When Will The Banks Release The Shadow Inventory? NOW…Are YOU Ready?
Million's Of Bank 'Shadow Listings'
What is the #1 question agents ask Harris Real Estate University?
“When will the banks release their ‘Shadow Inventory’ homes to the market..”
Harris Real Estate University students have been preparing for the massive waves of bank REOs for nearly 2 years…and…get ready…the first of many waves are hitting NOW.
So the question is, have YOU waited too long to become a REO Listing Agent? Have you waited to long and missed one of the best ways to make money in real estate? The answer is NO. Matter of fact, you ARE in the right place at the right time! Now is the perfect time for you to become a REO Listing Agent. Watch the FREE Agent REO Secrets video and grab your FREE Agent REO Secrets book.
What happens in Vegas…no longer stays in Vegas. Especially when we are talking about real estate. In Las Vegas the banks are finally removing their inventory from the shadows…in a simply massive way. In 2010 alone…in Vegas….6000 bank controlled REOs to be listed (and sold)! Expect the banks to be doing the same thing in YOUR market…NOW.
Here’s the new story…
Bank of America expects to release about 6,000 foreclosed properties into the Nevada housing market in 2010, or about 500 a month, an executive with the bank said Wednesday.
It’s part of the so-called “phantom inventory” of foreclosed homes being held by banks as they work out loan modifications and negotiate short sales, two of the more desirable alternatives to foreclosure.
‘Phantom Inventory’ = Shadow Inventory. (very spooky names…eludes to something sinister.)
“Where are these homes? Banks are trying to convert some of them to short sales, but they’re holding on to houses in lieu of the market stabilizing and it has,” Kiernan said. “But every trend says there’s a second tsunami coming. These houses are somewhere. They’re not disappearing.”
Yep…thats true. There will be significant increases in foreclosures and eventual REOs…no question.
Throughout the country, estimates of homes being taken back by Bank of America range from 11,000 to 14,000 a month in the early part of this year to 29,000 to 35,000 by November and December, said John Ciresi, vice president and portfolio manager for Bank of America in Towson, Md.
Thats ONE BANK….now, take those numbers and multiply by ALL the lenders. BIG numbers.
The system became “clogged” by a voluntary moratorium on foreclosures while banks met the requirements of President Obama’s Making Home Affordable mortgage plan program and by state legislation requiring mediation before banks can start the foreclosure process, Ciresi said at a panel discussion sponsored by the Nevada chapter of the National Association of Hispanic Real Estate Professionals.
Some homes are being held back from closing escrow because of Bank of America’s fiduciary relationship with investors, he said.
“Let’s say you have a $120,000 property and you have a $110,000 offer from a cash buyer and a $120,000 offer on a VA loan,” Ciresi said. “Do I take the higher offer and hope financing is approved?”
ReMax Pros Realtor Tim Kelly Kiernan said the REO inventory in Las Vegas is dwindling, even though 200 homes a day are going into default.
Adam Fenn, president of Merit Asset Services in Henderson, said there’s talk on Wall Street about a “double-dip recession,” even as some data point to economic recovery. People are frustrated in their efforts to buy a home and there’s not enough capital out there to finance purchases, he said.
“It’s kind of scary,” Fenn said. “When you go for the highest and best offer, you get people bidding too high and the property ends up going back on the market. I think there’s going to be a double-dip in values. They’re going to go up and then come back down.”
Ciresi anticipates a rise in the foreclosure rate in 2010 because 60 percent of loan modifications failed and went into foreclosure. It’s a combination of property devaluation and people losing their jobs, he said.
Bank of America is getting 40,000 new offers a month on short sales, or homes offered for less than the mortgage balance, Ciresi said. It’s a difficult process, he said.
Short sales for most homeowners headed for Foreclosure IS the solution. With the release of the Treasury Departments New Short Sale Guidelines…its clear that Short Sales are now the solution for those homeowners who want to avoid a foreclosure. Learn the NEW ways to do short sales. Watch the FREE Agent Short Sale Secrets video..and grab the FREE Agent Short Sale Secrets book.
“Try to understand, we don’t have the title in a short sale. That makes it very difficult in a short sale versus an REO (real estate-owned) home,” he said.
Some banks are getting short sales done in as little as 30 days, said Steve Hawks, director of the National Association of Short Sale Professionals. They’re doing “cash for cooperation” deals, giving people $5,000 to leave the home in good condition.
“The average right now is four to six months, but I see an average of 90 days in 2010, except for a few institutions that have to answer to different investors,” Hawks said. “With half the country underwater (owing more than their home is worth), they’re going to make it easier for a short sale.”
Agreed. The ONLY way for slow the seemingly never ending waves of foreclosures is Short Sales. No question. Learn the new…proven ways to list and sell short sales. Watch the FREE Agent Short Sale Secrets video now..and download the FREE Agent Short Sale Secrets book.
He said 22 percent of mortgage defaults were “strategic defaults,” coming on homes that were underwater. Banks need to eliminate the hardship letter for short sales and consider anyone who falls behind on their payment, Hawks said.
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This is a question I think most agents should be asking themselves. I think the reason why a lot of them don’t make the jump is that they believe the current REO inventory won’t last and it’s just another wave until this wave passes. Although this may be true, I think there will always be waves, and the best way to make money in real estate, or any other profession for that matter, is to be adaptive. If there are an overwhelming amount of REO’s in your area, be an reo agent.
Well said..
[...] have yet to put on the market. I recently ran across a Tweet from @timandjulie a day or so ago and Tim and Julie Harris posted this article highlighting a report that Bank of America expects to release about 6,000 foreclosed properties [...]