Perrysburg Blog

There are so many myths and problems with short sale, I almost cannot choose where to start.

So, let’s pick on the buyer first.

The buyer is the risk taker.  The buyer is actually helping.  The buyer is actually signing on the dotted line for more debt/time/money etc.

And buyers have to learn this:

YOU DO NOT HAVE A DEAL.

To repeat: you do not have a deal until you are at the closing table, the owners have signed the deed, and the bank/banks have signed off on the short payoff.

That date/time is way far away.

It is after you have written your offer.  After you have paid your earnest money.  After the seller has signed it.  It is even after the bank/banks have approved it – because with short sale payoffs there are often unexpected landmines.

The lender is in control.

They can pull the deal.  Kill the deal.  Change the deal.

There is no deal until the deal is done.

Pray they do not change the deal . . .

In today’s Wall Street Journal there is an excellent article detailing the carnage in the real estate industry and the real estate market – it makes for great reading.

Many of the real life stories deal with “strategic defaults”.   This is the cogent decision to pick up your stuff, move away, and never come back to the house.

AFTER you have stopped paying the mortgage for a long time.

I am not sure that banks want to talk about this – it being assumed you have to pay them once you get their money and not just walk away.

Options abound for upside down, underwater homeowners in Perrysburg.

Most of them are just bad.

Strategic Default?  Foreclosure.

HAFA and HAMP?  Funny.  You are joking, right?

Refinancing?  Not if your are late, distressed, or have taken an income hit with your job.

So what is left?

The SHORT SALE.

The amazing, wonderful, surgical real estate tool that lets the borrower/homeowner off of the hook.   Let’s the bank get maximum value for it’s distressed asset.  And lets the a new owner move into a newly stabilized neighborhood with happy people for neighbors.

What could go wrong?

Plenty.

In fact, since it makes great sense, it also mainly goes wrong in today’s upside down real estate market.

So . . . starting tomorrow an ongoing series of short sale myths in Perrysburg – in case you were interested or in need of a short sale yourself.

Or for a “friend”.

Just wondering.

I was an intern once for the City of Toledo.   Just like this guy.

And believe me . . . you never want to work in the sausage plant if you go in loving the product.

You are going to have your eyes OPENED.

That links to a great read in today’s Toledo Blade.

About Stephen Leggett.

Just about every homeowner gets tagged with special taxes on their property tax statement: sewer improvements, water improvements, ditch maintenance, mosquito control, on and on and on . . . oh, and often you get a special ding for “street lighting”.

This poor legislative intern did a terrible thing.

He used his mind.

He told the truth.

He stood his ground.

Homeowners who are faithfully and obediently paying ALL their property taxes are not only not getting what they pay for, they are now aware that the public servants paid to be good stewards of the public trust are complicit in a cover up.

How sad.

I wonder if a group of homeowners in Toledo would sue the City of Toledo -  what would happen?

****(I did about 10 seconds of research, since I used to be a research intern – and trust me it is REALLY easy to do research now in the internet age – and guess what I found?  Lots of people sue about special assessments that are unfair or broken or false!)

I wonder if a homeowner whose street had inoperative street lighting refused to pay for their streetlight assessment – or maybe paid 65% of it – what would happen?

It’s probably good they fired him.

It’s easier than listening to him and coming up with a plan to make sure the lights are really on.

Because water freezes, expands, and is very powerful.

Just for your perspective.

Just for comparison.

This is for the City of Toledo ONLY over a 3 year period.

2010 Q3 vs. 2007 Q3 . . .

1300 fewer listings on the market.   -20%

200 fewer listings pending. -23%

300 fewer listings closed.  -35%

That is a changed, impacted, depressed market.

But it’s for a reason . . .

It’s in Perrysburg.

And it’s going to be a GREAT buy.

A HUD foreclosure.

Faithful readers of this blog get the first look at 546 W. Second.

And more than the price, value, and investment/ownership potential . . . this property comes with a HILL!!

A real hill – at least in Perrysburg/The Great Black Swamp country it counts for a hill.

Amazing – you can sled down your own hill.

Burning houses?

Increasing tax rates?

A scarcity of buyers? (not in my world – sold 2 or 3 today . . . and very busy . . . )

What is wrong?  What is the new thing?

The Busted Appraisal.

I saw this about 15 years ago with the ratcheting effect of appraisals in condo conversions.  Discreet price jumps had to conform to a steady pace of higher appraisals.

Appraisers are like pendulums – following behind the real velocity and position of the market.

But they catch up!  And they have now in Perrysburg and in all of Northwest Ohio.

Wow – to think I worried and worked appraisers to keep raising valuations in steps to help condo projects price properly.  Those were the days!

We could only wish for that problem today.

Today the problem is the busted appraisal.   The failure of the house to appraise.

Money quote from a very good news article you can read:

“There’s been a pendulum swing in appraisals comparable to the one we’ve seen in mortgage credit, from foolishly lax to overly restrictive,” said Walt Molony of the National Association of Realtors. He reported that as recently as October, one in 10 member agents said they’d had a contract canceled as a result of a low appraisal, 13 percent said they’d had a contract delayed, and 16 percent said they’d had a contract negotiated to a lower sales price as a result of a low appraisal.

The pendulum has swung.  Way back to where it was.

If you own a house with a paid of mortgage and you need to or want to sell it . . . you are still going to be severely effected by the foreclosure pendulum.

Sellers need to be informed.

Buyers need to be aware.

News you can ignore:

1. Portugal is next.

2. Ireland is broke.

3. Bond holders are going to get haircuts – painful ones.

4. Federal employees are not going to get one type of pay increase for 2 years (but they get other ones . . . )

All* safely ignored in sleepy little Perrysburg Ohio.

*Unless you are a Federal employee, planning to vacation in Ireland, and your mutual funds are long in bonds to Portugal . . .

News you CANNOT IGNORE:

It’s simple.

The goose to buyers and sellers by the 2010 tax credit has ended.

Jobs are still not being created.

Almost all residential construction is dead – with thousands of people unemployed because of the cessation of new home builds in Lucas and Wood Counties.

And because of the end of the tax credit hangover and the general trends of the economy . . . we are seeing signs of the “double dip”.

Most denied it could happen.

Most said it was unlikely.

Most forecast that it was not possible.

But behold:

Case-Shiller says prices are going down across the board.

Again.

In the Winter.

Plan.  Prepare.  Be informed.  The watchwords of today’s real estate market.