Fannie Mae and Freddie Mac are now dictating market time. Short sales that are Fannie Mae or Freddie Mac loans must be active in the MLS for five days, including one weekend period, before an offer can be accepted by the seller.
Read the article. http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=1&id=293781
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Today they want to keep the house on the market for a certain number of days. Tomorrow they will tell you what to list the property for. The next day they'll tell the seller who the approved short sale realtor is. etc. etc. etc. Are they stupid or extremely smart? I haven't decided yet. If this is their well-thought out plan to take total control, then they're really smart. Nothing is ever done in big steps. Tiny little bites until there's nothing left.
Agreed Wayne, I believe the majority of agents want the same thing. They want to be able to present a fair offer to these institutions and get a fair answer. FNMA needs to let the agents do what they do best, sell properties and send the offer to FNMA for their review. If FNMA would simply establish if the borrower qualifies for a short sale and then review the offer compared to an appraisal, it is almost guaranteed that they will not get scammed or approve short sales that are low ball offers. Instead they have miles and miles of red tape and rules that most likely were brought about because of their lack of true safeguards and process reviews.
Instead they make stupid decisions, foreclose, and cost the taxpayers more money by selling to their investor buddies. How is that letting the market work the values out for them?
Apparently, there is little data here and the subject goes to the heart of frustration for those who think bankers walk on water and those who think all gov't rules should be erased. I'd hoped for some facts, which actually since FNMA and FHLMC are now Fed entities, I feel they owe us/the taxpayers in their "seemingly" arbitrary edicts. I don't see the "Oh yeah? I'm right and your wrong" as being helpful, but feelings seem to be hot on the subject. I'm resigned to this as another wrinkle in the way things are controlled and run in the U.S. right now, unfortunately.
I did not see anything that said that the same dishonest broker can't wait 10 days and tell his seller that his $30K less offer is the best - the seller doesn't care and the bank has no legal right to interfere, right? So, how many honest brokers and sellers and buyers will walk away from short sales while simply making a minor change to dishonest operations? Heck, disallow short sales and you'll get rid of ALL the dishonest brokers/sellers/buyers in short sales. I am still convinced that this was another half-baked "solution" with no basis in fact - nothing said here really indicates otherwise. It still seems that FHA appraisers usually do a decent job of getting the value of a property right and instead of making up values starting with often bad BPO's (or their FMV database) is not the way to fix the market or treat the taxpayer or the homeowner. Did I miss some other real solution or information?
@ Harry: Sorry, I have to strongly disagree. The government has way too much power now and to give them even more is absurd and ridiculous. I agree with rules Harry, but only those that make sense. If this is to just regulate the dishonest real estate agents out there, it is not acceptable in my book.
Most agents list the homes at the best market value. We try and take the best and highest offers as well. We do try and do what is best for both our client, the seller and their lenders, the lienholders. These properties still belong to the sellers and they should have the right to accept or reject any offer on their own, and not be dictated by the government. I was born in America, the free, and I will damn well fight to keep it that way :) Regulations on top of regulations do squat to get rid of the bad apples in this industry. It will be up to us to make sure we keep our industry honest! Have a great night!
Not only am I not happy about this but I don't agree with this either. The MORTGAGE INDUSTRY/GOVERNMENT wants to run our industry. I don't like this. I want my rights as an American citizen back. It is time we stood up to this!
That said, I know it will never happen...........not enough people with guts to do so!
I wonder what a thinking entity would do to solve perceived agent manipulations. What is the real goal of these bailed out investors in adding layers of rules that are beginning to look like half baked US tax code. It does not appear to be to actually get a market price and quickly get the best value for the investor.
Last summer, the banks changed from a default of usually 2 weeks to get a response from the seller, etc., to 3 calendar days - and, seriously, still the majority of counters I have gotten came in Thursday around 8 PM, meaning I had Friday only to get a buyer response to some insane counter. FNMA FHLMC had no issues with this while the servicers demand docs would take weeks to months to bother to look at them, often requiring newer docs because they didn't look at the "we must have in 3 calendar days" docs. How many buyers said, "ENOUGH" and walked? I'm guessing the ones that offered market value were the first to walk. Any complaint from the investors? Not obvious to me if they did - still can take forever to get the servicer to look at docs "required" in 3 calendar days or they kill the file.
And getting an appraisal by licensed appraisers to get close to a true market value is absurd to these "investors" instead of adding to layers of back room concocted rules with no basis? Why 5 days is some unexplained magic number? Do they offer up language for the agent to post on the now bait and switch MLS non-ad for this property for 5 days? "Come buy this house - oops, I was just kidding, but you can buy this other one instead." Nope, they don't. I guess they are too used to D.C. politics to understand that in the real world, bait and switch, pretend selling things is between underhanded and illegal for normal people. I guess it is the norm in their area.
So, these "investors" exhibit little interest in getting their servicers to conclude the sales and they don't see the value in actually using licensed appraisers to get a value for the property. Are they just waving hands and making rules to appeal to Fed trough watchers - so that they appear to actually be doing something to justify employment? Or are they adding more hoops to discourage agents from attempting sales so that they can foreclose more to feed houses to their pipeline of REO preferred people and not look like foreclosing vultures to the public?
Most answers are not clear to me, but some are. How many (any company) executives would put up with the shoddy work done by servicers year after year if it really mattered to them? Sorry, I've tried to say nothing, but some good points have been made here - much much more thought than these "investors" appear to have made (do I really think they could not have reached better solutions if they wanted to?). Someone has to work for the good of the country instead of the few money people behind banks and other big biz before we stop getting eaten as tax payers - hopefully before China eats our lunch. I can't make that change here, so I've tried not to add to the frustration - uh, but couldn't resist? :-)
I would not have a real issue with this if Fannie Mae would have some standards and if they would actually care what market value is. By waiting 5 days, Fannie believes that the market will dictate the price that the home will sell for? If that is the case, Fannie needs to accept the offer and not counter with an value that is above market. Their thinking is that the property is what someone will pay after exposing to the market for a certain period of time? If that is the case then the offer that gets submitted after their waiting period would be the value of the home. Fannie has no idea what the highest and best offer is and has no evidence that holding the home on the market for 5 days will get a better offer.
Sure there are agents who are scamming the system, that will NEVER go away. If Fannie is worried that they are not getting market value, there is a very simple solution. They hire a local appraiser to do an appraisal on the home and stop hiring agents that do BPOs and then they base their decision off of the actual appraised value. They then get market value for the home. If the offer that came in the first day is off from the appraisal then that offer is countered at appraised price.
Fannie wants to play games with market time but they sure don't have any cares about how long they take to process and decide on the short sale.
I realize that real estate is local and it totally depends upon your market. I had four Fannie Mae short sales last year and they all came back for more money. Buyers all brought in the extra money with sometimes a little help from agents. Six months later, they ALL would say they had an awesome deal - similar condos are selling for 10% more and houses selling for 15 -20% more. Believe me, I was yipping about the valuations like crazy but...it all worked out. Statistically, it seems in a seller's market, if you have the house on the market at least one open house weekend and preferably two, you would have a better chance of getting multiple offers and be able to counter the price up. In a regular sale, I would always have at least two open houses to build interest and generate multiple offers. Not all markets are getting multiple offers but...it seems like most are.
It's another political agenda disguised as Hey...we're your buddy...and we're here to help you.... yeah right!!!
Fannie is starting to want to get involved in agent's short sales as a concerned fatherly figure from the get go....
It's another attempt at Big Brother watching you every step of the way.... none of this benefits "the seller"
We as agents, know the rules when getting multiple offers and yes, presenting multiple offers to our sellers...and yes, as
Joseph Alfe points out...we hold a fiduciary responsibility to the Sellers, if we are the listing agents, not the lender...who as we all know...have THEIR agenda.
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