Life In Bonita Springs

Streamlining Short Sales is The Cure

Here’s the latest and greatest Bonita Springs real estate market report for the greater down town area and the metropolis of Estero. Yes, that’s sarcasm. I like our villages and I’m glad we’re not all towers like the east coast.

What did you missed last month in Bonita Springs? Surely you’ve been reading this blog and the local papers and caught that President Obama came to Fort Myers for a visit to talk about the stimulus package. While you listen to what government says nationally you should keenly listen to what is happening locally. You should let your government know about your local housing and real estate situation. Like this:

Express Lane Needed For South Florida Short Sales

How can a housing crisis get fixed with money when the very banks in charge have no systems in place to deal with the matter? Giving money to the banks is like handing heroine and needles to a junkie and asking them to distribute it to people that really need it.

Because the banks are bungling the credit crisis our inventory has started to creep back up again. Not much, but a little.

Here’s the latest numbers for the sales in the month of January 2009 for the cities of Estero, Florida and Bonita Springs, Florida. I threw in the last couple of years so you can measure the numbers against prior years.

The absorption rates are calculated on the same housing styles I have always used. I’d love to be diabolical and have enough spare time on my hands to twist numbers but I don’t, so you just get facts.

As usual, this data is deemed accurate and not guaranteed and was gathered from the Sunshine MLS service on 2-21-09.

Bonita Beach Shoplifters

You have to love this picture.  It's about the worst of the worst criminals at Bonita Beach.  Don't turn your back on your sandwich or spill the Doritos or you will be circled with a couple of dozen of your new closest friends.  They'll use you and when your food is gone they will leave without even saying goodbye.  It's true.

If you're looking for some steals on Bonita Beach they're starting to pop up.  There are currently five homes on the Gulf of Mexico on Bonita Beach priced under $2,000,000.  I know what you're thinking $2,000,000?  Yes, they're a deal under $2M on Bonita Beach.  A few of them are quaint old Florida cottages.  You won't get an expanse of living area but you will get sand between your toes when you walk out the back door to feed the gulls.

Everyone is so confused about the tax credit due to all the rewrites.   Here's a nifty chart to help you sort through the rumor mill and find out exectly what passed.

If you're considering purchasing your first home in Bonita Springs or Estero there are some great incentives available to you.  If you've not owned a primary residence within the last three years you are eligible as a first time buyer.

Here's a chart with the latest on the First Time Home Buyer Tax Credit:

I'm not nearly as bad as www.DanielRothamel.com

Zombies in Finance and Real Estate

Many people talk about how difficult and tedious short sales are. It’s true, they take a lot of work and there is a high rate of failure or buyer walk outs. There are a few banks that are negotiating short sales, though.

Out of curiosity I checked into our local market to see what sort of properties were closing sale and what amount of them were short sales. The search was a simple search for all home sales, regardless of structure type, in southwest Florida which had closed sale in the last thirty days. The closed short sales equated to about 22% of the total of the closed sales properties.

That figure almost sounded encouraging until I went one step further. I decided to figure out how many of our currently listed properties were actually short sales. That figure turned out to be 43% of the active properties in Southwest Florida.

Typically the short sales are the more aggressively priced properties and have more of an opportunity to sell because their sticker price is more appealing to a buyer. What could possibly explain why there are so many short sales available compared to what actually closes sale?

The overall transaction failure rate is responsible for a large amount of short sales that are languishing on the market.

What would it take to get these homes off of the market? There are people that want to purchase these homes, sellers that want to sell the homes and banks that probably don’t know it but they would be better off not foreclosing on the homes so it’s in everyone’s best interest to cooperate.

The big trip up is the banks. Total shocker, huh? They really should be controlling more of how to unravel this mess. I am sure none of us doubt what a monumental task the banks have cleaning this up. Most of us are just wondering why there are still no systems in place to even make a feeble attempt at organizing it. There is no staff to handle this overwhelming traffic jam and not one organization has really taken charge to set one up.

Three Thousand Reasons Why Short Sales Fail

The system is clogged with unrealistic bids and unprepared sellers. There, I said it. Most banks won’t tell what their bottom line is and won’t look at a file until there is a contract. Crappy offers count. True to human nature, the bottom feeders come out in a weak market and start throwing out offer prices for pennies on the dollar. The seller accepted contract is delivered to the bank and gets put on the short sale, not so merry, merry-go-round.

There Are Zombies Among Us

The home doesn’t stand a chance closing at that offer price but it gets put into the system and begins taking up valuable time and resources of the administrator in charge of short sales. Keep in mind, this bank officer usually has a couple of hundred files at any given time so it won’t be rejected for weeks or even months.

If the bank involved is a “zombie bank” it could be several months before rejection. Go ahead and Google zombie bank so you know where precisely where your bailout money got wasted. Listen to a Zombie Banks on NPR.

Sometimes when the contract is delivered to the bank it’s the sellers that also get put on the merry-go-round. They didn’t know they had work to do in order to get their short sale transaction ready for the ride and they got on only to be flung off because they weren’t prepared and didn’t have their own documentation in order.

Meanwhile, back at the ranch, realistic buyers are missing the opportunity to give this home a legitimate shot at a new owner because it’s “under contract”. The buyers move on to homes that are presumed to be more available.

The banks are not looking for any way to prevent avoidable foreclosures. The banks aren’t smart enough to simply name their bottom line price to liquidate short sales before they become rotting inventory. The banks believe that buyers are going to bid up and negotiate on homes that are no longer a commodity and it’s just not happening, nor will it. Buyers are left to guess at the price a bank will accept and it’s just a ridiculous waste of time.

It would take minimal effort for banks to call for a couple of broker price opinions and at the very least get a ball park price for the homes value and pre-approve that price. The wasted hours that are spent with buyers playing pricing darts and banks playing “you’re getting warmer, you’re getting warmer …” is too absurd to even try to quantify.

Besides the obvious increase in staff to handle the back log, it wouldn’t hurt the banking system to engage some sort of filter or a traffic controller to look over the contract price or even the files themselves before they get turned over to the loss mitigation department. When the paper work isn’t in order or when the price isn’t remotely close to the banks bottom line for the property it should be immediately rejected.

It is now estimated that there will be 10 million foreclosures in the next four years. Many will be short sales that were driven to foreclosure by the failed system. Shouldn’t at least one of these institutions set an example by putting in an express lane to process them?

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Real Life in Bonita Springs is a project by Chris Griffith dedicated to writing useful blog posts for consumers about the Bonita Springs, Florida area.  Find out what it is really like to live in Bonita Springs, Florida by reading about our fair city. You’ll get the latest in local real estate information, Bonita Springs real estate market reports and a little bit of humor.  If you have topic ideas, feel free to request a story about the idea, after all, this site is just for you.

You can subscribe to a weekly email newsletter by visiting www.LifeInBonitaSprings.com and entering your email in the subscription area on the left pane of the web page or by adding us to your reader by subscribing to this blog. Oh, and if you’re reading this content anywhere else but www.LifeInBonitaSprings.com or the Naples Daily News it is probably stolen.

Truth in Lending | Good Faith Estimate

'Transparency' is one of those terms that gets thrown around a lot in the mortgage world these days. It's actually pretty simple - you as the Client should be able to see everything that's going on with the home loan that you are getting for your purchase (or re-finance).

Nothing should be hidden, you should know where every dollar is going in the transaction, what all of the charges are for, etc. Simple.  Can you imagine wanting it any other way?

No one in their right mind would want to borrow large sums of money and not know what's going on! And no Mortgage Broker / Lender / Bank would ever try to cover anything up - right?!?

OK Alice, when you're back from Wonderland, we'll talk....................................

See the 'little' mess the country is in right now?   People saw more money available then they ever thought possible and they wanted it - quite a few closed their eyes at that point. Combine that with the BS artists who would gloss over the specifics of the loan just to make another commission!

Out of the entire loan package the two biggest items are the Good Faith Estimate (GFE) and the Truth in Lending statement (TIL).  These two items are put together so that you understand everything about your new loan.  If you don't understand something, ask for clarification.  If there is any hesitation on the part of the Broker to explain something, you should start to wonder..... and if you're ever told 'oh, don't worry about that' just get up and leave!

You also need to know if the person you're dealing with is making anything for the rate on the loan - Yield Spread Premium (YSP) - there's nothing wrong with it IF it's disclosed.  Make sure you understand EXACTLY how it affects rates / closing costs.

I could go on all day, but I do have to get to the office!

Call me if you have any questions-

Marc J Blasi

For some time now, Knightlines Mortgage Services has been offering the people of Florida a convenient way to finance and re-finance their residential property.

But that isn’t the entire story - we are also doing commercial lending in all 50 states.  AND - now we can offer commercial financing OUTSIDE of the country as well.  Caribbean, South America, etc - just call for the details.

Don't Use Scabs - Support Local Contractors

Several weeks ago I met up with a group of real estate agents and mortgage brokers at a conference in Phoenix, AZ. Listening to the conversations they were having about their market I felt that we were a little ahead of them in the market recovery. Florida quit building homes, which it had to do, so the inventory could get absorbed.

Unfortunately, the main product that Southwest Florida produces in is tourism, retirement and sunburns. We aren’t exactly bursting with industry. We’re a series of villages built upon the business of manufacturing homes, golf courses, malls and restaurants. When construction and real estate fizzled out we were hit hard.

Out of curiosity I pulled up the Lee and Collier County building permit filings just to see what was going on. In January there were 13 residential building permits issued in Lee County, Collier County didn’t exactly have a bumper crop either. That number 13 is a record low for Lee County, by the way.

It’s a catch twenty two situation. We need the number of new construction permits to be low to heal the market but there are so many families and businesses that depend on construction as their means of income. It’s harsh out there for a lot of people right now.

I’d Googled for news on building permits and found several interesting articles. In particular there is a story about Lee County laying off 20 employees in the building department. This is the dawn of a new age of fiscal conservation so we all probably understand the layoffs. It occurred to me that some of those employees could have been repurposed.

Maybe they could have been trained to keep watch over what little bit of construction is going on and make sure the money is kept local by enforcing licensing and insurance of those in the trades. Surely, you can’t be shocked that there is construction happening that isn’t done on the up and up.

What the average person needs to know is that there are some people that don’t have their paperwork in order. By paperwork in order I mean carrying the proper insurance and workman’s compensation. By people I mean employees and the company that they work for.

There are also contractors that pay their employees cash because their employees aren’t documented. It’s not fair. They’re cheating the system. They’re destroying the local trades that are doing it legal and above board. They’re also cheating our local economy.

I’ve spoken with several contractors that have told me that they lose during the bidding process by huge sums. Sums so large it doesn’t make sense unless the labor is paid cash and the company isn’t properly insured. What’s even more slippery is the company that carries workman’s comp on five of their employees while dozens of their other employees go uninsured and unprotected.

Should those employees that are not covered have an accident and get hurt on the job, they’re fired on the spot. They then have to figure out how they’ll get the medical care they need to heal their broken body.

Follow me on this stimulus package. Why doesn’t the building department of either of the counties we’re living and working in take control of the construction industry back? It’s finally shrunken to a manageable size. I say 13 permits in one month could be considered manageable to police and enforce the laws effectively.

Everyone was overwhelmed during the building boom. Maybe it is now time to start holding the contractors that employ uninsured subcontractors or undocumented labor accountable. Accountability should move up the food chain to the top. Those who are licensed should pay the piper for not checking the paperwork of those working for or under them.

How about just random checks of permits, licenses and workman’s comp? It doesn’t sound too very difficult, does it? How about something as simple as a decoy laborer looking for work but they don’t have a work permit or social security number? It’s not that hard, ask anyone in the trades. Before anyone gets on the high horse named Bigot, not every person that gets paid under the table is an immigrant or a foreign national.

This isn’t some sort of hidden secret. It happens more than you’ll ever know. These violations happen at shopping centers under construction and the most exclusive country club homes sporting decimal points in their ticket price.

When unlicensed companies and undocumented workers take jobs from local contractors and laborers the money leaves when the job is done. The scab workers, under the table company or under insured firm gets paid their wage, they pack up, hit the bricks and pump their paychecks into grocery stores, movie theaters and restaurants in whatever county or state they slinked back to.

The money they earn on our soil won’t be spent in Lee or Collier County. It’s more than just our local construction that gets hurt, it’s also every other local business that could have reaped the benefit of those paychecks.

Maybe it is time that the members and officers of the local building associations taking some action to protect those left in the industry. The building industry groups were created to represent the interest of those in construction and keep people informed. Nothing says support like, “We’re lobbying to keep the industry clean on your behalf so that you can put food on your family’s table.”

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Real Life in Bonita Springs is a project by Chris Griffith dedicated to writing useful blog posts for consumers about the Bonita Springs, Florida area.  Find out what it is really like to live in Bonita Springs, Florida by reading about our fair city. You’ll get the latest in local real estate information, Bonita Springs real estate market reports and a little bit of humor.  If you have topic ideas, feel free to request a story about the idea, after all, this site is just for you.

You can subscribe to a weekly email newsletter by visiting www.LifeInBonitaSprings.com and entering your email in the subscription area on the left pane of the web page or by adding us to your reader by subscribing to this blog. Oh, and if you’re reading this content anywhere else but www.LifeInBonitaSprings.com or the Naples Daily News it is probably stolen.