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Month: February 2011

Another Short Sale Success for Shelter Realty in Las Vegas

Shelter Realty closed another short sale listing last week, its 17th in a row with full liability release for our clients. In this case the subject property was also an investment, high-rise condo property. Contrary to myths about short sales that exist, investment properties may also be sold as a short sale.

Ultimately, the mortgage bank which holds your note evaluates each and every short sale approval as a unique agreement based on the individual borrower’s situation. This is why effective representation is so critical. You not only have to sell your property, but negotiate favorable terms with your mortgage bank.

If you have questions about a short sale in Las Vegas or anywhere else in the southwest, please contact us through this website or call us directly at 702-376-7379.

Las Vegas Housing Update: Death of Fannie Mae / Freddie Mac Coming?

Many media outlets such as The Wall Street Journal and Bloomberg are reporting that the Obama administration is considering plans to get the government out of the mortgage business and are submitting different plans “to bring a controlled end” to the government sponsored enterprises (GSE’s). In other words, their going to pull the plug on these brain-dead behemoths.

Neither Fannie or Freddie has posted a profit in over three years and the American taxpayers have subsidized them with $150 billion dollars of support to keep them operating. Many opponents of the bailouts felt nothing could save the GSE’s and the any monies spent would be wasted. It seems they were correct.

The government is finally crying “uncle” and this is a good thing. They should stick to oversight and get out of the mortgage business. Private companies are best equipped to provide financing; however, they need to do so in a lucid manner that best serves the long term interests of their shareholders…responsible lending.

Although no final plans have been adopted, the general consensus is to phase out Fannie and Freddie in the next few years. It should be noted that the process of eliminating Fannie/Freddie will have no impact on persons who are currently doing short sales or are in the loan modification or foreclosure process. These are huge institutions and shutting them down will take 3-5 years.

If you have any questions if you are delinquent or about to be on your home, please call Shelter Realty at 702-376-7379.

Pricing Your Las Vegas Short Sale

Savvy listing agents know that pricing the home is not simply a matter of maximizing the amount a buyer is willing to pay for a home. This may sound counter-intuitive to the average person. After all, doesn’t offering the bank the most amount of money, give you a better chance for an approval? Not necessarily.

Here are some issues your listing agent has to account for in a short sale:

  • You can elicit an offer so high that it won’t appraise for the buyer’s loan.
  • There may be other liens which have to be paid or monetary contributions must be made. Is there a 2nd loan? Maybe the first lien holder will only agree to a certain contribution that is less than the 2nd lien is willing to accept. Where will that money come from?
  • The seller’s lender may require some sort of cash contribution by the seller or accepting a promissory note. If the seller doesn’t have it and the bank won’t budge, how do you keep your transaction from falling apart? I recently had a lien for a delinquent credit card show up right before closing. We then had to figure out how to come up with another $2300 in order to make the transaction happen after we had a previous approval that did not account for the judgment.
  • What if you have delinquent homeowner association dues that exceed what the bank  is willing to allow?

I look at a purchase price as a pool of money. Yes, we have to get a qualified buyer willing to pay something reasonably close to market value to get the bank interested, but if you lock up too much of the money for the primary bank, you lose the flexibility to solve some of the difficult to foresee problems I mentioned above.

We like to work with our buyers on the pricing. Sometimes it is hard to break through the traditional mentality of a price just relating to the home itself, but it is imperative that we educate buyers and get them on our side that a short sale is more than a purchase price for a home, it is a negotiated debt settlement that includes a transfer of property. There are many aspects of that home which must be resolved in order for that buyer’s offer to get approved by the seller’s bank.

Agents who do not take into consideration the eventual need for monies to cover additional obligations often are unable to close the transaction and relieve the seller of their debt. They will often say things like ‘well, the bank just wouldn’t allow enough money for this or that’, but had they structured their offer properly, they might well have been able to get the short sale approval in the end.