Massachusetts Real Estate

Recent lobbying by the National Association of Realtors (NAR) and more than likely other online prominent educational postings at such places like Active Rain to preserve commissions led Fannie Mae to recently instruct all servicers NOT to reduce Real Estate commissions on short sales. 

Fannie Mae sent an announcement to its servicers stating that as of March 1, 2009 negotiations on short sales commissions below the amount established by the listing agent is prohibited unless the commission exceeds 6 percent. 

Fannie Mae has recognized that negotiating commissions for short sales is unfair because of the extensive work required in many occasions that occur over many months and working with numerous buyers. Paying real estate agents fairly benefits Fannie Mae because Realtors play a crucial role in short sales. The fact that many banks would turn around after a foreclosure and offer commissions much higher did not make much sense.

So as a home seller considering a short sale you may be thinking why do I care if the Realtor gets paid a certain amount of commission? The answer is real simple. When selling your home as a short sale there have been a couple of major issues that continue to plague the industry.

Reason number one is short sales take in many instances an exceptionally long time to get approved. There are times where it takes up to six months just to get a yes or no answer on whether or not the lender will even accept the short sale!

Reason number two is that everything has been open to negotiation up until this point. As a Realtor working with an excellent buyer, the last thing you want to hear on top of waiting months and months is that your commission is being significantly cut.

In a challenging market, a Realtor is your best friend. Banks shouldn't be alienating the party who is an alie in getting the sale accomplished. While it is always in a Realtors best interest to work on their clients behalf, can you see why a Realtor would begin to get a complex and instruct their buyers to stay clear of a short sale?

While this measure taken by Fannie Mae is an important one, the government really needs to step up their efforts of putting pressure on lenders to do whatever is necessary to get these short sales moved along. Whether is more staffing or better trained staffing, the problem starts and ends at the banks.

The announcement also reminded servicers that third party approvals like private mortgage insurers may be required and can affect commissions. 

According to NAR work they are continuing to work with both Fannie Mae and Freddie Mac to strengthen their policies against reducing short sales commissions.

NAR's next steps include continued work with Freddie Mac and other mortgage providers to enact similar regulations that will ensure that Realtors are compensated fairly. 

Currently, Fannie Mae's policy only applies to loans it owns and guarantees, therefore if a loan is owned or guaranteed by another lender the commission policy of Fannie Mae does not apply.

In order to find out if Fannie Mae is servicing your loan you can either call and ask your lender or if they are not forthcoming with the information you can get in contact with Fannie Mae by filling out the Fannie Mae mortgage request form.

If you live in the Metrowest Massachusetts area and are considering a short sale I would welcome the opportunity to answer any questions you may have. I have been successfully closing short sales and work with a local Real Estate attorney to accomplish this goal. So far I am batting 1000% and have not had a short sale rejected.

Here are a few articles I have written that you may offer you some additional insight about short sales:

Foreclosure avoiding it through a short sale or loan modification

Short sales and deed in lieu of foreclosure

Ethics in a short sale Realtor responsibilities

Massachusetts short sales

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About the Author: The above Real Estate information on Fannie Mae short sale commissions no longer cut was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356. 

Have a home to sell in Metrowest Mass? I have a passion for Real Estate and love to share my marketing expertise! 

For Metrowest Massachusetts Real Estate and homes see Metrowest Mass Real Estate. Want to have MLS access to beat other buyers to your dream home? Sign up with no obligation at my MLS Property Finder Site.

I service the following towns in Metrowest Massachusetts: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Franklin, Douglas, and Framingham MA.

Click here to view Bill Gassett's Real Estate profile.

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Building lasting relationships by helping people move in and out of Metrowest Massachusetts for the last 23 years.

Foreclosure is not a fun word yet it is reality that many across the US are facing in these tough economic times.

There are many ways that home owners find themselves in this predicament including job loss, reduction in income, mounting credit card debt, an increase in mortgage payments, a terrible illness, or divorce. There are probably others that I have missed as well.

A home foreclosing doesn't just effect the homeowner directly. It effects you and I and everyone else that lives near the home.

Foreclosures drive down property values! When you are faced with selling your home and you have to compete with the foreclosure down the street that's been marked down in price because the bank has no desire to hold it, you will quickly realize you are part of the epidemic.

There are many home owners that don't know there are other options besides letting their home end up in foreclosure. Some are even too embarrassed to investigate their options.

This is a shame and I would like to help explain some of the things you can do including a short sale or a loan modification.

The short sale and loan modification options would solve the same goal of avoiding a foreclosure but with each providing a different outcome.

The short sale is for those that absolutely need to move and get out from under their debt completely. A loan modification is for those that would really like to remain in their homes but can not do so without assistance.

It is important to remember that banks are not in the business of owning Real Estate in their portfolios and would much rather assist a homeowner than to take ownership of their home.

Here is a break down of how both assistance programs work.

Short sales                                                                                                                                    

A short sale is a legal lender approved solution designed to assist those home owners who are financially strapped to get out from under their mortgage debt.

A short sale is negotiated through the mortgage holder of an owners home where by the mortgage holder agrees to take less than what home owner owes on the property.

An example of a short sale would be if a home owner owes $500,000 on their current mortgage and their home is only worth $450,000. The lender in this example would agree to take a short fall of $50,000 at closing. In many cases the mortgage holder may completely wipe out the debt and the home owner does not have to repay the 50k.

The home owner benefits in this situation because they get out of a sticky financial mess without going to foreclosure which can seriously damage your credit.

You may be thinking why would a mortgage holder want to allow a short sale? There are a number of reasons, most notably the cost involved for the lender going through a foreclosure proceeding. The mortgage holder when all is said and done can easily spend $40,000-$50,000 going through a foreclosure. This avenue can save the lender money they would otherwise lose. The average loss by a bank is about double when a foreclosure is done instead of a short sale.

Most lenders will work with a short sale option to avoid a costly foreclosure.

As a Realtor representing a seller in a short sale scenario there some issues you need to be aware of. See Ethics in a short sale for an explanation.

When selling your home and you know you are going to be faced with a short sale make sure you choose to work with a good Realtor who has some working knowledge of short sale procedures! A good Real Estate lawyer in your corner who has worked with short sales would also be an important consideration. There are also short sale negotiating companies that work directly with the banks as well. There is a lot that goes into the process of completing a short sale. Having professionals to work with is vital when you are going through a short sale.

If you would like to investigate the short sale process and live in the Metrowest Massachusetts area, I would welcome the opportunity to speak with you. I am well versed in the procedures and have been successfully completing short sale closings.

Loan Modification

Over the last year working as a Metrowest Massachusetts Realtor, unfortunately I have heard a number of stories about people who have lost their homes that did not realize they had any other options.

What you need to understand is that just because you missed a few mortgage payments does not mean that a bank is not going to want to work with you! There are times in people lives where they can come under financial stress, as mentioned previously.

Banks understand that sometimes a persons problems are not permanent and can turn around quickly. You have all the incentive to try to avoid the foreclosure process at all costs.

With a foreclosure on your record you will not be able to buy a property with conventional loan financing for five years. So if you or someone you know is potentially facing a foreclosure because of falling behind in mortgage payments don't just sit back and let it happen. Reach out to your lender and explain your situation right away and ask for their help.

The 1st thing a lender or bank will want to know is exactly where you stand financially at the moment and what you can afford. Let the mortgage company or bank know your exact situation. Speak to them about your desire to remain in the home and how you can work out a payment plan that will be mutually beneficial.

The bank is going to want to know what has caused you to become financially strapped. You can plan on being asked to put this in writing. This is known as a "hardship letter". In the letter you will be asked to explain the circumstances behind your missed payments and an understanding of why you believe you will be able to continue to make payments under the modified terms.

You will be asked to provide documentation to prove your case. Documents that the bank will ask for most likely will include pay stubs, bank and brokerage accounts, W-2's, income tax returns, and a list of your current expenses including things like insurance, utilities, taxes, food and other typical expenses.

The bank has the option to try to keep you in the home in a number of ways including an extension of the length of the mortgage, the interest rate, or a reduction in principal. It potentially could be some combination of all three. Remember the goal is to keep you in the home and the bank is working with you!

One other option that can help those home owners who are under water where the value of their home is less than the mortgage balance is the new bill put into law in October known as the Home Owner Recovery Act of 2008.(read a complete explanation here) This new bill will allow a qualified home owner with the lenders approval, to refinance their home at 90% of the homes newly appraised value. There is one caveat, however, to this new program. The home owner will be required to share in the future appreciation of the property with the government.

If you live in Massachusetts and need help with a Short Sale please visit Massachusetts Short Sale Realtor

Above all else remember there is help available!

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The above information on Foreclosure ~ Avoiding it Through a Short Sale or Loan Modification was provided by Bill Gassett, the team leader for the #4 RE/MAX Team in Massachusetts in 2007. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356. Bill has helped people move in and out of many Metrowest towns for the last 22+ Years. Bill's office is conveniently located in the center of Hopkinton MA at 77 Main Street.

I have a passion for Real Estate and love to share my marketing expertise! I would welcome the opportunity to earn your business.

For Metrowest Massachusetts Real Estate and homes see Metrowest Mass Real Estate. Want to have MLS access to beat other buyers to your dream home? Sign up with no obligation at my MLS Property Finder Site.

I service the following towns in Metrowest Massachusetts: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Franklin, Douglas, and Framingham MA.

Click here to view Bill Gassett's Metrowest Real Estate profile

Subscribe in a reader

SUBSCRIBE TO MY METROWEST HOMES BLOG via email.

Building lasting relationships by helping people move in and out of Metrowest Massachusetts for the last 22 years.

With the rise in short sales happening all around the country it is important to know what your responsibilities are as an agent representing a seller in this situation.

A "short sale" is when a mortgage lender agrees to accept less than the total amount remaining on the mortgage, allowing the homeowner to sell the property at a lower price and pay off the balance of the loan.

As foreclosures increase across the United States, lenders are more willing to negotiate short sales to avoid the expense and troubles of taking a delinquent customers home.

Foreclosing on a home and selling it at an auction costs around $50,000 on average. Banks are not in the business to own homes and would just assume to work something out with the homeowner is it makes good fiscal sense.

I can not speak for other parts of the country but as a Realtor selling homes in Massachusetts the law is quite clear. Article two of the Real Estate code of ethics states that "Realtors shall avoid exaggeration, misrepresentation or concealment of pertinent facts relating to the property or the transaction."

This situation certainly can come to pass in a short sale. There will be times as a listing agent that you are representing a seller and find out that your client (the seller) is in financial trouble and their mortgage on the property is higher than what you can sell the home for.

The question that arises is should the seller's agent let the buyer's agent know these facts? The answer is not cut and dry. If the sale is not going to take place because of the "short sale" then it must be disclosed. If homeowner has an agreement with the lender and the deal will close as it was scheduled then the disclosure is not required. As a Realtor you need to make sure you avoid misleading the status of the transaction. If you find out that the sale is not going to occur you need to disclose this information immediatly to the buyer's agent.

As a Realtor when you find yourself in a short sale transaction is makes good sense to get things in writing. As an example, If a seller has told you he has an agreement with his or her bank, make sure you get confirmation of this. The last thing you want is to have a buyer take legal action against you because you trusted the seller was giving you accurate information.

A short sale is a complicated transaction where you will be asked for advice. Above all else do not try to act as an attorney. Make sure you have your seller client speak with appropriate council. These types of transactions can be filled with emotion. After all who wants to lose their home! In a short sale you more often than not will be investing a lot of time and hard work. A short sale has more parties to satisfy including the lender, homeowner, buyer, agent, and investor who has the mortgage.

In Massachusetts like many other parts of the country, the "short sale" will be a common term for a while.  Here are a few other articles on short sales worth reading:

Short Sales in Massachusetts

Avoiding foreclosure through a short sale

Short sales and deed in lieu of foreclosure

______________________________________________________________________________________________________

About the Author: The above Real Estate information on ethics in a short sale the responsibilities of a Realtor was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356. 

Have a home to sell in Metrowest Mass? I have a passion for Real Estate and love to share my marketing expertise! 

For Metrowest Massachusetts Real Estate and homes see Metrowest Mass Real Estate. Want to have MLS access to beat other buyers to your dream home? Sign up with no obligation at my MLS Property Finder Site.

I service the following towns in Metrowest Massachusetts: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Franklin, Douglas, and Framingham MA.

Click here to view Bill Gassett's Real Estate profile.

Subscribe in a reader

SUBSCRIBE TO MY METROWEST HOMES BLOG via email.

Building lasting relationships by helping people move in and out of Metrowest Massachusetts for the last 23 years.