your Deed of Trust , or ask your REALTOR to order a property profile from the title company which will have a copy of this document  in it.   

Once the servicer has obtained the initial documents and ordered an FHA appraisal they should be able to issue you the “Approval to Participate”    This clearly defines the FHA Fair Market Value, the deadline to get a contract for sale, minimum net proceeds that FHA will accept and the amount of the seller’s incentive and what date you have to close in order for the seller to get that money.

From the issue date on the Approval To Participate you are given a specific date to get the home under contract.  If you get the sale into contract within the first 30 days FHA will require the sale to net 88% of the FHA appraised value.   If the sale contract comes between day 31 and 60 FHA requires a 86% net.  Day 61 to the expiration of the Approval To Participate FHA will allow the offer to be 84% of the appraised value.

Once you list the property you basically have an approved short sale if the offer will provide the appropriate net to FHA.  There is one other major thing that needs to be remembered.  FHA will only allow up to 1% of the new buyer's loan amount as a closing cost credit if the buyer of your home is doing a new FHA loan.  Many buyers in our market are needing 3% closing cost assistance from the seller.  That will not work on this type of sale.

Once an offer is received that meets the required net, it is submitted to the servicer and an Approval is issued.  This is what is need to close the short sale.  

Sellers are offered an incentive on FHA short sales.  If you successfully close the sale within 90 days of the Approval to Participate you can recieve up to $1000 incentive which can be applied to paying off a second lien or other closing costs that FHA doesn't allow, or if there is neither of these you get the money for relocation assistance.  If it does not close in that 90 day window the amount drops to $750. 

Here is where things get tricky.  You may have a servicer (who you pay your mortgage to) that is not up to speed on FHA guidelines or has a large back log of files.  They are still required as an FHA servicer to follow FHA guidelines.  You and your REALTOR can contact FHA directly at their national servicing deparment and file a complaint.  The number is 888-297-8685.  They take your information and create a "work ticket" which is then assigned to a local field officer who contacts the servicer and resolves the issue.

Contact me today for a complete guide to FHA Pre-Foreclosure (short sales.)

1. For homes in price points under $400,000 it is a seller's market.   Overal in the Reno-Sparks market we have 2.8 months of inventory.  The National Association of REALTORS categorizes a "sellers market" as any market where there is less than 6 months inventory.   In price ranges under $200,000 there is less than 2 months of available inventory.  In the $200,000 to $400,000 there is 2.3 to 4.8 months of inventory -  signaling a seller's market.
2. The median sales price was $175,500 for March 2010 up from $170,o000 in February and $167,000 in January.  This is the 3rd straight month we have seen an increase in prices.  (Unfortunately the median is still down from March 2009 when it was at $200,000).
3. The number of distressed listings (bank owned, corporate owned or short sales) coming onto the market in March (new listings) was at August 2008. 

BUYERS - WHAT DOES THIS MEAN FOR YOU?

1. You need to be working with an experienced REALTOR that can help you locate inventory, and make a strong offer against the competition that is out there.  Believe the media or not, it is a seller's market.  Your offer will need to be strong in order to get the property
2. Median prices have been increasing for the past 3 months.   If you are inclined to "low ball" you may miss out on the property you want and if you are still waiting for the "bottom" of the market you may have missed it.  NOW is still a great time to buy.
3. Distressed properties accounted for 55% of the new listings that came on the market.  Again, make sure you are working with a REALTOR that has experience both listing and selling distressed properties in order to avoid possible pitfalls.

SELLERS - WHAT DOES THIS MEAN FOR YOU?

1. Equity position sellers you are in the driver seat.  The shortage of inventory and the challenges in purchasing distressed inventory puts you in a great position to attract buyers quickly and get top market prices.  (That doesn't mean you can over price your home, but if you want to sell and you price your home at fair market value it will sell.)
2. Prices are improving.  For sellers that are underwater or teetering, if this trend continues we will all be happy.  I caution sellers to keep in mind that we won't see 2005 prices again for quite some time.  If you are waiting for another boom you may be old and gray before it gets here.  If you have considered moving up and you have equity now is the time.  The move up home you want is available at a great price as well.  You may lose your "imaginary gains", but you can move up to a bigger or new home at much more affordable prices.
3. With less distressed inventory, you have less "low market" competition and more opportunities to attract buyers. 

Time will tell.