Light-rail extension on 19th Ave. shelved

Light-rail extension on 19th Ave. shelved

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The Short Sale vs. Foreclosure

Here's a great site with information for homeowner's deciding between short sales and foreclosures. This question of foreclosure vs. the short sale is very common. There is no one standard answer, so it is important to educate yourself on the potential outcomes. Take a look: Bankruptcy Attorneys vs Short Sales; To Short or not to Short

Welcome Amber

Amber Harryman has joined my team. She is a graduate of the University of Arizona and was "Zona Zoo" Director for the Student Government there (among many other clubs and programs she participated with). She graduated in 2006 and comes from the Marketing arena where she worked for Belkin Electronics. She loves real estate and will be a great addition to the company and help us help more Arizonans find a new home in the Phoenix market. Please visit her site at AmberHarryman.com.

A Short Sale Resolution

To update my note about "The Short Sale Nightmare" that I was dealing with on a short sale that required lender approval from a first and a large second lien, we may have success this week! I was able to negotiate an approval on the second lien with a small promissory note to Countrywide. The problem on this particular deal revolved around a second lien (due to a home-equity line) that was almost as large as the first. Countrywide tends to be very difficult to deal with on short sale approvals, but with a lot of persistence, and a bit of luck, we have approval on the sale. Pending the financing from our buyers, and no more catches at the closing table, we should have a close this week! So good things can happen in this market. This has been a long time coming, this journey started in February! The buyers are getting a great property, and the seller is getting rid of a huge burden on his shoulders, and will be able to move on with his life, and get back on his feet. I think we have a win-win here, which is always what we aim to achieve.

The Nightmares of Negotiating Short Sales

Before getting into the short sale business, make sure you are aware of the biggest pitfall facing the agent...the second lien. The second lien held by a different lender than the first can turn a normally difficult transaction an absolute nightmare. In this situation, I'd outsource it to a negotiating company like the National Short Sale Center, or a professional with experience in these situations. However, if you have to negotiate it on your own, please brace yourself! I've been caught in the middle of a Citi-Countrywide battle, and it isn't pretty. In a second lien situation, the primary lienholder cannot sell the property without the second lienholder's release. Usually the second lienholder will release it for a few thousand dollars. However, this obviously isn't always the case. In this situation, Countrywide thinks that it is entitled to more. Citi has absolutely no simpathy for the situation, and we are locked in a battle. Both companies are as stubborn as all get out, and both of them seem indifferent to foreclosure and the potential to lose thousands of dollars. I've had success with several short sale transactions, but this one has become quite difficult. I've been able to close the gap between the two companies, but they've come to a standoff and I'm worried that they'll do something stupid. Only time will tell, but I wouldn't put my money on the smart decision....(to be continued)

Why Perform a Short Sale?

With all the conflicting messages out there with respect to short sales, why should a seller do one? I have to admit, I get so frustrated with these that I often ask myself this question. The fact is, many short sales foreclose before they get a chance to sell. However, it is my opinion that much of the reason for this poor percentage of effective short sales is due to the fact that the short sale is such a new concept to the Phoenix market and most agents aren't proficient in conducting them.

When I started out selling short sales I had a few that got away from me as well. I didn't have the system down, and neither did anyone else. However, when using a professional short sale expert, your chances of completing a short sale effectively dramatically increase. This is because there is a process that banks adhere to, and short sale professionals can take advantage of this process with proven systems and close short sales effectively.

Just look at the logic, Short Sales save the bank money. According to a study from Clayton Holdings, Inc, the banks lose only 19% of a home's loan amount on a short sale compared to a 40% loss on a foreclosure. (Reagor, The Arizona Republic, October 18, 2008). Think about it, a bank is going to hold the property for much longer if the property goes through the foreclosure process, pay legal fees to the lawyers, all while the home deteriorates while sitting empty. In a declining market, banks will likely sell the property for much less later on.

The banks are motivated to do it, but why should you? Sellers who perform short sales experience less of a credit score hit than sellers who let their home foreclose. Either way, your credit will drop if you stop making payments on a mortgage, or have to settle on paying amount less than you owe. However, you can save yourself some time in recovering back to a respectable credit score if you sell it short vs. having to foreclose.

The key to this whole process is using experienced professionals to perform your short sale and advise you. Make sure to consult your accountant/lawyer about the short sale. Utilize these professionals to advise you on tax, legal, and financial consequences. There are always downfalls to these deals, and every situation is different. Ultimately, however, the key is to saving yourself, the bank, and all parties involved time and money and you should be rewarded for doing so. Short sales usually do this, and regardless of the reason you got into your situation, you have to give your best effort to mitigate the losses for everyone.

You can find more information on short sale by going to www.jpbenedict.com

52nd Street Construction Update

Well, the road closure on 52nd Street still continues to be a pain in the (you know where). McDowell to Thomas Roads are still torn up to pieces and there is no southbound access. It's loud, and ugly, and appears to have no end. Well, at least it did until recently.

I've finally seen a light at the end of the tunnel this week. They've started putting in curbs from McDowell to Thomas. They've hammered in measurements for grading and should bring in the blades for grading once they've completed the curbing. This means we're getting close, folks. The Phoenix.gov website is showing early Fall to be completed with the project (http://www.phxskyharbor.com/STRCLOSE/strclose.html).

I can't wait for this project to be completed. 52nd Street will look and feel so much better once this is finished. I will give more info as I get it.