Perrysburg Blog

Caveat Emptor?  It’s the Latin rendering of “let the buyer beware”.

Because buyers need to beware.   At least in Ohio they do!  A quick Google.com scan shows thousands of entries for “caveat emptor” in Ohio real estate.   It shields the real estate seller.  It protects the real estate agent.  It immunizes the real estate broker.  A good example, from a Realtor trade rag is here.

I had to put a house on the market that made this very painfully real.

The “buyers”, who shall remain nameless, simply relied on what the “seller” told them.   They trusted.  But did not verify.

Big mistake.

The “seller”?  He did not have real title to the property.  It was not his to sell.   There was a bank somewhere – not getting paid.   The “buyers” gave their rather sizable down payment to this Perrysburg-based con artist.   Their “down payment”?   Gone.  Scammed.   Stolen.

They were buyers – and they were not careful.

The damage to them – emotionally, financially, and more was and is terrible.

The seller/agent was neither a real seller or a real real estate agent.

Nothing was as it seemed.

I would trust . . . but then verify:

1. Who are you?

2. Why are we not using a title agency?

3. You allright with my lawyer looking at this?

4. Why isn’t your deed recorded?

5. Why don’t you have an office?

Just a few things to consider and learn to ask so that you can avoid some of the scams that are being done right now on innocent, trusting, unaware buyers!

Out and about in Perrysburg today.   Foreclosing and securing new bank owned properties in the city and township.

Then out to Toledo and Rossford – to snap some photos on a rare sun-shiney day of some new listings.

Then back to work on offers and new listings.

And everywhere I go . . . . “is the market getting better?” is the question.

Not based on what I am seeing.

Then I read this from Marketwatch.com

BOSTON (MarketWatch) — If you thought the housing crisis was bad, think again.

It’s worse.

New data just out from Zillow, the real-estate information company, show house prices are falling at their fastest rate since the Lehman collapse.

Average home prices are down 8% from a year ago, 3% over the quarter, and are falling at about 1% every month, according to Zillow.

And the percentage of homeowners in negative-equity positions — with a home worth less than its mortgage — has rocketed to 28%, a new crisis high.

Zillow now predicts prices will fall about 8% this year and says it no longer expects the market to bottom before 2012.

“There’s no way we can get to flat, from these depreciation levels, in the last nine months of the year,” says Zillow economist Stan Humphries. “Demand is a lot more anemic than we had previously thought.”

Just lovely.

It’s not.

It’s not the end.

It’s a house – you can get another one.

It’s a collection of sticks and dirt.

There is more to be had.

It’s not worth your marriage.  It’s not worth your family.  It’s certainly not worth your life.

I am at a meeting – a real estate meeting – writing this.  I had lunch (outside on a terrace, so you can now figure out I am not in Northwest Ohio . . . ) with a fellow Realtor from Nevada.

In Nevada they have 6 years, he tells me, to come back and collect from sellers who default.  And there is a HUGE amount of turmoil with his clients when they default (in Ohio lenders have 2 years to collect).

But – by his estimate – over 80% of the homeowners in Las Vegas are upside down.

4 out of 5.

The largest employer there is the local school system  – so their hope for job growth is limited.

By those metrics things are better in Toledo and Perrysburg.

But no matter what market you are in – when you are in distress with your personal real estate – it is not the end.

You need good help and advice and counsel.

You most likely need a good real estate attorney.

And you need perspective.

Life is more important than one house.

What you do with your life is more important.

And no matter how bad it is today, how bad the dunning phone calls are, how far underwater you are, how much equity has been destroyed – it is just a house.

They promise.

They promise the seller.

Who promises the buyer.

Who relies on the promise: “The Short Sale Manager will give us an answer by the 21st of the month . . . !”

Sure they will.

Because they “promised” to.

But they lied.

Things are going to happen.

Something is going to change.

Events are going to modify their promise.

Why?  It doesn’t really matter, does it?

They (the aggrieved bank/banks) are in control.  They are being harmed.  They are losing money.  They feel like they can modify what was said last month just like the upside down seller can modify the terms of the repayment to the bank.

None of this is malicious or intentional.   It just happens.

So be very careful to be FLEXIBLE when you are selling via a short sale.

And be very certain that you can be MORE FLEXIBLE if you are attempting to purchase a short sale asset.

Flexibility will be required.

The pay off for your flexibility will be worth it:  either a forgiven debt or a great house at a killer price.

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”.

The collapse of the Toledo Real Estate Market, caused by the collapse of the economy and our manufacturing base, has left a lot of home owners upside down – owing more than their home is worth in today’s dollars.  And this is known as a short sale.

Short sales are complicated transactions.  They are not for the feint of heart.

Who Actually Makes the Decision to Approve a Short Sale.

2 people.

You, the seller.

And your lender or lenders.  You both have to cooperate or nothing but a foreclosure train wreck will result.  You will not be allowed to take any money away from the closing so you really don’t have an economic reason to care about the price your home sells for.   But . . . the bank cares.  It’s now their money at stake.  And while they care there is neither rhyme nor reason as to why one deal is accepted, approved, and closed and another one is not.

Why Would I Short Sale My Home?

There are advantages – if done properly.   You can stop the bleeding.   You can be “forgiven” from owing any more.   You can avoid collection acts and lawsuits that lead to a deficiency judgment.  Bottom line – you can get the bank to take the money that the house sells for and you can walk away.  You will not be able to finance another home with an FHA mortgage for 3 years . . . but that beats the 7+ year ding that a foreclosure action generates on your credit.

What Is the Best Way to Go About a Short Sale on my Perrysburg Home?

“Just call Jon” as I am want to say.   I have closed quite a few in Perrysburg and have special training to increase the odds of success.   A real estate agent with actual field and negotiating experience in short sales is, in my opinion, absolutely required if you want to succeed.  You will have to prove to the bank/investor/mortgage holder that you really did try to get top dollar for it.   You will need help proving your suitability for a short sale, and assembling the paperwork packet that will increase your odds of success.

That’s what I and my team do.

Why Do Most Short Sales Fail?

Time.  And communication issues.  And mistakes in contract process, buyer process, appraisal process, and with second lien holders.  These are tough, complicated transactions and if your Realtor is also working at multilevel marketing too or selling holiday hams at the mall it’s not an indicator of future success.  Hire the best for the toughest jobs.

I love the press.

I just wish it was on a better and happier subject.  Like flowers blooming in the Spring or pennies from heaven.

But the Toledo Blade was kind enough to interview and quote me in their latest real estate article.

And it was on short sales.  Which is when the seller does not have enough money from a real estate sale to pay off the combination of mortgage debt and closing costs when a property sells for market value.

An indicator short sales is the number of homes in “preforeclosure”.   One database that I subscribe to has over 900 houses in Perrysburg listed as being “in distress”.

Now, it’s not a short sale unless you have to sell/move.

Then it might be – and there are options.  Plenty of them.   Hence the CDPE training that I procured for my agents.   It’s specialized training to get Realtors qualified to deal with short sales and distressed sellers.  And it was needed.

But 900 homeowners?  In potential distress in Perrysburg?

Hard to imagine but I believe that number is accurate.

If it is – there will perhaps be many more empty ghost houses – like this one I have on the market:

Because distressed homeowners can become short selling homeowners.

And if they are not successful they can become foreclosed homeowners.

And those houses become “HAUNTED”.  Empty.  Full of expense-causing gremlins that wreck monetary damage and hurt everyone’s neighborhood and the value of everyones house.

I have no answers or solutions (Steve Forbes does – and it’s the best I have read.)

But there is hope for any homeowner.   There are solutions.  There are options.  You just have to know where to look and what to do.