If you are a buyer looking to purchase a short sale property, I’m sure you have had some frustration on why a short sale property you fell in love with didn’t close. Rest assured after reading this blog, you should be able to determine which short sale properties you should walk away from and which ones you should stick it out.
On average a short sale negotiated property takes 60-90 days. However, there are unconventional short sale procedures that listing agents are conducting. These methods not only prolong the short sale transaction but often cause the transaction to fail.
Below are real examples of how some listing agents have it all wrong. Although there are many examples, I have listed the most common mishaps my buyers and I encounter with a listing agent.
Multiple Contracts Signed (Executed Contracts) I often call on short sale transactions where the listing agent states the home has multiple offers and has submitted all signed contracts to the lender. What? All buyer contracts are signed by the seller? How can you sell the home multiple times on the same transaction? I don’t think I have to continue on this subject.
Banks do not want multiple offers on their desks. One contract signed and submitted to the lender and maybe 2 backup offers held by the listing agent. That’s it.
Multiple offers to the bank but still active in MLS(MetroList) I am now in the habit of calling a short sale listing BEFORE showing the property. Originally, I would set up 5 – 10 properties for showings and after viewing the properties, calling the listing agent on the ones my buyers would want to put an offer on. After calling, we were only actually eligible for 1 to 2 properties. Listing agents are too lazy to pull their listing off of the market even when they are under contract. I recently called on a short sale property that had 32 offers…yes-32 Offers!! It was still active in MLS (MetroList).
Another example, my buyers wanted to put an offer on a short sale that had multiple offers. I called the listing agent and asked the status of the offers. Again, as usual, she had submitted all offers to the lender without a signed contract from the seller. I asked why it wasn’t placed in MLS and “under contract”. The listing agent’s response was that since she didn’t have a signed contract from the seller, she didn’t have to place it under contract in MLS. What’s interesting about this is the lender will not accept an offer unless it is signed by a buyer. I don’t think that property will close.
Buyers, if you come across a short sale property that has multiple offers submitted to the bank, still accepting offers, and it is still not placed under contract, walk away.
Communication from the Listing Agent Before submitting my buyers offer, I spoke with the listing agent regarding our offer. After submitting our offer, I called the listing agent several times and even emailed him regarding the status of our short sale transaction. I still hadn’t received a signed contract from the seller even though we were told we were the only contract submitted to the lender. The listing agent never called us back to tell us that we were in contract. A month later we finally received a message from the listing agent that they are ready to proceed with the short sale. Seriously….a month later?
Luckily, my buyers took my advice, moved on from the property and found a wonderful property that they are “under contract” at this time. You should always be in contact with the listing agent, at least once a week for an update, even if there isn’t one. It is just professional courtesy.
Earnest Money In one of my recent transaction a listing agent did not want to accept my buyer’s earnest money. The excuse given was that if they accepted earnest money, she would not be able to accept other offers. Isn’t that the point? Sell the property before the seller is forced to foreclose.
If you decide to put an offer on a short sale property, you should be giving earnest money. In return, this lets the seller know that you are serious about the property and willing to wait the negotiating period. If a listing agent does not want to accept your earnest money, more than likely they will not pull the property off the market or place under contract in MLS. You should avoid an agent who does not want to accept earnest money. As a buyer, you should be more than willing to give earnest money if you truly like the property.
Professional Short Sale Transaction Company
If the listing agent is using a professional short sale transaction company, you should feel more at ease. These companies specialize in coordinating the short sale process. They are in constant contact with the bank, title, all agents involved, buyer, and seller on weekly, sometimes daily bases. They often have great relationships with the lender negotiators.
In fact, these companies rarely lose a short sale to foreclosure. They usually have a 97 percent success rate compared to less than 50 percent with an agent that is not certified or not using professional services. Short Sale Transaction Companies coordinate the short sale while the listing agent can be a listing agent.
Ask the next listing agent if they are using a professional short sale transaction company.
Signed Contract After submitting an offer, if you do not receive a signed contract--you are not in contract, even if the listing agent has told you so. My buyers put an offer on a short sale property on a Friday. We gave a full price offer with no concessions. We were told by the listing agent he would get the seller to sign the offer over the weekend. The weekend passed. We didn’t have a signed offer. I called the listing agent and he reassured me that our offer would be signed that week and submitted to the bank. Again, we didn’t hear from the agent. Finally, after calling the listing agents broker manager, the listing agent called with news that our offer was submitted to the bank with 2 other offers. I still didn’t have an executed contract.
I understand that it is perfectly normal for the listing agent to present multiple offers to their seller. In fact, the property is probably a great bargain. In this case, I don’t believe the listing agent even presented our offer, especially after calling his broker manager for some answers.
Bottom line, a Short Sale Transaction should be treated as a “normal” sale.
*Present all offers to the seller (not the bank). The seller still owns the property.
*Seller accept the best offer (not the bank)
*Execute the offer
*Place the listing in MLS under contract
*Submit the signed contract by both parties to the bank
*Take back up offers
The only difference than a normal transaction is the seller is asking the bank to accept a lower offer than what is owed on the mortgage and the time frame it takes to negotiate. That’s it! I don’t understand why some listing agents are treating a short sale transaction differently.
There are many listing agents that can negotiate a short sale with great competence. Unfortunately there are agents that have no clue on the short sale process.
Please call The Denver Realty Company. We are Certified Distressed Property Experts. We can help both buyers and sellers negotiate a successful short sale!
Avoid Foreclosure - Ask an Expert - Distressed Properties
We are Certified Distressed Property Expert's! If you know anyone who is late on their mortgage payment, please give us a call.
We will evaluate the situation and help determine if a short sale is even necessary. You may be able to keep your home. We understand that this is extremely emotional and stressful time.
The Denver Realty Company can help you, your loved ones, or your friends through this process. We have only a limited amount of time to help you with your property. The sooner you act the more options you may have. All information is kept confidential.
In a day and age when technology seems to rule a big part of our lives, it is important to make sure that our “identity” is protected. As we have all read the horror stories of the victims of identity theft, there are steps we can take to protect ourselves and our personal information.
For starters we should be clear about what identify is and how we are identified as individuals in this high tech world we live in. Identity theft occurs when our personal information is collected without our permission and utilized, most of the time, for criminal activity. What personal information do these people target?
1.Your Name
2.Address
3.Birth Date
4.Social Security Number (SSN)
5.Credit Card Numbers
6.and Other Personal Identification Numbers
This is the type of information someone would need to open credit card or bank accounts, apply for cellular phone service, purchase vacations packages, forward your mail, etc. So how can you protect yourself from this information getting into the wrong hands?
If asked to provide personal information, ask why is it needed, how will it used, if it will be shared and with whom.
Carry the least amount of personal information with you as possible.
When asked for your credit number over the phone or internet, make sure that you know who you are dealing with and the communication line is secure.
It’s always a good idea to take extra security measures when dealing over the internet (i.e. digital signatures and data encryption).
Knowing your billing cycles can prove to be very useful should you not receive your bills in the mail. This could help in determining if you mail has been illicitly redirected.
Order your credit report at least once a year and review for any inaccuracies or any unusual activity.
Report lost or stolen credit cards immediately.
You can also request that your accounts require passwords before any inquiries or changes can be made
Choosing the right password is extremely important. You don’t want anything obvious and you DON’T want to write them down.
Always protect your pin number when using debit machines, bank machines or telephones.
Review your credit card cardholder agreement. A number of companies offer protection from credit card fraud.
Lastly, be aware of your garbage. Anything with the above mentioned personal information on it should not just be thrown out. Shredding this type of documentation (especially financial statements, receipts, etc.) is an effective step in preventing identity theft.
Taking the necessary steps above to protect your identity is not difficult. It’s as simple as being aware of what these identity thieves are looking for and arming yourself with the knowledge on how to properly protect your personal information.
Foreclosure vs. Short Sale.
Why Borrowers should pursue a Short Sale.
If your debt problems result in a foreclosure, your credit may suffer for a long time. If the foreclosure happened during the foreclosure crisis, 2007 to present, you might be able to reestablish your credit sooner than would otherwise be possible. The reason is because so many foreclosures are occurring in this period and for reasons which are not entirely the borrowers fault. For example, many borrowers could have avoided a foreclosure had their original lender provided them a fair loan. Instead many borrowers were duped into low interest rate or interest only loans. After these loans reset, the resulting payments were too high for many borrowers to afford. Rather than modify these loans, many banks chose foreclosure. Because of this, many lenders may be more willing to extend credit with a foreclosure on your record than they would have been in the past. However, your waiting period after foreclosure will likely be much longer than if you have had chosen to short sale your property.
Both a short sale and a foreclosure may result in a deficiency. However, if you have just one loan on your residence, many lenders will forgive the remaining balance and report the debt as settled to the credit agencies after a short sale closing. (Note: pursuant to legislation passed in 2008, the forgiven balance no longer has to be reported as income in most cases so long as the home was used as your primary residence.
If you have two loans securing your property, the second lien holder may release the lien for purposes of the short sale; however, they rarely agree to release the debtor's personal liability for the remaining deficiency.
The impact on your credit score after a short sale is nearly identical to the impact you would realize after a foreclosure.
What is a short sale?
A short sale is a sale of real estate in which the net from the sale falls short of the balance owned on the mortgage. The Bank/Lender or even multiple lien holders agree to sell the property discounted due to economic or financial hardship.The short sale prevents the home from going to foreclosure.
So what is the advantage of a short sale? Your credit score does not tell the whole story and future creditors will look beyond your credit score in making lending decisions. The fact that you worked with your former lender to mitigate their damages pursuant to a short sale agreement will be looked upon favorably by most lenders. The fact is, lenders will realize a much greater loss after a foreclosure due to foreclosure costs (legal fees), accumulating loan servicing fees, and perhaps most importantly the costs of the holding and reselling the property. After the lender purchases the property at the Public Trustee Sale, the lender must maintain the property and in many cases will incur substantial losses in reselling the property. By working with a real estate agent to short sale your property, you mitigate these damages on behalf of the lender.
Additionally, as a result of FHA lending standards the purchase of a new home is made much easier after a short sale. To obtain an FHA backed mortgage on a new home the minimum waiting period is five years after a foreclosure. The same waiting period is reduced to just two years after a short sale. (As a side note, the minimum waiting period to obtain an FHA backed loan after filing a chapter 7 bankruptcy is also two years).
What should I do if I am late on my house payment?
Contact The Denver Realty Company ASAP! We have a limited time to act on your options. Once a homeowner has been given the "Notice of Election and Demand", we have a limited time to save the property through a loan modification or a short sale. However, a loan modification or a short sale approved contract often slows or stops the foreclosure.
Should I file bankruptcy along with a short sale or loan modification?
There is no simple answer to this question because it is very facts and circumstances dependent. The Denver Realty Company cooperates directly with a bankruptcy law firm that has experienced former foreclosure attorneys on staff who will be able to answer this and any other questions you may have involving bankruptcy law. We also have a relationship with loan modification attorneys to help on your behalf of negotiating with the bank on reducing your loan payment.
We understand that this is an extremely emotional and stressful time. However, The Denver Realty Company and its team can help you, your friends, or your loved ones through this process. Please give us a call. All information is kept confidential.
Everyday we hear of new reports and statistics regarding climate change and global warming. These reports indicate how imperative it is that we all do our part to help preserve this fragile planet we live on. Not everyone knows what they can do, or how to start.
The easiest place to start would be at home. Listed below are few simple things that all homeowners can do to kick start a home recycling plan. Don't feel like you have to do everything at once, unless you want to, which would be great. Implementing a home recycling program will change some of the current processes in your home, but it shouldn't take long to get use to these new ways of doing things and change your habits.
Curbside or Drop-off Recycling
According to Earth 911, curbside recycling is offered to half the U.S. population which provides homeowners a convenient way to recycle a variety of different materials such as, plastic, paper, aluminum cans, glass bottles and steel/tin cans . For those areas where curbside recycling is not offered, recycling drop-off locations are a fabulous alternative.
Stop Using Plastic Shopping Bags
Plastic bags are not biodegradable and are threatening our marine life and clogging our landfills. A simple step in your home recycling plan would be to stop using plastic shopping bags. There are so many alternative shopping bag sources out there now with many large, and small, stores offering canvas reusable bags for less than a dollar each.
Composting Composting is a fabulous way to limit the amount of garbage in your garbage cans and ultimately the amount of garbage you add to our landfills. An added benefit of composting is the nutrient-rich fertilizer you will create for your gardens using organic materials from your home.
For additional information visit Earth 911 or contact your local home waste collection service provider.
"The greatest pleasure I have known is to do a good
action by stealth, and to have it found out by accident."
~ Charles Lamb (1775-1834)
GIVE IT AWAY!
Here's a "feel good" idea that pays big dividends to both giver and receiver: "Give something away every day!"
We all get caught up in our day-to-day routines and responsibilities. Between family and home, work and leisure, our daily schedules are usually packed with the things we do for ourselves. Managing to squeeze in a little time for others is often out of the question.
In the big picture, however, it is not what we do for ourselves but for others that really matters in life. We're not just talking about those who are "less fortunate" in this context. The world of "others" includes family members, associates, the elderly, those experiencing illness, those in our geographical, social, or church community, or the less fortunate.
So . . . what do you give away? Are we talking big money to charities or an endowment to the local university? Nope! What you give away is up to you. It might just be your time - something as simple as taking your grandchild for a walk, offering to take an aging neighbor grocery shopping, or donating a Saturday to Habitat for Humanity. On days when you lack ideas, just give away a smile, a compliment, or some encouragement.
Maybe you give away some of your material possessions. That might include a piece of furniture, an antique, a piece of family heirloom jewelry, or the like-new clothing in your closet that never fit right. Why not donate some of the kids' toys to a day-care center?
Whatever you decide to give away, do it quietly - and anonymously when possible. Make it a habit. It will bring you the special joy of knowing you've made a difference.
Moving can be extremely stressful especially if you have children. It is important to be aware of the things that may be a concern to your children when making a move.
A few areas of concern for children when making a move may include:
Preschool children tend to worry about being left behind or separated from their parents.
Kids aged 6 to 12 can be concerned with how their daily routines will be affected.
Teenagers are concerned primarily with fitting in and having their social life disrupted.
A way to ease these concerns may include:
Communicating with your child about what the new house will be like.
Take them on a visit of the new home and neighborhood (if possible)
If you can, visit the school with your child and meet some of the teachers.
Involving your children in the move can help make the transition easier. Your kids can be a great help to you and the move if you involve them such things as:
Packing some of their own special belongings, and decorate the box with stickers and markers.
Make plans together on how to decorate their new room.
There is a lot to consider during a move and by involving your children you just may relieve the stress your children are feeling, reduce your own stress and be able to focus more on other aspects of your move!
When it comes time to move you may find youself in need of a temporary place to store your belongings. The good news is you have several options, read more below to find one that will work best for your situation.
There are few things you’ll want to consider about your storage options:
• Will you need a large facility or just a small storage space?
• How long will you need storage, long or short term?
• If your items will be stored for an extended time frame, you will need to consider special needs before packing away your items. You may need temperature and moisture controlled facilities.
Different Options
Self Storage Facilities. These consist of mini-storage units where a monthly charge is incurred. Most have a variety of units in different sizes to accommodate your storage needs; if you are not sure of how big a unit you may need, use this estimator to help determine the best size you may need.
Depending on the facility, access can be granted at specific times but some do have 24 hour access. Find a self storage facilitynear you.
Container Storage or PODS. This option is ideal for long-term, portable storage. Pods can be stored at a storage center, and once you move to your new home, delivered at your doorstep for your convenience. This can be a time and money saving solution because you only have to pack once, you don’t have to move your items to the storage facility and then again to your final destination.
Moving Companies That Offer Storage Facilities. If you are using a moving company, check and see if they offer storage facilities as well. Many offer this service for an additional fee. This may be a convenient option to have the same company who is handling the moving, pick up, store your items and then delivery them to your final destination.
Before You Store Your Items
• It is a good idea to look into insurance for the items you will be storing. Check your homeowners or renters insurance policies to see if they will cover items kept in storage. Don’t assume the storage facility will cover your items if they are damaged or stolen.
• Make an inventory of the items you are storing and keep it in a safe, easy-to-find place. For highly valuable items, it is recommended that you take photos as well.
• Be sure the storage facility offers all that you need. A few things to consider may be location, 24 hour access, security features, climate control, whether you need mobile storage, etc.
• Before signing a contract, be sure to tour the facility so you can view the unit to make sure it is up to your standards and will accommodate your needs.
Why, then, should a buyer enlist the services of a real estate agent? Here are ten reasons that I think make a lot of sense. After reading them, see if you agree:
1 -- Experience
Purchasing a new home may well be the largest expenditure that you ever make. So it simply makes good business sense to enlist all the help you can get.
A seasoned real estate agent has completed more real estate transactions already this year than you'll likely make in your lifetime. That adds up to a whole lot of knowledge and experience. Experience that can help navigate you safely and securely through every aspect of the buying process.
2 -- Knows the Market
A real estate agent will know what's happening in a particular area, or neighborhood, and help you decide if a home you find is a good value. Once you find a property that interests you, your agent will show you "comps" (comparable properties) of similar homes that have sold recently, as well as those that are currently on the market.
And if your real estate agent works with an established firm, he or she will have instant access to a host of proprietary tools -- and property information -- that may be difficult, or even impossible, to find on your own. All this information will help you make a well-informed decision.
3 -- Saves Time
A good real estate agent is an organizational genius. He or she will manage to get you in to see new properties as soon as they become available -- and arrange the most appointments possible within your available time slots, no matter how limited.
But remember, accessibility is a two-way street! Be sure to support your agent by being as flexible as possible -- especially when your time is very limited.
4 -- Good Listener
If you decide to use a real estate agent, look for someone who asks as many questions as you do. When you mention a price range, does the agent give you a 'standard' list of available properties, or is he or she able to make -- or adjust -- his or her recommendations based on what comes up in your conversations?
How interested is the agent in listening to your point of view? How many questions does he or she ask? After all, your real estate agent's recommendations should vary substantially based on your personal needs and goals (for example, you may be starting a family, need to configure your new home to accommodate an office, need space for your son's new car, or be downsizing).
5 -- Tells the Truth (even when you don't want to hear it!)
Expect that a good real estate agent will challenge you once in a while, ask the tough questions, and yes, even disagree with you occasionally. When he or she makes a recommendation that seems off-base, give your agent the opportunity to give you the facts -- and share his or her knowledge and experience -- before making a decision. Learn to trust your agent's intuition, insights, and perspectives; they'll often lead you in the right direction.
6 -- Respects Your Budget
One of the most important things that your real estate agent will do is help you determine how much you can afford to spend. He or she may well ask you to consult with your accountant, financial planner, and/or mortgage broker before you make this important decision.
In some markets, there's a lot more to purchasing an apartment than having cash for the down payment, and securing financing. For example, most Manhattan cooperative buildings ('co-ops'), which account for about 75 percent of the properties in the city, will also look at your debt-to-income ratio (DTI), and your post-closing liquidity (yes, it can be a bit complicated!).
A good real estate broker will understand the particulars of your market, and help you find a terrific housing solution that you'll be able to qualify for financially -- and that will be possible within your budget.
7 -- Team Player
Your real estate agent should be able to recommend a great team of professionals to support your purchase -- from mortgage brokers and appraisers, to contractors and designers and real estate attorneys.
8 -- Getting to Closing
Remember that finding the right property is only the beginning. Be sure your real estate agent is well prepared to negotiate aggressively on your behalf, and assist you in finding financing, if necessary. Your agent should be ready to follow through with your bank or mortgage broker, any other agents involved in the deal, and with your real estate attorney, until the purchase is complete.
And if you're purchasing a home in Manhattan, be sure you have a real estate agent who is adept at helping you put together the materials necessary for the board application package, following through with the management company, and if it's a co-op purchase, preparing you for the board interview.
9 -- Gives Timely Updates
Throughout the buying process, stay in touch with your real estate agent regularly. He or she should give you regular updates on new properties, any changes in the local real estate market, mortgage rate changes, and so on. And you should update your real estate agent right away should any of your priorities change, or if your research turns up a property you may be interested in seeing. The result of working together closely? Finding just the home you're looking for, more quickly.
10 -- The Relationship
Don't underestimate the importance of personality when you choose your real estate agent. You'll be spending a lot of time with them -- and entrusting them with one of the most important transactions of your life. So be sure to find someone you not only trust and respect, but also look forward to working with.
Many home buyers try to find the perfect property on their own. No surprise, actually. With internet access to more real estate information than ever before, it's fairly easy for anyone who's computer literate to access a list of available properties in every part of the country.
One question that has been surfacing with regularity relates to the benefit of preparing one's home for sale BEFORE putting it on the market. It's great to think about this concept in advance of actually selling. In today's market, the successful sellers are the ones who are offering the "most for the least." Location continues to be an important criteria for success, enhancing demand and desirability. But successful sellers are also those who have coupled extremely good pricing, extremely good condition & presentation, and superb marketing. So addressing these concerns can be handled in a few ways.
I could personally meet with you, look at your home and make recommendations or if you preferred to have a home stager (an accredited professional who is trained to assist homeowners in getting their homes in top showing condition), I can recommend someone to you. This is a service that many Realtors provide to their prospective clients. To arrange a time to meet with you or for a recommendation to a local home stager, please feel free to contact me by email or phone. If you would simply like additional information about the home staging process, please feel free to visit: http://www.homestagingresource.com/2007-04news.asp.
Before you step foot into the first home you look at, it's a good idea to thoughtfully determine your wants and needs, and the difference between the two! By analyzing your needs you will be able to get a clear picture of exactly what you want your new home to look like and how it should function for you. Once you're in the thick of viewing homes, it's all too easy to fall in love with someone’s decorating or a home’s outstanding architecture – and to completely overlook that there aren't enough bedrooms or bathrooms to fit your needs.
First, you should write down why you're looking for a home. For example, are you currently renting and would like to have a home where you can begin building equity? Maybe you have outgrown your existing home or changed jobs which required you to move to a new city. These factors will all have an impact on how you approach your home search.
It is important to identify what you envision your home to look like and what features it should have. Writing this down helps to avoid ambiguity later in the home search process. You should make at least two lists:
Describe everything you would ideally like.
List the features of the home that are an absolute must.
It is most likely that you will blend the two lists into one as you progress through the homebuying process. This is a natural and evolutionary process that becomes clearer as you determine what you want and what is available.
If you live in the Denver, Colorado area are would like to learn more about our First-Time Homebuyer Program and how the new Tax Credit that is available, please visit my website to register.
When it comes time to move you may find youself in need of a temporary place to store your belongings. The good news is you have several options, read more below to find one that will work best for your situation.
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