Sean Williams, Your Louisville Realtor

Just the other day (February 29th Leap Year to be exact) I closed on a short sale transaction as the listing agent. My sellers lender happened to be J.P. Morgan Chase and as many people have probably heard about the short sale market...the big commercial banks TAKE FOREVER to get through the short sale process (more like a "long sale"). Typically you hear stories of deals taking anywhere from 2-6 months and then sometimes even longer.

Well after just closing with CHASE, I must say I have to give them a big round of applause and their well deserved KUDOS!

CHASE provided me with a private negotiator who I could call and speak with on a regular basis. If he did not answer, he would usually get back within 24 hours maximum, if not the same day. Our first offer was withdrawn by the buyers because they got cold feet after 30 days and wanted to move on to a typical home sale. Just a few days later we received our second offer...

36 Days Later....

We Closed! That's right...Chase was so efficient and well organized that we were able to go from CONTRACT to CLOSE to just a mere 36 days, which as many of you will know is even faster than many typical home purchases in today's market. My sellers and I were of course thrilled, but as you can imagine the buyers where estatic! They got a great deal and even mentioned "this was smoother and faster" than the last time we purchased a home.

I really wish and hope more banks move into this direction so we can speed up the short sale process to help move the stagnant inventory of homes. If we can push through this mess the housing market can begin to move forward into a steady, positive direction. So once again, I want to give praise to J.P. Morgan Chase for providing my sellers, myself, the buyer's agent, the buyers and the attorneys a stellar short sale transaction. Hopefully this will spread some light on the market and give hope to other Realtor and home sellers that are dealing with the overbearing inventory of short sales!

Last week, the Federal government and 49 state governments (Oklahoma being the exception) agreed to a $25 billion settlement regarding robo-signing and the challenges it created in the foreclosure process. I want to give a synopsis of the settlement and some perspective on what effect it will have on the housing market in 2012...

The Basics

The $25 billion in funds will be dispersed as follows:

$17 Billion National Commitment to Foreclosure Relief Efforts
The servicers collectively agree to commit a minimum of $17 billion directly to borrowers through foreclosure relief effort options, including principal reduction for qualifying borrowers, short sales, anti-blight measures, and enhanced homeowner transition programs.

$3 Billion National Commitment to Underwater Mortgage Refinancing Program
The servicers collectively agree to commit $3 billion to refinance “underwater” homes (when a homeowner owes more on a mortgage than a home’s current market value). To qualify, borrowers must be current on their mortgage payments on a mortgage owned by one of the five banks.

$5 Billion Payment to States and Federal Government
The servicers’ $4.25 billion payment to the states includes $1.5 billion for payments to borrowers who lost their home to foreclosure by one of the five servicers…$750 million of the state-federal payment will go to the federal government to resolve federal claims.

Will the Settlement Have a Major Impact on a Housing Recovery?

Probably not. Though it is a step in the right direction, it may be too little too late. Here are some opinions on the settlement:

What about Foreclosures Moving Forward?

The settlement did bring clarity to one major issue – foreclosures. Banks have been holding off the foreclosure process on millions of homes over the last 18 months as they waited for the particulars of the settlement. They now know how they can move forward without penalty. The result will be an increase in foreclosures coming to the housing market.

Housing Wire

“It will speed up processing, and perhaps mean that foreclosures that have been waiting around since robo-signing came to light in 2010 will now gain legitimacy.”

Calculated Risk

“It does appear the number of completed foreclosures will increase following this settlement – especially in some judicial states with large backlogs – so there will probably be more REOs (lender Real Estate Owned) for sale.”

Wells Fargo

“Mark Vitner, a senior economist at Wells Fargo Securities, said the settlement helps the housing market in the long run because it allows banks to proceed with millions of foreclosures that have been stalled. Many lenders have refrained from foreclosing on homes as they awaited the settlement.”

This has become a growing question in the real estate community especially for buyers and sellers as the market has seen a large increase in short sale/foreclosure/distressed properties. Before this was such an issue, generally appraisers would not consider one of these types of properties since they were "not comparable" or an outlier from the comparable homes.

Well, with so many of these short sale/foreclosure/distressed properties flooding the market, appraisers have had no choice but to consider them since they are in fact "the market". Unfortunately, this has brought down housing prices and decreased homeowners equity in the same neighborhood because of the neighboring houses declined/lower value.

Last month, the Appraisal Institute issued an article on the subject. In the paper, the Institute explained that:

“Foreclosures and short sales can provide important information for appraisers, who develop valuations based on market data and market forces.”

On whether an appraiser should use distressed properties as comparables, the Institute was very direct (all items in boldwere shown as bold in the original paper):

“An appraiser should not ignore foreclosure sales and short sales if consideration of such sales is necessary to develop a credible value opinion.”

And they explained the possible differences between short sales and foreclosures:

“A short sale … might have involved atypical seller motivations and so might not be an ideal comp…

"A sale of a bank-owned property might have involved typical motivations, so the fact that it was a foreclosed property would not render it ineligible as a comp.”

Some will argue that distressed properties should not be used when appraising non-distressed properties. However, there is no longer any doubt that they will be considered...at least during the current market begins heading north again.

According to a recent article on Zagat.com named "The 8 Best Foodie Getaways Around the World",

- Louisville, Kentucky -

was ranked #3 in the world for one of the best food destinations!!

Obviously I am excited about the news as Louisville has also previously been ranked at #9 as a "Top 10 City to Raise a Family"

Ranked just behind #1 Okinawa, Japan & #2 Price Edward Island, Canada, Louisville was able to beat out prestigious places such as:

#4 Cornwall, England
#5 Puerto Rico
#6 Morelia, Mexico
#8 Ciaro, Egypt

This is just another ingredient to the recipe (pun intended) as to why Louisville is one of the best cities in the United States (and world!) to live, work, play, eat, visit & experience...oh, and buy a house of course! :)

Yeah, Yeah, Yeah...I know the first word that popped in your head was "Service" or "Superior Service" or "Excellent Service" or something along those lines, right?

Well of course many agents like ourselves seek to provide the best client and customer service possible. It's a "no-brainer"...it's the life blood of our business. We aren't selling houses, we are selling our services!

So what can you do to seperate yourself from the pack? Simple...Add MORE VALUE to your clients!!

• Buyer/Seller counceling session - whether its their 1st house or 11th house, people need to be reminded of the transaction process as well as any laws and regulations that may have changed in just the past couple of years. Let them know what they can expect so they dont run into the unexpected.
  
• Mortgage Lender - why do many real estate contracts fall through nowadays? Financing! Having trusted lenders or mortgage officers that will assist your buyers and give you an open line of communication is key and will help save your clients a large headache.
  
• Contractor network - odds are your buyers/sellers aren't going to know a contractor in every industry they can trust. Whether its an inspector, painter, plumber, landscaper, builder or just a handyman, being able to provide them a list of contractors your personally trustt will put them at ease when facing these various types of issues with their home.
  
• Feedback system - have some type of system where you can receive honest, objective feedback from the agents that show your listing. This will help you when it comes time for a price adjustment but more importantly your sellers will appreciate feedback much more from the "horse's mouth" than from yours.
  
  
• Communication - this is probably one of the easiet, yet most commonly forgotten by agents. I called my seller last friday to give her an update and analysis of how her listing was doing. She told me "she never had an agent pick up the phone and keep in such close contact with her" and she really appreciated it...whether the news was good or bad. Also, when they call you, PICK UP! For them to know they can call/text/email you anytime of the day and you'll respond promply will say 10X more than anything else.