The Metropolitan Indianapolis Board of Realtors has released a new quarterly report prepared by 10K Research, a Minneapolis real estate research firm. This is going to be a new quarterly feature from the Board. Here is a direct link and we will post a copy on our website.
Posts Tagged ‘Indiana’
MIBOR Releases Central Indiana Foreclosure Report
Friday, August 20th, 2010Make Your Offer The One That Is Accepted And Closed!
Tuesday, July 27th, 2010
I follow many different periodicals, blogs and forums..both in print and on line..related to the topic of foreclosure. There is some really bad advise out there for people as to how easy it is to buy foreclosed properties. Today I am going to focus on a few simple facts that likely go against what many of these self-proclaimed knowledgeable people state.
You Should Make Your Offer At 50-60% Under List Price
Only if you wish to waste every body’s time. Most foreclosures are priced today where they receive multiple offers. The list price is where the discount to market exists. Sometimes the bank gets it right, sometimes they need to move the property. Just know that our average sale to list price ratio on bank owned homes over the last 12 months stood at 98% That is for almost 600 properties in four different markets! HINT: There are properties for sale, often by third party servicers or investors, where they do not seem to want to accept the market realities and over-price. These properties will be on the market for 90 or more days. Sometimes a more aggressive offer might fly.
Use A Superstar Agent Who Leads The Market In Their Sales Production
What..because everybody will cow-tow to their super stardom? This one cracks me up. It is a myth put forward by the large franchise real estate players in support of their top producers who are not funding as much overhead in today’s markets. Actually what you want is to find an agent who will follow the bank’s very specific instructions for how to submit an offer! If they are the superstar agent, then fine. In my experience, they often are not. For some reason, after years of foreclosures being a major part of the market, there still seem to be agents who think the banks will do business THEIR way and act like they can control the seller. If you choose one of these agents because of the confidence they seem to exude, you will likely not end up with an accepted offer. Buying bank owned foreclosures is a rather black and white program. Your agent needs to be somebody who excels at following instructions and details step by step. Find out how many bank owned homes they have sold or if you insist on using your cousin, make them share every shred of paper that comes to ensure that things are being done correctly.
The Process Drags Out So Don’t Expect Things To Happen Fast
Again, quite the opposite is true. Be Available! Whether by electronic communication, in person, or proxy, now is NOT the time to take that international vacation. Nobody from the listing agent to the bank really cares if the proposed buyer has to leave the country and will not be available to review the bank addendum contract until next Tuesday when it is due on Monday. Your accepted offer will be cancelled. Remember black and white.
The Bank Will Accommodate The Buyer’s Need For Repairs Discovered After A Inspection
Negotiation for repairs kills more accepted deals than anything else. Yes, I will admit the banks seem to have more tolerance for making a home habitable for owner occupant purchasers than ever before. Start with considering the type of buyer you are when you feel it necessary to request that the leaking kitchen plumbing be repaired. If you are investor, please refer back to some of my as-is means as-is posts. If you are going to live in the property, this request is a wild card. I do not know how the bank will respond. The first question I often am asked is “could the buyer have seen this need for repair on their own prior to making the offer?” If the answer is yes, chances are not good that the bank will front the repair. TIP-If you really want the property, do not haggle with the bank’s response. They usually make one response and if you do not accept it they cancel the deal.
A commonly heard order from Asset Managers is “BOM”. Back On The Market. Nobody is ever happy when this happens. Avoid these pitfalls in order to improve your chance for success in your foreclosure purchase.
Time To Move On
Monday, July 26th, 2010The following is written to other Realtors. Not to upset but to emphasize a point.
When you are contacted by an agent informing you that the home you have listed has been foreclosed, don’t ask or expect to receive a listing cancellation. The fact your listing is executed by a party no longer in ownership cancels your listing.
If you really do not believe the bank’s listing agent, check with your client or the public records. Don’t waste a lot of time hanging on because somebody has an offer in to your seller. Your seller has no authority to accept it and the bank is going to want to complete their own valuation before looking at any offers.
Assuming the home is vacant, the bank will likely hire a company quickly to change the locks. It should not happen but often those fancy electronic lock boxes, are left hanging on the old removed handset. So, don’t waste any time if you are informed of a change in title. Not if you want to get your lock box back easily.
Speaking of lock boxes, we have over and over again worked in a spirit of cooperation to remove a lock box for the former listing agent and leave it somewhere that they can pick it up. When we do this we are not accepting responsibility for what happen to the lock box…so don’t wait a week to come pick it up.
Same can be said for your signs. We work with the former listing agent, but do not take responsibility and don’t have room in our vehicles to throw them in.
It is common for the banks to have a property preservation company that changes the locks, mows the lawns, and removes interior debris and furnishings left behind. A certain estimated value of between $300 and $500 is going to result in a personal property posting notice. Some Realtors have been known to add a few hand towels, kitchen and bath bric-a-brac, and fake flowers in the mode of staging. Chances are these are not going to cross the threshold of being saved as personal property. I have no idea what happens to these items, but please, when you are told the home is foreclosed, just come get your stuff and then confirm. I have seen this become a big issue in several cases where the agent did not want to stop showings because they were convinced that a sale was about to occur.
Last but not least, unless you really want to make some type of point that will cause you to have a bad name with the bank seller and have a complaint filed with your local MLS, go ahead and withdrawl your listing from the MLS when informed of the foreclosure. I realize this is the last line of defense. I have never seen a bank choose to keep the existing listing agent at this point so there is nothing but bad things to occur by taking this path.
I know it is hard to do, and I do have empathy, but the truth that needs to be accepted is that it is “time to move on”.
Settlement Conferences Expanding To Indiana’s Marion County
Wednesday, April 21st, 2010Therequirement that Indiana homeowners facing foreclosure be provided free counseling settlement conferences, scheduled via the court system when a foreclosure suit is filed, will be expanding to Marion County. The state has a law that lets borrowers know that the option of a settlement conference exists. Very few responses caused the Indiana Foreclosure Prevention Network to try this new creative option to force feed these conferences. Early this year the Allen County served as the test. Enough of an increase in requests was experienced that this method of arranging conferences, not waiting on borrowers to request them, will be expanded to the even more foreclosure ridden Indianapolis area.
From the Indiana Foreclosoure Prevention Network website:
If your mortgage lender has filed to foreclose on your home, you may be entitled to a court-ordered settlement conference with your lender to negotiate an agreement tha could allow you to avoid foreclosure. Look for the notice of your right to a settlement conference in your foreclosure papers. To take advantage of this right, YOU MUST NOTIFY THE COURT that you desire a settlement conference within 30 days after receiving your notice. (My understanding is you will not HAVE to request in Marion County….the court will set it up for you.)
At the settlement conference, you have the right to be represented by an attorney or assisted by a mortgage foreclosure counselor, either in person or by telephone.
If you are facing a foreclosure suit, here is a link to be proactive and request the settlement conference. I would like to talk to somebody who has experienced one of these conferences to learn if they are helpful or what benefit is derived. I hope that this is not just more political talk. It seems that a settlement conference will simply chart the outcome of the foreclosure and possibly offer a modification, short sale or deed in lieu. In today’s world such an offer should have been discussed long before filing of foreclosure.
If you pursue one of these conferences, please write me and share your experience.
Are The Banks Following The Law?
Friday, February 19th, 2010Short sales…everybody has them on their mind these days. The incidents of short sales are going to be more volumnious in areas where the real housing bubble burst. Florida has a real demand. Indiana’s is not quire as common. The reason…ot that many people in Indiana ended up losing 25% or more of the value of their homes. Short sales in Indiana should, by reason, be easier to accomplish because in all likelihood they do not involve as much money.
I am not sure how many people who get involved in short sales in Indiana are aware that last year consumer protection legislation was signed into law by Governor Daniels. Indiana H>B> 1176 contains provisions that became law in July 2009 requiring mortgage servicers to acknowledge and respond to short sales within certain time frames.
This law requires creditors, servicers, or creditors agents must acknowledge written short sale offers within 10 business days and the servicer must accept or reject a borrower-submitted offer no later than 30 days after receipt of the offer. If you enjoy reading the actual law, here is a link to the language.
I have read this and could dribble on about questions that come to mind for me and no amount of research I am able to do seems to provide answers. The two primary questions is the requirement that the written offer qualifies as a “qualified written request” under RESPA (Real Estate Settlement Procedures Act”. The second is does this law allow for counter offers in the post 30 day period. It would seem not.
I will update this blog as I discover these answers. It may be that, like many laws, they have been left to interpretation and ultimatly the courts to decide. Nevertheless, the most important thing to know is how to file a complaint if your short sale request is ignored in Indiana. There is an on-line complaint form that can be filed with the Indiana Department of Financial Institutions (DFI). The DFI uses the complaints to track and establish patterns with certain lenders and use regulatory authority to investigate the complaint. Additionally, the Homeowner Protection Unit of the Indiana Attorney General has enforcement authority over the complaints. When completing the form, the complaints should be filed with the DFI, and the field that the Homeowner Protection Unit should investigate marked (Field #18 on the Indiana complaint).
So, in your experience, has the implementation of this law helped?
