For banks, short sales generally beat foreclosures

NEW YORK (CNNMoney) -

Bank of America is offering some struggling homeowners payments of up to $30,000 if they sell their homes in a short sale and avoid ending up in foreclosure.

Under the plan, Bank of America will offer homeowners so-called relocation payments of between $2,500 and $30,000 if they sell their home in a short sale. In short sale deals, the sale price of the home is less than what the seller owes the bank.

The bank first tested the payments in a pilot program in Florida last fall. Under that initiative, Bank of America paid up to $20,000 to borrowers who sold their homes in short sales.

"This program can help customers make a planned transition from ownership when home retention options have been exhausted or they have made a decision not to keep the home," said Bob Hora, an executive for the bank.

Chase started a similar initiative in late 2010 that pays as much as $35,000 to short sellers. Wells Fargo has also paid five-figure incentives to short sellers or to owners who turned over their deeds to the bank.

BofA said it has completed 200,000 short sales over the past two years. These sales are generally more cost effective for banks than foreclosures. By avoiding foreclosure, the lenders get distressed properties back from delinquent borrowers more quickly, which helps them to avoid property tax payments, maintenance expenses and legal fees that can build up for months, even years, as foreclosures work through the system.

In addition, the incentives help guarantee the homes will return to the lenders in better condition. Foreclosed properties are often poorly maintained, even sometimes sabotaged, by angry former owners, making them worth far less to the banks.

During the last three months of 2011, foreclosures sold for an average of about $150,000, according to RealtyTrac. Meanwhile, short sales sold for an average of about $185,000.

To qualify for Bank of America's relocation payments, borrowers must obtain pre-approval on sale prices for their homes. The sale must begin by the end of 2012 and close by September 26, 2013.

The exact compensation is determined case-by-case based on a calculation that involves the home's value, mortgage balance and other factors.

Borrowers can call 877-459-2852 to find out if they may be eligible for the program.

This is big news.  They aren't doing it because they're nice guys.  They caught caught with their pants at half mast.  But in here there's a number for you to call if you're in trouble.  If I can help you, I will.  But here's the news:

http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=1&id=275499

First and foremost, I answer my emails and phone calls.  You will find that very important.  Make one phone call, get results.

I've got a lot of miles on my tires.  I've seen booms and busts, 20% interest rates, and now 3.75% interest rates.  That experience can help you find a deal that's right for you.

When you say "two stories", I take you to homes that are two stories.  I don't show you what I like.

I have a working knowledge of home repairs and construction.  I've done it for 35 years for myself.  I bought my first duplex in April, 1978. 

I provide you with real time internet searching capabilities you can do from the comfort of your own home.

The professionals I use, we call ourselves "Team Gary", know I demand that they answer their phones also, and know I am fee conscious.  I use people who get my customers to the closing table, not because they line my pockets.  I take NO outside remuneration.  You will see disclaimers from other firms telling you they have "deals " with outside professionals.  I consider that unseemly, and I do not think it leads to you, the customer, getting the best deal.

And I do not charge an "Additional Broker Compensation" fee for deals over $75,000.  Those fees, charged by the big franchises, range from $295 to $695 per transaction.  That is supposed to be what the commission is for.  My customers are ahead of the game out of the box.

If you think this is for you, give a call.  I'll answer, and you can decide for yourself whom you wish to work with. 

I advertise heavily on the internet at my expense. I attract the most buyers in the shortest period of time to your home.

I answer my phone diligently.  Speak to people in the business about that.  What good is that sign on your lawn if, when the number is called, no one answers?  I just sold a listing in a month and a day.  It was a sign call in the middle of the day.  I was there Asap while the people waited.  That's how it's done.

I have been in realestate privately since the 1970's.  I can price a home properly so that it  sells in the shortest period of time. 

My contract is straightforward and fair.  Not only will I write in the commission discounts, but, there is not "cancellation fee" or, "Additional Broker Compensation".  If you don't like me or what I'm doing, I'll simply cancel the contract, no questions asked. 

And I negotiate my commissions.  In most cases I'm at least 30% below the competition.  That means thousands in your pocket.  And, isn't what this exercise is all about?

Simply email, or call.  Let me know what you are trying to do  and where.  I'll tell what I can and can't do.  I am convinced I have the most competitive and fair listing deal in the business.  And, you get me.  Read the Zillow reviews.  I earned every one of them.

Oh.  If you are underwater.  I've done many short sales and I have a great team with a great attorney and short sale processor.  Don't be afraid to call and ask.  You are not alone.

That's the name of my Property Management Company, and or good reason.  Property Management is a people business.  I have learned over 35 years that, if you deal with tenants on a basis of respect, you can expect that same treatment back again.  No call goes unanswered.  No complaint unheeded.

I have a local crew who work for me at favorable rates, and respond to me if I need them. I am rather handy on my own, and will chip in in a pinch.  It's whatever it takes to make my tenants know I care for them and about them is what I do.  That's why they'll pay you on time.

Whether you want full time rental management, or someone to watch the homestead while you summer in Connecticut, give a call for a quote.  I am fully congnizent of the fact that my tenants and my landlords stay real estate customers for a long time.  It just takes that little extra.  And I give it. 

Welcome to Atlantic Florida Properties, and my website.  Fully half the sales in  today's market  are foreclosures and short sales. I have attempted to put information on my site to inform the buyer/seller/investor on the current state of affairs in this strange but lucrative real estate market.   Check back often.  Things are changing daily.  And I anticipate that to accelerate.

I spent 25 years as a stockbroker, having commodity and Principal Licenses on the NASD and NYSE.  I am well acquainted with the workings of stocks, bonds, commodities, and how all pertain to real estate and especially the mortgage market.  I have been a landlord and investor, and am very aware of the principles of cap rates, depreciation and cash flow.  I am a  full time professional agent.  When you call, I answer.  And a question we can't answer, we research.

If you are looking to buy or sell, give me a call.  First, I'll answer the phone. From what I'm hearing, that puts  me in the top 1% of sales people.   Second, we will work with our team of professionals to get you into your new home as quickly and cheaply as possible.  I am convinced that no one works harder to serve the client.

So, give a call.  I have contacts in Mortgages, Insurance, and I have a Property Management firm too. 

Sincerely,

Gary  J. Ferrara
Realtor

http://www.zerohedge.com/news/will-america-ever-recover-housing-crisis-real-estate-infographic

The daughter of a FB friend lives in Arizona, and she expressed to me her frustration of being shut out the market.  I hit her back with an explanation that got some nice responses, and it may help you and yours:

"A realtor told me this yesterday: "Sorry, but the market has taken a weird turn here in AZ, the Canadians and Europeans have bought up all the homes under 150K. I have 4 clients like you, and between them we bid on 34 homes...no luck. People are over-bidding on these homes here just to ensure that they get it." Isn't that what started this mess to begin with out here? Now I am stuck living in an apartment who is about to jack our rent up because they know that no one can afford a house in my same financial circumstances. There are a load of 200 K to 400K homes sitting out there for sale for an infinity. GRRRRR"

"Gary Ferrara ‎100% correct. The thing is, though, that it was caused by the government shutting down foreclosures because of the Robo Signing scandal. That is interfering with the capital markets. The dearth of supply panicked people into throwing money at stuff. If the economy takes another dip, reference last week's jobs numbers , the simple fact of a flood of foreclosures will correct this situation once more. You must be patient, and I can see that is not your forte. Force yourself. Rates are still low, and if the government panics, they will throw money at it. If I see it, I'll tell you. They may give you zero down, pay your closing costs, ease underwriting standards, but they'll do it. Why? Maslow's hierarchy of human needs first tenet is food. Second is shelter. That is why you have mortgage deductions, Federal Housing Authority (FHA), etc. They don't want you, especially you, in the street protesting. And that would happen, and they know it. So, bite your lip, and buy right. Also, all the Canadians and Europeans are gone now. I sense a slowing here already. And You're right about the 200 and up market , but here it's 250 and up."

In essence, this mess is far from over.  The big cash buyers are taking everything in.  But, you may have a window.  Log in, and set up a search for your favorite area.  I'm sure you'll see more inventory.

http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=2&id=273504

Tough on sellers, good for buyers.  The relationship between price, supply  and demand hasn't been repealed as far as I can tell.

If you 've followed my stuff, you know this is what I've been telling you.  Be patient.  Hunt your deals carefully.  Get your financing lined up.  Call me.  Talk to me.  I'm in no hurry. 

http://www.bizjournals.com/jacksonville/news/2012/03/06/lps-foreclosure-starts-and-sales-up.html?ana=yfcpc

On Cnbc, this morning, Warren Buffett indicated he was bullish on housing.  More telling, and I paraphrase.....

"I would buy all the distressed housing around me that I could, rent it out, and sell it for a handsome profit three or four years down the road."

http://www.cnbc.com/id/46538421

Great idea, and I do it daily.  However, and this is aimed at the dozens of aspiring investors I hear from, how are you going to:

find a tenant?

Qualify that tenant?

Monitor that tenant?

What if something breaks?  Who do you call?

What if the tenant doesn't pay?  What are your rights?  What are his?

It 's a great idea.  It's just not as easy for you as it is for a billionaire.  But I think he's dead on.

If you are a serious investor in need of information and property management, send an email, or call.  I started in the 70's.  It's time again.

The average foreclosure takes 748 days, and can cost the bank in excess of 50,000 dollars.   Hence:

http://www.desmoinesregister.com/article/20120122/BUSINESS03/301220032/1029/BUSINESS&odyssey=mod|dnmiss|money

If you're underwater, it is an option.

In a recent blog:

http://sticksbricksandmoney.wordpress.com/

I mentioned that 3.75% Mortgage money was artificial, the the Government had to offer that rate to move the foreclosures they have on the books.  On CNBC Video today is saying that the new burst of forclosures is on the way:

http://www.cnbc.com/id/45682960

But also, the banks are "sprucing up" the new product:

http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=4&id=268709

The concept of the blog was prescient, if I do say so myself.  Why not spent the extra time and find that perfect home?  Then, you use Uncle Sam's dime, instead of going to The Home Depot and borrowing $20,000 at 22%?  And if it were me, and I say that mortgage rate, no way I'd pay it down early.  I've seen these cycles for 40 years.  Rates won't stay here, and that extra money can go for a high rate CD a few years out.  You know, as well as I, that rates will eventually rise. 

Think outside the box.  You'll be surprised what you come up with.

http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=1&id=264538

I original opined that, given so many people cannot qualify for mortgages, they are renters.  However, In the $2000 and up market, I'm see families combine, both couples having kids, who need the room and opt to rent, given the uncertainty of the economic environment. 

Another thing to consider.  With mortgage rates at 4%, and the ten year treasury at 2%, with the mortgage rate interest deduction, buying rentals is extremely attractive.  There really is no alternative for money. 

I do a lot of work with investors.  We need them to clean up this mess and give folks a decent place to live.  The Capitalization Rates, a ratio used to estimate the value of income producing properties, is remarkable given the (lack of) interest on CD's and money markets....... Read on.

http://classic.cnbc.com/id/44229897

Surprisingly, the answer is "NO".

http://www.realtor.com/blogs/2011/07/11/short-selling-without-missing-a-payment-explaining-imminent-default/

Call, or email.  I can help. 

“Another benefit of using Team Gary, is the accessibility of a licensed title professional, Cathyrine M. Hilgendorf, “Cat”. Cat  started in the title business working for top real estate attorneys, achieved Certified Legal Assistant with a Specialty in Real Estate in 1990. Cat owned her own title company for 17 years and is now working as the Operations Manager of Olympia Closing Services, Inc. in West Palm Beach. She is available to answer any title questions you may have and seamlessly guide you through the closing process. Please feel free to call her at 561.689.4481 and/or email her at cat@olympiatitle.net .”

And I can tell you, she'll drop what she's doing to answer your questions.  All you need do is, tell her Gary sent you.