Home $$s & Sense

Are e-Signatures Legal in Real Estate?

noreply@blogger.com (Sue Thompson) — Fri, 12 Mar 2010 00:26:00 +0000

Dear Sue,

I am in the middle of buying a new house. My Realtor e-mailed several documents for me to sign.

In my work electronic signatures are common practice. I was wondering if electronic signatures are used in real estate transactions. Is it legal?

A friend of mine said that in order for real estate contracts to be legal they needed to be signed in blue ink.

If it isn’t legal to use electronic signatures, the real estate industry should get into the 21st century!

Electronic Ed

Dear Ed,

Electronic signatures are legal in a real estate transaction. They have been legal since President Clinton signed their use and guidelines into law 9 years ago.

In fact, the National Association of Realtors is in the 21st century. NAR just unveiled an exclusive Realtor electronic signature service called DocuSign. It is an exclusive on-line eSignature service designed specifically for Realtors.

The Realtor edition allows agents, buyers and sellers to electronically sign agreements. The new product includes on-line signing from an iPhone, Blackberry, Windows Mobile, Google Android and other mobile devices.

According to NAR there are already over 20,000 Realtors using DocuSign.

The new e-signing service is a win-win all the way around! It frees up the back and forth faxing of documents that often end up illegible. The less paper that is used, the greener the transaction. It also allows buyers and sellers the time to calmly and thoroughly review documents from the comfort of their own homes prior to signing them. Agents can now spend more time with clients and less time processing paperwork.

In today’s real estate climate time is really of the essence. Multiple offers and counter offers and returned contracts with electronic signatures will take a matter of minutes instead of hours and sometimes days.

Transactions can be done from anywhere. One client completed his real estate purchase by transferring his funds to close his escrow while he was 30,000 ft in the air. If you forgot to pack your blue ink pen, no worries. Use electronic signatures. They can be a matter of good Home $$s and Sense!

Landlord Can Recover Money for Damages

noreply@blogger.com (Sue Thompson) — Mon, 08 Mar 2010 19:01:00 +0000

Dear Sue,

Our handyman, Al, has a rental in Sacramento. His last tenant left the place filthy and damaged.
What does one do to lessen that kind of thing from happening?

Luckily Al is able to do his own repairs, but it seems that an owner ought not to have such things happen without some way of recovering the expense. Am I just thinking, “pie-in-the-sky?”

Al’s Agitated Friend

Dear Friend,

You are asking a two-part question. First you ask what can a landlord do to keep from renting to tenants that leave the property filthy and in disrepair.

I don’t have a 100% solution but I can recommend a few strategies that will certainly help.

First, a thorough screening is a must!

Do a credit check. FICO scores are not only used as indicators for loans, they are currently being used as indicators for certain employment. They can also be used for tenant screening.

A credit check of all occupants responsible for paying the rent should be done. If you have roommates as potential tenants, I recommend that all of them sign the rental agreement. It’s not uncommon to rent to roommates that eventually move out during the rental period and are replaced by occupants that are not on the rental agreement. Generally speaking the higher the FICO score the better the tenant.

Calling a previous landlord is not nearly as effective as calling the previous to the present landlord. The present landlord may give a glowing recommendation just to get rid of the tenant. The previous landlord has nothing to lose by telling the truth.

Some landlords actually pay a visit to the tenant’s current residence. This method by far is the most revealing.

I had one old timer tell me that how a tenant keeps their car is probably the way that they will keep their home. This old timer made sure that he got a peek of the inside of his applicant’s car. He said that over the years it proved to be a pretty good indicator. This old timer owned and managed 30+ properties.

My best advice would be to not go against your instinctive judgment. Some landlords are so eager to get a property rented that they rush into a rental agreement only to regret their decision. I guarantee that it is better to have a vacancy for a month or two than to go against your better judgment and select a questionable tenant!

The second part of your question was about recourse for repairs.

A tenant must repair all damage caused by his failure to use ordinary care in the use of the premises.

A landlord can recover the cost of repairs made to correct excessive wear and tear by deducting the cost of repairs from the security deposit and demanding payment for any deficiency in the deposit to cover the expenses.

If the tenant fails to pay any charges remaining unpaid after deductions from the security deposit, the landlord can file an action against the tenant to recover amounts not covered by the security deposit.

In cases like these, I suggest legal counsel. It can be a matter of good Home $$s and Sense.

For more articles and real estate news visit:

HomeTown Realtors

Home Inspection Report not a Honey Do List

noreply@blogger.com (Sue Thompson) — Thu, 25 Feb 2010 15:41:00 +0000

Dear Sue,

I am under contract to purchase a mobile home. I had a termite report and a home inspection.

I could accept the termite report because it was minor. The pest inspector found signs of termites but he said that it would only cost about $200.00 to get rid of them.

However, the home inspection was a different story. The inspector found missing breakers in the electrical panel, dead plugs and uncovered switch plates. The hall light switch didn’t seem to work at all.

The hot water heater wasn’t strapped properly and the smoke detector was missing. There were more items on the list that the inspector said needed to be repaired.

When I told my real estate agent that I wouldn’t buy the mobile home unless the seller fixed everything she got upset. She said that a home inspection was a disclosure not a “honey do” list.

She said that the seller wasn’t going to do any repairs.

I couldn’t believe it. I thought that sellers were required to take care of safety issues when selling a home.

Could you please shed some light on this? No pun intended!

Fix- it Frank

Dear Frank,

Your agent is right! Home inspections are a form of disclosure. They are not “honey do” lists.

The California Association of Realtors purchase agreement is as an “as-is” contract. Sellers are not obligated to do any repairs requested by the buyer. On the other hand, buyers are not obligated to complete the purchase if they are dissatisfied with the inspections.

From a practical stand- point, market conditions will dictate the seller’s motivation. If the property is in high demand and the seller is receiving multiple offers it’s doubtful that he/she will be willing to make repairs. If the property has been sitting on the market the seller is likely to be more eager to meet the buyer’s requests.

I don’t think that it’s unreasonable to expect the home you are buying to be safe. Two of the safety issues you mentioned are actually mandated by state law. California requires seller’s to properly strap the hot- water heater and install working smoke detectors in the appropriate locations before transferring title.

I would suggest that you get estimates from a contractor. Get an idea of what the repairs would cost. Ask for a cash credit from the seller and consider tackling some of the smaller items yourself. Be prepared to negotiate it. It could be a matter of good Home $$s and Sense.

For more real estate matters:

www.seehometown.com

Tips for Beating out Cash Offers

noreply@blogger.com (Sue Thompson) — Mon, 22 Feb 2010 22:43:00 +0000

Dear Sue,

I am a first time buyer attempting to take advantage of the $8000.00 tax credit and low interest rates. I have been looking at homes from Colfax to Roseville. I have made over a dozen offers only to be out bid by cash investors and other buyers.

I know that I have to be in contract before the tax credit expires. I am just so frustrated I can hardly stand it. No matter what I do my offers flub!

Can you give me some pointers on how to structure my offer so it will be accepted?

Frustrated Francis

Dear Francis

Investors paying cash are driving today’s market. It’s tough to beat cash. “Cash is King!”

You can however, structure your offer in ways that will make it hard for the seller to ignore.

Begin with price. If you haven’t been offering full price and then some, think again. The best deals are receiving multiple offers at higher than list price. While the highest priced offer is not always the “best”, it doesn’t hurt. Price will definitely be one of the main factors that will be considered.

The deposit known as earnest money is also important. The larger the deposit the better. A minimum of 1% is recommended. Make it 3% if you can handle it. The deposit is a good indication of how serious you are as a buyer.

If you are like most first time buyers your financing will be FHA or USDA. You will probably be asking for a 3-31/2% credit from the seller for recurring and non-recurring closing costs. If you are, I recommend that you add the requested credit to the offer price. For example, the property is listed at $100,000.00. The comparable sales in the area show that the property is undervalued by approximately $5000.00. You want to make an offer that nets the seller $105,000. You also want a 3% credit for closing costs back from the seller. Make an offer for $108,500.00. The seller is more interested in the bottom line than the top line!

Clean, clean, clean means “as-is” subject to inspections. Your deposit will be protected during the inspection period. This is the time you are allowed to inspect the property and make your investigations without jeopardizing your deposit. Many buyers believe that “as-is” means that they have to go through with the purchase no matter what they find. Not so! Buyers can cancel without penalty if they do it within their time frames. The cleaner the offer the better the offer.

Since the bottom line is such an important factor I suggest that you make it look good by offering to pay for all of the inspections. That includes septic pumping, well testing, pest and professional home inspections even the home warranty. It may be costly, but it will be better than losing a property that you really want. It’s also good for you to have control over those inspections. You might say that it’s a cost of doing business in the current market.

Time has value. The shorter the contingency period and the quicker the escrow, the better. Time is of the essence.

I hope this advice will help you get your next offer accepted. Using these tips can be a matter of good home dollars and sense. Please let me know how it goes!

For more Home $$s and Sense:

www.seehometown.com

Loan Mods Set to Get Easier

noreply@blogger.com (Sue Thompson) — Wed, 10 Feb 2010 19:56:00 +0000

Dear Sue,
I applied for a loan modification with BofA. After several months of back and forth and this and that and tons of paperwork, my application was accepted and I was told that I had to make three maybe four “trial period” payments.

I made three payments, on time I might add. Last night a woman came to my door asking for more documentation. She asked for financial information that I already provided. She said that BofA couldn’t give me a permanent modification without it.

She also said that she was there on the banks behalf, but her visit made me uneasy. I didn’t want to be scammed so I told her that I was already in contact with the bank.

Have you ever heard of such a thing?

Suspicious Sally

Dear Sally,

The current administration has attempted to prevent foreclosures by initiating the Home Affordable Modification Program known as HAMP. The intentions are good, but the implementation has not been without considerable frustration.

Borrowers who have enrolled in the modification program are required to send in financial information and other documentation as part of the process. The information that has been FedEx’d, faxed and/or emailed has been reportedly lost, misplaced in the shuffle or not received. The bank’s remedy has been to hire servicer’s to make personal visits to borrowers’ homes in an attempt to collect the missing documents.

To avoid suspicion, the banks send letters introducing the servicers ahead of time. The servicer should show you a business card and copies of the bank’s letter. Maybe the bank has an incorrect address for you. You should call your contact at the bank and make sure that they have your correct address on file.

With over 450,000 troubled homeowners in the loan modification pipeline, the Treasury hopes to minimize the “documentation” problems through a new set of guidelines expected to go in effect June 1.

As part of the new guidelines, homeowners will be required to submit their paperwork before they are enrolled in the three-month trial payment program. The documentation
requirements will also be eased. Homeowners will no longer be required to submit, old tax returns and pay stubs. They will only need to submit a form that authorizes lenders to request the tax return from the IRS.

“These changes were made based on lessons learned over the past seven months,” Phyllis Caldwell, chief of the Treasury’s Homeownership Preservation Office, said during a conference call with reporters. “We will eliminate the back and forth that borrowers have had in trying to submit the documentation.”

I would say that streamlining the loan modification process is a matter of good Home $$s and Sense!

Shadow Inventory--Real?

noreply@blogger.com (Sue Thompson) — Thu, 21 Jan 2010 18:29:00 +0000

Dear Sue,

I recently met with our family’s real estate agent. I wanted to know what I should do to get my house ready for sale. I also wanted to know how much I could expect to get out of it.

I was shocked to hear how much he thought it was worth. The price he came up with is not much more than I paid for it six years ago!

I really like this agent but I feel like I should get a second opinion. What are your thoughts?

Baffled Bob

Dear Bob,

I definitely think that you should get a second and maybe even a third.

You can still use your family agent but interviewing others will bring new and fresh marketing ideas to the table. You will also be able to explore different price opinions.

Avoid choosing an agent based on price opinion alone. Agents do not create market value they discover it. What a willing and able buyer is willing to pay and what a ready and able seller is willing to take creates market value. The comparable sales are used as a bench mark in the discovery process.

Keep in mind that California’s median price is the same today as it was in 2001, $285,000.00.

I realize that it's hard to believe especially after reaching a median price of $594,530.00 in may of 2007!

Good luck with your interviewing process!

Dear Sue,

What is shadow inventory? I keep hearing bits and pieces here and there.

I heard that its expected to hit the market this year and we will see home values decline even further.

What do you know about it?

Worried Walt

Dear Walt,

Bank owned properties that have not yet been released for sale to the general public are known as shadow inventory.

It's been said that the lenders are holding on to them as a way of keeping home values up. They don't want to flood the market and cause the values to drop.

Some have speculated that the properties are being held for accounting reasons. The lenders are reluctant to take further write-downs from losses when a home is actually sold in foreclosure.

When a home or asset is held in the banks inventory, the book value is typically the loan value. When the asset is sold it is booked at sale value, which today is likely to be much lower than the loan value.

I don't know how many of these bank-owned properties are held in inventory.
In fact, I don't know if there are any.

Some think that the whole shadow inventory idea is a conspiracy. Others believe that there are as many as seven million properties in shadow inventory.

If we see more property come on the market than the demand can support, we will definitely see a decline in values.

Let's hope shadow inventory is a myth. It would be a matter of good Home $$'s and Sense!

www.seehometown.com

Fewer Vacancies When Tenants are Happy!

noreply@blogger.com (Sue Thompson) — Wed, 13 Jan 2010 21:27:00 +0000

Dear Sue,

I have several rentals that I manage myself. I have been rather successful at it but lately I have had a couple of vacancies that I just can’t seem to fill.

I have never experienced a vacancy. It’s going on three months.

Any suggestions?

Landlord Lou

Dear Lou

Congratulations!

I too am a landlord. I believe that providing housing is a good service. If maintained and managed properly rentals can also be a landlord’s ticket to financial freedom.

First and foremost a good landlord knows that vacancies are a cost of doing business. No rentals, no vacancies. Vacancies must be factored into the return on investment.

A good property manager’s challenge is to keep the vacancy rate as low as possible by staying in touch and adjusting to market conditions.

Options for renters are greater than ever. Tenants are being lured away with promises of better amenities, lower and sometimes free rent and other benefits.
Landlords like you and I can operate just as efficiently and often times more effectively than the larger professional property managers. Our tenant relationships are often times better and our response time can be quicker when issues arise! The net result is happier tenants.

I view it as the difference between navigating a slow cumbersome ocean liner compared with a quick little power-boat.

There will always be vacancies. People get married, divorced, change jobs, buy homes and everything else that one can think of. You don’t want to lose a tenant because the rents aren’t in line with the market or the property is in shambles. Face it, happy tenants mean fewer vacancies. Here are some tips!

Maintenance is important. Preventative maintenance is best. Quick responses and fixes to leaks, broken dishwashers, inoperable thermostats, plumbing problems, sticky doors and other tenant issues shows respect for your tenants. It also shows pride in the condition of your property.

Weekly laundry room cleaning and yard maintenance is essential. Again, it lets your tenants know you are on top of things. It gives them a sense of security.

Regularly scheduled maintenance such as gutter and roof cleaning and HVAC servicing will not only save you money it will cut down on tenant complaints.

Why not make the improvements that you would normally make with a “move-out” before your tenant gives notice? Make periodic visits. If the tenants carpet is stained or worn, replace it. Paint is one of the best and least expensive ways to spruce a place up. New light fixtures come in at a close second. How about upgrading the appliances? Your tenant will be thrilled. Who wouldn’t like a new refrigerator? Don’t forget, the cost is deductible!

Keep your rent in line and maybe just a little under market. Offer discounts for longer leases. I know a landlord that offers one month’s free rent for signing a two-year lease. His tenants love it and he only gives up two weeks worth of rent per year. It’s makes financial sense to receive a lower rent than to have a vacancy. You can never make up a vacancy.

Add value. Do you have room for an outdoor bar-b-q or picnic area? If so, it could be an inexpensive addition and fun for the tenant. Is it possible to install a horseshoe or bocce ball game? Think about it. I am sure that you can come up with ideas that will add value to the rent that your tenants pay.

Keeping your tenants happy helps to minimize vacancies and is a matter of good home $$s and Sense!

Short Sale Questions!

noreply@blogger.com (Sue Thompson) — Wed, 13 Jan 2010 21:23:00 +0000

Dear Sue,

I owe $300,000.00 on my house. Based on what my neighbor’s house just sold for, I think that my house is worth $225,000.00.

Because of all of the good deals, I would like to sell and buy a nicer house for less money.

Would I qualify for a short sale?

Excited Ed

Dear Ed,

Just because you owe more than your house is worth doesn’t mean that you have to sell it.

If you can make the payments and have no extenuating circumstances such as divorce, death of a spouse or job transfer just stay put.

Dear Sue,

Our adjustable loan just went up. The payment is now more than we can possibly make. When we got the loan we were both working and figured that we could easily make a higher payment.

Things have changed. My wife is the only one working at this time. I get unemployment but it’s just not nearly enough.

Should we consider a short sale?

Scared Silly

Dear Scared,

Try a loan modification first. Call your lender immediately.

It can be a trying but rewarding process. The Obama Administration is determined to get as many loans modified as possible under the making homes affordable program.

Dear Sue,

I am thinking about a short sale.

I have heard that I will have to pay tax on the difference between what I owe and what my home sells for. I heard that the amount would be viewed as income.

Is this true?

Inquiring Ida

Dear Ida,

Borrowers that qualify Under the Mortgage Forgiveness Debt Relief Act of 2007, no longer have to report their debt relief as income.

To qualify under the Mortgage Forgiveness Debt Relief Act of 2007, the forgiven or cancelled debt had to be used to buy, build or substantially improve ones principal residence or to refinance debt incurred for those purposes.

Before continuing with a short sale seek legal and tax advice!

Dear Sue,

My son was just turned down for a loan modification. Apparently his lender doesn’t think that he has enough income to make adequate payments.

I have read that he would be better off short selling his house than going through a foreclosure.

Who chooses the real estate agent? Does the bank?

Helping Dad

Dear helping

Many people are confused about short sales.

It helps to look at the banks approval as a contingency. It’s much like when a buyer makes an offer to purchase a home. One of the contingencies in the offer could be the lenders approval of financing.

When your son receives an offer on his home there will be a short sale addendum clarifying that the sale is subject to lenders approval of the short sale.

Your son gets to choose the listing agent.

A short sale definitely has less impact on a credit report. A foreclosure can prevent a buyer from qualifying for a new loan for up to five years. With a short sale a new purchase can be made the next day.

In any case I strongly urge your son to seek legal and tax advice. It can be a matter of good home dollars and sense.

It's a Wonderful Life!

noreply@blogger.com (Sue Thompson) — Thu, 24 Dec 2009 14:54:00 +0000

Dear Sue

The bank just accepted an offer that my son and daughter in law submitted. The property, located in Auburn Lake Trails, has everything they wished for. Three bedrooms, two baths and it’s on over an acre. There’s plenty of room for the kids. It even has an attached two- car garage.

The best part is the price. $155,000.00! That’s not all. They qualify for the first time buyer tax credit. At the end of the day they will pay less than $150,000.00!

Who says that there’s no Santa?

Delighted Dad

Dear Dad,

Your son and daughter in law looked for and found an opportunity in these tough economic times.

What a gift!

Dear Sue,

Yahoo!

We just got our loan modification after one full year of working with Wells Fargo.

We started the paper work when we knew that our income would be going down because my husband is in construction.

The bank just reduced our loan payment from $2400.00 per month to $1900.00! It is definitely a payment we can afford! I started crying when I opened the letter.

It took a profit and loss statement, hardship letter and perseverance. Two special women, Kelly and Sandy gave us special guidance through the entire process. I want to thank my network of friends. I couldn’t have done it without them.

This is truly a wonderful life. Through all of the difficulty, we managed to hold onto our gratitude and be thankful for everything we have. We weren’t in the 49er fire, our family stayed healthy and strong. When there was only peanut butter and jelly in our cupboard we sang and danced.

Merry Christmas to us!

Miracle on Main Street

noreply@blogger.com (Sue Thompson) — Thu, 17 Dec 2009 14:03:00 +0000

Dear Sue,

My son is a first time buyer. He has been looking for a home for over a year. He has made several offers only to be beat out by investors with cash.

He wanted to get in on the $8000.00 tax credit for first time homebuyer’s. I told him that it expires at the end of December. He said that the tax credit was not only extended, it was expanded to include existing homeowners.

Frankly, I find that hard to believe. Is it true?

Skeptical Sam

Dear Sam,

You might be thinking of the $10,000.00 state tax credit for purchasers of new homes. That sweet tax credit is no longer available.

The $8000.00 federal tax credit due to expire at the end of the year was extended and expanded to include existing homeowners. The extension and expansion is a Miracle on Main Street!

The first-time homebuyer’s tax credit is now available for homes purchased before April 30, 2010 and closed by June 30, 2010.

Single taxpayers with incomes up to $125,000.00 and married couples with income up to $225,000.00 qualify for the tax credit.

The $8000.00 tax credit is for first-time homebuyers or someone who has not owned a principal residence during the three-year period prior to the purchase.

To qualify, the first-time homebuyer’s must live in the home as their primary residence for at least three years.

A $6500.00 tax credit is now available for homebuyer’s who purchase a home before April 30, 2010 and close by June 30, 2010. The credit is for primary residences only.

The $6500.00 tax credit is for any homebuyer who has lived in their current residence for five consecutive years out of the eight years that they have owned their home.

I recommend that you consult with your tax professional for complete details. The tax credit guidelines and restrictions for the federal tax credit can be found at www.FederalHousingTaxCredit.com.

It looks like your son is on target! Up to date information on State and Federal tax credits can be a matter of good home $$’s and Sense.

Can Buyer Get Financing on Home With Ditch Water?

noreply@blogger.com (Sue Thompson) — Thu, 17 Dec 2009 14:01:00 +0000

Dear Sue,

My home is located in N. Auburn and is on Bowman Ditch water. I have a filter system, chlorinator, & holding tank in my garage. I am contemplating selling someday and need to know what I should do at this time. Some of my neighbors have been unable to successfully install a well because their lots are too narrow or where a well could be drilled is too near their sewer leach line.

Is it true that a bank will not loan on a home with a water system such as mine? What options do the people have who built homes 30 yrs ago and had no other options for water?

I am thinking if it is impossible to put in a well and my home will not sell, then maybe I should go for a reverse mortgage (I am retired) since my children wont be able to sell my home some day I may as well spend the equity.

Would a reverse mortgage lender require me to put in a well? Is it possible that they won’t give me a reverse mortgage if they could not resell the home later?

I am confused as to what I need to do at this time.

Thank you for your interest.

Anxiously awaiting your reply.

Dear Anxious,

Many Placer County residents get their drinking water from canals. The raw water is pumped from a near-by canal and piped through a filtering and chlorination system. Some of the newer state-of-the-art systems utilize a special UV light for killing bacteria. The systems are owned and privately maintained by the homeowner.

Private filtration systems were once considered common- place in spotty well areas and where treated water was not available. At one time private water filtration systems were acceptable to both the Environmental Health Department and mortgage lenders. It wasn’t until 1983 that the County stopped issuing building permits for homes that required private water filtration systems.

Since the systems don’t meet current water treatment technology and there’s no monitoring for continuous water quality, the Environmental Health Department now regards private filtration systems as sub-standard and inadequate.

I spoke to an environmental health technician who told me that the Department of Environmental Health will not issue a building permit for a remodel or expansion of a dwelling that relies on a private water filtration system. The property must be served by well or publicly treated water.

The technician suggested that a homeowner with an existing private water filtration system, make every effort to drill a well or connect to the nearest public water system. If insufficient setbacks are a limiting factor, he suggested that the homeowner apply for a $150.00 variance. He said it is possible that site conditions may allow for one. He also explained that recent development might have brought the public water line close enough to feasibly hook up.

If a variance is not an option, an easement from a neighboring property owner could be explored. If that’s not an option, sharing a neighbor’s existing well is a possibility worth considering especially in these economic times. However he pointed out that sharing another persons well should be a last resort.

I made calls to several lenders in an effort to get information about financing a home on a private filtration system. One lender that I talked to explained to me that they would need at least two comparable sales of homes on private filtration systems. The sales had to be within the last nine months.

I spoke with Pat Johnson at US Bank. She said that her bank would consider lending on the property if the borrower was a good US Bank customer. The bank would portfolio the loan (keep the loan in house).

Based on this information I would suggest that you call your lender, credit union or a community bank and ask them what they are willing to do for you. Financing is available but it won’t be easy.

In regards to a reverse mortgage the same lending guidelines will apply.

You need to decide what it is you want to do. If you want to sell, your future buyer will need to acquire a loan. Your agent should provide the financing information in advance so that the buyer is not taken by surprise!

Remember that you can buy with a reverse mortgage as well.

If you want to remain in the property and take advantage of your equity apply for a reverse mortgage.

As you can see, the financing will be tricky but doable, especially for the persistent. Good luck. Let me know how it turns out!

Homeseller Questions Marketing Home Over Holidays

noreply@blogger.com (Sue Thompson) — Wed, 02 Dec 2009 18:25:00 +0000

Dear Sue,

After six months of painting, repairing, landscaping and clearing out over twenty years of clutter we are finally ready to sell our house.

My husband thinks that we should wait until spring before putting the sign out. I think that we should do it now.

It took me over five years to get him to agree to sell and clean up. I certainly don’t want to lose our momentum now!

What do you think?

Anxious Ann

Dear Ann,

I believe that you should always put your home on the market when you are ready. People buy homes year round.

The special holiday ambiance can actually be one of the best backdrops for marketing your home. Imagine the yummy aromas from the kitchen accompanied by holiday melodies full of hope, fellowship and love.

The smell of fresh cut pine wrapped in a garland of cranberries and popcorn will warm one’s heart almost as much as the crackling fire.

In Western culture we choose homes that help us to express the way we love. A home dressed in holiday style will surely tug at the heartstrings of all but the Scrooge!

With available home inventory typically low during the winter months, homebuyers have fewer homes to choose from. The low supply generally means a higher price for the seller.

I remember selling a home on Christmas Eve. It was dark and it was pouring rain. It was the last home on our list. No one was home. The house was dark except for the colored Christmas tree lights and glowing fireplace.

Without uttering a word we walked over to the couch and just sat down. We watched the fire for a few minutes before my client said, “This is the one!”

So you can see that marketing your home over the holidays can be a matter of good Home $$s and Sense!

Visit us at HomeTown Realtors!

Be Thankful for the Most Important Things in Life

noreply@blogger.com (Sue Thompson) — Wed, 25 Nov 2009 17:59:00 +0000

I asked a long time friend and local builder how his business was doing. He said that it sucked, but everything else was great!

He said that he and his wife were having more fun together than ever. They were spending long week-ends away and hiking the trails around their new home. He took the time to take a two- week trip with his teen-aged son, just the two of them. He has been able to keep his promises to help his friends with their building projects. He even framed in a set of stairs, something he hasn’t done for twenty years. (He felt pretty darn good about it)

He said his bills are getting paid on time and his family and friends are all healthy and happy!

I told him that it sounded like the most important things in his life were great. He agreed. He realized that it was a good thing that he had “everything else.”

If you think that you have nothing to be thankful for, take a closer look! It’s more than a matter of good home $$’s and sense!

Happy Thanksgiving!

Visit me at:
www.seehometown.com

Retirees Have Options in Today’s Market

noreply@blogger.com (Sue Thompson) — Tue, 24 Nov 2009 22:35:00 +0000

Dear Sue,

My husband and I are in our seventies. We know that we will be in our eighties at the blink of an eye.

We love and have lived in the Auburn area our entire lives. We bought our second to the last home about ten years ago.

Yes, you heard me right. We bought a bigger home than we needed. Our plan was to let our home appreciate over five years or so and then sell it and buy a smaller less expensive home that we could retire in. We planned on taking advantage of the capital gains law where you can make a profit of up to $500,000.00 on your personal residence and not have to pay any taxes.

Obviously our plan has backfired. We keep waiting for the market to turn around but it just seems to get worse and we seem to get older. I forgot to mention that our home is on a slope and it is a two story. At our age I don’t think we have the time for the market to come back.

We are at a loss. We don’t know what to do or who to turn to for help!

Aging Angie

Dear Angie

Many aging homeowners are in a similar situation. Some of these seniors are upside down or “under water” in their present homes. If they have been current on their payments and have good credit and sufficient income they can complete a short sale and then actually buy another home immediately after they close their short sale escrow if they use FHA financing.

Since you purchased your home ten years ago and assuming that you didn’t refinance and take out all of your equity, you should be in a good equity position. If this is the case I would recommend that you sell your home and buy a smaller home that you find more suitable for retirement. You may sell your home for less money than you had planned on but keep in mind you will be buying for less money as well. This is referred to as a lateral move.

I have seen some amazing bargains in today’s market. One can buy a new 3 bedroom, 2 baths, 1900 sq ft. single level home in Auburn for just $275,000.00.00. That was unheard of just three years ago! You can get better deals if you are willing to move to Lincoln, Rocklin or Roseville.

Some seniors currently residing in the homes they have retired in have lost income from their savings or investments. These seniors now have the reverse mortgage option. That is a program where the lender pays the homeowner a lump sum or scheduled monthly payments. The homeowner can stay where they are until they die.

The place to start is with a trusted financial planner. Understand the ins and outs of reverse mortgages. Weigh all of your options, do the math. Choose the option that meets your needs and then make a plan.

If you think you want to sell your current home and buy a home that meets your retirement needs you will need information. Select a skilled and patient Realtor that can give you a fair market evaluation of your current home. Have her/him show you the homes that are available on the market that may work for your retirement. Make sure that it makes financial sense before you put your home on the market. Doing the homework will be a matter of good home $$’s and Sense!

Homeowners Horror Story

noreply@blogger.com (Sue Thompson) — Wed, 11 Nov 2009 18:42:00 +0000

Dear Sue,

I refinanced my home three years ago. I got one of those pick-a-payment loans and made the lowest monthly payment possible. My loan is due to adjust to a 30 year fully amortized loan where I have no payment options.

When I got this loan three years ago I planned on having the option to refinance because I knew that I wouldn’t be able to afford the adjusted payment. Little did I know that stated income loans would be discontinued!

Hoping for a loan modification and finding the process intimidating, I went to an attorney who promised to get it done. I gave him $2500.00. He closed his office and took my money with him.

A friend of mine suggested that I go directly to the bank and negotiate the loan modification myself. I took her advice and started the process a year ago. The bank representative told me to stop making my payments. I did as she asked. I put the money in a savings account.

We have been in communications at least twice a week. They reassured me that I would be getting my loan modification any day. Every day it was any day.

Last week a man came to my door and posted a notice of sale. He also told me that I shouldn’t just send the past due money in because in his experience, the banks pocket the money and go ahead and sell the house anyway! He said that I should get a lawyer to help make sure that my loan was reinstated.

I called my lender demanding to speak to a supervisor or anyone that could get this fiasco straightened out. When I finally got someone on the phone they said that there was nothing in my file. No communications. Nothing.

Based on my previous experience with a lawyer, I was reluctant to talk to another one. I knew that I had to do something quickly so I asked a good friend for a referral. I met with the real estate attorney yesterday.

He told me that I needed more paper work to him before he could help me.

Sue, I hope that my story will help others. I plan to keep you posted.

Jerked Around Jim

Dear Jim,

I appreciate the opportunity to share your horrible experience. I see many lessons in your story.

Avoid making financial decisions predicated on something changing in the future unless you enjoy gambling.

Never stop making payments on your loan.

Never pay an up front fee for a loan modification to an attorney or anyone else for that matter. Unscrupulous people come out from under their rocks when they see an opportunity to prey on desperation. Fortunately it is now illegal to accept advance fees for loan modifications.

I can only hope that your lender acted out of good faith. Lenders are not prepared for today’s onslaught of loan modification and short sale requests. Their representatives are learning as they go. The internal communications of lenders is overwhelmed. The loan modification department doesn’t know what the foreclosure department is doing.

Please keep me updated as to the outcome of your saga!

In today’s lending environment it’s hard to make good home $$’s and Sense!

Let Your Agent Do Their Job!

noreply@blogger.com (Sue Thompson) — Wed, 11 Nov 2009 15:48:00 +0000

Dear Sue,

I just put my home up for sale. My agent asked that I make myself scarce when my home is being shown.

I didn’t believe that she was serious. I really thought she was joking. When I had my first showing I had to point out some things that the agent wasn’t telling the buyers about. The buyers seemed to like my assistance.

It wasn’t but two hours later that I received a call from my agent scolding me (in a nice way) for being present when the buyers were there. I explained to her that the agent wasn’t telling the buyers everything they needed to know about my house. She still insisted that I not be there when my house is being shown.

I don’t understand it. I know more about my house than anyone else. Can you please explain to me why I shouldn’t be the one showing my own house?

Baffled Bev

Dear Bev,

Your agent is right. You shouldn’t be present when your home is being shown. There are many reasons. I will share some examples with you.

Most people don’t understand that the sales process begins the very moment the agent meets the potential buyer. The buyer’s agent is asking “open ended” questions throughout the entire process. The answers to those questions are what guide the agent through the selling process.

For example, the agent may ask a retired couple, “How do you feel about being in a neighborhood where there are children?”
The buyer’s response may be “We would love it, our grandchildren will have someone to play with!”

The buyer’s agent knows that there are several retired homeowners in your neighborhood. The agent also knows that they have grandchildren that visit. Problem solved.

So the buyer’s agent makes an appointment to show your home. You greet them and tell them that you will stick around just in case they have any questions. Mr. and Mrs. Buyer ask you, “Are there any children in the neighborhood?”
Assuming that they are older and may want peace and quiet you unwittingly say, “No we don’t have any children in our neighborhood. We enjoy the peace and quiet.”

Mr. and Mrs. Buyer are disappointed and go on to the next property on the show list.
Another example; Mr. and Mrs. Potential buyer tell their agent that they want a great room concept. They also want 5 acres with a pond. The buyer’s agent knows that your house meets all of the criteria except for the great room. The buyer’s agent knows that if a wall was taken down; presto, a great room!

The buyer’s agent makes an appointment to show your home. You greet them and let them know that you will be there to answer any questions that they may have. Mr. and Mrs. Buyer don’t say a word. They are thinking that their agent doesn’t listen. You are pointing out all of the great features. The agent is afraid to talk to the buyers about tearing down the wall that separates the family room from the living room. The entire showing is a bust!

I believe that potential buyers need to “try on” a home before they feel comfortable enough to make an offer. Potential buyers feel very inhibited when sellers are hovering over them. They are reluctant to open closet doors and kitchen cabinets. They are afraid to ask questions. They feel intrusive. I have that same feeling when I am trying on clothing and the store clerk won’t leave my dressing room. I will just leave without buying anything.

You may know your home better than anyone but believe me your agent will show it better than anyone. Your agent will have listed your property features in the MLS. You can help the buyer’s agent by making a list and further describing the many features that your home offers. Display photos of the fabulous sunrises and sunsets and the roses at their best.

Understanding the sales process and letting the buyers agent do the showing is a matter of good home dollars and sense!

Selling Strategies for Today’s Market Conditions

noreply@blogger.com (Sue Thompson) — Wed, 28 Oct 2009 18:52:00 +0000

Dear Sue,

Because I plan on selling and buying within the next couple of months, I found the offer strategy that you wrote about last week to be very interesting. I want to be able to write a “winning” offer when the time comes.

I need a strategy to attract multiple offers. I have heard that the price is often “driven up” in multiple offer situations. In fact, I believe that you reported that in some price ranges the offers were as much as 5-6% above the asking price.

What strategies can I implement to push my price up?

Strategic Sam

Dear Sam,

No one has ever asked me that question before. I find your question to be very interesting and fun to think about.

A very smart strategy that the banks have been using is to price their foreclosures significantly below current “market” value. The strategy has created multiple offers. The agents representing the lenders are then asking each buyer to bring in their “highest and best” offer.

The highest offers are almost always above the asking price but the best offers are cash. The lender chooses the offer that they like best. Keep in mind that it is not the bottom line as much as it is the certainty that cash can provide.

Another strategy commonly used in many areas is pricing the property below market value and then offering the property for sale for a specified period of time in order to accumulate offers.

Lets say that the last comparable sale for your property was $300,000.00. You decide to list and market your property for $289,000.00. Your agent advertises and announces in the multiple listing service that the offers will be presented in 10 business days.

The hope is that many buyers vying for your property will go into an offering frenzy and bid your property up over the $300,000.00 mark!

Regardless of what strategy you use you must remember that we are in a declining market. The best strategy for a successful sale is to price your property at or below the last comparable sale price.

Your agent will tell you the right things to do to put your home in top show condition. Keep a tight rein on your budget because you are not likely to recoup expensive improvements. Putting your home in top condition will serve to make it more desirable and sell faster. In a declining market the faster your home sells the more you will net!

Keep your home tidy and make your home accessible at all times. If your home isn’t easy to show a potential buyer will cross your home right off the show list.

Exposure to as many potential buyers and agents as possible will create the most competition for your home and get you the highest sales price in the most reasonable amount of time! Our local market requires that Internet advertising and print advertising are a must!

Implementing today’s marketing strategies for today’s market conditions is a matter of good Home $$’s and Sense.

Visit me at:

www.seehometown.com

Strategies for a Winning Offer

noreply@blogger.com (Sue Thompson) — Fri, 23 Oct 2009 20:19:00 +0000

Dear Sue,

I am so frustrated!

I am a first time (trying to be) buyer. Believe it or not I am in my second year of looking and making offers for homes that are ultimately bid right out of my price range.

It’s not that I am wasting any time. I signed up on one of those listing notification sites. I sometimes know about the new listings before my agent does.

I have been pre-approved and my down payment is in the bank.

In spite of everything it looks like I will miss out on the $8000.00 federal tax credit which I understand is due to expire at the end of November. I don’t seem to stand a chance. Any ideas?

Disappointed Dan

Dear Dan,

Properties listed in Placer County below the $300,000.00 price point are flying off the shelf! Other first time homebuyers looking for the tax credit, as well as investors who think that the market has hit bottom are jumping on every new listing in this price range.

Before making any offers I would suggest that you have your agent pull the most recent comparable sales. The most important statistic to analyze is the percentage of list price to sale price. If a $100,000.00 property sold for $105,000.00, the percentage would be 105%. If the sale price on a $100,000.00 asking price was $100,000.00, the percentage would be 100%.

My suggestion would be to offer approximately 1% above the average. i.e. the sales comparables indicate that the properties are actually closing escrow 5% above the asking price. Try offering 6% above the asking price.

I would also suggest that you keep your offer as clean and straight forward as possible. If the property appears to be in good condition make your offer “as-is” subject to your inspections and independent investigations.

If during your inspection period you find a defect that you just can’t live and the seller is unwilling to correct, you will not be contractually obligated to close the escrow. Many people believe that “as-is” means that you are obligated to go through with the sale no matter what turns up during the inspection period. Not true!

These strategies could be a matter of good home $$’s and Sense

For more Real Estate news and listings go to:

www.seehometown.com

Negotiate When Property Doesn’t Appraise

noreply@blogger.com (Sue Thompson) — Mon, 19 Oct 2009 19:56:00 +0000

Dear Sue

I am in escrow on my first home. Many people find this hard to believe since I am almost sixty years old!

Since I was competing against another buyer, I upped my offer to more than I wanted to pay. My real estate agent prepared a market analysis that indicated that I offered about $10,000.00 to $15,000.00 more than the property is worth.

I don’t want to do anything foolish, but I love everything about the house. The location and floor plan are perfect. It has all the charm that can only be found in an older home and it has been beautifully updated. I have been looking for two years and this is the only home that I can see myself living in!

My Realtor said that the lender would not lend on the property if it doesn’t appraise. She said that I would have to come up with the cash for the difference or cancel the escrow.

I have always been told that value is based on what a willing buyer is willing to pay and what a willing seller is willing to take. In other words, the property would appraise for the sale price. If that’s not the case, and the appraisal doesn’t come in at the sale price, will I be forced to come up with the cash? Unfortunately, I don’t have any extra cash so that isn’t an option.

How can I be sure that I am protected? I want the home but I don’t want to overpay. What should I do?

Fretful Frank

Dear Frank

Ask any homebuyer. Your situation is not uncommon. Today’s low interest rates, near bottom pricing, and tax credit incentives create competition for properties. Many buyers have been out bid on more than one occasion forcing them to up their offers. The winning offers are all cash because they are generally made without an appraisal contingency.

The first page of the California Residential Purchase Agreement, Line 2, Item J, defaults to an appraisal contingency. “Unless otherwise checked, a buyer is not obligated to buy if the property does not appraise at the specified purchase price.”
Obviously, your offer was accepted with the appraisal contingency in place.

Appraisers are very conservative in today’s climate. The collapse of the financial industry and decline in property values has created an extra level of caution when it comes to appraisals. An appraiser is not going to push the value up in a declining market unless the property warrants it.

You will not be “dead in the water” if the property doesn’t appraise. One can always renegotiate with the seller.
Buyers and sellers have been known to split the difference between the offer price and the appraisal value. If the buyer is short on cash, it is possible to trade personal property or write a secured or unsecured note.

I would definitely discuss the note option with your Realtor and lender because some lenders prohibit secondary financing by the seller.

Finally, the seller may agree to reduce the price to the appraised value. In any case good luck and don’t be afraid to negotiate. It could be a matter of good Home $$’s and Sense!

Check out more real estate news, information and listings at:
HomeTown Realtors

No New 21- Day Turnaround/ Everything has Burned Around My Home in Escrow!

noreply@blogger.com (Sue Thompson) — Wed, 07 Oct 2009 20:27:00 +0000

According to the California Association of Realtor’s legal team, the recently enacted Senate Bill 306 does NOT require a 21-day turnaround for short sale approval. The new law, according to CAR, requires that the “pay-off demand” be provided within 21 days from short sale approval.

Under the new law lenders are now required to contact certain borrowers to explore alternatives to foreclosure. The contact must be made at least 30 days before filing a notice of default.

There are other technical changes. The full text of Senate Bill 306 can be read at http://www.leginfo.ca.gov.

Dear Sue,

I was in escrow on a beautiful home that was located right in the middle of the North Auburn fire. Even though the house made it through the fire without being damaged I came very close to not purchasing it because I couldn’t see myself living in the middle of all of that devastation and destruction.

My Realtor supported me in whatever decision I made. She did say that if I decided to close the escrow I would eventually end up living in a brand new neighborhood but the ultimate reason for my choosing to close the escrow was my love for the property. I wanted to make it my home.

My brother later told me that if I chose not to buy the house that the seller could have sued me to perform. I was under the impression that I didn’t have to buy it because of the fire. Who is right?

Curious Bob

Dear Bob,
I checked with the CAR legal department. California’s recent firestorms have made this a very hot topic. No pun intended!

Q 1. May a buyer get out of a purchase contract under the Uniform Act if the damage or loss caused by fires to the property is minor?
A Probably not. The Uniform Act implies that the seller may still enforce the contract if the damage is not material. However, a purchase agreement may require the seller to repair such damage. For example, Paragraph 7A of C.A.R.'s Residential Purchase Agreement requires the property to be maintained in substantially the same condition it was in on the date of acceptance. Under this language, a seller could be obligated to repair fire-related damage to his or her property.
Q 2. May a buyer get out of a purchase contract under the Uniform Act if the damage or loss caused by fires to the property is major?
A Yes. To repeat, if (1) neither legal title nor possession has transferred from the seller to the buyer, and all or a material part of the real property is destroyed by fire, and (2) no express contract provision to the contrary exists, then, under the Uniform Act the seller cannot enforce the purchase contract and the buyer may cancel and recover any portion of the purchase price already paid. (Cal. Civ. Code § 1662.)
Q 3. If the damage is not severe, does the timing of the fires (whether they occur before or after an inspection) affect the right to cancel?
A Yes. If the damage occurs before the buyer has removed an inspection contingency in his or her purchase contract, the buyer can, of course, exercise any inspection, disapproval, and cancellation rights provided by the contract.
If the damage occurs after the buyer has removed his or her inspection contingency, the buyer generally does not have an automatic right to re-inspect the property and approve or disapprove of its condition under most purchase contracts (including C.A.R.'s Residential Purchase Agreement). However, the seller may be obligated to repair the property. See Question 1.
A purchase agreement may, however, require a seller to disclose fire-related information, which in turn may give a buyer a right to cancel a transaction, even if he or she has already removed contingencies. For example, Paragraphs 5A(3) and (4) of C.A.R.'s Residential Purchase Agreement provide that if, prior to the close of escrow, the seller becomes aware of adverse conditions materially affecting the property, the seller must provide a subsequent or amended disclosure or notice, which then gives the buyer a right to cancel the agreement.

I hope this helps. My recommendation is to ALWAYS seek legal advice. It could be a matter of Good Home $$’s and Sense.

For more real estate news and Home $$s and Sense articles go to:

HomeTown Realtors

My House Isn't Selling!

noreply@blogger.com (Sue Thompson) — Wed, 07 Oct 2009 20:23:00 +0000

Dear Sue,

I have had my home on the market for over three months. My agent has had Broker tours but no open houses and very little advertising.

I have not had a single showing. I am even more frustrated because I haven’t talked to him since my property was listed. I think that it’s because I wanted to list my house for a higher price than he wanted to.

Is there anything that I can do?

Grumpy Gail

Dear Gail,

Don’t just be grumpy. Pick up the phone and call your agent! Express your frustration.

Ask him to do an updated market analysis and be sure to tell him that you will listen this time. Insist that he be factual about it. Tell him that a realistic evaluation of your home will not offend you. Let him know that you aren’t blaming the market on him. Tell him that you are not one of those sellers that wants to find an agent who will tell you what you want to hear, however unrealistic.

I assume that you realize that we are still in a declining market. Short sales and bank owned properties are dominating. Our local market is losing between 1-11/2 % in value per month. Pricing your home competively in order to sell it quickly will save you money in the long run.

I am sure that your agent will be happy that you want to revisit your listing price. In my opinion, overpricing is the number one reason that homes linger on the market. This market requires aggressive, competitive and up to date pricing!

A realistic market analysis can be a matter of good Home $$s and Sense.

visit us at:

HomeTown Realtors

Best Short Sale Process is the one Everybody Agrees on

noreply@blogger.com (Sue Thompson) — Thu, 24 Sep 2009 15:49:00 +0000

Dear Sue,

I want to buy a short sale that has an offer on it pending the lenders approval. I asked my agent to write an offer for substantially more than the asking price in an effort to beat out the existing offer.

My agent explained that my offer would be in a “back-up” position since there was already an offer. The agent who has the property listed, said she wouldn’t give my offer to the lender until the lender responded to the first offer.

That doesn’t seem right to me. I thought that all offers had to be submitted to the sellers. Should I get legal advice? I am tempted to submit my offer directly to the bank! Please advise.

Mad Mark

Dear Mark,

The short sale process can be very confusing. There is no uniform short sale system in place at this time. The best process is the one that the seller’s agent, seller and lender agree on.

Keep in mind that properties listed as “short sales” belong to homeowners that are selling their homes subject to their lenders accepting a short pay off. In other words the offers are being submitted to the sellers (home owners). The lenders are not the owners. The lenders approval of a “short pay-off” is merely a contingency or condition of an offer. The condition for a short pay off is necessary because the lenders or investors must agree to take less than the homeowner owes them.

Another way of looking at it; an offer is written subject to the lenders approval for a loan to purchase. Who is the owner? Not the lender.

There are exceptions. A listing agent, seller and lender can agree right up front that the first buyer in the short sale process has the right to meet or beat any subsequent offers. If he/she is unwilling or can’t meet the price, the subsequent offer is put in first position.

Knowing the short sale agreement “up front” can assist you in your negotiations and be a matter of good home dollars and sense.

For more Home $$s and Sense articles, up to date real estate news, listings and local information visit:

HomeTown Realtors

US Treasury to Introduce Streamlined Short Sale Process

noreply@blogger.com (Sue Thompson) — Fri, 18 Sep 2009 23:42:00 +0000

Dear Sue

I have been in escrow on a short sale property for over a month. My agent has not heard from the lender so I don’t know if the sale will be approved or not.

My agent said that I should be patient. She said that my patience would be rewarded because the property is such a good deal.

The problem is, I can’t wait because I am doing a 1031 Tax Deferred Exchange and I must identify the property that I am exchanging into by October 2.

If I don’t get the property I will have to pay taxes on the money I made on my sale.

Should I stay in escrow and take my chances or should I move on to another property?

Nervous Ned

Dear Ned

You are wise to be concerned. Getting short sale acceptance from certain lenders is sketchy at best. While some short sales are approved within a two to three week time period, some take three months or more. Some are not approved at all.

I would suggest that you keep your current escrow in place and locate and identify at least two other properties that would work for you. The “Three Property” Rule, under Internal Revenue Service guidelines, allows you to name three properties within 45 days from the closing of the escrow of the property you are exchanging out of.

The three properties must be identified within the 45-day time period but you have six months to close the escrow on one of the three properties that you identified. You can buy more than one property as long as the total amount is at or more than the relinquished property. It is very important that you verify the time frames with your exchange consultant and/or tax professional.

Good luck with your exchange!

Dear Sue

I am burning with envy! Here I am sitting in a house that I am upside in down while my friends are out buying homes that are “killer deals”.

Homes in my neighborhood are being purchased for 40% less than I bought mine for. Is there any way I can get out from under my house and just start over?

Frustrated Frank

Dear Frank,

The administration is expected to introduce a foreclosure alternative program by months end. It will provide incentives for, and encourage servicer’s and borrowers to pursue short sales and deeds in lieu of foreclosure, in cases where the borrower does not qualify for other programs.

The program will simplify the process of pursuing short sales and deeds in lieu. The program will standardize the process, documentation and short performance time frames.

According to David Stevens, FHA Commissioner, “These options eliminate the need for potentially lengthy and expensive foreclosure proceedings, preserve the physical condition and value of the property by reducing the time a property is vacant and allows the homeowners to transition with dignity into more affordable housing.”

No matter how you cut it, this is good news! A prudent “under-water” homeowner would wait for the details of this plan. It could be a matter of good home dollars and sense!

Visit HomeTown Realtors

Short Sale Myths

noreply@blogger.com (Sue Thompson) — Thu, 27 Aug 2009 00:26:00 +0000

Dear Sue,
I am planning on moving my family out of state. We need to sell our home first.
Our Realtor said that we owe more than it’s worth so we need to do a short sale.
I have heard that the lender won’t approve a short sale unless we are behind on our payments. Is this true?
We have never missed a payment in our lives!
Moving Mike

Dear Mike,
If your credit is important to you and you can still make your payments, then do it!
The story about not making your payments is a myth. Don’t fall prey to it.
A short sale does not always affect your credit but not making your payments will.
Missing payments will compound your problems. You will have excess interest and penalties. Your credit rating will suffer.

A low credit score means higher interest rates on credit cards and any money that you borrow in the future.
Make your payments!

Dear Sue,
I am in construction and have been out of work for over a year.
My unemployment and side jobs have been getting us by.
It is getting to a point where I can no longer make my house payments.

I don’t know if I should just walk away or try a short sale. Maybe I should try a loan modification?

What I do know is that I can’t go on like I have been. Something has got to change.
Broke Bob

Dear Bob,
You must have sufficient verifiable income to qualify for a loan modification. Go to FinancialStability.gov for qualifications and guidelines.

If you decide you can’t do it yourself, don’t send your money to an advanced fee company without knowing for sure that they are legitimate. It’s best to have personal references. Be sure to check the DRE web site to make certain that they are listed as legitimate.

There have been way too many scams!

I would recommend that you engage the services of a trusted financial adviser, one that is not selling you anything. You want an adviser who can objectively evaluate your financial situation. Try your CPA or tax attorney.
Evaluate all of your options and make your decision based solvency, credit and tax implications. It will be a matter of good home $$’s and Sense.

Visit HomeTown Realtors

How Will Short Sales Affect Appraisals?

noreply@blogger.com (Sue Thompson) — Sat, 22 Aug 2009 00:07:00 +0000

Dear Sue,

How would I know if I am “upside down” on my house? Several of my neighbors have sold their homes for half of what I paid.

What’s going to happen when I go to sell? How will the appraisal be effected? ??
Worried Walt

Dear Walt,

Great question. It happens to be one that many homeowners have been asking.

Home values tripled between 2000-2005. That rate of appreciation hasn’t been seen since the Gold Rush days.

However, since 2005 home values have fallen by approximately 50% and continue to do so. If you purchased a new home between 2000-2006 or maxed out your equity with a “cash out” refinance on your existing home between 2000-2009, you are probably “up-side down.”

If you plan on selling within the next 3-5 years a short sale may be necessary. The only way to know for sure is to get an estimate of value on your home. If it is less than what you owe the bank and your cost of sale combined, a short sale may be your best answer.

Short sale and bank owned property sales have dominated the local market since November of 2008. An appraiser cannot possibly ignore the distressed sales comps. They need to be factored into the appraisal.

If you enjoy your home and plan on living there for years to come, the market will have stabilized. In fact, you will aid in the stabilization by staying put.

Dear Sue,

I made a good cash offer on a short sale listing. After waiting for sixty days I received a verbal counter offer from the lender for $20,000.00 more than I offered.

I was very surprised and disappointed. Do I have to accept their verbal counter offer?
Can I counter back?

Anxious Andy

Dear Andy,

I would strongly encourage you to counter back, in writing, with your best offer. Support your offer by including the most recent comparable sales.

Remember, short sale negotiators are paid to negotiate. So negotiate. It could be a matter of good home $$’s and Sense!

Please visit HomeTown Realtors