Betsie Melter's Real Estate Blog: August 2010

I just wanted to let consumers out there know a little bit about what we deal with behind the scenes of a short sale.

The most recent scenario happened to me on Wednesday. I called the listing agent of a short sale that my buyer has an offer in on to check on status. He said that the first mortgage had offered the 2nd mortgage (who was the same bank by the way) $2100 at closing. The 2nd mortgage had responded to the agent (because apparantly the 1st and the 2nd mortgage don't talk to each other eventhough they are in the same building) that they wanted $3000. The 1st mortgage then decided to only offer them $1500. The agent now had to go back to the 2nd mortgage and tell them that the original offer of $2100 had decreased to $1500. HA HA HA HA.

This is what we are dealing with everyday. The banks aren't on the same page and the agent has to do triple the work when really shouldn't the 1st and the 2nd be working it out on their own. Especially if they have a standard amount that they accept on the 2nd mortgage, shouldn't the 1st mortgage just know that they routinely accept $3,000 on a short sale for the 2nd mortgage and just offer that and be done with it. The poor listing agent has been going round and round with these 2 for over 2 weeks now.

This is just one example of what we do on a daily basis in order to make a short sale work. I have had great success with short sales because I hire an amazing negotiator. But really, these loops are starting to kill us.

I try to explain to both buyers and sellers, some of the circumstances and obstacles we may run into while waiting for an answer from the short sale bank, but I can never predict what they will say and I have found that every transaction throws something new at me. So, if you are thinking of buying or selling a short sale house, please be prepared for jumping through hoops and not being surprised by anything the bank says. Think of it as your daily dose of humor and just laugh because that is all you can do sometimes.

This is a question that I get asked a lot. I thought that it was 7 years, but I recently read in the Arizona Realtor Magazine that it could be more like 3 years. Wow, that isn't that long to have to wait. I was really shocked. But that could be great news for people who did a strategic walk away and are working on getting their credit back in order.

According to Patrick Ritchie, the author of the article, some consumers will have a chance in as little as 3 years from a foreclosure to purchase again. The FHA guidelines allow for a loan to be obtained 3 years after as long as NOTHING else has been delinquent. Any negative reporting or any missed or late payments will negate it, but if everything has been paid on time, then more than likely a buyer can purchase again.  Now, there are circumstances where an FHA, VA or USDA loan may have a claim against them in the Credit Alert Verification Reporting System. If that is the case then the 3 years starts after that claim has been paid. A loan officer can check in the HUD system to see if a buyer has a claim against them. This might be something a homeowner may want to check on sooner rather than later if they plan on purchasing another home in the future.

Just because a person has waited 3 years and hasn't missed any payments, doesn't mean they are automatically approved for a loan. As we know, right now there are very tight guidelines. That would just be the first step in knowing you can try. Any borrower still has to have good credit, make enough money to qualify for the loan, and have a down payment. Employment is also a big deal. The borrower needs to have been employed for at least 2 years with the same company or in the same industry.

The underwriter has the final say, of course, as to whether or not a borrower will get the loan. But at least now we know it isn't an automatic 7 years, like I had previously thought.

If you would like more information on what time lines exist for short sales, bankruptcy's and other situations, click the link below. The National Association of Realtors has put together a chart for different experiences.

http://www.realtor.org/wps/wcm/connect/1919ce80433346c5849787b0e53c74b2/government_affairs_impact_credit_events_07112010.pdf?MOD=AJPERES&CACHEID=1919ce80433346c5849787b0e53c74b2

My webmaster and IT extraordinaire introduced our office to QR codes this week. QR codes are a little graphic that you can put on print media and people who have smart phones can use them to scan info to their phones. It basically takes a picture of the graphic and it tells your phone where to go and brings up the website that the graphic has embedded into it. It is pretty cool.

He recommended using Scanlife, but there are a number of different companies out there doing it now. So, my next goal is to search out these QR codes and practice using them to see if they work and how easy they are to scan. Then, I am going to start putting the codes on my flyers for buyers or renters to use when driving by a property. My only problem is going to be getting the word out to people so they know what QR codes are and see the benefit to them. This way when I put a QR code on my flyers, people will actually use them.

I think it will be a really cool tool once people get used to them. The benefit for the client would be that when they are driving by one of my listings they can scan the QR code and my website or the specific home will pop up and they can see all of the pictures or the virtual tour right there on their phone in front of the house.

The technology that has come out in the last couple of years is just mind-boggling. I feel like I finally get the grasp of one thing and in the meantime 10 other things have already come and gone. I do see the usefulness of this and the instant gratification to the consumer. But like all things, it has to be used in order to be helpful and worthwhile.