Realtor Coaching & Training: Tim
How much underwater does a homeowner have to be before they walk?
In other words…is there a magic number…a number that once reached triggers a strategic default or ‘walk-away’?
Turns out there is.
That number is $70,000 or 25%.
From Diana Olicks blog:
With more and more evidence of more and more borrowers walking away from their mortgage commitments due to overwhelming negative equity, I got to thinking: What exactly is the monetary tipping point for a homeowner, someone occupying the home, hanging pictures on the walls, perhaps raising their kids in the second and third bedrooms, going to the neighborhood block parties…what exactly is the negative equity number that makes them say, “We’re outta here.”
Negative $70,000.
At least according to First American Core Logic. FACL put out its quarterly negative equity report today, showing that the number of “underwater” loans is rising, from 10.7 million in Q3 to 11.3 million in Q4 or 24 percent of all borrowers from 23 percent.
What interested me was a paragraph lower down in the report:
“The rise in negative equity is closely tied to increases in pre-foreclosure activity and is a major factor in changing homeowner default behavior. Once negative equity exceeds 25 percent, or the mortgage balance is $70,000 higher than the current property values, owners begin to default with the same propensity as investors.”
This behavior is apparently measured by the actual data, that is, the default rates of investors vs.. owners and comparing that to loan-to-value ratios.
Agents, don’t think for a second that homeowners doing strategic defaults is going to be a short term problem.
The mortgage industry/ mortgage lenders are living in fear that this trend will become viral. For example, if you hear your neighbor is doing a strategic default you will at least consider doing one yourself.
We are not advocating agents telling their homeowners to strategically default. We ARE advocating agents leaning how to help homeowners who choose to strategically default to short sale vs allowing the home to go into foreclosure. The advantages to the homeowners for doing a short sale massively out weigh a foreclosure….The New Treasury Departments HAFA Guidelines that take effect April 5th will be the next step in streamlining the short sale process.
Bottom line…
Learn how to become a HREU CDPD (Certified Distressed Property Designation) agent. Watch the FREE Agent Short Sale Secrets video and grab your FREE Agent Short Sale Secrets book.
I asked for a little deeper explanation from their economist, Mark Fleming.
“The closing of the gap between owners and investors represents the change in owners behavior because up to that point investors default at higher rates, but beyond that point owners propensity to default increases to nearly match that of investors. It’s not necessarily strategic default – I don’t even like that term because it can’t be identified – but I would characterize it as the behavior becoming more rational or calculating. Put another way, when someone is 25% or on average $70k in the hole, they know they will not climb out of that hole for some time and they figure that they can default and repair their damaged credit while saving money faster than they can ride out the price recovery.”
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Freddie Mac is buying back the loans they have sold off to investors…when the borrower has missed 4 payments.
Here is how the process traditionally works:
Home buyer needs a mortgage——-> Loan Officer who works for ABC Mortgage originates a Fannie Mae mortgage for buyer/ borrower. ——–> ABC Mortgage has to follow the Fannie Mae lending guidelines in order for the loan to be a Fannie Mae loan. ———-> ABC Mortgage originates and closes the loan for the buyer. ———> ABC Mortgage becomes the servicer for the new FHA Mortgage. They collect the payments etc. ————> Loan is sold off to the secondary market.
Obviously, this is an over simplification. But, this is the process. Now, the problem comes in when ABC Mortgage didn’t follow the FHA Lending guidelines and issued a mortgage to a borrower who didn’t truly qualify. If the loan goes bad (4 payments) because ABC Mortgage’s not following the rules…then the Fannie and Freddie will force the originator (ABC) to literally buy the loan back. Remember, this is a ‘non-performing’ loan…no money is being collected.
(Lenders, feel free to post comments if my details are wrong)
We have also heard that Fannie Mae has hired hundreds of new auditors to ‘audit’ mortgages originated over the last 3-5 years. When they discover the originator (as in the back that originated the loan….) issued a mortgage and didn’t follow the Fannie guidelines…the originator is going to be forced to buy back the loan.
Think about all of this for a moment….all the flaky origination that has happened over the last few years may result in the originating mortgage companies actually being forced to buy back the loan they sold to Fannie Mae! How many of these lenders can afford to cover these bad loans?
Here is the story from CNBC.com
Government controlled mortgage finance company Freddie Mac says it will buy back troubled loans contained in securities it has already sold to investors.
The McLean, VA-based company said Wednesday it would repurchase mortgage loans in which borrowers have missed at least four months of payments. It did not disclose how much it would spend.
Freddie Mac guarantees the mortgage securities it sells. The company said buying the delinquent loans back would cost less than making those guarantee payments.
Freddie Mac and sibling company Fannie Mae have been run under tight government oversight since they almost collapsed in September 2008. They have required $111 billion in federal aid to stay afloat.
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Harris Real Estate University Students…as we predicted, strategic defaults are now moving to center stage.
As millions of homeowners find themselves underwater in their home loans many are turning to a ’strategic default’ as their solution. Agents, be prepared for what is coming next. Understand that in your market more homeowners will be considering a strategic default. Help the economy…help your community…and help the homeowners to avoid foreclosure. As you (hopefully) know by now HREU has declared 2010 the Year of the Short Sale. The banks, the government, real estate brokers (finally)…and your real estate clients will expect you to know how to do short sales. Watch the FREE Agent Short Sale Secrets video and grab your FREE Agent Short Sale Secrets book. You can enroll now to become a HREU CDPD for only $97.
In 2006, Benjamin Koellmann bought a condominium in Miami Beach. By his calculation, it will be about the year 2025 before he can sell his modest home for what he paid. Or maybe 2040.
“People like me are beginning to feel like suckers,” Mr. Koellmann said. “Why not let it go in default and rent a better place for less?”
After three years of plunging real estate values, after the bailouts of the bankers and the revival of their million-dollar bonuses, after the Obama administration’s loan modification plan raised the expectations of many but satisfied only a few, a large group of distressed homeowners is wondering the same thing.
New research suggests that when a home’s value falls below 75 percent of the amount owed on the mortgage, the owner starts to think hard about walking away, even if he or she has the money to keep paying.
In a situation without precedent in the modern era, millions of Americans are in this bleak position. Whether, or how, to help them is one of the biggest questions the Obama administration confronts as it seeks a housing policy that would contribute to the economic recovery.
“We haven’t yet found a way of dealing with this that would, we think, be practical on a large scale,” the assistant Treasury secretary for financial stability, Herbert M. Allison Jr., said in a recent briefing.
The number of Americans who owed more than their homes were worth was virtually nil when the real estate collapse began in mid-2006, but by the third quarter of 2009, an estimated 4.5 million homeowners had reached the critical threshold, with their home’s value dropping below 75 percent of the mortgage balance.
They are stretched, aggrieved and restless. With figures released last week showing that the real estate market was stalling again, their numbers are now projected to climb to a peak of 5.1 million by June — about 10 percent of all Americans with mortgages.
“We’re now at the point of maximum vulnerability,” said Sam Khater, a senior economist with First American CoreLogic, the firm that conducted the recent research. “People’s emotional attachment to their property is melting into the air.”
Suggestions that people would be wise to renege on their home loans are at least a couple of years old, but they are turning into a full-throated barrage. Bloggers were quick to note recently that landlords of an 11,000-unit residential complex in Manhattan showed no hesitation, or shame, in walking away from their deeply underwater investment.
“Since the beginning of December, I’ve advised 60 people to walk away,” said Steve Walsh, a mortgage broker in Scottsdale, Ariz. “Everyone has lost hope. They don’t qualify for modifications, and being on the hamster wheel of paying for a property that is not worth it gets so old.”
Mr. Walsh is taking his own advice, recently defaulting on a rental property he owns. “The sun will come up tomorrow,” he said.
The difference between letting your house go to foreclosure because you are out of money and purposefully defaulting on a mortgage to save money can be murky. But a growing body of research indicates that significant numbers of borrowers are declining to live under what some waggishly call “house arrest.”
Using credit bureau data, consultants at Oliver Wyman calculated how many borrowers went straight from being current on their mortgage to default, rather than making spotty payments. They also weeded out owners having trouble paying other bills. Their estimate was that about 17 percent of owners defaulting in 2008, or 588,000 people, chose that option as a strategic calculation.
Some experts argue that walking away from mortgages is more discussed than done. People hate moving; their children attend the neighborhood school; they do not want to think of themselves as skipping out on a debt. Doubters cite a Federal Reserve study using historical data from Massachusetts that concludes there were relatively few walk-aways during the 1991 bust.
The United States Treasury falls into the skeptical camp.
“The overwhelming bulk of people who have negative equity stay in their homes and keep paying,” said Michael S. Barr, assistant Treasury secretary for financial institutions.
It would cost about $745 billion, slightly more than the size of the original 2008 bank bailout, to restore all underwater borrowers to the point where they were breaking even, according to First American.
Using government money to do that would be seen as unfair by many taxpayers, Mr. Barr said. On the other hand, doing nothing about underwater mortgages could encourage more walk-aways, dealing another blow to a fragile economy.
“It’s not an easy area,” he said.
Walking away — also called “jingle mail,” because of the notion that homeowners just mail their keys to the bank, setting off foreclosure proceedings — began in the Southwest during the 1980s oil collapse, though it has never been clear how widespread it was.
In the current bust, lenders first noticed something strange after real estate prices had fallen about 10 percent.
An executive with Wachovia, one of the country’s biggest and most aggressive lenders, said during a conference call in January 2008 that the bank was bewildered by customers who had “the capacity to pay, but have basically just decided not to.” (Wachovia failed nine months later and was bought by Wells Fargo. )
With prices now down by about 30 percent, underwater borrowers fall into two groups. Some have owned their homes for many years and got in trouble because they used the house as a cash machine. Others, like Mr. Koellmann in Miami Beach, made only one mistake: they bought as the boom was cresting.
It was April 2006, a moment when the perpetual rise of real estate was considered practically a law of physics. Mr. Koellmann was 23, a management consultant new to Miami.
Financially cautious by nature, he bought a small, plain one-bedroom apartment for $215,000, much less than his agent told him he could afford. He put down 20 percent and received a fixed-rate loan from Countrywide Financial.
Not quite four years later, apartments in the building are selling in foreclosure for $90,000.
“There is no financial sense in staying,” Mr. Koellmann said. With the $1,500 he is paying each month for his mortgage, taxes and insurance, he could rent a nicer place on the beach, one with a gym, security and valet parking.
Walking away, he knows, is not without peril. At minimum, it would ruin his credit score. Mr. Koellmann would like to attend graduate school. If an admission dean sees a dismal credit record, would that count against him? How about a new employer?
Most of all, though, he struggles with the ethical question.
“I took a loan on an asset that I didn’t see was overvalued,” he said. “As much as I would like my bank to pay for that mistake, why should it?”
That is an attitude Wall Street would like to encourage. David Rosenberg, the chief economist of the investment firm Gluskin Sheff, wrote recently that borrowers were not victims. They “signed contracts, and as adults should also be held accountable,” he wrote.
Of course, this is not necessarily how Wall Street itself behaves, as demonstrated by the case of Stuyvesant Town and Peter Cooper Village. An investment group led by the real estate giant Tishman Speyer recently defaulted on $4.4 billion in debt that it had used to buy the two apartment developments in Manhattan, handing the properties back to the lenders.
Moreover, during the boom, it was the banks that helped drive prices to unrealistic levels by lowering credit standards and unleashing a wave of speculative housing demand.
Mr. Koellmann applied last fall to Bank of America for a modification, noting that his income had slipped. But the lender came back a few weeks ago with a plan that added more restrictive terms while keeping the payments about the same.
“That may have been the last straw,” Mr. Koellmann said.
Guy D. Cecala, publisher of Inside Mortgage Finance magazine, says he does not hear much sympathy from lenders for their underwater customers.
“The banks tell me that a lot of people who are complaining were the ones who refinanced and took all the equity out any time there was any appreciation,” he said. “The banks are damned if they will help.”
Joe Figliola has heard that message. He bought his house in Elgin, Ill., in 2004, then refinanced twice to get better terms. He pulled out a little money both times to cover the closing costs and other expenses. Now his place is underwater while his salary as circulation manager for the local newspaper has been cut.
“It doesn’t seem right that I can rent a place somewhere for half of what I’m paying,” he said. “I told my bank, ‘Just take a little bite out of what I owe. That would ease me up. Isn’t that why the president gave you all this money?’ ”
Bank of America did not agree, so Mr. Figliola, who is 48, sees no recourse other than walking away. “I don’t believe this is the right thing to do,” he said, “but I’ve got to survive.”
This story originally appeared in the The New York Times
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Happy Martin Luther King Day.
Harris Real Estate University celebrates one of our nations greatest leaders. Here is a video and the transcription of MLK’s many historic contributions…
“I have a dream!”
Transcription of MLK’s, I Have A Dream historic speech.
I am happy to join with you today in what will go down in history as the greatest demonstration for freedom in the history of our nation.
Five score years ago, a great American, in whose symbolic shadow we stand today, signed the Emancipation Proclamation. This momentous decree came as a great beacon light of hope to millions of Negro slaves, who had been seared in the flames of withering injustice. It came as a joyous daybreak to end the long night of their captivity.
But one hundred years later, the Negro still is not free. One hundred years later, the life of the Negro is still sadly crippled by the manacles of segregation and the chains of discrimination. One hundred years later, the Negro lives on a lonely island of poverty in the midst of a vast ocean of material prosperity. One hundred years later, the Negro is still languished in the corners of American society and finds himself an exile in his own land. And so we’ve come here today to dramatize a shameful condition.
In a sense we have come to our nation’s capital to cash a check. When the architects of our republic wrote the magnificent words of the Constitution and the Declaration of Independence, they were signing a promissory note to which every American was to fall heir. This note was a promise that all men, yes, black men as well as white men, would be guaranteed the unalienable rights of life, liberty, and the pursuit of happiness. It is obvious today that America has defaulted on this promissory note, insofar as her citizens of color are concerned. Instead of honoring this sacred obligation, America has given the Negro people a bad check, a check which has come back marked “insufficient funds.”
But we refuse to believe that the bank of justice is bankrupt. We refuse to believe that there are insufficient funds in the great vaults of opportunity of this nation. And so we have come to cash this check, a check that will give us upon demand the riches of freedom and the security of justice.
We have also come to this hallowed spot to remind America of the fierce urgency of Now. This is no time to engage in the luxury of cooling off or to take the tranquilizing drug of gradualism. Now is the time to make real the promises of democracy. Now is the time to rise from the dark and desolate valley of segregation to the sunlit path of racial justice. Now is the time to lift our nation from the quicksands of racial injustice to the solid rock of brotherhood. Now is the time to make justice a reality for all of God’s children.
It would be fatal for the nation to overlook the urgency of the moment. This sweltering summer of the Negro’s legitimate discontent will not pass until there is an invigorating autumn of freedom and equality. Nineteen sixty-three is not an end but a beginning. Those who hope that the Negro needed to blow off steam and will now be content will have a rude awakening if? the nation returns to business as usual. There will be neither rest nor tranquility in America until the Negro is granted his citizenship rights. The whirlwinds of revolt will continue to shake the foundations of our nation until the bright day of justice emerges.
But there is something that I must say to my people who stand on the warm threshold which leads into the palace of justice. In the process of gaining our rightful place we must not be guilty of wrongful deeds. Let us not seek to satisfy our thirst for freedom by drinking from the cup of bitterness and hatred. We must ever conduct our struggle on the high plane of dignity and discipline. We must not allow our creative protest to degenerate into physical violence. Again and again we must rise to the majestic heights of meeting physical force with soul force.
The marvelous new militancy which has engulfed the Negro community must not lead us to a distrust of all white people, for many of our white brothers, as evidenced by their presence here today, have come to realize that their destiny is tied up with our destiny. And they have come to realize that their freedom is inextricably bound to our freedom. We cannot walk alone.
And as we walk, we must make the pledge that we shall always march ahead. We cannot turn back. There are those who are asking the devotees of civil rights, “When will you be satisfied?” We can never be satisfied as long as the Negro is the victim of the unspeakable horrors of police brutality. We can never be satisfied as long as our bodies, heavy with the fatigue of travel, cannot gain lodging in the motels of the highways and the hotels of the cities. We cannot be satisfied as long as a Negro in Mississippi cannot vote and a Negro in New York believes he has nothing for which to vote. No, no, we are not satisfied and we will not be satisfied until justice rolls down like waters and righteousness like a mighty stream.
I am not unmindful that some of you have come here out of great trials and tribulations. Some of you have come fresh from narrow jail cells. Some of you have come from areas where your quest for freedom left you battered by the storms of persecutions and staggered by the winds of police brutality. You have been the veterans of creative suffering. Continue to work with the faith that unearned suffering is redemptive. Go back to Mississippi, go back to Alabama, go back to South Carolina, go back to Georgia, go back to Louisiana, go back to the slums and ghettos of our northern cities, knowing that somehow this situation can and will be changed. Let us not wallow in the valley of despair, I say to you today, my friends. And so even though we face the difficulties of today and tomorrow, I still have a dream. It is a dream deeply rooted in the American dream.
I have a dream that one day this nation will rise up and live out the true meaning of its creed: We hold these truths to be self-evident that all men are created equal.
I have a dream that one day on the red hills of Georgia the sons of former slaves and the sons of former slave owners will be able to sit down together at the table of brotherhood.
I have a dream that one day even the state of Mississippi, a state sweltering with the heat of injustice, sweltering with the heat of oppression, will be transformed into an oasis of freedom and justice.
I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character. I have a dream today!
I have a dream that one day, down in Alabama, with its vicious racists, with its governor having his lips dripping with the words of interposition and nullification; one day right down in Alabama little black boys and black girls will be able to join hands with little white boys and white girls as sisters and brothers. I have a dream today!
I have a dream that one day every valley shall be exalted, and every hill and mountain shall be made low, the rough places will be made plain, and the crooked places will be made straight, and the glory of the Lord shall be revealed and all flesh shall see it together.
This is our hope. This is the faith that I will go back to the South with. With this faith we will be able to hew out of the mountain of despair a stone of hope. With this faith we will be able to transform the jangling discords of our nation into a beautiful symphony of brotherhood. With this faith we will be able to work together, to pray together, to struggle together, to go to jail together, to stand up for freedom together, knowing that we will be free one day. And this will be the day, this will be the day when all of God’s children will be able to sing with new meaning, “My country ’tis of thee, sweet land of liberty, of thee I sing. Land where my fathers died, land of the Pilgrim’s pride, from every mountainside, let freedom ring!” And if America is to be a great nation, this must become true.
And so let freedom ring — from the prodigious hilltops of New Hampshire.
Let freedom ring — from the mighty mountains of New York.
Let freedom ring — from the heightening Alleghenies of Pennsylvania.
Let freedom ring — from the snow-capped Rockies of Colorado.
Let freedom ring — from the curvaceous slopes of California.
But not only that.
Let freedom ring — from Stone Mountain of Georgia.
Let freedom ring — from Lookout Mountain of Tennessee.
Let freedom ring — from every hill and molehill of Mississippi, from every mountainside, let freedom ring!
And when this happens, when we allow freedom to ring, when we let it ring from every village and every hamlet, from every state and every city, we will be able to speed up that day when all of God’s children, black men and white men, Jews and Gentiles, Protestants and Catholics, will be able to join hands and sing in the words of the old Negro spiritual,
“Free at last, free at last.
Thank God Almighty, we are free at last.”
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Do Mortgage Loan Modifications work?
Is the Obama administrations 75 BILLION dollar ‘Home Affordable Modification Program’ (HAMP) doing anything to end the seemingly never ending foreclosure crisis?
Will mortgage loan modification’s end the housing crisis?
Read this…watch the video….and you tell me!
Here are the facts:
1) 78 banks and servicers in the HAMP, which represent 85 percent of the total mortgage market, have just over 3 million loans on their books that are at least 60 days past due. So they sent out notices to those 3 million borrowers requesting more information.
2) A lot of those borrowers (as high as 50 percent) didn’t respond, according to the banks. Some don’t even live in the houses anymore. Gone.
3) 1,032,837 were offered modifications. But only 759,058 modifications were started. Why? Because a lot of the borrowers just didn’t want them. They would rather try to sell the house or go into foreclosure and walk away. Remember, some borrowers are so underwater on their loans, that they will never see equity again, so why bother making any modification payment, even if it is affordable.
4) Of the 759,058 modifications started, 697,026 are still in the three month trial phase.
AGENTS: As you know we have been offering short sale training for years and years now. We were the first national coaching company to teach agents how to do short sales…and we are by far the largest. Thousands of agents have received their HREU CDPD* (Certified Distressed Property Designation). We have made it easy for you to learn everything you need to know to easily list and sell short sales. Watch the FREE Short Sale Secrets video and grab your FREE Short Sale Book. If you would like to go ahead and enroll now for only $97 call 1-866-422-9497 or sign up here.
5) Treasury reports that 31,382 trial modifications are now permanent. It also reports, well I had to do the math because they didn’t put it on the report, but a spokesperson did independently confirm, that 30,650 modifications were disqualified.
6) Treasury officials noted the 31,000 number in the release: “the report shows that servicers have only converted 31,382 modifications to the permanent phase.”
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Do you actually believe that the housing markets have reached bottom? (I know that some of you do…)
Please consider this.
If you DO believe that the housing markets have reached bottom (and they haven’t) you won’t be prepared for what is happening next. You may be lulled into complacency and when the next waves of foreclosures hit you will be taken by surprise.
We have been telling you…warning you…heck pleading with you to learn the skills that this market requires.
STOP waiting for the markets to ‘return to normal’…..agents, this is the new normal. THIS market is the market that we will be in for years….don’t be afraid, be prepared.
Remember, this market is about agents who have the mindset of being of service and the skillset to serve.
Lets take a look at Las Vegas. Yesterday a blog reader asked me this question:
“Where are all of these foreclosed properties in Las Vegas?”
So, lets take a look at what is happening in Vegas.
Through June, financial institutions acquired 6,472 real estate-owned properties and sold 11,254, the broker-owner of Residential Resources reported. Las Vegas-based SalesTraq showed REO inventory declining from nearly 16,000 in January to 13,200 in June.
The banks’ voluntary foreclosure moratorium, combined with increased investor activity in Las Vegas, and the $8000 first time buyer tax credit have resulted in a home sale surge homes listed for less than $250,000. This increase in activity has allowed many agents (investors and buyers) to believe that the markets have ‘reached bottom’ and the worst in depreciation is behind us….
That’s about to change.
After the moratorium was lifted in March, bank-owned acquisitions jumped 55 percent in May and nearly 40 percent in June.
Its been reported that Fannie Mae and Freddie Mac foreclosures could increase by 400 percent to 500 percent by the end of the year. In a public statement the Fannie and Freddie has reported that they have well over 100,000 already foreclosed on homes being listed for sale soon.
Agents, learn NOW how-to become a REO Listing Agent. Don’t believe for a second that the REO listings are in anyway ‘locked up’. There is still time for YOU to become a REO listing agent. Watch the FREE Agent REO Secrets video now and then download your FREE how-to list REOs book.
Another report recently published estimated that there will be 13,000,000 foreclosures over the next 5 years alone. To support this prediction a recently released report showing that the there are nearly 3,000,000 homeowners who are 60 days late. Why is this important? 90%+ of the time when a homeowner misses 2 payments they are headed for a foreclosure sale (or short sale).
Although the first two waves of foreclosure losses came from subprime loans and borrowers who defaulted when their adjustable-rate mortgages reset — many of them speculators — the next wave will be prime loans, said Whitney Tilson, principal of New York-based investment firm T2 Partners.
Watch this video for more details about the Tilson’s report...
In a recent interview with the Review-Journal Tilson stated:
“These defaults will be due to job losses and home price declines that have left one-fourth of homeowners “underwater,” owing more on their mortgage than their house is worth.
What we’re seeing in housing is prime borrowers and people who weren’t speculating now starting to default,” Tilson told the Review-Journal. “There are sobering implications for expected defaults, foreclosures and auctions in 2009 and beyond, which promise to drive home prices down further.”
June housing data for Las Vegas alone showed 12,545 properties for sale and 12,821 properties in escrow, awaiting closing. Of those for sale, 3,266 are bank-owned and 5,296 are short sales, homes offered at less than the mortgage balance and requiring lender approval. In other words, more than 50% are Short Sales and REOs.
The actual number of homes available for sale in Las Vegas, including foreclosures and short sales, is much smaller than the 20,613 units reported by the Greater Las Vegas Association of Realtors, industry observers say.
Las Vegas-based business advisory firm Applied Analysis is showing 13,028 properties listed as available for sale, down 9,224 units, or 41.5 percent, from a year ago. About 5,100 units are identified as short sales, which leaves about 7,900 units available for sale in a normal transaction.
According to CNBC 83% of ALL homeowners in Las Vegas are UPSIDE DOWN. In other words, if those homeowners need to sell they must list with an agent who knows how to list and sell short sales. Clearly, short sales are the make money now opportunity. Watch the FREE Agent Short Sale Secrets video…and grab the Short Sale Secrets crash course book.
The number of units in contracted status — either contingent or pending — has risen dramatically in recent weeks to 13,456, Applied Analysis reported. Contingent sales (9,681) are contingent upon some other action taking place, while pending sales (3,775) are awaiting customary closing procedures.
Las Vegas continues to rank as one of the nation’s most distressed areas for foreclosures.
For the first six months, Clark County foreclosures rose 84.3 percent to 23,588 from 12,800 in the year-ago period, Sacramento, Calif.-based investment advisory firm Foreclosures.com reported. Preforeclosures increased 34.8 percent to 47,467 from 30,922 a year ago.
Estimates for the next wave of foreclosures in Las Vegas range from 20,000 to 30,000 homes.
The Obama administration’s $75 billion Making Homes Affordable Plan and lenders’ commitments to loan modifications have accomplished little to stem the tide of foreclosures, statistics show.
Since 2007, fewer than 500,000 loan modifications have been completed, according to the Center for Responsible Lending. Meanwhile, 60-day mortgage delinquencies surpassed 2.5 million and total foreclosure starts are approaching 3.5 million.
Realtors, re-read those last numbers. THOSE are the potential Short Sales and REO Listings…..you don’t still believe that housing has reached bottom…do you? Learn how to become a REO Listing Agent. The greatest wave of foreclosures is still coming. Learn NOW how to become a REO Listing Agent. Watch the FREE Agent REO Secrets video then download the FREE How-To List REOs Book!
Keith Ernst, the center’s director, in testimony before Congress, said that 1.5 million homes have already been lost to foreclosure, and that’s just the tip of the iceberg. Another 13 million foreclosures are expected over the next five years.
Again from the Review-Journal, Egbert Oostburg of San Diego-based Project HomeWatch said “banks are also holding back REO inventory in California and Arizona. It’s that hidden wave you keep hearing about. When is it coming? That’s the question,” he said. “We’re going to hit bottom eventually, but as long as the state and federal government put in these false bottoms, we’re not going to move forward and reach the true bottom.”
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Do you follow a schedule?
You know, a written down schedule whereby you are working daily on what you should be doing, when you should be doing it?
HREU Top Producers know that they must follow a schedule designed around doing what matters most every day. The challenge for most of us is knowing exactly what matters most. After all, we must jump whenever our clients tell us to or we may lost their business….right? Are you controlling your business or is it controlling you? Remember, if you don’t follow a schedule, someone or something else will always dictate how you spend your time.
Not so fast! You don’t have to be a ‘pop-tart Realtor’…popping up whenever there’s a fire to put out or if someone calls and has to talk with you right this second! The simple fact is that your lack of control over your schedule isn’t due to your client’s demands but, your lack of professionalism. Sorry if that offends you. Before you jump off this page allow me to make a point….
Do professionals follow schedules? For example, lets assume you needed an appointment with the best doctor in town. This doctor was well known for being the best of the best. It makes sense because this doctor was so desirable that you would have to make an appointment and wait your turn to see him. You see, we are conditioned to expect service professionals who are the best to be professional and follow a schedule. You can’t just call that doctor up and let him or her know that you’ll be right over and expect them to wait for you to show up. Instead, your expectation is that they will let you know when THEY can meet with you, not the opposite. Imagine how you’d feel about that same doctor if they said, ‘ok, you can come any time…I’m not doing anything else.’ Wouldn’t that make you nervous?
How about you? When a buyer calls you and asks to see a house do you immediately (or almost immediately) pop on over to show the buyer the house? Seriously, if your phone rang right now…as you are reading this post…asking to see a house….would you rush out the door to show him the property? Before you’d even pre-qualified them by asking simple, scripted questions?
If you are like 99.9% of the agents out there you WOULD pop over to show the buyer the property. What message is this behavior sending to the buyer? Will that buyer see you as a the busy, highly professional and desirable Realtor or some Agent hack who has not control over his time?
Its OK and even smart to tell buyers (and sellers) that you follow a schedule.
Back to ‘what matters most’. I assume that you are not running a real estate non-profit. I would certainly hope that your desire is to make money (and lots of it). Remember, the more people you help at a high level the more money you will make. Always.
Your new schedule puts what matters most first:
1) Lead Generation.
2) Lead Follow-Up.
3) Appointments.
4) Presenting.
5) Pre-qualifying.
6) Negotiating. (once you have contracts)
Tomorrow…we give you the schedule!
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