Jacksonville Real Estate Ramblings: January 2011

Especially when it comes to selling your Jacksonville Florida Home!                                               

See that picture on the right? That's what your home looks like when there isn't a picture of your home uploaded to the Northeast Florida Multiple Listing Service (MLS).                                                                    

As I search through the expired listings (listings that failed to sell and are no longer on the market) in the MLS, I come across that generic No Photo Available frequently. How in the world can a house be listed for months and months and never have any pictures taken? If you're wondering why your Home In Fleming Island or Orange Park hasn't sold and your MLS listing features the dreaded No Photo Available, it's safe to say, that is a HUGE reason your home hasn't sold! There may be other reasons your home hasn't sold and we will discuss all those reasons, in my Pinnacle Home Value Report.

In today's market, a buyer has more available homes to weed through, to find their perfect home, then they have in many years. Chances are, if they come across a house that has no picture, they will move on to the next one without even clicking on it to get more information. Why? One of the first things that pops in their mind is, "gee that house must really be ugly or need alot of work for them not to have any pictures." Who cares if your backyard view is of a beautiful lake or your kitchen is big enough to fit the entire Jacksonville Jaguars team in it. Without a picture, they will never know!

Now on the flip side, what if your house really is as ugly as a pig in mud and has pink and green shag carpet in the entire house? I think you should still take as many pictures as possible to give the potential buyer a look at the floor plan. That shag carpet can be removed after they buy it! (who knows, they may really want to keep it) If the house is a great deal, certain things can be overlooked! Without a pic, you may never get a fair shake.

So, what's a seller to do? Hire an agent whose standard procedure is to take alot of photos. Request a copy of your listing to be emailed to you, so you can see what a buyer sees. Taking alot of photos is your agent's job, your job is to make sure your house shows in the best possible way to make those photos jump out at a buyer. Now that's a whole other post! :) 

You've just received the letter you have been dreading and hoping would never come, the notice of Lis Pendens, which announces to the world that you're behind on your mortgage payments and the bank has begun the foreclosure process on your Jacksonville home.

Not long after your notice, your mailbox seems to be a popular place for all the mail your getting from all the "nice" people wanting to help you and your family. Some of those people are investors, real estate agents, attorneys, or companies who say they can negotiate a loan modification or a short sale on your behalf.

Some of these companies and people are good people who are honest and will do the right thing. Some are only wanting to take advantage of your situation and want your property to make a ginormous profit, dishonestly.

Here's one scenerio you need to avoid so you don't commit mortgage fraud: The investor who wants you to sign over your deed to them, without them paying off your loan first. This means you don't own your house but you're still responsible for your mortgage. You sign over your deed and the investor lists the property for sale, sometimes with a real estate agent. (Sometimes the investor doesn't take over the deed, so they may not always ask for you to sign over the deed) Let's say they list the house for 150k (with you owing more than 150k, making this a short sale) and get a buyer willing to pay that price. The investor submits a contract to your mortgage company for 100k, with them being the buyer. Your mortgage company has no idea about the other buyer with the 150k offer. The bank accepts the 100k offer and eventually 2 closings take place, the first with the investor as the buyer, then the 150k buyer. Guess what this is called? Mortgage fraud! You, the investor and the real estate agent have all committed mortgage fraud together. Even if you and the real estate agent are unaware, you could both be held responsible, along with the investor.

Why is it mortgage fraud? In a nutshell,since this is a short sale, the house was listed for a higher price, got a buyer at the higher price, but the investor's contract was for alot lower. The 150k buyer is never disclosed to the lender. Most of the time, the buyer isn't even aware of the offer the investor is making with the lower amount. The investor has pretty much stolen money, due to the lender.

How do you avoid this situation?

1. NEVER sign your deed over to anyone, unless it's at the closing table because you have completed a successful and honest short sale (if your short) or a closing if you're not in a short sale situation.

2. If the investor tells you NOT to talk to your lender, then that's a red flag!

3. If they tell you that they will act as a trustee to your property, don't buy it.

4. If a real estate agent approaches you with any of those situations, saying that is good to do, kick them to the curb!

I've seen these scenarios in our local MLS and the FBI has made visits to the Jacksonville, Orange Park Florida areas, investigating this type of mortgage fraud.

I won't get involved with those situations and as my client, I would never ask you to get involved either. I always use a reputable and honest closing attorney, if you don't already have an established relationship with one. During the short sale process, I handle all the details for you, but at any time, you can call and talk to your mortgage company to discuss the process with them. I will never sway you to not be in communications with your bank.

I currently service short sales in Jacksonville, Fleming Island, Orange Park and the surrounding Northeast Florida Area. Call me at 904-910-3516 to discuss your situation and find the best solution to help you avoid foreclosure.

I've noticed a trend with banks who have a faster short sale procedure, and the banks who are slow, don't have that same trend. I think it's something that should be brought out in the open, so other lenders who are having a difficult time approving short sales in a timely fashion could learn. I notice when I communicate with one person, the process is much better. Here's some examples:

GOOD EXAMPLE:

Taylor Bean and Whitaker,I know they are kinda a bad example due to their fall from grace, but they had their short sale process down. Once I faxed the short sale package to them, it was never "lost" and I was assigned a negotiator, who had a direct line, direct fax number and an email. When I called the negotiator, she returned my call quickly, but her response time to emails was even better! The process took about 3 weeks for short sale approval.

BAD EXAMPLE:

Had a short sale with Navy Federal, sorry NF, gotta throw you under the bus! Their process from the time I faxed the short sale package was 2 months, which isn't too terribly bad but has room for improvement. I never could directly call or email my negotiator or asset manager, I always had to speak to one of the gatekeepers, who would always tell me different information every time.

GOOD EXAMPLE:

AMHSI did a great job. Once they got the package, a negotiator was assigned. I had her direct number, fax and email. She had at least 100 files but she stayed on top of her game. There were 3 contracts on this before the house finally closed with the third buyer. The first two fell through due to the buyers. The first two short sales were approved in a matter of 2-3 weeks. The last! Get this.... was approved in one day! During the holidays to boot!

Besides dealing with long short sale approvals representing the buyer, I've been lucky in the fact that most of my short sale listings have had lien holders who have it together. Plus, I have learned to put together organized and complete short sale packages, have constant follow up without overkill and I believe in being very humble and respectful to the other person on the phone.

Back to the common trend, the lenders who we have to call in and get a random person each time have slower short sale approvals, lose the short sale packages more and tell you a different process each time.

The ones who have fast approval times have not lost my package, I can contact the negotiator directly without having to go through the gatekeeper. Oh and let me throw one more thing out there, they also tell me what they need to net instead of playing games and saying they're not "allowed" to tell me!

I have one more good example and a process that every lender should implement:

BEST EXAMPLE:

Wells Fargo Financial, which is different than Wells Fargo Mortgage, has their act together. The moment you list it, you send in a short sale package. They assign the negotiator, who orders a BPO. We then use the BPO value. The negotiator is the same one through the whole process. We know upfront if the seller is approved for a short sale. Once a month, the listing agent  fills out a market report, sends it to the negotiator and the price is re-visited. You work as a team and the negotiator will approve the price changes, so you never have to deal with having a home that has comps to justify a higher price but the subject property just isn't selling and the listing agent has had it at the higher price but can't get it moved. Then the BPO comes back at the higher price and the bank won't move, no matter that you have given them the showing log and history showing price changes and showing history. Once we had an offer, we had an approval within a week. Closed 30 days later!

Just think of how many more Jacksonville Florida homes would sell before they were foreclosed on, if every bank took the same approach as WF Financial!!!

What we really need as an industry is to have a meeting of the minds. We need to have real estate agents, attorneys, loss mitigators from the banks that are failing at the short sale process and loss mitigators from the lenders who are slam dunking short sales. Whoever is involved with the real estate transaction needs to have some input. We need to find out why lenders are taking so long and why some have the process down so well. I get frustrated with the banks, but honestly I don't know what goes on over there in their world, just like they don't know what goes on in mine. Maybe instead of throwing money at the problems with bailouts and tax credits,we FIX the problems so our housing market can improve, which in turn will improve the economy.

That's my take on short sales, what's yours?