The government has expanded its Home Affordable Modification Program (HAMP) to include provisions and incentives for loan servicers to allow short sales or deeds-in-lieu as positive options for eligible homeowners in default who wish to avoid foreclosure. The new program is called Home Affordable Foreclosure Alternatives (HAFA).
Participation in HAFA cannot save the homeowner from losing his or her property, but it can eliminate the effects of a foreclosure on the homeowner’s credit. Financial incentives for participation in the program include a $1,500 servicing bonus for lenders and a $3,000 relocation bonus for displaced homeowners.
HAFA is designed for homeowners who have applied to HAMP for assistance but have had no success with their loan modification program. To participate in HAFA, homeowners must still meet HAMP’s eligibility criteria (principal residence, first-lien mortgage, serious delinquency, unpaid balance under $729,750, and a mortgage payment over 31 percent of gross income).
Homeowners must be considered for HAFA within 30 days if they cannot meet HAMP’s requirements or if they specifically request consideration for HAFA. However, the homeowner only has 14 days to respond to a written notice that HAFA may be available to them, giving the lender time to meet their 30-day deadline.
As with other short sales and deeds-in-lieu, the lender or loan servicer of the primary mortgage must approve of the transaction and conduct their own independent appraisal. Under HAFA, however, they must also agree to accept the proceeds from the sale of the house as payment in full, waiving their right to collect the balance of the loan from the homeowner.
An article in the Wall Street Journal this week reported that sales of existing homes declined in June while inventory rose. This is a result of the end of the $8000 federal tax credit on April 30, 2010. Many first time buyers rushed to buy homes to take advantage of the credit. As inventory increases, prices decline.
In Dublin Ranch we have seen inventory increase both in June and July. It is still relatively low compared to other areas though.
One of the bright spots today is the low interest rate. Last week it was 4.56% for a 30 year fixed rate mortgage. It is not only a great time to buy a home but it’s a great time to refinance your mortgage. We can refer you to a good lender if you need one.
Why are the prices for short sales of single family homes in Dublin Ranch so much lower, as much as $50,000, than homes that are not short sales? I am referring to homes that are on the same street and even the same model. That is a very good question and we are having a hard time finding the answer. Our job as your trusted community Realtors is to sell your house for highest price that the market allows. We sold a short sale this year in the Verona neighborhood of Dublin Ranch. It sold for the highest price, $866,000 in the neighborhood since the model sold for $875,000 in February of 2009.
The practice of listing short sales for substantially under the market is affecting all of the home sales in Dublin Ranch. The appraisers are using these sales for comparables of every property sold. It is our responsibility as both your community realtors and your neighbors, to sell all of the homes for the price the market allows. We are not interested in selling homes at a low price to sell it quickly or to sell it ourselves.
How do we market a short sale to realize the highest price? We do the same thing we do with every one of our listings. We have the house cleaned from top to bottom. We stage the house so it looks like a model home. Our professional photographer takes the same photos we use for any listing so that the house looks the best it can on the multiple web sites we use to market your home. More importantly, we expose the home to the entire market, encouraging the maximum number of buyers and agents to view the house.
There was a short sale recently listed in The Pinnacles. One of our clients, a current Dublin Ranch resident, wanted to see the house. The listing agent put it on the market and said in the confidential remarks that the house could not be shown until mid August. In an email he told us that the bank required that the house be listed on the MLS for a minimum number of days and that the seller was in the process of moving. Eight days later the house is pending and he is representing the buyer. The only one who will benefit from this is the agent. Who knows what the house would have sold for if it had been exposed to the market? I can’t tell you how many times I have seen this same thing. It is affecting all of our home values.
If you need to short sale your home, please call us. We have your best interest at heart as well as your neighbors and your community. Our track record speaks for itself. We have closed over 20 short sales in the last three years.
Real Estate Agents are not paid by the number of web sites we place a house on or the number of directional arrows and Open House signs we own. Internet marketing and data entry into the MLS is only a small part of what we do. We are paid for guiding the seller through the entire selling process – properly helping the seller prepare and “stage” the house for the market; advising on the proper pricing to attract the most buyers; spearheading the marketing and promotion… not only to potential buyers, but to all the other agents in the MLS to get them to show our seller’s house over all the other choices; getting feedback for the seller during the time on the market to determine if adjustments need to be made; being there in the seller’s corner at any and all contract negotiations to make sure that the offer that is accepted or countered best represents the seller’s needs and desires in the transaction; monitoring the 40 or more people (inspectors, appraiser, loan officer, underwriting staff, title company staff, etc.) who just got hired once a contract gets ratified… to ensure everything is going smoothly all the way to closing. This is the real job description of a listing agent!
Dublin single family homes built after 1998 for June 2010
Short sales- 4
Average days on the market- 20
Pending Sales- 51
Short sales- 21
Average days on market- 28
Short sales- 4
Average days on market- 17
The market has slowed down since school ended. We see that every year when families go on vacation. There are fewer short sales and REOs currently listed, only 17%. Pending are 50% and solds are 33%. Since the banks take so long to approve the sales the pendings will be a larger percentage