San Jose Short Sale Agent: Silicon Valley Foreclosure Prevention Specialists

Although there was much anticipation that HAFA would streamline the short sale approval process, it is still, at best, a work in progress.  Some Lenders  (Loan Servicers) have gotten better in streamlining their decision making process, while other s are still taking their sweet time.   Overall, it is getting better, but not to the extent it was anticipated.   And this is for HAFA approved short sales; we are not even talking about the other short sales.

There are still the traditional (non-HAFA – because they don’t meet all of the requirements) short sales which are not required to follow the standardized guidelines set out by HAFA.   Because these short sales fall outside of the HAFA standardized guidelines, they languish in the lawless world of  “short sale hell” where lenders linger and contemplate until buyers walk away after months from frustration of non-response to their offers.  There seems to be no sense of urgency to protect and preserve offers in hand; the bottom line is, if the buyer walks away and the property has to be put back on the market, the probability is that the subsequent offer will bring in a lower price.   It is in the best interest of the lender to quickly approve their bona fide buyer before they walk, but the negotiators often do not seem to understand this dynamic.

Everyone understands that the homeowner’s lenders have to do their own appraisal to ensure that the offer price is in line with current market value.  But how much time do you need to make that determination?   In a regular sale, the buyer’s own lender will send out an appraiser to make sure the buyer is not overpaying; this can typically be done in less than two weeks.  So why does it take the homeowner’s lenders to hire the same people, yet it takes them months sometimes from hiring said appraiser to reaching their own valuation to approve the sale?     It is not reasonable and something is broken.

Two Congressmen from states with high foreclosure rates have reached the same conclusion and are trying to pass a bill to remedy these needless delays.    Apparently they have heard enough complaints from distressed homeowners who were losing buyers and being needlessly forced into foreclosures.    The new legislation would force lenders to make a decision within 45 days of receiving an offer.    Short Sales are anticipated to increase in the coming months, so it naturally makes sense to free up the bottleneck and permit the decision making process to move forward in a more expedient manner.   Hoorah for Congressmen Andrews and Cooney on their bi-partisan effort!

I was a bit upset yesterday at having experienced what I’d been reading about for several months: dealing with an appraiser who was not from the area and did not apparently have the local knowledge that a real estate professional would expect from another real estate professional.  This is a problem, as appraisers who are local and have the requisite experience and the skills that are needed for doing a proper appraisal are being replaced by cheap, often inexperienced appraisers who got the job because  they can give these management companies bulk discounts.

Interestingly, this sentiment is shared by people from within the appraisal industry. As the article mentioned, HVCC started off with good intentions, however, it is now being transformed into something totally different and unrecognizable.  Rather than insuring that mortgage brokers not pressure appraisers to get values to match loans, inexperienced appraisers are killing legitimate deals because they do not know the market place.  How is this in line with the national goal of bringing the housing sector back and support the economy by helping close deals?  As with any industry, it’s fundamentally about “professionals” doing jobs in a professional manner.  How can the consumer benefit by being forced to use appraisers who don’t know the market place and killing legitimate deals with incorrect valuations?

We Realtors keep hearing about how the HVCC (Home Valuation Code of Conduct) is negatively impacting transactions because appraisers who are not local and do not understand local issues are being brought in and are killing otherwise, perfect deals.   I was hoping I would just continue to read about other people’s woes……

Apparently San Jose Short Sale Agent is not so lucky………  I just came back from meeting with an appraiser that Bank of America ordered on one of my short sales.  I was happy to see that the owner of the company who had emailed me had a local phone number.  I was thinking he will know the values in the area and felt good.

He was supposed to meet me at 10:30 AM today, he showed up at 11:00 AM.  The guy who showed up was not the owner who had been communicating with me by email and his business card said he is a Trainee.  It was a young guy, about 20 and he gave me his card which had a local phone number but the address was in Ceres, which is a small town next to Modesto.  Now I understood why the email only contained the phone number and no physical address.  Now I was concerned.

Nothing against young people since they have to learn the business, but why isn’t a Trainee accompanied by the person who is training him?  I don’t want to offend this guy and have my sellers suffer, so I keep my mouth shut and bite my tongue.

I asked him how counties he covers.  He told me he covers 9 counties!  A Trainee who covers 9 counties??!!

He told me he does about 4-5 appraisals a day, so I asked him how the market was in Hollister and Sacramento and how they differed.  He couldn’t give me an answer, except that Sacramento is worse.  I ask why Sacramento is worse, he mumbles there are more foreclosures.  Duh.   Sacramento is a metropolitan area with millions of residents, whereas Hollister is a city with less than 50,000 residents; of course there will be more foreclosures there!

I asked how is the market in Modesto?  He says he hasn’t done an appraisal in Modesto in two month.  His office is essentially in a suburb of Modesto, yet he hasn’t had a job there for two months, but he is in Mountain View, some two hours away appraising my listing?  What’s wrong with that picture?

Don’t get me wrong, he was a nice kid learning the business to make a living. More power to him.  But what is the owner of the company doing?  Why is he sending a trainee alone two hours away working in  an area he obviously does not know?

Luckily, I always show up to these appraisal in person and let them in myself, so I can figure out with whom I am dealing.  In this case, there is a special circumstance, so I wanted to make sure the appraiser (even if he were from around here and knew things) was spoon-fed information about the construction litigation and how that impacts the value compared to other units that are not involved in litigation.  I brought a letter explaining what the reason was for the litigation, what the price difference was between litigation and non-litigation units in the past 3 months, a copy of the actual lawsuit along with the most recent comps of properties involved in litigation.   I mean literally, I gave him everything he needs to determine value.

The kid was obviously grateful for all of the information I spoon-fed him, but what if I had not been so prepared?  What if I had left the lockbox and he showed himself in and spent the whole 10 minutes he spent today to take measurements?   What kind of value would I get from him?
He still has not produced a report for me, so I don’t know what effect my package of information will have on him, but I am writing this post as a point of reference, in case I have to challenge the valuation in the future.