Gina McKinley, ABR, CDPE, CRS ~ Chandler, Gilbert, & Mesa's #1 Expert

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By Gina McKinley October 18, 2008

There is a great need to tell the TRUTH about Short Sales and to let homeowner's know the "in's and out's" of Short Sales.

After reading Catherine Reagor's article this morning on the front page of the Arizona Republic, I decided to spread the Truth. If you haven't read Catherine's article on Short Sales, then PLEASE READ IT WITH A GRAIN OF SALT. (While it will sell newspapers, much of the information is inaccurate and adds to the public's confusion). If you missed the article, then click here to read it, but read with caution. Catherine's article includes "folklore, myth, and legend" points which I would like to dispute and get the REAL truth out....

· "Lenders, overwhelmed by a record number of mortgages in default and their own losses in the financial-market meltdown, are not negotiating with many borrowers seeking a short sale." This is absolutely false! The truth is, most real estate agents don't know how to negotiate with banks and would rather blame the banks than learn how the banks work and work the bank's system.

· "Many homeowners facing foreclosure wait too long before contacting their lenders." There is some partial truth here BUT a lot of the story is not being told...homeowners typically get lost in the bank's convoluted system when they try to contact their bank for help and in turn the homeowner thinks that they "waited too long to get help." If a homeowner wants to do a Short Sale, don't even bother calling the bank, contact your local real estate agent who is a Short Sale Specialist, and let them them talk to the bank on your behalf!

· More than 7,000 homeowners facing foreclosure in the Valley are trying to sell their homes through a process known as a short sale, according to Arizona Regional Multiple Listing Service data. Actually Catherine, you kind of got this one right, except that the true number of active, active with contingency and pending listings in the MLS that are marked as "Lender/Corporate Approval Required" or "Short Sale Approval Required" is 11,558 as of 11:35 AM on 10/18/08. (Please note: the correct marking in MLS for a Short Sale listings is "Short Sale Approval Required" but some agents are still using the old ARMLS coding of "Lender/Corporate Approval Required"

· "But less than 5 percent (of Short Sales) manage to sell before lenders seize their houses." Are you kidding me? Where did this number come from? Read one of Catherine's other points below...

· "There's no exact way to track short sales in Arizona. The best indicator is how many homes in pre-foreclosure sell before a foreclosure. In the Valley, only about 200 homes a month in pre-foreclosure sell before the lender takes them back, according to housing-data firm Information Market." If there's no "exact way" to track Short Sales in Arizona, then how can you make the point above that less than 5 percent of Short Sale homes sell before the lender forecloses. By running the figures on MLS, one would know that 887 of the total sales in September were Short Sales. Even I admit this number should be higher, but that's much greater than 5 percent. A good, qualified Short Sale agent should be closing on 90+ percent of their homes and losing less than 10 percent of them to foreclosure. I know that because I have actually closed 100% of my short sales. NOT ONE HAS BEEN LOST TO FORECLOSURE AS OF TODAY.

Here's the bottom line to the story. Catherine Reagor is not a bad person, she's just not qualified to speak as any sort of expert on Short Sales. As a matter of fact, a large percentage of the real estate agents in Arizona aren't qualified to talk about Short Sales either. It's true that Short Sales are the "Brain Surgery of Real Estate" as quoted. Before listening to the 97+ percent of people who can't even spell "short sell" please consult someone who does know about Short Sales. Check out our website for even more detailed information about short sales at www.locatearizonahomes.com/seller-short-sale-info.asp Over the next few entries I'd like to share with you some of the real success stories we're having and have had with our Short Sale listings and clients.

The RE/MAX Elite and Children's Miracle Network, Phoenix Children's Hospital Fund Raiser is right around the corner. Please join us Saturday, November 1st from Noon-3:00 p.m. at:

Old Chicago at Fulton Ranch

135 W. Ocotillo Road

Chandler, AZ 85248

Join us for an afternoon of FUN!

$12 for adults and $8 for children and includes:

♦ Pizza Buffet and Drinks

♦ Bounce House

♦ SWAT Robot

♦ Chandler Fire Department

Buy tickets for the Carnival Games, Dunk Tank and the Many Raffle Prizes!

Thank you for helping us help kids!

Support Phoenix Children's Hospital

Phoenix Children's Hospital is one of the ten largest children's hospitals

in the nation and offers world-class care in 40 sub-specialty fields of

pediatric medicine. Your contribution will support programs and services

that make the hospitalization easier for kids and their families. These

services are entirely funded by donations from the community.

During September, existing home sales in the greater Phoenix metro area increased a remarkable 81% year over year, bringing the number of transactions recorded last month to the highest level seen since June 2006 (near the peak of the housing bubble). Similar to recent months, this volume improvement continued to be stimulated by sharp declines in home prices and foreclosure activity, with Phoenix area median prices falling 28% year over year to $170,000. Compared to September 2005, when the median price stood at $260,000, prices have declined 35%.

* Inventory listings fell 6% year over year, but despite the increased sales activity, September's listed inventory level actually rose 2% sequentially from August. Specifically, listed inventory in Phoenix stood at 54,427 units, representing approximately 8.8 months of supply unadjusted for seasonality. Based on these data points, the Phoenix market appears to have reached a critical point in its local housing cycle, as large numbers of buyers are continuing to absorb the growing stream of heavily discounted foreclosures and bank repossessed properties - but inventory is not moving materially downward. Prices continue to slide because of the increasing mix of distressed homes, but the encouraging sign is that there are still buyers in the market with cash to invest - at the right price. Notably, Phoenix home purchases financed with cash comprised 17% of all sales this month, versus 11% a year ago.

* Moreover, with supply pressure from single-family housing starts at the lowest level since 1982, we believe the slightest sign that the level of new foreclosures and repossessions is beginning to wane could help fuel a rapid clearing of excess inventory and help stabilize Phoenix home prices sooner rather than later. In our view, we believe the government is likely to be increasingly proactive on this front.
Unfortunately, in the meantime, the foreclosure crisis in markets such as Phoenix still appears to be feeding on itself unabated in a vicious circular reference. As these distressed sales become the new neighborhood comparables, the risk of severe price declines dragging more neighboring owners into a dangerous negative equity situation continues.

* Also, while the September numbers are very encouraging on the surface, we must also acknowledge that much has changed in the financial and housing market landscape over the past three to four weeks since the Treasury Department's massive $700 billion bailout package was first announced to the public. We also note that while we envisioned many of these events transpiring, several homebuilders in the wake of the government's announcement unfortunately underestimated Congress' ability to create a political fiasco out of the situation and to thoroughly impair consumer confidence. With indications from homebuilders that buyer traffic has slowed to a virtual standstill in recent weeks, we believe data points from October will be more indicative of the new housing environment in light of the lingering credit crisis.

* It is possible that the MLS system is not necessarily capturing the entire picture. As increasing numbers of bank-owned properties are entering the market at deeply discounted prices, these homes are not always listed in the MLS system (and therefore may not be captured in this data). Accordingly, we will continue to closely monitor the inventory situation in Phoenix .

To commemorate the history of their neighborhood and create a scrapbook, several generations of Chandler residents gather for Hightown Family Day from 10 a.m. to 2 p.m. Sat., Oct. 11 at the City's McCullough-Price House.
Free and open to the public, the event brings together the descendants of the original families who settled and lived in the Pueblo Alto area, southeast of the intersection of McClintock Road and Chandler Boulevard. A hands-on children's art project is also open to anyone visiting.
"This event will be like a family reunion for many people, and we are proud to be able to bring them together to help us create a community history scrapbook that will preserve their memories of a very different Chandler," says Chandler Public History Coordinator Jean Reynolds, who manages the McCullough-Price House.
Currently, the McCullough-Price House is hosting an exhibit featuring the history of this predominantly Hispanic neighborhood, plus the works of local Latino artists whose art centers on the themes of neighborhood and home. The "Hightown/Pueblo Alto" history exhibit and the "Mi Barrio" art exhibit are on display through Nov. 26.
Hightown Family Day is co-sponsored by the City of Chandler Neighborhood Programs Division, and staff will be on site to provide resource information to visitors. The historic McCullough-Price House is located at 300 S. Chandler Village Dr., southwest of the Chandler Fashion Center. For more details call 480-782-2876 or access www.chandleraz.gov/pricehouse.