1.  What is robo-signing is, and what all the fuss is about?  The phrase robo-signing refers to what we’re now realizing has been a very common practice in the banks’ foreclosure document processing divisions, where one person was essentially given the job of signing as many 10,000 foreclosure documents per month, by hand.  These individuals were supposed to be reviewing the files, making sure grounds for foreclosure actually existed, signing the docs in front of notaries. But because of the volume of documents, what they actually did was just sign thousands of documents at a time, without even reading them, and ship them off somewhere else to be notarized.

If you do the math on an 8 hour workday, you'll see that that only gives the staffer 1.5 minute to review each file and documents to make sure the foreclosure is warranted.  That's not humanly possible, which is how these staffers got the nickname “robo-signers”
   
Government regulators are very concerned that the banks may have been taking people's homes without following the proper legal procedures.  As a result, 40 states' attorneys general are teaming up to launch a multi-state investigation, and the federal Comptroller of the Currency and federal attorney general may also get involved in investigating this issue.

2.  Will the freeze will make the banks cancel buyer contracts on REO properties? Currently, the freeze impacts bank-owned properties that are owned and/or serviced by Ally Financial/GMAC Mortgage, JP Morgan Chase, and some properties that were owned by Bank of America. Generally, contracts to buy these homes are being put on hold and extended for 30 days.  As well, the banks are often reaching out directly to buyers and offering them the option to cancel their contracts and recoup their deposit money.

3.  Is it safe to buy a foreclosed home? There's lots of talk right now about the "clouds" that this scandal will create on the titles to homes that were foreclosed by the banks' foreclosure mills. And that makes sense: if the home wasn't properly foreclosed on in the first place, then the legitimacy of the bank's resale can be called into question.  Normally, I'd say: Don't worry about it, buyer - that's why you'll get title insurance!  But last week, 3 of America's largest title company insurers declared that they will not offer title insurance on a number of the homes that may have been involved in this scandal.

In the vast majority of cases – when the foreclosure was justified and a bona fide purchaser, someone who was not involved in the bank’s wrongdoing, has purchased the home, courts will not reverse these foreclosures or their sale to buyers.  But if you’re in the market for a foreclosure, get clear on which bank owns the place as soon as you can, and run the property past your title insurer before you get too far into the transaction to make sure they can write a policy of title insurance on the property before you spend too much money on inspections and appraisals.  (And see my Bonus Buyer Advice at the end of this blog post!)

4.  How the foreclosure freeze will impact American home values, say after you buy.  In the short term, these freezes might cause prices to stabilize, as we expect to see the supply of foreclosures for sale start to shrink.  However, if these freezes stretch out for a long period of time, they could simply be delaying many inevitable foreclosures, which could delay the recovery of the housing market and home prices, over time.  I wouldn't expect to see the freezes cause prices to drop much beyond where they are now, but if they stretch out, they could keep appreciation flat for a longer period of time.

P.S. - Bonus Buyer Advice from Tara: Don’t underestimate the deals you can get on non-foreclosed properties. You can often get just as good of a price on a better property with more flexibility on the seller’s part in terms of repairs and other negotiation points if you buy a home from an individual seller, as opposed to a bank-owned property.

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So you are ready to move out and sell your home. And you found yourself a real estate agent to help save time, expenses, and the headache of navigating the myriad of details that go into putting a house on the market. But not all agents have the professional experience necessary to sell your home quickly and for the highest price. Or even worse, they are lazy. Here are 10 best practices that a good listing agent will use to get the best price for your home:

1. Conduct a pre-sale inspection with the seller

A good listing agent should meet with the seller and do a walk-through of the property. With a fine-toothed comb, both of you should look for problem areas that can be easily fixed before getting professional inspections and listing your home.

Few agents are willing to do the extra work of a pre-sale inspection, but fixing a leaky faucet or other easy to address problems beforehand will mean a cleaner report when the professional inspector comes through, and potential buyers see less initial issues with your home.

2. Getting and reviewing necessary professional home inspections

Depending on the age, size, location, and condition of a home, an agent will be able to advise what are the required and recommend home inspections. Some common inspections are termite, general property, roof, and chimney. They are not always required on the seller side but it leaves a better impression if you do. (Buyers note: get your own inspection to verify a seller’s report.)

Also, without all the necessary inspections, a home cannot be accurately valued. In this situation the buyer makes an offer and then conducts an inspection only to find out something the seller didn’t know. The buyer will then renegotiate a lower
price or, at worst, take back the offer.

3. Price it right from the start

We all want our home to sell for what we have personally invested in it, but overpricing will just make it harder to sell. Buyers are weary of a house that is not priced accurately, which results in less offers, a prolonged marketing period, makes the competition look better, and may eventually sell for below market value.

A listing agent should know the value of a home based on the local market and price it accordingly, maybe even modestly, to create demand and let buyers push up the price through multiple offers.

4. High-quality marketing material

Make your home look its best. If your home needs it, your agent should put you in contact with a home staging professional to target your buyer market. For advertising work, an experienced home photographer and graphic designer can help present the strengths of your home.

5. Generate buyer interest through the Internet

A 2009 study by the National Association of Realtors found that 90% of buyers use the Internet when searching for a home. There is no reason why your agent shouldn’t be taking advantage of this large and affordable medium.

Internet marketing should include a dedicated home website, with a slide show or video tour of the home, and advertising through various social media and syndicated websites.

With a larger audience, your home has a higher
chance of receiving multiple offers and, ultimately, a
higher selling price.

6. Prepare a listing disclosure package before going on the market

Without a properly prepared disclosure package how can a potential buyer have all the information they need to know about pricing and specific details of a home. A disclosure package needs to include seller requirements, previous inspections and modifications, HOA documents (if any), and a seller wish list.

7. A seller wish list

This gives basic instructions of how to structure a potential offer, but more importantly, lets the buyer know conditions or expectations that make for a strong offer. For example, the seller may want to sell the house as-is, or rent back the house after it has been sold. A careless agent wouldn’t take the time to make a wish list and instead let a potential buyer set the offer conditions.

8. Setting up a broker tour

One of the advantages of having an agent is holding a broker tour. It’s an opportunity to have local real estate agents view a home and receive valuable feedback on the pricing, condition of the property, and network with agents who have potential buyers. The more qualified buyers looking at a home will drive demand and increase perceived value. If your agent isn’t doing this, they aren’t doing one of their primary jobs: to market the home.

9. Following up after a broker or open house tour

A listing agent should contact any agents with buyers or potential buyers who might be interested in putting down an offer. A less proactive agent would wait for offers to come in.

Just as important as receiving offers, is knowing how many
potential buyers there are. It helps in negotiations by
leveraging the seller’s position.

10. Track buyer progress during and after escrow period

An offer doesn’t mean your agent’s work is done. There are many factors that can unravel an offer from the buyer side that a seller should be aware of.

A good portion of why home purchases fall apart is because of financing. The buyer may not be qualified to purchase the home even though they are pre-approved. An inferior lender may not have the loan approved quick enough or not understand loan qualification requirements, which
might happen when a lender is not local.

In addition, your listing agent should regularly contact the buyer’s agent to make sure they finish home inspections and don’t miss contract deadlines during the escrow period. It is a lot harder to sell a home if it goes pending and then comes back on the market because of a buyer issue that could have been prevented by the listing agent doing the research beforehand.

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