The several years of "loose lending" by mortgage lenders helped bring a surge of bad loan programs with borrowers that were either overextended from Day One or should have been unqualified to begin with. This surge has now become a tsunami of foreclosures and short sales, which Jeff Allen and I have lumped together as the term: "Lender Mediated Sales." Now that lenders, banks, retirement funds, investment bankers, average investors and everyone else have all been bitten by the fallout from this housecological … [Read more...]
Minneapolis/St. Paul MLS Addresses Foreclosures & Short Sales… Kinda
June 10, 2008 by 2 Comments
The RMLS of Minnesota, which is the governing body of the MLS in the Twin Cities and is owned by the 4 local REALTOR associations, has made some policy changes in regards to the reporting of foreclosures on the MLS, effective on Thursday: The "In Foreclosure/Lender Owned?" field: Initially will be an agent-only field (not available on Customer reports or on public Web sites through Broker Reciprocity). Options are: Yes, No and Not Disclosed For NorthstarMLS, Foreclosure is defined as the homeowner being … [Read more...]
Short Sales & Foreclosures in Plymouth and Maple Grove
May 19, 2008 by 2 Comments
I took a few hours Sunday to review short sale and foreclosure sales in Plymouth and Maple Grove during the last 10 months and found some interesting information. Before I explain what I found, I want to explain what I looked at: Homes that were clearly a short sale OR a foreclosed, bank owned home. This meant I only searched the terms like "short sale" and "bank owned" or "REO" and not all the other terms that can sometimes be ambiguous. This gave me a short list to work from, but it was as close to … [Read more...]
Price Per Square Foot – Lender-Mediated vs Traditional Sellers
May 6, 2008 by 1 Comment
As a follow-up to the report I co-authored with Jeff Allen from MAAR, below is a comparison of price per finished square foot between lender-mediated sales and traditional sales. As can be seen by the chart above, there is a substantial price discount on a cost per square foot basis when you look at lender mediated sales. My reasoning for why this is happening is as follows: Short Sales Short sale transactions often take several months to come together, thereby reducing the number of buyers willing to deal … [Read more...]
Aaron Dickinson and MAAR Publish Report on Foreclosures and Short Sales on Twin Cities MLS
May 6, 2008 by 1 Comment
You can find the report here. Background In late October I wrote a blog post regarding foreclosures and short sales listed on the MLS in the Twin Cities. Once I started researching this topic, I found that the information I was uncovering was previously unknown in our market and that the trends it offered were very insightful. I shared this first-step research with Jeff Allen from MAAR and we decided to work together to explore it further. The hardest part of this whole research project was developing the … [Read more...]
Foreclosures and Short Sales Skewing Twin Cities MLS Statistics
May 5, 2008 by 6 Comments
In the first quarter of 2007, sold homes reported by the MLS were 90% "Traditional Sellers" and 10% "Bank Mediated Sellers" (bank owned foreclosures and/or short sales). In the first quarter of 2008, these "bank mediated" listings comprised more than 27% of the sales. The Median Sales Price of homes sold by Traditional Sellers in Q1 2008 was $220,000, down only 3.9% in the last 12 months, while the Median Sales Price for the bank mediated listings was only $155,000, down a substantial 10.4% in the last 12 months. … [Read more...]
Greedy Buyer Loses in Multiple Offers
April 9, 2008 by 4 Comments
This is a story about a buyer who was too greedy for his own good, and how his underestimating of the situation left him with terrible regret when he lost out on the offer for his "dream home." About a month ago this buyer went looking at new construction in a outer suburb of the Twin Cities. This neighborhood, while all built in the last 5 years, has a lot of dynamics currently going on: There is still a lot of development going on in the area: several developments within a mile (and this development as well) … [Read more...]
Q&A: How Long to Hear Back on a Short Sale?
March 31, 2008 by 2 Comments
Question: I submitted an offer on a listing where the seller needs to get approval of a short sale from their bank(s)...how long will it take to hear back? Answer: Responses from banks on short sales is typically taking anywhere from 2 weeks to 2 months, with 1+ months being the most typical. Most lenders are so bogged down with short sales that they're taking 2+ weeks simply to get to processing your offer. At that point they'll order a BPO (Broker Price Opinion) from local agent(s) and ask the seller to … [Read more...]
Looking for Foreclosures or Short Sales – Come to Me!
March 9, 2008 by Leave a Comment
If you are an unrepresented buyer looking for foreclosures or short sales in the Twin Cities Metro, you should contact me to get set up for a custom MLS search for properties marked as foreclosures or short sales. Through hours of research and trial and error, I have found a list of terms that REALTORS commonly use to note properties that are bank owned or subject to bank approval. This list of terms is likely the most comprehensive and best tested list in the region. If you are not currently under contract … [Read more...]
Foreclosures & Shorts Sales Should Be Classified As Such on MLS
February 28, 2008 by 3 Comments
There's a lively discussion going on in our office regarding foreclosures and short sales and their impact in this market. I was going to call it a debate but typically a debate has two opposing viewpoints whereas of the people I've spoken to, we all seem to be in agreement: the MLS should add a flag for foreclosures and short sales. Right now most agents do disclose if their listing is a foreclosure or short sale by saying something in either the Agent Remarks, Public Remarks, or Financial Remarks. The … [Read more...]
