Blog
Hard Data: How Long Do “Short Sales” Take?
Once a “short sale” finally goes under contract, how long can you expect to wait for a lender’s decision? A recent Deutsche Bank study looked at the short sale aproval process of mortgage servicers. The report found that timeframes vary by loan type.
For prime loans, GMAC completed short sales the fastest – averaging roughly six months per transaction. Citigroup’s CitiMortgage took about seven and a half months. Wells Fargo averaged 8 months. Bank of America took 11 months. Countrywide, acquired by Bank of America, had the slowest timeline averaging over 13 months.
For subprime loans, Wells Fargo had the shortest timeline at just over 15 months, whereas Ocwen and Equicredit took 29 months.
For Option-ARM loans, transactions took anywhere between 8 to 13 months. See article for details.
As a CDPE (Certified Distress Property Expert) who has had over 70 short sales approved in the Tampa Bay area, I have a few comments on the study. When we submit a contract to the bank, we are assuming that the buyer will wait patiently for months without any substantive news along the way, and without any indication that the seller or the price will be approved. Short sale contracts are approved on a case-by-case basis for a specific contract with a specific buyer. Short sale approvals are not assignable to another buyer.
About half of the time, we noticed that the buyer would wait a few months and then cancel the contract because they became impatient or they found another home. When the contract is canceled, we must put the home back on the market and look for another buyer. We do not gain any benefit with the bank, as they will start the process over from the beginning the next time.
Once a home enters the market, it may require a series of price reductions and a couple months to find a buyer. If the buyer cancels after 3 months, then we would have already burned 5 months that we will never get back.
After the cancellation, it may take a month to find a new buyer, then another 5 months for the bank’s decision, and one month to close. At that point we would be 12 months into the game, right up against the foreclosure timeline. And what happens if the 2nd buyer cancels? We have seen up to 4 buyers cancel on the same home, each after waiting 3-6 months. At that point, we are in a race against foreclosure – every day that goes by is precious.
How can we keep the buyer engaged in the process and reduce the number of buyer cancellations? While some cancellations are inevitable, Team Bohannon has developed strategies to speed the process, keep the buyer informed and increase the odds that buyers will remain committed to the transaction for the duration. Call Dale Bohannon today at 813-979-4963 for more information.
School Grades Show New Tampa Tops
Looking for top rated schools? A Tampa Tribune article on August 13th says “If you want to enroll your child in an A-school, look north…One of the top-performing ZIP codes was 33647, which covers New Tampa. That area includes 10 elementary and middle schools, all of which received A’s this year.”
The primary schools in the 33647 zip code are: Clark Elementary, Chiles Elementary, Heritage Elementary, Hunter’s Green Elementary, Pride Elementary, Tampa Palms Elementary and Turner Elementary. The middle schools are: Bartels Middle School, Benito Middle School and Liberty Middle School.
For the State of Florida FCAT Results, see: http://fcat.fldoe.org/mediapacket/2010/default.asp
Click here for county, district or school reports: http://fcat.fldoe.org/results/default.asp
Mortgage Modification Programs Not Working
As of July 2010, government programs to reduce mortgage payments for millions of homeowners have helped only about 400,000 households avoid foreclosure, though nearly 530,000 have fallen out of the program. While the bailout set aside up to $50 billion for mortgage modification programs, only $248 million has been spent according to the Government Accountability Office.
See Related Stories:
Yahoo Finance: http://bizy.be/tJEPV
Wall Street Journal: http://bizy.be/LGlYD
What Listing Agents Do To Earn Their Commission
Wondering what listing agents actually do to earn a commission? According to the 2009 NAR Profile of Home Buyers & Sellers, only 53% of sellers were very satisfied with their home sale. Many cite lapses of performance during the listing or closing process.
While procedures vary from one agent to another, the Orlando Regional Realtor Association has put together a list of activities that usually occur behind the scene of any transaction. Listed below are nearly 200 typical tasks and processes that normally happen during the course of a successful residential real estate transaction. These steps are normally provided by the listing agent at a full service real estate brokerage.
– Pre-Listing Activities –
1 Make appointment with seller for listing presentation
2 Confirm listing appointment
3 Review pre-appointment questions
4 Research all comparable currently listed properties
5 Research sales activity from MLS and public records
6 Research “Days on Market” for similar properties
7 Download and review property tax roll information
8 Prepare “Comparable Market Analysis” (CMA)
9 Obtain copy of subdivision plat/complex lay-out
10 Research property’s ownership & deed type
11 Research the property’s public record information
12 Research and verify legal description
13 Research property’s land use coding and deed restrictions
14 Research property’s current use and zoning
15 Verify legal names of owner(s) in county’s public property records
16 Prepare listing presentation package with above materials
17 Perform exterior “Curb Appeal Assessment” of subject property
18 Compile and assemble formal file on property
19 Confirm public schools and explain impact on market value
20 Complete appointment checklist and note follow-up items
– Listing Appointment Presentation –
21 Give seller an overview of current market conditions and projections
22 Review agent /company credentials in the market
23 Present company’s position or “niche” in the marketplace
24 Present CMA including Comparables, Solds, Current Listings & Expireds
25 Offer pricing strategy based on interpretation of market conditions
26 Discuss Goals With Seller To Market Effectively
27 Explain market power and benefits of Multiple Listing Service
28 Explain market power of web marketing, IDX and REALTOR.com
29 Explain the “behind the scenes” work and weekend availability
30 Explain agent’s role in taking calls to screen for qualified buyers.
31 Present and discuss strategic master marketing plan
32 Explain agency relationships and determine seller’s preference
33 Explain clauses in Listing Contract & Addendum
– Once Property is Under Listing Agreement –
34 Review current title information
35 Measure overall and heated square footage
36 Measure interior room sizes
37 Confirm lot size via certified survey, if available
38 Note any unrecorded property lines, agreements, easements
39 Obtain house plans, if applicable and available
40 Review house plans and make copy
41 Order plat map for retention in property’s listing file
42 Prepare showing instructions
43 Obtain current mortgage loan(s) information
44 Verify current loan information with lender(s)
45 Check assumability of loan(s) and any special requirements
46 Discuss possible buyer financing options with seller
47 Review current appraisal if available
48 Identify Home Owner Association manager if applicable
49 Verify Home Owner Association Fees
50 Order copy of Homeowner Association bylaws, if applicable
51 Research electricity availability and supplier’s name and phone number
52 Calculate average utility usage from last 12 months of bills
53 Research and verify city sewer/septic tank system
54 Water System: Calculate average water fees or rates
55 Well Water: Confirm status, depth and output
56 Natural Gas: Research/verify availability and supplier
57 Verify security system, and trems
58 Verify if seller has transferable Termite Bond
59 Ascertain need for lead-based paint disclosure
60 Prepare detailed list of property amenities and assess market impact
61 Prepare detailed list of property’s “Inclusions & Conveyances with Sale”
62 Compile list of completed repairs and maintenance items
63 Send “Vacancy Checklist” to seller if property is vacant
64 Explain benefits of Home Owner Warranty to seller
65 Assist sellers with submission of Home Warranty Application
66 When received, place Home Owner Warranty Certificate in file
67 Have extra key made for lockbox
68 Verify if property has rental units involved. And if so:
69 Make copies of all leases for retention in listing file
70 Verify all rents & deposits
71 Inform tenants of listing and discuss how showings will be handled
72 Arrange for installation of yard sign
73 Assist seller with completion of Seller’s Disclosure form
74 “New Listing Checklist” Completed
75 Review results of Curb Appeal Assessment
76 Review results of Interior Décor Assessment
77 Load listing into transaction management software program
–Entering Property in Multiple Listing Service Database –
78 Prepare MLS Profile Sheet and review accuracy of listing data
79 Enter property data from Profile Sheet into MLS Listing Database
80 Proofread MLS database listing for accuracy – including proper mapping
81 Add property to company’s Active Listings list
82 Deliver signed copies of Listing Agreement and MLS forms
83 Take additional photos for upload into MLS and use in flyers.
–Marketing The Listing–
84 Create print and Internet ads with seller’s input
85 Coordinate showings. Return all calls – weekends included
86 Install and program electronic lock box.
87 Prepare mailing and contact list
88 Generate mail-merge letters to contact list
89 Order “Just Listed” labels & reports
90 Prepare flyers & feedback faxes
91 Review comparable MLS listings regularly to ensure competitiveness.
92 Prepare property marketing brochure for seller’s review
93 Arrange for printing or copying of supply of marketing brochures or fliers
94 Place marketing brochures in all company agent mail boxes
95 Upload listing to company and agent Internet site, if applicable
96 Mail Out “Just Listed” notice to all neighborhood residents
97 Advise Network Referral Program of listing
98 Provide marketing data to buyers coming through relocation networks
99 Provide marketing data to buyers coming from referral network
100 Provide “Special Feature” cards for marketing, if applicable
101 Submit ads to company’s participating Internet real estate sites
102 Price changes conveyed promptly to all Internet groups
103 Reprint/supply brochures promptly as needed
104 Loan information reviewed and updated in MLS as required
105 Feedback e-mails/faxes sent to buyers’ agents after showings
106 Review weekly Market Study
107 Discuss feedback from showings agents with seller.
108 Place update calls to seller to discuss marketing & pricing
109 Promptly enter price changes in MLS listing database
– The Offer and Contract –
109 Receive and review all offers
110 Prepare a “net sheet” on each for the owner for comparison purposes
111 Counsel seller on offers and evaluate all terms
112 Contact buyers’ agents to review buyer’s qualifications and offer
113 Deliver Seller’s Disclosure to buyer’s agent
114 Confirm buyer is pre-qualified by calling Loan Officer
115 Obtain pre-qualification letter on buyer from Loan Officer
116 Negotiate all offers on seller’s behalf
117 Prepare and convey any counteroffers
118 Deliver contract and all addendums to title company
119 Deliver signed contract to buyer’s agent
120 Record and deposit earnest money in escrow account.
121 Disseminate “Under-Contract Showing Restrictions” as seller requests
122 Deliver copies of fully signed Offer to Purchase contract to seller
123 Fax/deliver copies of Offer to Purchase contract to Selling Agent
133 Fax copies of Offer to Purchase contract to lender
124 Provide copies of signed Offer to Purchase contract for office file
125 Advise seller in handling additional offers
126 Change status in MLS to “Sale Pending”
127 Update transaction management program to show “Sale Pending”
128 Review buyer’s credit report results and advise seller
129 Provide credit information to seller if property is seller-financed
130 Assist buyer with financing, if applicable and follow-up as necessary
131 Coordinate with lender on Discount Points being locked in with dates
132 Deliver unrecorded property information to buyer
133 Order septic system inspection, if applicable
134 Receive and review septic system report
135 Deliver copy of septic system inspection report lender & buyer
136 Deliver Well Flow Test Report copies to lender & buyer
137 Verify termite inspection ordered
138 Verify mold inspection ordered, if required
– Tracking the Loan Process –
139 Confirm Verifications Of Deposit & Employment are completed
140 Follow Loan Processing Through To The Underwriter
141 Add everyone to transaction management program
142 Contact lender weekly to ensure processing is on track
143 Relay final approval of buyer’s loan application to seller
– Home Inspection –
144 Coordinate buyer’s professional home inspection with seller
145 Review home inspector’s report
146 Update transaction management tracking software program
147 Explain seller’s responsibilities regarding clauses in the contract
148 Ensure seller’s compliance with Home Inspection Clause requirements
149 Help identify and negotiate with contractors for repairs
150 Oversee completion of all required repairs on seller’s behalf, if needed
– The Appraisal –
151 Schedule Appraisal
154 Provide comparable sales used in market pricing to Appraiser
152 Follow-Up On Appraisal
151 Enter completion into transaction management program
153 Assist seller in questioning appraisal report if it seems too low
– Closing Preparations and Duties –
154 Contract Is Signed By All Parties
155 Coordinate closing process with buyer’s agent and lender
156 Update closing forms & files
157 Ensure all parties have all forms needed to close the sale
158 Select location where closing will be held
159 Confirm closing date and time and notify all parties
160 Assist in solving any title problems
161 Coordinate buyer’s Final Walk-Thru prior to closing
172 Research all tax, HOA, utility and other applicable prorations
162 Request final closing figures from title company
163 Review closing figures to ensure accuracy of preparation
164 Forward verified closing figures to buyer’s agent
165 Request copy of closing documents from closing agent
166 Confirm title insurance commitment
167 Provide “Home Owners Warranty” for availability at closing
168 Review all closing documents carefully for errors
169 Forward closing documents to absentee seller as requested
170 Review documents with closing agent (attorney)
171 Provide earnest money deposit check to closing agent
173 Coordinate with seller’s next purchase and resolve any timing problems
174 Ensure“no surprises” so seller receives a check at closing
175 Refer sellers to one of the best agents at their destination
176 Change MLS status to Sold and ener sale data.
177 Close out listing in transaction management program
– Follow Up After Closing –
178 Answer questions about warranty claims if requested
179 Resolve any conflicts about repairs if buyer is not satisfied
180 Respond to any follow-up issues regarding paperwork.
19x Easier Than Cutting Hair!
It requires 19 times more education in Florida to cut hair than to sell homes! To cut hair in the State of Florida one must complete 1,200 school hours in a cosmetology program and pass a state exam. To sell homes, all you need is a 63-hour course and an exam.
Once they have a sales license, the National Association of Realtors 2009 Member Profile reveals that the average Florida agent sells just one home every 2 months. The typical Florida REALTOR® has business expenses of only $430 per month and invests only $20 per month on their website. The study finds 40-80% of buyer inquiries “fall through the cracks” because most Realtors do not have a systematic way of handling leads.
The Tampa real estate market is facing a tumultuous time that offers both great opportunity and great peril. Can you afford to go down this road with an average agent?
Here is a quote from a trusted source on the subject:
”I’m always looking for high-octane, high-protein Realtors. About 80% of the sales are made by 20% of the people. You don’t want one of the other 80% to do the work here; you want a top agent. This is your largest asset, and we’re in tough times, so only the top agents can sell. They won’t fool around and list your property for too much, and they won’t under-price it and make you mad. They get stuff done.
When you interview them, ask how many houses they sold last year. If they sold four, get them out of your house. If they sold 44 houses, that’s a different story. Ask them what you need to do to get this house sold. If they can’t give you good pointers and tell you what you need to fix in a diplomatic way, you don’t need them. Find out how much property they’ve moved in your area and within a 5-mile radius. If all the houses they’ve sold are on the other side of town, that worries me.
Don’t hire your aunt Sally or some guy you sit next to in church. Interview them and rake them over the coals. If they don’t show up on time for the appointment with you, they will do the same when showing the house. Get someone who will return your phone calls.”
– Dave Ramsey
Real estate transactions are complicated. Buying or selling a home, organizing the move and relocating your family can be stressful enough already. You should not have to worry about all the details. Rather than leave the process and outcome to chance, Team Bohannon has developed a proven system that saves you time, money and aggravation. Along the way to selling over 4,400 homes, Team Bohannon learned some important lessons that can benefit you today.
