Short Sale History

Historically, the one thing that has not been short with short sales is the time necessary to close.  I've heard horror stories of closings taking months and even years.

But this week I think I may have made short sale history.  On February 12, I listed a home in N. Chili.  On March 14th, we received and accepted an offer.  On March 18th, we submitted the offer to the bank for short sale approval.  (For those that don't know what a short sale is, it is when the property is worth less than what is owed on it and therefore the bank must agree to a shortage.)  On the 20th of March we received the bank's approval and we closed on April 30th.

Now, Guinness doesn't keep records on short sales closings and to the best of my knowledge, no one else does either.  But I can't find anyone who has heard of a short sales closing this fast.

While it's fun to be a record holder, if even only in my imagination, I hope this record falls soon and often.  Short sales are the result of financial hardship.  When a homeowner goes through a short sale, they are are stressed and often feel like a failure.  And when banks make it a long, drawn-out process it is pure agony for the seller and the buyer often loses their enthusiasm for their new home.  It doesn't need to be this way and I hope my recent experience is an indication of what the future holds.

If you have any questions about Rochester real estate, don't hesitate to call or e-mail me.  Mary Shelsby

The Seach for the Ugly House

Some of my clients think I'm a little crazy when I advocate for buying ugly houses. Now I'm not talking butt-ugly. I'm talking about the type of ugly that a coat of paint or perhaps new carpet will fix. And I advocate for that type of house because that is where the best deals are.

Houses with "Pottery Barn Decor" are fun to look at but you will "ohh and ahh" all the way to the bank if you purchase this type of house. Sparkling clean and tastefully decorated houses command top dollar but keep in mind that the furniture and art work will be gone when you move in.

Everybody wants to buy a beautiful house. It's just not as exciting to tell all your friends, "Well, it has green and orange shag carpeting from the '70's BUT the roof is new and the furnace is only a couple of years old!"

Here are a few tips for ugly house shopping.

1. Do your homework so you can budget for remodeling jobs. Kitchens, for example, and be remodeled for a few thousand dollars or tens of thousands, depending on your standards. Even wall-to-wall carpeting comes in a wide variety of designs and quality and so no real estate agent can honestly give you a ball-park figure for these projects.

2. Have a checklist so that you are certain to check all the mechanicals, such as electric, hotwater heater, roof. It would be down-right depressing to have an ugly house that also leaks every time it rains. This is not to say you won't have the house inspected, but you should check for obvious problems before you put in an offer.

3. Analyze the layout. This is especially important in kitchens. You may be able to improve its looks but it also needs to function well.

4. Don't be afraid to ask for help. If you'd don't know how to decorate, hire an interior designer. Generally, they charge a few hundred dollars for an initial consultation which is a bargain if you saved thousands on the purchase.

Want to go ugly house shopping? Give me a call. I don't mind showing you beautiful houses as well.

www.RochestersBestHomes.com

Rochester Foreclosures

Last week I showed two properties back-to-back that were listed as potential short sales (the bank agreeing to taking less than owed, i.e., shortage) but when I arrived both had bright "Winterized" caution stickers and duct-taped toilets that indicate foreclosure. So I was surprised when I got an e-mail stating that in the state of New York, foreclosures are down 10 percent in the third quarter that just ended September 30th.

So how does Rochester stack up with the rest of the country in foreclosures. I found a cool map on the internet that paints a pretty vivid photo: Foreclosure Map According to this map, New York state is in the orange, or a foreclosure rate of 1 in 1,200 homes. That's not too horribly bad compared to states like California, Nevada, Missouri and Florida with rates of 1 in 150! Unfortunately, Monroe County doesn't fair as well as the state. Currently, 1 in 600 homes are in some state of foreclosure with some of the large pockets in Rochester's 18th and 19th Wards with rates at the 1 in 150.

The bottom line is we have a serious situation with foreclosures. In fact, the state of New York has enacted a law that requires lenders to wait 90 days before starting foreclosure proceedings.

There are organizations that can help if you are facing a possible foreclosure. The most important advice is talk to your Bank! Avoiding the situation will only make matters worse. Do not just desert your property. If you remain there and maintain it, the bank is more likely to work with you. And call for help. The Housing Council provides FREE foreclosure prevention counseling simply by calling 585-546-3700 Ext. 3015.

And if you are interested in purchasing foreclosures, take a peek at my post from last December: Buying Foreclosures Yes, there are some good deals out there but you need to keep a few precautions in mind when shopping for foreclosures.

I'm a optimist by nature. We are in a difficult economic climate right now but it is temporary. Soon real estate will be fun again.

The Waiting Game

Last Monday I wrote an offer on a property in the city of Rochester owned by a bank. We made the "life of the offer" as Wednesday at noon. When I talked to the listing office on Tuesday, they advised me it would probably take the bank 48 hours to give a response. After 36 hours, I started calling.



My client simply wants to know if his offer was accepted. Fortunately, this is an investment property. He has a very nice home ten or twelve miles outside the city. Often, I write an offer on a foreclosed property for young, first-time home buyers that are looking for the most economical way to purchase their first home. Sometimes they really NEED to know if they succeeded in purchasing the next place they will call home or do they need to hit the pavement again to find another property.



I don't really dislike writing offers for foreclosed property but I do dislike how much more stressful the process is for my clients. The people at the bank work Monday through Friday and to them, the purchase offer is just another file on their desk that they will get to when they can. Me? I work with real people that simply want to know if their offer was accepted, even if it is a Sunday afternoon.

Buyer Beware!

With all the media attention on the sub-prime mortgage situation, it seems that hardly a day passes when some buyer doesn't ask me about foreclosures. It seems that everybody thinks that is the best way to get the best deal in Rochester real estate.

Today was no exception. I was working with a buyer looking for a multi-family investment property in the city of Rochester. He was pretty excited about a new listing and could tell that it was a foreclosure by all the tape and winterizing stickers in the bathroom photo. The price was right and the description claimed it was a good property in average condition.

I made the appointment and met the buyer on site. Our first impression was the property was better than average condition. The kitchens and baths were dated but functional. One of the apartments had nice gum-wood trim that had not been painted. Each unit had three bedrooms of respectable size. The roof was older but still functioning.

We were both excited about "the find" as we headed back down into the basement. Suddenly my client realized that there was no plumbing in the basement. Someone had gone through and cut the pipes and harvested all the copper! Only in real estate can a house without plumbing be described as in average condition!!!

I often discourage young, first time home buyers from even looking at foreclosures. In most cases, the water, electric and gas have been turned off which makes even major defects obscure, unless you pay several hundred dollars for an inspection. So if you think buying a foreclosure is right for you, remember the old adage, "buyer beware!"

Three Things to Keep in Mind About Foreclosures

Lots of people are talking about foreclosures these days. There are those with variable interest rates on their mortgage that are worried about loosing their home to foreclosure and there are those who hope to buy foreclosures at a bargain price. I have a few pointers for those considering buying bank-owned and government owned foreclosed property.



First off, budget for extra closing costs. In the Rochester area, it is normal for the seller to pay for a survey, updating the abstract and transfer tax. With foreclosures, most banks and government agencies will NOT pay these expenses and so they must be paid for by the BUYER. Transfer taxes on a $100,000 home run $400 and survey and abstract could cost in excess of $1000. You will also want to be sure there are no back taxes due on the property.



Foreclosures are almost always sold in "as is" condition and not all foreclosures are a good deal. Often, when a homeowner is struggling to keep up with mortgage payments they will neglect important maintenance schedules. When buying foreclosures, it helps to have a working knowledge of what are minor repairs and what costs a fortune to fix. When doing an engineer inspection of a foreclosure, if the utilities are off, the buyer must turn them on in his name and then turn them off and re-winterize the property after an inspection.

Finally, the best place to search for foreclosures is in the normal websites that feature all the mls listings. (http://www.rochestersbesthomes.com/ is my favorite!) Services that charge to send you foreclosures are making money on information that is out there for you for free. You can recognize most foreclosures by the language in the listing. Some of the common phrases in foreclosure listings are: "Buyer to verify all information including zoning and C of O ordinance", "Proof of Funds with offer", "To be sold in 'as is' condition", "Seller Will Not Provide Abstract, Survey or Searches" and "Taxes Estimated." If you suspect that a listing is a foreclosure, have your realtor check so that you can budget for the extra closing costs.

For additional information about buying foreclosures, give me a call at 585-414-5513.

Mary Shelsby, Re/Max First