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Archive for March, 2011

What The End Of The Rainy Season Means For Some Benicia-Vallejo Short Sale Buyers

March 31st, 2011 categories: Buying, Foreclosures / Short Sales

March-MayIf you’re buying a vacant short sale property in Benicia, Vallejo or elsewhere in the Bay Area, it’s important to know that we’re getting close to the time of year when what you see today may not be exactly what you see the day escrow closes.

That’s because in another month or so, we’ll be at the end of the rainy season, which means that the yards of many of those short sale listings will go from lush and green to dry and brown — and often within a matter of days.

Green Today, Brown Tomorrow

While the hills are still green and the ground is still moist from last week’s downpours, the warm, sunny weather of the last few days reminds us that we’re nearing the end of the rainy season.

In another month or so, it will be time to start watering, mowing and pruning on a regular basis, which often doesn’t happen when the responsibility falls on the shoulders of a short sale homeowner who’s already moved out.

If you buy and close escrow on a short sale between October and April, you usually get a free pass, since mother nature keeps things moist. But when the warmer weather arrives, unless someone’s there to water, fertilize, trim, mow, edge and pull the weeds, that lush green lawn you saw in March can quickly turn to a dry brown carpet by early May.

And if you’re buying a short sale, where you might be waiting two, three, four months or more for the seller’s lender to approve the sale, you could end up in a situation where a big chunk of the money you had allocated for carpet, paint, cabinets or appliances might end up going to unexpected landscaping instead.

It’s In The Contract, However…

On page 4 of the standard California purchase contract, it says that the seller shall maintain the property “in substantially the same condition as on the date of Acceptance.” But I can Read the rest of this entry »

Written by Rod Herman | Discussion: No Comments »

.600 Is A Pretty Good Batting Average…Unless You’re Talking About Short Sales

March 14th, 2011 categories: Buying, Foreclosures / Short Sales, Viewpoint

BB Shortsale

A few days ago, our state association, the California Assn. of Realtors, released the results of a recent survey which claims that only three out of every five attempted short sales in the state actually went through.

A .600 batting average may be great if you’re Barry Bonds, but it’s not so great if you’re talking about the percentage of short sales that were successfully completed.

The report lays blame with the banks for dragging out the process for months and months on end. And to be sure, with some banks, that’s definitely an accurate statement. But others, like Bank of America and Wells Fargo have made great strides in streamlining the process over the past 12 months.

In fact, on all of the short sales I’ve negotiated with Bank of America since last summer, I’ve gotten responses in about 30 days or less. That’s a far, far cry from what was happening a year ago — when their norm was a good 6-8 month wait (if you were lucky).

I don’t dispute CAR’s findings, but based on my own personal experience with representing short sale clients here in Benicia, Vallejo and elsewhere in  Solano and Contra Costa counties, I think it’s fair to point out that while many banks are definitely the root of the problem, some of the blame for that 40% failure rate lies with sellers or their agents.

Now, I certainly haven’t had a 100% success rate and anyone who tells you they have isn’t telling the truth.

But by the same token, I’m sure I’m well above the 60% figure that CAR’s survey suggests.

What’s more, I’m sure colleagues of mine who know what it takes to successfully negotiate a short sale would say the same thing.

In my experience, if an agent is only successful on 3 out of every 5 short sales, they’re either not doing something right, are plagued by sellers who aren’t really committed to the short sale process or are in the midst of a run of incredibly bad luck.

Most of the time, the handwriting’s on the wall for all to see, with plenty of tell-tale signs that this particular short sale has little chance of going through.

Here are some signs you may be in for a bumpy short sale road: Read the rest of this entry »

Written by Rod Herman | Discussion: No Comments »

10 Ways To Help Avoid A Short Sale Disaster

March 11th, 2011 categories: Benicia, Foreclosures / Short Sales, Selling, Solano, Vallejo

10 List - Short Sale GraphicAs anyone looking for a home in Solano County right now can tell you, many of the homes on the market right now are short sales (where the seller owes more than the home is worth and can’t complete the sale without their lender(s) agreeing to reduce the amount they owe).

Short sales are far more complicated than a regular sales transaction and can take far take longer, too, due to the time a bank can take to review the seller’s financial situation.

Right now, about 4 out of every 10 homes on the market in Solano County are short sales, including 43% of the homes in Benicia and 47% in Vallejo. And, despite what you may have heard, many short sales do indeed close escrow.

Most  of the short sales we’ve represented clients on over the past few years have successfully closed.Yes, there can be some drama or unexpected twists and turns along the way.

But sadly, many sellers or agents either throw in the towel far too early — either out of frustration or by giving up at the first sign of a short sale decline.

If there’s one thing I’ve learned from representing short sale clients it’s that there’s definitely an art to successfully negotiating a short sale. There’s far more to it than just shuffling papers and waiting for the bank to give its answer.

Over the years I’ve found that there are 10 critical factors that either the listing agent or the seller can directly control. Read the rest of this entry »

Written by Rod Herman | Discussion: No Comments »

Bank of America Announces New Loan Modification Program For Military Personnel

March 11th, 2011 categories: Foreclosures / Short Sales

Military CartoonA few years ago, a past client of ours who was in the military received orders to relocate to a new base in another state.

They didn’t have a choice. They had to move.

Yet, their home was worth at least $150,000 less than when they’d purchased it a few years earlier. After numerous futile attempts to have their loan terms modified, they decided to do a short sale.

They ultimately successfully closed escrow, but always wondered why Bank Of America, their lender, wouldn’t have modified the loan to a point where they could have rented it out and covered their payments.

As it was, by the time their short sale was approved and escrow closed, BofA ended up losing about $200,000.

Well, had our clients been a few years later on the military relocation schedule, their story could have ended up much differently.

That’s because yesterday Bank of America announced its new Military Loan Modification Program, which for now will apply only to loans that BofA itself actually owns. Read the rest of this entry »

Written by Rod Herman | Discussion: No Comments »

Chase Offering Some Benicia, Vallejo Sellers $20k To Do A Short Sale?

March 9th, 2011 categories: Benicia, Foreclosures / Short Sales, Vallejo

$20k

Tales Of Letters Offering Upside-Down Borrowers $20k…But Are They Legit?


Over the past few months, I’ve heard rumors of Chase Bank offering some upside-down borrowers a $20,000 incentive to sell their homes as a short sale.

When I first saw this, I thought it was probably nothing more than an internet scam perpetrated by some unscrupulous bottom-feeders in our industry who were trying to prey on down-on-their-luck homeowners.

There are a few short sale programs (BofA’s Cooperative Short Sale and the Fed’s HAFA program), where the homeowner receives a few thousand dollars as an incentive to participate in a short sale.

But $20,000?! That seemed wildly unlikely.

However, at our local Assn. of Realtors breakfast this morning, I heard the same rumor Read the rest of this entry »

Written by Rod Herman | Discussion: 20 Comments »

BofA Proves Its Short Sale Mantra Isn’t All Talk

March 8th, 2011 categories: Foreclosures / Short Sales, The Economy, Viewpoint

BofA SS Graphic - 2010 vs 2011A year ago, if you’d asked me who were the worst banks to negotiate a short sale with, I would have quickly put Bank of America near the top of that list.

Back then, BofA was notorious for dragging out short sales for months on end, for asking for the same documentation over and over again, and for switching negotiators in mid-stream and starting from scratch. Each time you called, you got a different story. It all depended on who answered the phone.

There was no consistency and certainly no commitment to expediting the short sale process. It was as if  the powers that be at BofA just wanted to make the homeowner’s life a little more miserable by dangling the possibility of doing a short sale in front of them before ultimately making a settlement demand so unreasonable that the owner would finally just walk away out of frustration.

A year ago, I wondered whether the acronoym BofA really stood for “Bank of Anxiety,” for that’s the state of mind most short sellers found themselves in for months and month on end.

Fast forward to the present

Well, as they say, that was then and this is now. Read the rest of this entry »

Written by Rod Herman | Discussion: No Comments »