Archive for July, 2010

10 WAYS TO SPEED UP A SHORT SALE

By: Maria Hass

Short sales is a complicated transaction. It is likened to conducting an orchestra where all musicians play the same note to produce beautiful music. Just as in a short sale, the buyer, seller, seller’s lender, Realtors have to agree to the terms of the seller’s lender to consumate a short sale. There are many reasons why a short sale could fail. In order to prevent an unsuccessful short sale and expedite the transaction, here are a few tips.

1. QUALIFYING AND PREPARING THE SELLER- The seller should be committed to the short sale and is convinced that the short sale will benefit his future. Seller’s who are better informed about the expectations of a short sale are less likely to change their minds during the process. Such expectations include, the possibility of the seller’s lender to ask for upfront cash, promissory note, long wait and any legal or tax consequences of the short sale.

2. PREPARING THE HOME – A home that is clean and staged well stands a better chance of receiving an offer quickly thereby expediting the short sale process. Successful Realtors will advice their sellers to show their homes to sell. Otherwise, the home does not get an offer and eventually lead to foreclosure.

3. SEND SHORT SALE PACKET EARLY- Some lenders will allow short sale packet to be sent earlier than the offer. By doing so, the short sale documents are entered in the system and a BPO is ordered. This will save around two to three weeks of waiting and will encourage buyers to send an offer if the waiting time for a decision is less.

4. QIALIFYING THE BUYER – After qualifying the seller, it is time to qualify the buyer who makes the offer. How long will the buyer wait?, Has the buyer made other offers to other properties?, Is the Realtor still showing houses to this buyer?, Can the buyer easily qualify for a loan?, Could the buyer qualify for more? (In case the seller’s lender comes back with a counter) The answers to these questions are important PRIOR to accepting the offer. WITHOUT THE BUYER, THERE IS NO SALE.

5. NON REFUNDABLE EARNEST – The $500 – $1,000 NON REFUNDABLE earnest money shows the commitment of the buyer to the home for 60-120 days while the short sale is being processed. Without this requirement, the buyer could walk away at any time and the seller is left to foreclose on.

6. PRICE THE HOME AT FAIR MARKET VALUE- Pricing the home right is crucial in determining whether or not the seller’s lender will approve the short sale. If it is priced too low, the bank could counter and the buyer may walk away. If too high, the house could sit for months without an offer while the foreclosure clock is ticking. In determining the price for the home, consider the CLOSED, PENDING AND ACTIVE WITH CONTINGENCIES. Pending and Active with contingencies will most likely be the SOLD listings by the time you get your short sale approval. When looking at CLOSED sales, consider those that closed very recently. Otherwise, they might not be usable comps by the time you get your acceptance to the short sale.

7. CUT OUT THE JUNK, GO CLEAN – A clean, full price offer is ALWAYS the best. It is easier for the seller’s lender to approve a short sale without unneccessary concessions by the buyer. The higher the NET for the seller’s lender the lower the risk of denial. If the offer is low, the seller should counter the offer until it makes sense for the lender.

8. MEET THE BPO AGENT AND APPRAISER – BPO is key to a short sale. It is a good practice for Realtors to meet the BPO agent or appraiser and provide them with comparable homes to support your purchase price, if possible. Let them know that YOU CARE about the outcome of this short sale. Establish a good rapport with the BPO person or appraiser. Even though, you were not able to determine the actual value of the home, the BPO person or appraiser will be keen and careful with their assessment after talking with you.

9. PROVIDE WEEKLY UPDATES ON THE SHORT SALE – Majority of the time, buyer’s walk away from the deal because they have NO CLUE about what is going on. Make certain that you provide the buyer’s agent a weekly update on the short sale to pass on to the buyer. Buyers are more likely to be engaged in the home if they know what is going on with the short sale.

10. ESCALATE – Be aware of the allowable time frames for a task to be completed. If the task is behind schedule, it’s time to escalate. If you think you are not getting anywhere with the negotiator, it’s time to find someone else who would listen. This could mean changing negotiators. A well processed short sale should not take two or three negotiators to make a decision or go through more than one committed buyer with a good offer.

Overall, if you are listing a short sale or any listing, DO EVERYTHING RIGHT AT THE VERY START (Pricing, condition, presentation of the home, preparing the seller). Accept a great offer from a committed buyer with the non-refundable EM check, make certain that the values are in line and escalate whenever needed. Lastly, pray hard that everything falls into place.

July 16, 2010 at 5:36 am Leave a comment

What is the waiting time to buy a home after a short sale, foreclosure or bankruptcy?


CONVENTIONAL:

Chapter 7 Bankruptcy – 4 yrs from discharge date
Chapter 13 Bankruptcy – 2 yrs from discharge date
Foreclosure – 5 yrs from completion date (Foreclosure waiting period applies if mortgage was included in a bankruptcy)
Deed-in-Lieu of Foreclosure – 4 yrs from completion date
Short Sale – 2 yrs from completion date

FHA
Chapter 7 Bankruptcy – 2 yrs from discharge date
Chapter 13 Bankruptcy – 1 yr of the payout must elapse & payment performance must be satisfactory. Buyer to receive permission from court to enter into a mortgage.
Foreclosure – 3 yrs from foreclosure date (Foreclosure waiting period applies if mortgage was included in a bankruptcy)
Short Sale – Immediately if borrower is current in paying the mortgage during the short sale. 3 yrs. if at least 30 day late. Ask lender for details.

* Borrower is disqualified from obtaining FHA if borrower had a previous FHA loan.

VA LOAN
Chapter 7 Bankruptcy – 2 yrs from discharge date
Chapter 13 Bankruptcy – 1 yr of the payout must elapse and payment performance is satisfactory. Buyer to receive permission from court to enter into a mortgage.
Foreclosure – 2 yrs from completion date (Foreclosure waiting period applies if mortgage was included in a bankruptcy)
Short Sale – No information on this yet. Assume 2 yrs from completion date.

USDA LOAN
Bankruptcy – (Chaps. 7 or 13) – 3 yrs from discharge date
Foreclosure – 3 yrs from completion date (Foreclosure waiting period applies if mortgage was included in bankruptcy)
Short Sale – No rule on this yet, assume 3 yr foreclosure rule

* Lending guidellines may change without notice. Please check with your loan officer for more details.

July 13, 2010 at 9:13 pm Leave a comment

CITY OF CHANDLER DOES IT AGAIN!

The city of Chandler recently was awarded as one of the ten “All American City” by the National Civic League. Chandler was selected from candidates nationwide. The award honors cities and towns of all sizes for their ability to address serious issues and challenges with innovative solutions using collaborative efforts and promoting civic engagement. The 10 winners were selected among 27 finalists from 19 States.

The presentation of a delegation sent by the City of Chandler in Kansas City focused on three major projects including partnership with ICAN’s underage drinking taskforce, the Chandler CARE Center and its involvement with developing the Chandler Heights Community facilities comprising of a police substation, Environmental Education Center (EEC) and park and water recharge facillity.

This prestigious award is the first in the many awards that the City of Chandler has in its bag. It is a testimonial of the quality of service the city provides. Other awards that Chandler has received include;
America’s Promise – The Alliance for Youth100 Best Communities for Young People
Money Magazine2008 Top 100 Best Places of Live
AARP Magazine2007 Top 5 Places to Live
Prevention Magazine2007 Top 10 Best Fitness Walking Cities
On top of the many awards Chandler has received, residents pride in Chandler’s exceling school district http://ww2.chandler.k12.az.us/chandlerschools/site/default.asp and opportunities for recreation and parks http://www.chandleraz.gov/default.aspx?pageid=301 Chandler has the most number of state of the art aquatic facilities, lakes and recently transformed a land fill into a gorgeous recreational park.
To visit the city website go to http://www.chandleraz.gov/

July 8, 2010 at 1:51 pm Leave a comment

NEW HOUSING PROGRAM TO AVOID FORECLOSURE TO BEGIN IN SEPTEMBER 2010

By: Maria Hass

A June 24, 2010, Arizona Republic article explains a new federal program that will help homeowners reduce their principal mortgage. Under this initiative, the government has approved a $125 million mortgage relief fund for homeowners to help them stay in their homes and avoid foreclosure.

This funding is supposed to help an insignificant number of homeowners who will qualify under restrictive guidelines. It is directed to foreclosure hard hit states like Arizona.

Among the terms of the plan:
The state will issue borrowers loans of up to $50,000 to apply to their mortgage balances. Their lenders will be expected to match or exceed that amount. Homeowners may pay a portion of the loan unless they DO NOT SELL IN 10 YEARS.
Lenders will be given incentives of up to $5,000 to settle second mortgages for up to 1,500 homeowners.
Up to $12,000 in temporary aid will be provided to as many as 1,000 households that have suffered reduced incomes.
Most important of all — this plan is OPTIONAL. Lenders are NOT REQUIRED TO PARTICIPATE – And many of those big, greedy banks will not do so.
The program, called “Save My Home AZ,” is scheduled to be launched in September 2010. Whether this program will bear fruit will depend on the big banks – Bank of America, Chase, Wells Fargo, and investors like Fannie Mae and Freddie Mac’s willingness to reduce the principal mortgage of homeowners. In the past, ALL government housing relief efforts have FAILED including the HARP (Home Affordable Refinancing Program) and HAMP (Home Affordable Modification Program). The Home Affordable Foreclosure Alternative (HAFA) is in the works and could only help about a quarter of the loans because Fannie Mae and Freddie Mac are not participating in the program. Now, this new program looks destined to FAIL just like the rest. These banks are good at claiming that they are “committed to helping homeowners avoid foreclosure” but they are UNWILLING to reduce the principal mortgages. Until and unless these banks and investors reduce homeowners’ principal mortgages, foreclosures and short sales will continue. A majority of homeowners in Arizona are upside-down. Anyone who bought a house in 2001 or later is at risk of losing equity. A home can be a worthless investment given these conditions, and people are inclined to cut their losses now and rebuild rather than continue to feed a dead horse.

For the complete Arizona Republic article, please go to: http://www.azcentral.com/business/realestate/articles/2010/06/24/20100624arizona-mortgage-relief-plan.html.

July 1, 2010 at 10:04 pm Leave a comment


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