SEPTEMBER / OCTOBER 2011 - reomac

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Short Sales – continued from page 19 practice would be exciting and could instill confidence within the Realtor® community by those who currently choose not to work with short sale sellers and buyers. According to Realty Trac, there were approximately 314,002 “pre-foreclosure sales” (typically short sales) nationwide in 2010. This represented 10 percent of all residential sales, while REO sales accounted for an additional 16 percent. The average sales price of a pre-foreclosure sale was $206,306 nationwide, which was 15 percent below the average sales price of homes not in foreclosure. By contrast, the average REO sales price was 36 percent below the average sales price of homes not in foreclosure. The difference between pre-foreclosures and REO sales prices amounts to 21 percent. Nationally, in the third quarter of 2010, Fannie Mae and Freddie Mac reported a ratio of approximately 5 to 1 between foreclosures and short sales. There were roughly 200,000 foreclosures and 40,000 short sales. Clearly the benefits of pre-foreclosure sales are evident, and can only work towards promoting more stability within local housing markets and help distressed homeowners who prefer an alternative to foreclosure. If we can get the pendulum to swing more toward short sales than REO, then not only does this have a more positive impact on market values, but it also allows lenders to achieve higher recovery rates. Short sale properties sell for more than REO’s and are more likely to be in better condition as well. Short sale sellers are certainly less likely to strip their homes of the kitchen or leave it loaded with trash, as we often see with REO properties. While the industry has been trying to decrease the number of REO’s through loan modifications, leaseback programs, short sales and other creative processes, there is still work to be done. The HAFA program which was launched in April 2010 has had spotty success. Recent changes to the program, however, should result in more homeowners qualifying for HAFA and an increase in short sales numbers. Most servicers have added short sale negotiators, departments, procedures and staff. The next step is to find ways to shorten the short sales timeline and find ways to list these properties with pre-approved list prices. Realtors® can be very influential in helping distressed homeowners choose the short sale option. We need to provide them with clearer procedures and also not keep the commission piece as an unknown to the end, given the time and energy required to complete these types of transactions. The current short sales trend is going to drastically increase over the next 3 -4 years. Don’t miss the boat, for the sake of all of us in the real estate industry who desire to provide service to sellers and buyers, distressed or not. James A. Browning is the CEO of the REO Institute of Colorado, Broker/Owner, Browning Group LLC, National Speaker/ Instructor related to Residential and Commercial Distressed Assets. HAVE A PROBLEM REO? PATRICK J. FOX, GRI NEW JERSEYS #1 REO BROKER With over 20 Years experience in the REO industry and thousands of REO’s closed, we are your New Jersey specialist for….. Loss Mitigation Residential REO Sales - Commercial REO Sales Property Preservation - Property Management _______________________ Our Long Standing Clients Include: Many of the Nations Leading Banks, Outsourcers and Servicers _______________________ If you want RESULTS instead of Excuses Call the people that do the job! WE SPECALIZE IN PROBLEMS! Call Patrick J. FOX, GRI MEMBER OF REOMAC - EQUATOR CERTIFIED PLATINUM MEMBER NATIONAL, STATE AND LOCAL ASSOCIATIONS OF REALTORS AMERICAN REALTY SERVICES GROUP, INC. REO IS ALL WE DO Call Patrick J. FOX, GRI MEMBER OF REOMAC - EQUATOR CERTIFIED PLATINUM MEMBER NATIONAL, STATE AND LOCAL ASSOCIATIONS OF REALTORS www.AmericanRealtyServicesGroup.com www.AmericanRealtyServicesGroup.com 20 September / October <strong>2011</strong> REOMAC ® update tm
Ad Valorem Tax Challenges “The only thing certain in life is death and taxes” By Arlene Udick, Esq. — Benjamin Franklin If you are looking for a way to help your clients increase cash flow, you might want to suggest an ad valorem tax challenge. 1 The phrase “ad valorem” is Latin for according to value. The ad valorem tax is based on the value of the real estate being taxed. Depending on the jurisdiction, the taxing authority or county tax assessor performs an appraisal of the monetary value of the property, and the tax is assessed in proportion to that value. As we all know, property values have been dropping across all segments of the real estate market over the last several years. There is not one sector that has been left untouched by the diminution in value. In many cases the taxing authority cannot keep up with the decline in value. There are also a number of reasons why a tax assessor may be discouraged from posting lower values; one reason may be a decline in revenues generated by the ad valorem tax. Depending on the value of the property, an owner who challenges the ad valorem tax may gain substantial savings in the amount of taxes the owner is required to pay annually. Every State has its own statutory framework and burden of proof to appeal the assessment used in setting the tax. Various state laws and relevant section of the administrative code are beyond the scope of this article. In almost all cases the filing fee is minimal, and in most cases there is an administrative review process and if desired by either side, a provision for judicial review of the administrative hearing. However the evidence that must be presented at the administrative hearing is fairly similar in all jurisdictions depending on the burden of proof. The evidence generally presented is similar to information used in presenting a market analysis or a broker price opinion. It consists of a list of recent sales and valuation of similar properties in the area comparing the comparable properties to the subject property. Depending on the value of the property challenging the ad valorem assessment and the amount of tax burden in dispute, the owner may want to pay the cost of an appraisal, and have the appraiser present the evidence. Generally the way it works in many jurisdictions is that the taxpayer can get relief even when the property is assessed below market value, by pointing to lower-taxed similarly situated properties. For example, in a given jurisdiction most five- to ten-store strip malls are assessed at eighty percent of market value, but the taxpayer’s seven store strip mall is assessed at ninety percent of market value. The taxpayer in this case has a right to a reduction to eighty percent because others in the same area are assessed at the lower rate. Before the taxpayer starts the challenge process, he or she will need to know the law of their state/jurisdiction and the administrative code that applies to tax appeals. The best place to start is to go online to that municipality’s taxing authority web site or to visit the tax assessor’s office in person. At either venue the taxpayer should be able to obtain the information and forms needed to pursue the tax challenge. The taxpayer will need to develop the evidence required to support the challenge on his or her own. This process will take time for preparation, research, and patience. The time spent in preparation will give the taxpayer the confidence when the taxpayer meets with the assessor or the review board. If the amount in dispute is substantial or the taxpayer does not have the time or inclination the taxpayer can hire an attorney, CPA, or other professional to represent the taxpayer as allowed by the state law. In many instances the assessor for the taxing authority will work with the taxpayer to review the evidence presented and come to an amicable solution. continued on page 22 REOMAC ® update tm September / October <strong>2011</strong> 21
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Page 7 and 8: 5 September / October 2011 REOMAC
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Page 11 and 12: July Dinner Meeting - continued fro
Page 13 and 14: Moving Beyond the Numbers It’s a
Page 15 and 16: The REO Open House.... Successful M
Page 17 and 18: REOMAC ® TECHNOLOGY AND WELLNESS E
Page 19 and 20: Erik Qualman Author of Socialnomics
Page 21 and 22: Harry Gardner MISMO SPEAKER Harry G
Page 23 and 24: THURSDAY, OCTOBER 20, 2011 7:00 am
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Page 41 and 42: Office Safety … and How We Surviv
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Page 45 and 46: The Tough Will Get Going - continue

SEPTEMBER / OCTOBER 2011 - reomac

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