The following is a press release that was sent to local media welcoming Michael Floyd to the Valley of the Sun.
FOR IMMEDIATE RELEASE
April 26, 2012
Dean Ouellette (480) 270-4990
Michael Floyd: Welcome to Phoenix Arizona, here is your Phoenix housing market
PHOENIX- Today the Arizona Cardinals made a great step in their efforts to return to the Super Bowl by drafting Michael Floyd of Notre Dame with the number 13 overall pick in the 2012 NFL Draft. To save Floyd time, we at Thompson’s Realty would like to help him give a better understanding of the Phoenix real estate market, and provide him with a few homes for sale that may be perfect fits for his housing needs.
Despite what many would believe by the national media reports, the Phoenix housing market is as hot as Floyd’s career is right now. The housing inventory is as low as it has been in years, and we have moved to a sellers’ market. With houses moving as fast as Floyd’s 4.40 40-time, finding a good house and not falling into a bidding war with other buyers will be about as difficult as creating separation from Darrelle Reevis.
To save Floyd some time, here are some available properties that may be of interest:
1225 E Warner Rd Tempe. This property in the Wingfoot development is close to the Cardinals practice facilities where you will be spending most of your summer. Get as much sleep as you can and still get to the office early with this convenient location.
11816 S Montezma Ct, Phoenix. Welcome to Ahwatukee which is the part of Phoenix south of South Mountain. This home will be great for you if you like to get out and work out in the mountains. With a yard that borders South Mountain, you are just moments from getting a good early morning run in the desert.
120 E Rio Salado Pkwy #601, Tempe. If you don’t want to worry about yard work, this Tempe condo may be a perfect location for you. Right on Tempe Town Lake, the Edgewater building complex has some of the best luxury living in Tempe, and you cannot beat the prices. Currently on the market at $259,000, this luxury condo sold for $620,000 back in 2008.
Whatever Michael Floyd decides for his living situation, myself and my fellow agents at Thompson’s Realty welcome him to the Valley of the Sun, and we look forward to watching him line up opposite Larry Fitzgerald and giving the team another great option.
BTW Michael, this Larry Fitzgerald guy’s pretty good. Watch his work ethic, follow his lead and we know you will be a great Cardinal too!
So the good news is we just closed a short sale listing from Queen Creek at the beginning of the week. More good news is this short sale was not a cat because if it only had nine lives, it would be dead.
We took the listing in May of 2010 and by the time we got an offer that would stick it was mid-July. The BPO came back at $131,000, right about where we thought it should be. Even thought he buyer had only waited for less than five weeks, they had found another house so back to the market the house went. The problem we were facing with this area of Queen Creek is it was probably the most rapidly declining area of the East Valley.
We got another offer in October, and because this is a Fannie Mae short sale the original BPO should have been still valid and with an offer of $120,000 we knew we would have to work some magic to make this happen or challenge the BPO. But for some reason, they ordered a new BPO, and in this rapidly declining market the number came in at $152k. 152k? Someone used some bad comparables. I usually meet the BPO agent at the property as I did this time, but this BPO agent would not allow me to even talk to him, so there was nothing we could do to make sure he was looking at the same info I was.
The buyer was not willing to work with us as we fought it, so they walked too and back to the market we went.
The first week of January I get an offer for $117k, which was about market value, and they were willing to wait while we challenged Fannie’s BPO.
Of course Fannie would not make it easy and just look at the comparables we were providing and see the obvious. They refused to look at value. We escalated in Bank of America to try to get them to help us fight Fannie Mae. Again we were told no Fannie would not take a look at value.
After we were told at least 5-6 times by a variety of people that Fannie was refusing to even look at value, we eventually found someone in the escalations department who realized we were right. How could values go up 20% in four months? If the comparables sold in the last three months were 95k-130k, with only one above 117k, how could ours be worth 152k?
But again even though she was working on making the case to Fannie Mae, they would not look at it. Finally as a last ditch effort I started calling every manager and executive at Fannie I could get a number for, and they all refused to talk to me saying I needed to go through the servicer. Then I blasted them all with emails outlining my case. I was so aggressive in my contacting that Fannie Mae called my escalations contact at Bank of American and yelled at her telling her I had to stop contacting them. That meant I was doing my job.
Eventually all my harassing of Fannie Mae paid off and they agreed to do a new BPO, which came back at $122k, right where we thought it should. So we wasted hundreds of man hours and two months of time, but we were making progress. Of course there were issues with cash contributions and promissory notes that I will discuss tomorrow, but we would eventually get an approval letter and they gave us only 5 days to close. Of course they had to make that difficult to and it took two days on the phone to get them to eventually extend it two days AFTER the letter expired.
Fannie Mae needs to find a better way to work with agents and/or servicers. Eventually they would agree with everything I say, but they took months and hours of time to get there. If they had been able to use their brain, it could have saved a lot of time and money.
Something I hear out there from a lot of agents, most of them not doing short sales from the listing side is Chandler short sales are getting easier to get through than they used to be. Well maybe if you are comparing them to 2007, but short sales are not any easier to get closed today than they were 6, 8, 12 months ago. In fact they may be harder.
Short sales often have the MI company, or investor or servicer pushing back wanting more money, cash contributions, promissory notes or relying on bad valuations and sticking firm. I am not sure why banks are putting their foot down more than they used to, it may be because the cost difference now between a short sale and foreclosure may not be as great because of all the extra staff that has been needed to be hired to process them. But whatever the reason is, one thing is certain if you are looking to get into short sales because they are getting easier, be prepared to be stunned.
Kristin and I probably talk to a few agents each a month that start doing short sales then come asking for help. They conversation is usually concluded with them making a statement such as “I am not doing another one of these short sales again.”
The weather in Chandler Arizona is in my opinion the best in the country. Here in Chandler it is sunny an average of 330 days a year. This morning when I woke up was one of the other 35 days a year as it was windy, dusty and about to rain. So while the weather in Chandler is great, it is not perfect.
Just like the weather, even with the best short sale agents things will not work out 100% of the time. The industry average of short sale closings is close to 40%. The best agents will close somewhere between 80-90% of their short sales. If any agent tells you they close 100%, RUN. They are either lying, have lost their mind or have not done enough deals.
There are reasons that short sales do not pan out that are sometimes out of the control of the listing agent. But while no one will close 100% of their deals, there is still a big difference between those closing 80-90% and the industry average of 40%.
The reason some agents close 85% while other agents close less than 30% is a combination of experience and understanding that every no is just one no closer to getting a yes.
I was talking with another agent from Scottsdale yesterday and we were talking about some of the problems we are seeing with short sales right now. We ended up talking about my videos and short sale training in general. One thing we both agreed on is is you need to be cautions of advice on the web.
If you are selling your house or an agent looking for tips this site and other sites which give advice on short sales can be a great resource. At the same time, there are great dangers. Things on the Internet live around forever. A post I wrote or a video I did about Fannie Mae or Bank of America 6 months or a year ago may no longer be relevant at all.
The short sale scene and the dynamics of the deal are always changing. Advice about how to overcome a promissory note or about getting an extension on a foreclosure date on a Fannie Mae property a year ago would get you no where today. Advice on how to escalate within Bank of America a year ago may not be relevant to how we do it today.
If you are taking advice from a video or blog post take it with a grain of salt. Just because something works for one agent does not mean it will work for you too. And if it is advice from more than a few months back, it may not be good advice today. That is one of the important things about short sales. It is a lot harder to take a short sale transaction now and then as a listing agent than it is to be in them every day. When you are in them ever day you see changes as they happen and can make quick adjustments.
The forms we include in our short sale package change on a regular basis and we now have different packages for different banks. If you are doing a Chase short sale you will not receive the same package from us as if you were doing a Bank of America short sale.
So remember, be cautious and if you are looking for a short sale agent make sure it is someone who is staying active in short sales on a daily basis.
Managed chaos, this is the word or the phrase of the day. When you are doing a short sale whether you live in Chandler Arizona or anywhere else, your short sale agent is going to need to know how to manage chaos. That is exactly what a short sale transaction is.
In a short sale transaction you have the buyer and buyers agent, listing agent, investor, servicer, servicer escalations department, MI company all wanting the best deal for them in the time frame they want, which is usually now. Everyone involved is going to be saying no a bunch of time, threaten to pull out or not approve it and eventually you get the approval letter then Fannie Mae wants you to close in five days.
There are so many road bumps and obstacles to overcome in many short sales that to an outside observer or anyone but the short sale agent it probably seems like chaos. The thing is, to the agent who is doing this every day and in the trenches it is chaos, but managed chaos.
We anticipate these problems are going to come up. We know what is normally going to happen next and prepare everyone involved. We have a plan on how to deal with these issues and know how to get around when a new issues arises. The key to a successful short sale is knowing how to expect the unexpected and managing the issues when they explode. And they will explode.
When you are negotiating your Chandler short sale there is most likely going to be a point where your bank is going to counter offer and you will accept the deal. That does NOT mean you have an agreement. That means based on the guidelines the investor behind the loan has given the bank who is servicing the loan, the deal is good enough to be submitted to the investor for final approval.
After you and the bank come to an agreement the deal is sent to the investor to be approved. Often the investor is going to come back and say they need more money, a cash contribution or a promissory note from the seller. This is often negotiable, but expect that to happen.
So don’t be surprised when the bank you thought you had a deal with all of a sudden says they need more money. This is when the real negotiations begin. Until you get the final approval letter in writing in your hands never assume you have a deal.