Thursday, August 11, 2011

Success with a Difficult Sale

I recently sold my home and was so fortunate to have Donna as my realtor. She worked harder than any other realtor I know, and I am certain that had it not be for her dedication, determination, and persistence my home would have not been sold. Donna has several years of experience with all types of listings and is very familiar with the Tucson market. I would highly recommend her to anyone who is looking at buying or selling their home. She has what it takes and will be sure to get the job done!

Natalia Reding

Why Do Banks Seem to Prefer Foreclosures to Short Sales?

When a seller owes more to his mortgage company than his house is worth, he needs his mortgagor's approval to sell the house, because the mortgagor will not be repaid what the seller owes it from the proceeds of the sale. This is called a short sale, but there is nothing short about it.

Mortgagors are very reluctant to accept a short sale, and the request for short sale approval drags on for several months. The seller and his real estate agent must repeatedly submit the same documents because the mortgagor loses them or the documents become outdated while the seller waits for short sale approval.

Often, after keeping a seller and a prospective buyer waiting for a response to a perfectly reasonable short sale offer for several months, the mortgagor will decide to foreclose on the property. Then the investor in the mortgage, usually Fannie Mae, Freddie Mac, or HUD, lists the property for sale with a different real estate agent at a much lower price than what a buyer had offered as a short sale.

It would seem that the mortgagor would lose money by doing this, wouldn't it? Yet the banks are enjoying record profits. How do they do it?

The secret may be that the lender forecloses so they can get paid for their loss by mortgage insurance. Borrowers sometimes pay for this insurance, but sometimes the lenders pay for it themselves. Because they won't get the mortgage insurance pay out if they agree to a short sale, the lender considers the costs of foreclosure--attorney's fees, property tax, insurance, homeowner association fees, utilities, repairs, real estate commissions--and if they will net more by foreclosing, collecting the mortgage insurance, and selling the house quickly at some below market price, they will.

Lenders don't seem to have made the connection between selling foreclosed prices at low prices, and the depression of prices of nearby houses that weren't underwater until the foreclosed house sold in the neighborhood. This is the real mystery to me. It's been four years since the real estate market imploded, and the banks still don't see that their actions are preventing a housing recovery.

Wednesday, August 10, 2011

Residential Sales Statistics

The Tucson Association of Realtors has published the Residential Sales Statistics for July.

Average sale price is $167,172, up 3.57% from June, but down 9.86% from July last year. Median sale price is $125,000, down 0.79% from June and down 16.67% from last July.

1,124 properties sold in July, a healthy 41.92% increase from last July, when the Federal housing credit giveaway program had just expired, and many buyers cancelled their purchase contracts because they couldn't get the free money.

Of the 1,124 July sales, 844, or 75%, were under $200,000.

Foreclosures accounted for 46% of the sales, and short sales were 10% of the sales.