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Posts Tagged ‘loss of equity’

Short Sale Pricing

13 Jan

If you find yourself in the short sale situation, then selling your home is a different story.

You might be receiving letters and postcards from Real Estate Agents talking about listing your home as a short sale.  After all, they have looked at the tax rolls which are public records and the notice of default shows up.   After you have missed 3 months payments the bank will file a notice of default with the county.

Interview 3 Agents to see what they can do for you.  All 3 should tell you the same thing – you must have a hardship to be able to short sale your home.  Without a hardship, the banks will not grant a short sale.  A hardship is loss of employment, death, divorce or illness.  In other words, an event that caused you to get behind in your payments.  Loss of equity does not qualify you to short sale your home.  Sorry if someone has told you otherwise but claiming a hardship and proving it will be necessary.  You will be asked to write a hardship letter that will be submitted to the bank(s).

If you have a true hardship, the banks will also require that you give them copies of your last 2 years tax returns, current paycheck stubs and two months bank statements.  Make copies and give them to the Real Estate Agent that you have chosen.  They will have to prepare a short sale package to go along with an offer.

When you go to price your home, the best advice I can give is to go with Market Value.  Some agents prefer to price a little under market value to create a buzz about your home so that you will have multiple offers to choose from.  During the time that you are waiting for your home to be approved for a short sale, the bank(s) will send out an appraiser.  The bank will want to know the value of your home.  Hopefully the offer you and your Agent have sent to the bank will be the same amount that the bank’s appraiser tells them that it is.  Otherwise, they will have you adjust it.

 

 
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Posted in Homes For Sale, Real Estate Update

 

Fix It!

05 Jan

This seems like a no-brainer.  If something needs repair such as a curtain rod, trim around a door or a sprinkler hitting a window – then it is wise to fix it.   Sprucing up your home to show it off can bring you extra $$.

Now there is a fine line here.  I’m the type of Listing Agent that does not recommend installing new carpet, granite counters and any other high dollar improvement.  Most times the Buyer will have their own ideas and style about home improvements and it is too hard to guess what they want.  About 4 years ago I had a Seller who was insistent on updating her deceased parent’s home before putting it on the market.  It took her about 9 months and $50,000 to accomplish this.  We put the house on the market and it sold for much less than I had predicted 9 months earlier due to declining values.  If she had put it on the market without any improvements she would have sold it for a higher amount and not went through all the improvement drama and money.

Now if you are dealing with electrical, heating or roof problems and you know they are in need of repair or upgrading then by all means have these attended to right away.  These can be expensive but a Buyer will automatically put a high dollar amount on fixing them.  Plus you can give the new Buyer the receipt when you close escrow so that they know who to call if they have trouble in the future.

One other thing that I advise Home Sellers is to have a professional home inspection.  For about $350-400 a home inspector will tell you if any of the major systems of the house need attention.  This is especially a good idea if you find yourself selling a parent’s home.  It might have been your childhood home but since you haven’t lived in it for 20 or more years, you might not know if your parents have been keeping up with repairs.

 

 
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Posted in Escrow, FHA, Homes For Sale, Real Estate Update, Title

 

Top 5 Blogs Posts of 2011

30 Dec

  2011 was my first full year of blogging.  I kept my resolution and posted sometimes twice a week!

I learned a lot about what my audience is looking for when it comes to real estate information.  You want to know the steps for buying a House!

In January 2012  I will start blogging about Selling a House giving step by step information on what to expect in this ever changing market.   I think 2012 will be the year that Sellers finally “get it”.  Meaning that prices are not what they were 5 years ago and they won’t be for many years to come…..sorry about that!

Here are the top 5 blogs of 2011:

5.  12/5/11 Walk Thru

4.  9/23/11  House Hunting – Short Sales

3.  9/5/11  Find A Realtor

2.  9/2/11  What do I need to know when Buying a House?

1.  7/23/11  Not All Homes listed for sale are for sale?

p.s.  If you haven’t already seen my intro video – here it is!

Thanks for following me this year – see you in 2012!

 

 

 
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Posted in Escrow, FHA, Homes For Sale, Real Estate Update

 

House Hunting – Short Sales

23 Sep

Step 6

The market in the Inland Empire is about 45% short sale listings at this time. If you have unlimited time on your hands and don’t mind waiting and waiting and waiting some more – then a short sale is for you!

I’ve been on both sides of a short sale. I have listed short sales and actually sold them! My hairdresser thanks me for that as I needed lots of touch-ups to hide the gray hairs that started sprouting when I was worried that the bank would foreclose before I could get a short sale approved for sale. At this time, a short sale listing is just that – a listing for sale. There is no guarantee that the house OR the seller will qualify for a short sale with the bank. So let’s back up, the short sale listing might not be able to be sold?

Yes, that is the truth! The owner/seller of the home has to qualify for a short sale of their home. A short sale means that the bank will sell the home for LESS than the current mortgage amount. But, in order for the bank to agree to selling the house as a short sale there MUST be a hardship. A hardship is a loss of job, death, divorce or illness. A hardship is not a loss of equity in the house. In other words if the seller bought the home 4 years ago at the top of the market and they owe more on the mortgage than what the house is worth then unless you have a hardship, there will be no short sale. I get calls daily from distressed sellers about this but if you remember back in the 90′s when we first experienced short sales, these rules were not in place. An owner back then could short sell their home and go right across the street and buy another home for less and many did. The rules are pretty strict this time around. In fact, do you know that the bank asks the seller for 2 years of tax returns, current bank statements and pay stubs? The reason they do is so they can look for assets. If the seller has assets, the bank wants them and they are not shy about asking for them! After all the seller signed on the dotted line for the mortgage and they promised to make the payments.

Ok, so how does this affect a Buyer, well like I said in a previous post – don’t fall in love with the house – because the bank might not grant a short sale. As a Buyer, find an experienced Buyer’s agent that knows the right questions to ask of a short sale listing agent. It takes more research to determine if the house you are interested in is able to be sold. Another thing to remember, the short sale owner because of their hardship is usually not in a good frame of mind. They are sad, depressed and can have no motivation to cooperate. That leads to not wanting to show the house to prospective Buyers. It is very common to hear that there are no showings on short sale listings or even that it is available to view at restricted times. Some sellers decide to rent their home out and then there are tenants to deal with – messy! My all time favorite showing restriction – the house is drive by only – meaning you buy it without seeing it until the bank approves the sale!

I’m sure you have friends and family that have bought short sales and can tell you all the horror stories they went through. Trust me, they are true. According to today’s newspaper, our area will not return to normal for another 5 years. So call me if you want more information about short sales, they can be negotiated and you shouldn’t be afraid of them just educate yourself and decide if you are willing to wait.

 
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Posted in FHA, Homes For Sale, Real Estate Update

 

I Want to buy a House with the Listing Agent.

16 Aug

Really?? Really! Are you sure?

I hear this statement several times a week, as I’m sure most Buyer’s agents do. Do you know what you are giving up?

The Seller has already signed a contract with the Listing Agent to have exclusive representation by the Listing Agent. If a Buyer wants to buy a home with the Listing Agent, then a conflict of interests arises. This is called Dual Agency and it must be disclosed. Dual agency is such a bad idea that it has been outlawed in other states, yet it is still legal in California. Some of the information you may want to know would be illegal or unethical for a dual agent to disclose because of their fiduciary responsibility to the Seller. Just because the seller “has” to use their Cousin George as their agent, doesn’t mean YOU have to.

A fiduciary responsibility requires that every action the agent performs must be in the best interest of their client. This is above and beyond “Honest and Fair”. This responsibility goes so far as to require that even if a particular course of action is NOT the most advantageous action for the agent, but IS in the best interests of the client, the agent must act for the benefit of the client.

In every real estate transaction I have been involved in, I have found at least a dozen things the other agent wanted to do, but were not the best path for my client. Dual Agency is just as crazy as having the same lawyer represent both sides in the same lawsuit.

Wow, buying a home is a “Big Deal”. Why would you want a conflict of interest?

Call me if you want to work with a Buyer’s Agent!

 
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Posted in FHA, Homes For Sale, Real Estate Update

 

What’s the right price for my Home?

14 Jul

Most Standard Sellers in today’s market are still California Dreaming of 2006.  Five years ago you could price your house $10,000 more than the last home on the block sold for, and it would sell at that price!   Sorry to say,  that was then, this is now and that time will not come back – EVER!

You could have sold your home in 2006 for $200,000 more than today, so why didn’t you?  Well, you had to have a place to live.  And if you had sold in 2006, you most likely would have turned around and bought another home at the top of the market and lost the $200,000 gain anyway.

What’s the right price for your Home?  Market Value.  I guarantee your home will sell for Market Value.  We are back to the good old fashion, American way of selling a home.   You put your Home on the market for Market Value – NOT higher than Market Value because “we want to have some wiggle room”.  You get a lot of showings by Real Estate Agents with qualified Buyers.  You get one or more offers, you open escrow and pack, the appraisal comes in at Market Value and Viola – You have sold your Home!

 
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Posted in Homes For Sale, Real Estate Update

 

Short Sales

23 Feb

Another day, another short sale seminar.  But the one I attended today was different.   The content went so deep into the subject and questioned  how to decide if a short sale is even possible.  Not all short sales are alike.

I learned you need to qualify the Listing Agent as well as the property.  What does that mean?  Well, not all listing agents are educated in the process.  Not all listing agents know what a hardship is.  Short sales are predicated on the fact that there is a hardship such as: death, divorce, job loss or relocation and illness.  Loss of equity is not a hardship.

The second most important factor in a short sale is: does the loan qualify for a short sale?  This means is it purchase money or refi?  Will the banks say ok to the fact that a homeowner took out a second loan to buy a new Escalade or take a trip to Europe?  Well, well the plot thickens.

If you are finding yourself at a point that you need real estate counseling, please call the right professional – an educated Short Sale Realtor.  Maybe a loan modification will do the trick, if not short sale is an option.

 
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Posted in Real Estate Update