July 1st, 2009 Categories: Distressed property, Oklahoma City Real Estate
The recent news articles saying that the recession is over is very premature. First, the job loss from the auto industry has not had it’s full affect. The reduction in state budgets will almost certainly create another drain on the economy with fewer employees, fewer essential services, and less unemployment benefits. Californis is one ogf many states although by far the largest that is in a full blown crisis nationwide that runs into the 100’s of billions in budget shortfalls. Add to that two more waves of foreclosures coming from negative amortization loans and negative equites from foreclosures, and you have a financial situation that won’t end this year, and hopefully will see improvement by the end of next year. We are fortunate that we live in Oklahoma, but judging by the increase in the sheriff sale list, we are not immune to the problems. Our team is expert in working short sales, and for those of you who have financial troubles or have family, friends, or neighbors that need help, let me offer some helpful information.
First, short sales by definition is when the mortgage company decides to take a loss upfront that going through the full foreclosure process, hence taking less the what is owed or being “short of a full payoff.
Second, Oklahoma is a deficinecy state, so even though the IRS has a moritorium on forgiveness of debt as taxable income, this does not prevent the mortgage company from pursuing a foreclosed homeowner.
Third, short sales are wasy, in fac they are hard, and very few Realtors anywhere have the expertise, patience, or desire to work three times harder than a normal sale. For instance, If a Realtor tells you that they will try to get multiple offers and send them all to the mortgage holder, run like the wind, this is a sure fire way to court failure, and it also violates Realtor ethics. If they do not know that a credit hit can be limited to 50 points, and don’t know how to do that, find another Realtor. If they haven’t done hundreds like we have, they don’t know that every mortgage holder is different, and every situation is too.
Fourth, if they do not get about 80 pages of documentation up front from you, then they don’t get the process. When an offer is turned in, it should be accompanied by a complete file. Many loss mitigators have anywhere from 100 to 500 files they are working, and an imcomplete file goes to the bottom.
Fifth, do not wait until it is too late. No one really wants to do this, and it is a very emotional experience, but being in denial and going close to sheriff’s sale is not good. The process can take time, especially if you have a second mortgage, but we have been successful in getting homes removed from sheriff’s sale, but only if we have been in process for awhile before.
Sixth, and I will leave more for another post, you do not have to bring any money to closing. In the negotiations, the mortgage company agrees to pay all fees for buyers, sellers, and Realtors. Warning, that is not automatic. If a Realtor does not do this properly, you may have to bring money but we put in writing for you that you do not. If all this works out, and our close rate is above 95%, you can repair your credit in 2 years, not 7 years, have only a 50 to 150 point credit hit on your score, and like so many of us, look back on this as a bad experience, and one that promises a better life moving forward. Please contact us if we can be of service.
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June 26th, 2009 Categories: Personal
Man, sometimes your thoughts just have an ADD quality especially when you are going on vacation next week, so I though I would do a post of short, what the hey type statements.
First, have you ever noticed that when oil prices change on CNBC reporting, that even though that oil is at least six months off, the gas stations change price immediately?
After my two divorces, and living in the heart of the bible belt where the divorce rate is over 50%, how can you say that Gays will Read the rest of this entry »
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June 21st, 2009 Categories: Distressed property, Oklahoma City Real Estate, short sales
Short sales, also known as preforeclosures, are not a transaction any Oklahoma Realtor wants to go into without education. It also a transaction that usually takes three times the effort as a regular sale, and about five times the paperwork. The results although difficult to get to, are hugely rewarding at the end. No, I am not talking about commission checks, rather in the benefit to the client who’s credit worthiness is much less impacted, than in a foreclosure.
To define a short sale again for those who haven’t read previous post, is when a distressed homeowner has stopped making payments due to changes in conditions like health, job loss, or divorce to name a few. Just wanting to quit making payments is not enough to prove a hardship. The mortgage company decides that it is less expensive to take a loss up front than go through the expense and time of a legal process to gain control of the home. The distressed homeowner benefits because they do not have a foreclosure on record, saving them about five extra years of credit repair, and in some cases their jobs. A military person with a security clearance would be an example, or a cashier with companies like Walmart, and there are other examples. Our team is dedicated to helping homeowners in the Oklahoma City area.
Teamwork is the key. With all the “good news” about the Oklahoma City economy, we are working with more short sales every day. The first advantage of the team is a lack of burnout. Form the start of the transaction where you deal with people in distress because of their situation, all the way to the loss mitagator at the mortgage owner who handles hundreds of files at the same time and has a lot of turnover of personel, short sales require a light and understanding touch, coupled with nerves of steel. We have an experienced negotiator who has a 96% success rate with mortgagors, a 20 year veteran with listings, and an experienced investment Realtors who can supply a buyer quickly. Add in an administrator, and this is the way we can find relief for the homeowner in distress.
If you or a family member, or a friend is having problems, please contact us. Why would we want to do this work that requires all this time? Because if one of the values of being a good Realtor and getting referrals from others is to have raving and loyal fans, then you need to see the look on their faces at closing when they have successfully avoided the foreclosure.
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June 20th, 2009 Categories: Economics, Oklahoma City Real Estate
A little over a year ago Forbes declared that Oklahoma City was the most recession proof city in the United States. Many looked at that any only saw recession proof, and not the most in front of it. Oklahoma City has not been immune to the economic downturn. All areas have retail stores, car dealerships, and downsizing businesses, that have raised the unemployment rate, and the banking industry has slowed down the growth through tight money policies. But in comparison, a 5.7% unemployment rate versus the national average of 9.75% is an accomplishment.
Now a new study by the prestigious Brookings Insititution has Oklahoma City abuzz again. For the first time, this organization analyzed the top 100 metro areas in population and they ranked Oklahoma City the No 2 city in the first quarter recovery. Officially, the recession was declared to have started December of 2008. Our sister city Tulsa ranked No 9 and the top city was San Antonio.
The criteria for the study was six indicators: employment, employment change by industry, Unemployment rate, wages, gross metropolitan product, Housing values, and foreclosure rate. One of the reason sited was that Oklahoma City avoided the housing bubble, in fact even in 2008 housing prices were considered undervalue. Two areas that Oklahoma excelled and lessened the downturn was the energy and government sectors. Devon Energy alone will double their employee number in the next three years. Once again, for home buyers and investors, there’s no place like home, if it is in Oklahoma City.
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June 16th, 2009 Categories: Real Estate, Real Estate Stats
This weeks analysis is for single family homes in the 73099 zip code. This is a Yukon, Oklahoma mailing address that encompasses 3 school systems, Yukon, Piedmont, and Mustang. The Yukon schoold district is the largest of the three for this zip. Yukon and this area runs North to South of Piedmont, Yukon, and Mustang when the zip code crosses I-40. All three on on the west side of Oklahoma City. Yukon itself was a small town until the 1990’s saw tremendous building increases due to the availability of undeveloped land, aned the lower cost of the lot prices for builders. The interior suburbs on the North and South had initially the highest land cost, so the west and the east side of Oklahoma City became very attractive. In the last 5 years, more building permits were issues for this area this area than any other in the greater Oklahoma City area. You can download the complete market condition report here, or below is an executive summary in thumbnail mode. By next week, this site should be updated with a sign up for a weekly report of the zip codes of your choice that will come to your email. If you have any questions please contact me at joe@joepryor.com.
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June 15th, 2009 Categories: Investment, Oklahoma City Real Estate
Close to OCU Apts
Less than a block from Oklahoma City University is a $560K 14 unit brick building that has had all the capital inmprovements upgraded. Apartments close to Universities are probably the most recession proof real estate investments that you can make. The beauty of these units is that the West side of OCU is gradually being rehabbed as the University grows. The location is also around 10 minutes to Downtown, 10 minutes from the State Capitol complex, and 10 minutes from 4 major hospitals. The location is Google accessed at 2015 NW 25th St., Oklahoma City, OK . It is in walking distance to class, over 30 food locations, 2 supermarkets, and other amenities like hardware stores, cellular phone stores, and pharmacies. The building has a property manager that understands the area, and we are in a prime time for rentals, as all the units are close to completed. This is a perfect time to buy as new rentals are being built in the area, and since all the major improvements like roof, central hear and air, appliances, windows, flooring, cabinets and fixtures are new, maintenance should be low in the next few years, making your bottom line better. Please contact me at joe@joepryor.com for more information. You can download a financial analysis PDF to see the cash flow.
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June 11th, 2009 Categories: Distressed property, Oklahoma City Real Estate, short sales
This is a first in a new series of stories about what is happening in short sales, also known as pre-foreclosures, and normals sales from private sellers. Then instructions you give an appraiser will help determine the final price that the house can sell for. If the appraisal is higher than the purchase price, great for the buyer because the price remains the same, but if is lower, woe to the seller because the price must come down. I will focus on FHA and VA loans here because the new HVCC set up on conventional loans is a whole different set of terrors.
Much of what I am seeing in the under $200,000 range in greater Oklahoma City is an increasing number of homeowners in distress. We met with a couple who both lost their jobs and have fallen behind. Other have had salaries cut back, while many have unexpected bills like with medical problems, one of the most prominent problems. These distressed homes are becoming more numerous in markets like Edmond, Oklahoma, because of the desirability of the schools and community, and the huge run up in new construction.
Here is the problem. The instruction on private and normal sales of homes has the appraiser not only instructed that this is a down market, but also many requirements hamstring the appraiser from adding any value. In some instances pools are worth zero despite the fact that $30K or more have been invested. Increasingly normal sales are coming in lower than the selling price. In another post I will go through some of the instructions I have seen.
Now on the short sale front another problem exist. The instructions to the appraiser is to max the appraisal to minimize the loss to the mortgage company. In some cases I have seen prices that would equate to a new home sale in a 2005 house. In those cases no one will buy them. The bad news is that you have people who are in desperate straits, and if the short sale cannot be accomplished, then they have 7 years of bad credit, not 2, and they have possible an extra 250 points off their credit score. It should be added that getting a rental property can then be a problem, or even getting certain jobs. If you are with the military, a foreclosure can get you relieved from the service because of loss of a security clearance.
Clearly, something has to be done to change this. We have fought appraisals successfully before which can add 3 months to the process. However, some cannot be saved. We have to streamline the process, and acheive some degree of uniformity. Otherwise, more forclosures means lower prices for non-destressed sellers, which leads to more people going negative on equity. Something has to be done to stop the madness.
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June 9th, 2009 Categories: Real Estate Stats
This weeks market summary from Altos Research is on a newly created zip code in Edmond, Oklahoma 73025. This is a Northern part of Edmond, and it is a area of much new construction. If you hit the hyperlink it will give you the comprehensive report. The graph below is a snapsnot of the basic market conditions. Remember that this month you will be able to sign up for these reports on zip codes that you choose, and get updated on a weekly basis. If you are relocating to the Greater Oklahoma City, Oklahoma area, you can also compare a location of your choice from one of Read the rest of this entry »
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June 7th, 2009 Categories: Oklahoma City Real Estate
Sometimes I get tired of reading about how great Oklahoma City real estate is. Don’t get me wrong, when CNN reported that Oklahoma City had appreciated 4% in the 1st quarter, I prefer that to doom and gloom. I just don.t buy it. Actually Zillow I think was more accurate with their .9% rate, and other cities would love to have any numbers in the black. Here is the problem, appraisers are under tremendous stress. It is not just the change in appraisal guidelines for conventional loans, it is also FHA and VA. The other problem is Realtors. Realtors are still breathing in the hype about Oklahoma City being the most recession proof city in the U.S. The problem is is that they forget the most part. No one is recession proof. Let’s get a bit more detailed about these two issues.
First, appraisers who in the past would appraise anything at any price except for a few, not get appraisal guidelines that limit, or even discourage setting new highs in a neighborhood. I have seen some of these instructions and it says appraise for a down market. Lenders just don’t have the time, inclination, or manpower to assess a city apart from the general condition. They also are prohibited in some cases of giving any added value. You put in a Pella window, it is just a window. You have a pool and you may not get a dime extra for your $40,000 investment, if they can’t find comps within blocks. We are going to have to deal with an over correction to the laxness of the last 8 years. Get used to it, and give the appraisers a break.
Now let’s come to Realtors. Why would they take a listing that is say $150,000, when $125,000 for a similar house is the max in the last six months. And why if they do get a contract and it appraises for $125,000 which is good for six months so they lower the price only $10,000? Pricing correctly has always been more than an art, and now with the current market conditions set my mortgage companies, it is even more crucial. If you are a homeowner reading this post and you put in an extra $25,000 in landscaping, granite counter tops, and upgraded appliances and fixtures, understand you just over-improved your property unless you are selling a luxury home that has this normally. Also remember the time value of money. If 120 days clicks away on your listing, you are paying money out of pocket that might go to finding a real deal out there, and they are there.
Realtors, appraisers, and mortgage companies are like people in other industries. There is a variable level of experience, knowledge from education, and talent for the business. Make sure that when you interview a Realtor, don’t just go for the one that tells you what you want to hear, because what you throw up against a wall typically doesn’t stick. When we price a house we know all the market conditions. Look for another post tomorrow where we will talk more on proper pricing.
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June 4th, 2009 Categories: Oklahoma City Real Estate, Personal
Plenty. A recent article in the L.A. Times talked about a Harvard study that quantified 62% of bankruptcies being medically related. Health Insurance, if you have it, has deductibles, copays, and will not cover all expenses. Not only that, if you are the patient or the care giver, you ability to work can be seriously impaired. I speak from experience after Read the rest of this entry »
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