Low Appraisals Impact on Home Sales

Low appraisals continue to be the concrete block tied around the ankles of a sinking real estate market that is already unstable due to epic unemployment, tight credit, decreasing values, rising foreclosures and the like. Because lenders must cap their loans at the value set by appraisers while sellers and buyer’s disagree on how to make up the difference with an original deal price, cancellations happen.
According to the National Association of Realtors (NAR), 16 percent of Realtors reported cancelled contracts in July, due mostly in part “by declined mortgage applications or failures in loan underwriting from appraised values coming in below the negotiated price.”
Nine percent reported contract delays because of low appraisals, and 13 percent reported that a contract we renegotiated to a lower price because the appraisal cam in below the original price, NAR said, making over one in five real estate contracts cancelled in July because of appraisal issues.

It’s hard to talk about any recovery

“It’s hard to talk about any recovery of the housing market and home prices until the appraisal issue is squared away, and that is a broad issue,” said Guy Cecala, publisher of Inside Mortgage Finance told Reuters.
Some point to the housing bubble inflation as the fault of high estimates of property values by appraisers, but recent reforms has curbed this and the industry is now seeing what some project to be artificially low appraisals.
“The industry, both from a lending perspective and appraising perspective, has gotten as outrageously conservative now as they were outrageously aggressive a few years ago,” said Rick Sharga, senior vice president of data firm RealtyTrac.

Appraisal Management Companies popping up

Third party appraisal management companies have popped up all over America to play middleman since Realtors were banned from selecting appraisers for Fannie Mae or Freddie Mac approved loans (90% of all U.S. loans). Regardless of accuracy, being too liberal or too conservative, the management companies get paid and are offering smaller and smaller commissions to overworked appraisers who ultimately bear the liability of the appraisal in the new “sue everyone” era.
Appraiser Mike Evans, former president of the American Society of Appraisers told Reuters, “Some guy blows in from 300 miles away and grabs three comps that may not be in the right area, and leaves.”

10 Essential Steps to Close Short Sales

Short Sales are here to stay, and working these transactions requires education, patience and persistence.
Just ask two RE/MAX agents who specialize in Short Sales: Ron Buzzetto and Aaron Juarez. Both agents work in markets that were hit especially hard with distressed properties; Buzzetto, who runs a team with his wife, Melissa, is a 100 Percent Club member with RE/MAX Premier Group in Wesley Chapel, Fla. Juarez is a Hall of Fame and Platinum Club member with RE/MAX Masters Realty in Chino Hills, Calif.
Despite the complexities involved in Short Sale transactions, both agents say they can be a steady and valuable source of income – if you know what you’re doing. Also, Buzzetto shared his downloadable documentation checklist that he gives to homeowners. You can customize the checklist for your business, or simply use it as a model when crafting your own version.
Here are the agents’ 10 steps to mastering Short Sales:
1. Get educated. "Education is the first step," says Buzzetto. "I have the CDPE and SFR; you need this kind of training if you’re going to speak confidently and intelligently about the process." Juarez agrees. "Remember that this is someone’s financial future in your hands, so you need to know what you’re doing, or you should refer the lead on to a Short Sale specialist."
2. Team up with experienced agents. If you’re new to Short Sales, it’s wise to find an agent who is doing them and is willing to partner up with you to share expenses and responsibilities, Buzzetto says. Not only will you learn the process and become better prepared, you’ll also minimize the chances of fudging your first few sales if you have a skilled mentor.
3. Determine whether you can help. At the first meeting with distressed homeowners, find out how far behind they are and if they’ve exhausted all other options (loan modifications, mediation, etc.). There’s a chance that the bank might work with them so they can stay in their homes. If you don’t think you can help, step back and refer them to a trusted local attorney who can better assist them.
4. Explain how it works. "They’re going through one of the darkest times in their lives, so talk through everything as if they’re children, and repeat things 10 times if you have to so they understand it," Juarez says. "Don’t talk down to people, but ask the hard questions and be honest and realistic about what’s next." He also provides a document checklist to his clients and gives them one week to return the required information. "We will not put a Short Sale listing into the MLS, nor will we spend time or money marketing it until we get all the documentation."
5. Price it aggressively. Juarez completes a Broker Price Opinion on a Short Sale listing, then prices it in the lower end of the range. He also schedules 10 percent price reductions if no offers come in. "A BPO has all the clout in the world," Buzzetto says, "so contact the agent performing it to find out if that person is local and knows your market. Have your own CMA ready so you can compare notes on how you each arrived at the listing price, and be prepared to make your case to the lender if the values differ drastically."
6. Qualify buyers. Getting a loan pre-approval letter from buyers is a must before you can submit an offer to the bank. Also, buyers need to understand that they can’t make multiple offers on Short Sales and just bail if it takes too long. "Once you sign a purchase agreement, that’s a legally binding document," Buzzetto says. "That’s why I require buyers to pay an up front deposit and get an inspection within 10 days of making an offer. People who balk at that are probably not serious."
7. Establish rapport with the lender. Once the process starts, get in touch with the bank and speak with someone in the Short Sale or escalation department. Juarez suggests calling first to get things rolling and to ask if anything else is needed for the package. If you’re not sure who to contact, check the lender’s website for its Short Sale or loss-mitigation department; the CDPE has a great resource for tracking down contacts, too. Once a representative is assigned to your listing, email them weekly progress updates and track every single exchange.
8. Submit a complete package. This is crucial, both agents say. You’ll have a better chance of a bank approving a Short Sale offer if you submit a detailed package that includes items such as: a hardship letter, current W2s, bank statements, pay stubs and mortgage statements, a financial worksheet, a signed listing agreement and CMA, a lender pre-approval letter for the buyer, and other forms requested by the lender. Missing documents or incomplete forms might cause the lender to reject the offer.
9. Communicate often. Update all parties on the process at least once a week – even if there’s nothing new to report. If you don’t, you’ll leave your sellers and buyers feeling like they’re not a part of the transaction, and they might not stick around, Juarez says.
10. Stay in touch. Once a Short Sale closes, your work isn’t over. Help clients with their next step, whether it’s a relocation or finding a rental property, and keep in touch. After clients have a few years to rebuild their finances and credit, they’ll likely want to buy another home. If you treated them well and helped them get past a turbulent time, they’ll likely turn to you first when they’re ready to jump back into the market.

5 Tech Moves to Save Time, Money

For Brent Lauinger, a longtime network and software engineer, incorporating technology into his real estate business is a matter of convenience.
"Moving from a tech career into real estate, it was a challenge dealing with antiquated systems," says Lauinger, a Sales Associate with RE/MAX First in Calgary, Alberta. "You end up with filing cabinets overflowing with hundreds of files that are virtually unsearchable. And when you do the math, you realize you're spending a ton on office supplies that could be better spent on electronic solutions that make the process easier for you and your clients."
Here are Lauinger's top five technology solutions for streamlining your business systems:

1. Maximize the iPad – It's a game-changer in real estate, Lauinger says, especially once you outfit it with key apps, such as Trulia and Zillow (both RE/MAX Approved Suppliers), and ones that connect you directly to Facebook, Twitter and other social networks. You also can store all of your files virtually and access them on the go. By default, the iPad cannot open PDFs, but the PDF Expert app is a great solution. And with services like DocuSign, also an Approved Supplier, you can have clients safely and securely e-sign documents right in the living room of a home they'd like to buy or sell.
   
2. Tether your smartphone – You can work around Internet access challenges and costs by using your smartphone as a modem, Lauinger says. The iPad and BlackBerry Playbook can both piggyback on the current data plan of a companion phone to help manage expenses and make it easier to monitor usage and rates. Check with your service provider regarding tethering policies.
   
3. Focus social media monitoring – Lauinger says the best way to manage your time on social media and the expectations for ongoing interaction is to use the apps for Twitter and Facebook, plus services like TweetDeck and Twitterific for iPads and iPhones. TweetDeck, in particular, connects users to their contacts on various social media platforms – not just Twitter – and keeps them updated on topics they care about.
   
4. Manage documents anywhere – An increasing number of products, such as DropBox, allow you to store your files virtually (in a cloud) – and access them anywhere you have an Internet connection. Lauinger developed his own web-based contact- and transaction-management software, Opreie, which now integrates with DocuSign's e-signature technology.
   
5. Stop paying for email marketing – A lot of people don't realize they can get email services for free, Lauinger says. He uses MailChimp, which has a free base package up to 2,000 subscribers and 12,000 emails per month. Various low-cost packages are also available. Using a bulk email service provider allows him to create dynamic HTML messages, plus send hundreds of emails that are less likely to be marked as spam.

Flex Warehouse Fort Lauderdale

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