In a modern-day evocation of David's slingshot triumph over Goliath, a couple of foreclosed homeowners in Naples, Florida reportedly foreclosed on a Bank of America branch last week, their attorney actually having moving trucks pull up in front of a Naples branch to execute a foreclosure judgment against the bank.
What must have seemed to observers like a scene out of a parallel universe - you can see some video here - was actually the fair and logical conclusion to a situation which, the court had ruled, had an unfair and illogical start. In 2009, retired police officer Warren Nyerges and his wife, Maureen Collier, paid $165,000 cash for their 2,700 square foot home in the Golden Gate Estates subdivision, and never took a mortgage out on it. So imagine their surprise when, in Februrary of 2010, Bank of America initiated foreclosure proceedings against them. The Nyerges hired an attorney, Todd Allen, to defend them against the wrongful foreclosure, and the Bank eventually abandoned the matter.
But not before the Nyerges incurred $2,534 in attorney's fees, which they requested informally from Bank of America multiple times before resorting to the courts, which ordered the bank to make the couple whole. When B of A still had not paid the judgment after five months of phone calls and letter writing by Allen and the Nyerges to the bank insisting that the court order be obeyed, Allen took the next step in the legal collection process, obtaining an order of foreclosure against the bank. (See The Best Blogs of 2011)
"They've ignored our calls, ignored our letters, legally this is the next step to get my clients compensated," Allen stated during an interview with CBS News.
Allen then reported to a local branch of the bank with sheriff's deputies, who he instructed to remove cash from the tellers' drawers, furniture, computers and other property. Approximately one hour later, the Naples News reports, the bank manager produced a check for $5,772.88 to satisfy Allen's fees and additional costs.
"We apologize to Mr. Nyerges that there was a delay in receiving the funds," read the bank's written statement to the Naples News. "The original request went to an outside attorney who is no longer in business."
Some might say all's well that ends well in this scenario, seeing as the Nyerges got their home, Allen got his fees and the bank got its come-uppance. But there are deeper implications to every one of these foreclosure foul-up horror stories we read about, and even those we don't. The finger-pointing to outside attorneys seems reminiscent of the banks' excuse for the robo-signing scandal that broke last fall, and just as flimsy: the fact that a bank has lots of foreclosures to process and hires an overworked, underqualified or otherwise not-up-to-the-job professional to do it does not justify the nonchalance with which documents and properties of such gravitas were treated. The similarity didn't escape Allen, who told CBS News "this is a symptom of a larger problem." (Foreclosure Watch: It's Not as Bad as You Think)
Further, these excuses also doesn't stand up to snuff: I've pointed out before that in transactions with far less monetary significance than foreclosure (and far greater frequency), banks get it right, almost every single time. Just think: when was the last time you got an extra $20 bill at the ATM? I've never yet met someone who could remember such a time. Similarly, while one or even several of the Nyerges' efforts to get B of A to pay the court judgment might have gone to the defunct lawyer's office, the Nyerges say they actually submitted their pleas directly to the bank, multiple times, to no avail: "I talked to branch managers, I called anyone who would listen to me," the couple told the Naples News. "And I wrote a certified letter to the president (of the bank). No response, nothing." (See the Top 9 Successful Ex-Playboy Bunnies)
And all these instances - from the robo-signing news to the refusal to pay this judgment, may contribute to the depression of home values, with just a few degrees of separation. A survey last year found that the robo-signing scandal caused American adults to trust the banks less. Not surprising, but perhaps this is: a study by professors at Northwestern University and the University of Chicago recently found that the vast majority of homeowners, even those with negative equity, would rather keep their homes than strategically default on them. However, "people who are angrier about the current economic situation are more willing to express their willingness to default, as are people who trust banks less."
To be fair, the Office of the Comptroller of the Currency's sweeping investigation into the robo-signing scandal concluded that only a small number of foreclosures actually took place wrongfully, and that even those were only wrongful because of an intervening law or event (like a bankruptcy filing by the homeowners), not because the mortgage payments weren't actually delinquent.
But if ever there was a business argument for the banks to get their procedures and processes together when it comes to foreclosure and cleaning up the messes created by the few, truly wrongful foreclosures which, like the Nyerges' case, will get widespread notoriety and further tear down consumer trust in the banks, it might be contained in these three simple statements. Less trust, more walk aways. More walk aways, more foreclosures. More foreclosures, lower home values. Enough said? We'll see.
Tuesday, June 7, 2011
Wednesday, June 1, 2011
HOW TO PRICE YOUR HOME
It's a tough time to be a homeowner trying to sell. The national statistics show inventories and prices holding steady through the first half of 2010. While this is a relief from the grim free fall that home sellers faced after the real estate bubble burst, there still isn't the upward momentum that owners prefer when they're looking for home sales.
According to a Wall Street Journal report, only 47 percent of houses listed for sale in major U.S. markets had actually sold by August 2010. Several of the remaining listings were taken off the market. Moreover, the national averages belie the differences that realtors and other experts are seeing from one region to another, and even one neighborhood to the next.
"There's no longer a national housing market," says Armando Montelongo, the real estate maven who was featured on A&E's "Flip This House," a housing-bubble-era reality show. "You can drive 200 miles and see a totally different real estate climate."
You might not have to drive that far. Realtors report homes getting offers after a few days on the market in some neighborhoods and languishing for six months or more the next town over. So how do you figure home value and set the right price?
"We have a lot of pockets of activity," says Debbie Cobb, RE/MAX realtor in the Research Triangle area of North Carolina. "Out in the country we had foreclosures and that area is still sluggish, but we also have an area closer in, called North Hills. That market is still steady, although it's not as quick a sale as it use to be."
In short, home sellers who want a quick home sale, say to move for a job or transition to a more affordable place, need to be very price sensitive, especially if they live in average or underperforming areas (like those hit hard by foreclosures). "You can't price a home too low today, but you can price it too high and not have it sell," Montelongo cautions.
The best thing, real estate agents say, is to price a home appropriately to begin with. Try to resist the urge to overestimate your home's value; you want to avoid having your house sit for several months while you lower the price again and again. The more you do this, the more people will wonder what's wrong with your place, says Chad Goldwasser, a realtor with his own shop in Austin, Texas.
Here's how to figure out a fair home value:
1. Don't make it personal
The second you decide to put a house on the market, stop referring to it as "my home," Montelongo says. "It's a property," or at the very least, "the house." This will help you to get some emotional distance as a home seller. You can view the place with the objectivity that potential buyers have and think about pricing, and the home's value, in a realistic way.
2. Tour the neighborhood
Cobb suggests asking your Realtor to take you around to open houses in the neighborhood, or grabbing the local listings and going yourself to research home values. Focus on homes within a mile of your own that are a similar size with similar property, adds Montelongo, who has been buying and selling properties around the country for 10 years.
Pay attention to "how they show." That is, does the outside property look tended to? Are the kitchen and bathrooms up to date? The windows and siding in good shape? The floors and carpets clean and the walls freshly painted? Would the buyer have to make any immediate, obvious repairs or correct any extreme style choices (like a macho black-marble bathroom or way-too-green kitchen)? Is the temperature comfortable? Consider the price and see how long the house stays on the market. In the meantime, come back to your house and approach it the same way you did the others, the way a buyer would. How does your house "show" in comparison? Be ready to make some improvements or adjust your price.
"The homes selling quickly are in the best condition they can be in. They're cleaned up, staged well and priced correctly," says Goldwasser.
3. Follow the comps
"Comps" are the price tags on homes, comparable to a seller's, that have sold or gone into contract. While open houses will tell what home sellers are asking, comps tell you what they're actually getting, and therefore what the true home values are in your neighborhood. The comparison of those two numbers can itself be instructive. Your Realtor can give you local comps, as can websites like AOL Real Estate.
Since many Realtors won't list a price until the deal has closed, comps can lag a little bit. Follow them for as long as you have a property on the market to know which way local prices are trending.
Montelongo adds that you also want to know how long comparable houses sit on the market. If local properties are moving in less than a month, you're in a robust market and can price more aggressively. Thirty to 60 days means a good but not great market; more than 90 days means you're in a slow market and you've got your work cut out for you.
4. Do a test run
Watch what happens during the first three weeks that your property is on the market. If people look but don't make offers, you probably priced it a little too high. If no one even comes to look, you aren't in the right ballpark. In either case, "Get the price down as quickly as you can," says Goldwasser.
How much do you cut? Look at the latest comps and set a price that sits on the low end of them, or lower.
5. Reset the clock
If you've already made too many price cuts or the house has sat for too long and is getting stale, you might consider taking it off the market for a while. But before you do, Cobb advises, find out how long you'll have to wait before it shows up as a new listing (it could be one or a few months) and if the listing will tell how many cumulative days the house has been on the market; then decide whether it's worthwhile to do so.
6. Make your house a good deal
If he knows homes in a certain market are selling for about $300,000, Montelongo won't hesitate to put his on the market for $275,000. He figures that making it look like a really good deal will make people curious enough to come out and look. "You want to generate interest," he says. He's OK with selling for less than he could if it means getting out from under a house quickly. But it's not unusual, he says, for homebuyers who think they've spotted a good deal to bid the house up a little, bringing it closer to what the seller who lists at $300,000 might wind up having to come down to.
In a few select markets, trying to sell your home for too much might mean sitting on it for a lot longer than you prefer, but in most markets, it might mean not selling at all, experts say. As long as it's a buyers' market, getting the price right, and correcting pricing mistakes quickly, is one of the most important things that a home seller can do to attract a buyer and get to that closing date fast
According to a Wall Street Journal report, only 47 percent of houses listed for sale in major U.S. markets had actually sold by August 2010. Several of the remaining listings were taken off the market. Moreover, the national averages belie the differences that realtors and other experts are seeing from one region to another, and even one neighborhood to the next.
"There's no longer a national housing market," says Armando Montelongo, the real estate maven who was featured on A&E's "Flip This House," a housing-bubble-era reality show. "You can drive 200 miles and see a totally different real estate climate."
You might not have to drive that far. Realtors report homes getting offers after a few days on the market in some neighborhoods and languishing for six months or more the next town over. So how do you figure home value and set the right price?
"We have a lot of pockets of activity," says Debbie Cobb, RE/MAX realtor in the Research Triangle area of North Carolina. "Out in the country we had foreclosures and that area is still sluggish, but we also have an area closer in, called North Hills. That market is still steady, although it's not as quick a sale as it use to be."
In short, home sellers who want a quick home sale, say to move for a job or transition to a more affordable place, need to be very price sensitive, especially if they live in average or underperforming areas (like those hit hard by foreclosures). "You can't price a home too low today, but you can price it too high and not have it sell," Montelongo cautions.
The best thing, real estate agents say, is to price a home appropriately to begin with. Try to resist the urge to overestimate your home's value; you want to avoid having your house sit for several months while you lower the price again and again. The more you do this, the more people will wonder what's wrong with your place, says Chad Goldwasser, a realtor with his own shop in Austin, Texas.
Here's how to figure out a fair home value:
1. Don't make it personal
The second you decide to put a house on the market, stop referring to it as "my home," Montelongo says. "It's a property," or at the very least, "the house." This will help you to get some emotional distance as a home seller. You can view the place with the objectivity that potential buyers have and think about pricing, and the home's value, in a realistic way.
2. Tour the neighborhood
Cobb suggests asking your Realtor to take you around to open houses in the neighborhood, or grabbing the local listings and going yourself to research home values. Focus on homes within a mile of your own that are a similar size with similar property, adds Montelongo, who has been buying and selling properties around the country for 10 years.
Pay attention to "how they show." That is, does the outside property look tended to? Are the kitchen and bathrooms up to date? The windows and siding in good shape? The floors and carpets clean and the walls freshly painted? Would the buyer have to make any immediate, obvious repairs or correct any extreme style choices (like a macho black-marble bathroom or way-too-green kitchen)? Is the temperature comfortable? Consider the price and see how long the house stays on the market. In the meantime, come back to your house and approach it the same way you did the others, the way a buyer would. How does your house "show" in comparison? Be ready to make some improvements or adjust your price.
"The homes selling quickly are in the best condition they can be in. They're cleaned up, staged well and priced correctly," says Goldwasser.
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"Comps" are the price tags on homes, comparable to a seller's, that have sold or gone into contract. While open houses will tell what home sellers are asking, comps tell you what they're actually getting, and therefore what the true home values are in your neighborhood. The comparison of those two numbers can itself be instructive. Your Realtor can give you local comps, as can websites like AOL Real Estate.
Since many Realtors won't list a price until the deal has closed, comps can lag a little bit. Follow them for as long as you have a property on the market to know which way local prices are trending.
Montelongo adds that you also want to know how long comparable houses sit on the market. If local properties are moving in less than a month, you're in a robust market and can price more aggressively. Thirty to 60 days means a good but not great market; more than 90 days means you're in a slow market and you've got your work cut out for you.
4. Do a test run
Watch what happens during the first three weeks that your property is on the market. If people look but don't make offers, you probably priced it a little too high. If no one even comes to look, you aren't in the right ballpark. In either case, "Get the price down as quickly as you can," says Goldwasser.
How much do you cut? Look at the latest comps and set a price that sits on the low end of them, or lower.
5. Reset the clock
If you've already made too many price cuts or the house has sat for too long and is getting stale, you might consider taking it off the market for a while. But before you do, Cobb advises, find out how long you'll have to wait before it shows up as a new listing (it could be one or a few months) and if the listing will tell how many cumulative days the house has been on the market; then decide whether it's worthwhile to do so.
6. Make your house a good deal
If he knows homes in a certain market are selling for about $300,000, Montelongo won't hesitate to put his on the market for $275,000. He figures that making it look like a really good deal will make people curious enough to come out and look. "You want to generate interest," he says. He's OK with selling for less than he could if it means getting out from under a house quickly. But it's not unusual, he says, for homebuyers who think they've spotted a good deal to bid the house up a little, bringing it closer to what the seller who lists at $300,000 might wind up having to come down to.
In a few select markets, trying to sell your home for too much might mean sitting on it for a lot longer than you prefer, but in most markets, it might mean not selling at all, experts say. As long as it's a buyers' market, getting the price right, and correcting pricing mistakes quickly, is one of the most important things that a home seller can do to attract a buyer and get to that closing date fast
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