Archive for month July, 2008

Big Myths About Short Sales – Part II

Thursday, July 17th, 2008

During the last 2 months, when the market is turning even tougher, I have been spending more time dealing with Agents and Buyers that have big myths about Short Sales.

Here are a couple of the big myths I would like to share with you.  A couple more can be found in my last post.

3.  I don’t want to deal with Short Sales, I would need to deal with an eviction process.  FALSE.

All sellers that understand the Short Sale process KNOW that it is a WIN-WIN for everybody.  They do not want to cause any kind of problem in leaving the house, as they are also benefiting from the transaction by not having their credit damaged.  The seller, as in any transaction, will be leaving the house on their own as of the closing date.

4. I don’t want to work with Short Sales.  It is a long process and at the end, the lender is not going to accept it.  FALSE.

Short Sales are going through a BOOM right now.  Many Real Estate Agents, in this current slow-moving market, want to work with short sales.  Please, when you are considering making an offer, ask the Listing Agent some questions about the Short Sale Process.  For example: what experience the agent has with short sales, how many have they closed in the last three months, and if they have an established relationship with the specific lender for that property, etc.

The KEY in short sales is to work with an experienced Listing Agent.  If you have found an inexperienced one, the short sale could be a nightmare.  Unfortunately, due to the inexperience of many agents, millions of sellers are living the affects – not just because they lost their houses, but also because the buyers and their agents think the process is endless and they decide to buy a different house with less hassle.

Also, remember that the economy as a whole gets a little shot in the arm as it avoids yet another foreclosure.

Let me know what you think about these myths, as well as those in the previous article, by posting a comment.  And if you are in trouble, struggling hopelessly to make your mortgage payments, please give me a call and let me tell you how I can help.

Big Myths About Short Sales – Part I

Sunday, July 13th, 2008

During the last 2 months, when the market is turning even tougher, I have been spending more time dealing with Agents and Buyers that have big myths about Short Sales.

Here are a couple of the big myths I would like to share with you.  I will discuss a couple more in the next article.

1. The house is in the market for full price – I want to wait until all the price reductions take place.  FALSE.

Many agents and buyers believe that waiting is the way to have a good price on a short sale.  The reality is that as soon as you encounter a short sale that interests you, you should make the offer you think is best for you, and not wait for the reductions.  Believe me, the seller will not be offended; and the price reductions may never happen – and you have lost a good opportunity.  A house with no offers may get foreclosed while you are waiting, and your offer can hold that process back.  Keep in mind that you are really negotiating the price with the bank, and they have no emotions involved in the property – it is all about the numbers.  The lender has a number they will accept, and as long as your offer meets that number or better, and no one has submitted a better one, it will get fair consideration.

2. I want to wait until the house has been foreclosed – so I can buy it cheaper.  FALSE.

In the current market, every lender prefers to negotiate a short sale and save the costs that a foreclosure process brings – which in the best of cases will not be less than $15,000.  After a foreclosure, these costs become part of their cost basis for the house, making the same offer appear even more of a loss for them.

In addition, you will be getting a house in better condition that has not been abandoned throughout the foreclosure process.  Some foreclosure cases also result in additional damage to the house as angry owners depart.  All my short sales have been occupied, and the owners continue to care for the house until closing.  My clients understand the process of a short sale, and they know the value of maintaining it in the best condition, clean and without that damage.

In my next article, I will discuss another couple of major myths about short sales.  In the mean time, let me know what you think about these.  And if you are in trouble, struggling hopelessly to make your mortgage payments, please give me a call and let me tell you how I can help.

Short Sales May Help Curb Housing Slump!

Sunday, July 6th, 2008

A growing number of lenders are approving short sales as an alternative to foreclosure, says Doug Duncan, Mortgage Bankers Association chief economist.

The move is a way for lenders to avoid having to take over and manage property.

“The way banks see it, it’s better than if the house goes into foreclosure, stands empty, and sees its value spiral downward before it’s auctioned on the courthouse steps,” says Duncan, who expects rising delinquencies to spark an increase in pre-foreclosure sales.

Though short sales put additional downward pressure on the national median home price, Fannie Mae chief economist David Berson says they also lower the number of foreclosures and can help ease the housing downturn. Short sales are hard to track, though, because they’re not counted, making it impossible to know exactly how many occur.

This is yet another reason why short sales are a win for everyone involved.  Even the national economy wins because the depression in housing prices does not go as deep as it otherwise could.  So help me help others!  If you or anyone you know is in need of my help, please let me know.  I will do my best to create a fair transaction that is a win for everyone.

Don’t Leave Your Home!

Wednesday, July 2nd, 2008

I cannot tell you the number of times I have been called by a distraught homeowner ready to call U-Haul and move out of their house because they’ve been intimidated by the folks trying to collect back mortgage payments.  What I can tell you, however, is that it is a big mistake to do so.

If the bank comes by during the short sale process, and determines that the house is unoccupied, they are likely to consider it “abandoned” and foreclose immediately.  This stops the short sale process, and the homeowner experiences all the negative impacts on their credit of a foreclosure.  In the mean time, the homeowner is paying someone else for housing as well.

If the homeowner stays, the foreclosure can only happen by following the proper legal procedure which takes a considerable amount of time and cost for the lender.  It is one of the major reasons the lenders agree to do a short sale in the first place.  In addition, while I cannot advise anyone not to pay their mortgage, if you are already behind and not paying, there may still be several months before the foreclosure forces you out of the property.

Once you have begun the short sale process, the collection calls should cease, and the Lender knows they can’t use any intimidating tactics.  And you can continue living in the house right up until the last moment.

So do not let people intimidate you out of your home, or into any bad financial decisions that will make your financial picture even worse than it already is.  Call me for advice, let me help.