Archive for February, 2008
When is a “Short Sale” the right exit strategy?
February 19th, 2008 categories: Home Buyers, Home Sellers, Real Estate News
When is a short Sale the right exit strategy?
There are several ways to lose a home but signing away ownership in a manner that destroys your credit score, embarrasses the family and strips an owner of dignity is one of the most painful. For owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings. One of those options is called a “short sale.”
When lenders agree to do a short sale, it means the lender is accepting less than what is owed on the property. Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose. However, foreclosures are expensive to the mortgage company and in a declining market, taking a lesser payoff and getting the property off the books may be in everyone’s best interest.
If you are considering buying a short sale, there could be drawbacks. For your protection, I suggest that all borrowers and home sellers:
- Obtain legal advice from a competent real estate lawyer
- Call an accountant to discuss short sale tax ramifications.
As a real estate agent, I am not licensed or qualified to give advise on legal or tax consequences. Except for certain conditions pursuant to the Mortgage Forgiveness Debt Relief Act of 2007, be aware the I.R.S. will consider debt forgiveness as income, and there is no guarantee that a lender who accepts a short sale will not legally pursue a borrower for the difference between the amount owed and the amount paid. In some states, this amount is known as a deficiency. Speak with an attourney to determine whether your loan qualifies for a deficiency judgment or claim.
Although all lenders have varying requirements and may demand that a borrower submit a wide array of documentation, the following steps will give you a pretty good idea of what to expect.
Call Your Mortgage Lender
You may need to make a half dozen phone calls before you find the person responsible for handling short sales. Ask to speak with a manager; someone who is capable of making decisions and moving your case forward.
Lenders typically do not want to disclose any of your personal information without written authorization to do so. If you are working with a real estate agent, closing agent, title company or lawyer, you will receive better cooperation if you write a letter to the lender giving the lender permission to talk with those specific interested parties about your loan. The letter should include the following:
- Property Address
- Loan Reference Number
- Your Name
- The Date
- Your Agent’s Name & Contact Information
Preliminary Net Sheet
This is an estimated closing statement that shows the sales price you expect to receive and all the costs of sale, unpaid loan balances, outstanding payments due and late fees, including real estate commissions, if any. Your closing agent or lawyer should be able to prepare this for you, if you do not know how to calculate any of these fees. If the bottom line shows cash to the seller, you will probably not need a short sale.
Hardship Letter
The sadder, the better. This statement of facts describes how you got into this financial bind and makes a plea to the lender to accept less than full payment. Lenders are not inhumane and can understand if you lost your job, were hospitalized or a truck ran over your entire family, but lenders are not particularly empathetic to situations involving dishonesty or criminal behavior.
Income and Asset Statements
It is best to be truthful and honest about your financial situation and disclose assets. Lenders will want to know if you have savings accounts, money market accounts, stocks or bonds, negotiable instruments, cash or other real estate or anything of tangible value. Lenders are not in the charity business and often require assurance that the debtor cannot pay back any of the debt that it is forgiving.
Comparative Market Analysis
Sometimes markets decline and property values fall. If this is part of the reason that you cannot sell your home for enough to pay off the lender, this fact should be substantiated for the lender through a comparative market analysis (CMA). Your real estate agent can prepare a CMA for you, which will show prices of similar homes:
- Active on the market
- Pending sales
- Homes that have sold in the past six months.
Purchase Agreement & Listing Agreement
When you reach an agreement to sell with a prospective purchaser, the lender will want a copy of the offer, along with a copy of your listing agreement. Be prepared for the lender to renegotiate commissions and to refuse to allow payment of certain items such as home warranty plans or termite inspections.
The Sweeky Wheel Gets The Oil
Stay in close touch with your short sale case manager. Call them daily for updates and progress reports. If everything goes well, the lender will approve your short sale within a few weeks.
We have successfully sold and closed short sales. When working through a short sale, you are faced with bureaucracy, lots of phone calls, and dealing with a mortgage company representatives that may not be that nice to work with. But for a home seller that is behind on payments and no way out, a short sale may be daunting, but a better alternative to foreclosure.
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The Magic of Pricing Your Home Right From the Start will ensure a timely sale in 2008
February 19th, 2008 categories: Home Sellers, Prescott Real Estate Trends
Selling your home in this market takes more than the wave of a magic wand, it takes experience. Don’t make the #1 mistake that sellers make!
Pricing your home slightly below current market value can produce great results right from the start. In a market saturated with listings, many of them over priced, an appropriately priced home is what buyers and Realtors alike are waiting for. As listing agents, we love to be the third Realtor to have listed the property, after the Seller has made all of the major mistakes.
We Want More Money When The Home Sells in this Prescott market
It’s easy to get caught up in choosing a sales price. The higher the price, the more financial opportunities we have when the home sells. We can pay off all of our credit cards, take a vacation, send the kids to college, buy a more expensive home and so on. Many times, the uninformed sellers will choose the Agent who suggests the highest listing price. This is without question the worst mistake a seller can make.
In Prescott’s Real Estate market it’s imparivite to establish an accurate market value
Many sellers choose a list price based on how much they need to net when the sale is complete, unfortunately that strategy can prove to be a costly mistake. Pricing your home involves several steps. Comparing similar properties, making adjustments for the differences, tracking market movement, and evaluating the competition. As listing agents, we consider all of the facts, and suggest the most realistic price. Some sellers are concerned about setting the price of their home too low. If a home is priced too low, it will generate more activity and chances are the seller will receive multiple offers driving the price back up to the market value. In a buyers market, the danger does not lie in pricing your home too low, it is in pricing it too high. The buyers will ultimately set the price of your home. Their opinion is really the only opinion that matters.
Keep More Money in Your Pocket
How much is it costing to keep you home every month? Sellers often feel that their home is worth more that what we recommend. They couldn’t possibly list their home for $300,000 because they feel it’s worth considerably more. They make payments for an additional year and then sell it for $250,000. Not to mention the hassle of keeping the home in spotless condition while buyers and their agents are in and out of the house. Price your home right from the start, don’t be an expired listing over and over. It will only cost you money.
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2008 Prescott Real Estate Market Forecast..!!
February 19th, 2008 categories: Home Buyers, Home Sellers, Real Estate News
Who remembers the psychic Jeanne Dixon? We could use someone like her on our team! She could answer the most FAQ 
“what’s the Real Estate market going to do this year?” “Are things going to improve?”, “is my homes value ever going to come back up?”
These are great questions I wish I had answers for. Here are some of my thoughts for the 2008 Real Estate market.
- In 2008, I don’t think that home prices will increase in Prescott, they may even dip a little further. Home prices will not start to stabilize until the back log of homes absorbs and sells. That is a huge ingredient to recovery in the housing market. Foreclosures hitting the market will also effect home prices. Bank owned re-sales are of no value to bank unless they sell. Banks are motivated sellers and often offer homes at reduced prices, putting the squeeze on private home sellers.
- I can say with certainly that the number of Licensed Realtors Will continue to decline. Currently there is not enough business to support the number of licensed Realtors in the Prescott area.
- Interest rates will remain steady, or even drop a little further.
- Buyers are looking for the bottom. When you really look at what is going on in the market, this could be a great opportunity to buy. Interest rates are low, inventory is high, sellers are motivated. Although property values may be flat for another couple of years, your home is an investment you can enjoy for a lifetime. You may not see much appreciation over the next year or so, but you will in the future. In all likelihood, buyers that purchase homes in 2008 will make money in the long run.
- Home Sellers need to except the truth about home values. Many home sellers are still dwelling in 04 and 05 market. Those days are long gone. I know it’s painful to hear that your property is worth considerably less that it was a few years ago, and unfortunately, these market conditions will be with us for a while. So, if you need to sell, bite the bullet and price your home right from the start. If you don’t need to sell, stay put and enjoy yourself until things turn around.
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The Village People Live At Yavapai College
February 19th, 2008 categories: Just For Fun, Prescott Nights
Friday, February 22, 7:30 PM
Yavapai College Performance Hall
The one of a kind Village People is synonymous with dance music. These six talented men combine energetic choreography with outrageous fun, singing and dancing to provide entertainment for all. Their hits include Macho Man, YMCA, In The Navy and Go West.
Contact Yavapai College for ticket information.
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Prescott, Arizona is a great place to retire.
February 19th, 2008 categories: Home Buyers, Prescott Homeowners
Prescott, Arizona is set in the heart of the 1.25 million acre Prescott National Forest. With a near perfect four-season climate, excellent quality of life and small town atmosphere, Prescott continues to be one of America’s most desirable communities to work and live in.
Prescott’s strong sense of community has developed over its 140 year history, earning Prescott the nickname of “everybody’s hometown”.
The October 2007 issue of US News and World Report and well as recent issues of Money Magazine again named Prescott as one of the top cities to retire to. The standards for this award were cost of living, climate, education, health care, along with recreational and cultural opportunities.
Prescott offers many entertainment opportunities. Home of the World’s Oldest Rodeo and knows as Arizona’s Christmas City, Prescott hosts numerous art galleries, museums and annual events. Prescott’s Fine Arts Association is in its 37th year and has staged over 175 main stage productions and over 85 children’s and family shows. Housed in the historic Sacred Heart Church in downtown Prescott, PFAA enhances the quality of the community through education and participation in a variety of cultural and artistic activities. Residents have the opportunity to participate in theater productions, workshops, technical work and well as musical and vocal productions. Tim’s Toyota Center located in Prescott Valley is one of Northern Arizona’s premier entertainment venues. This beautiful arena is host to over 400,000 people annually for trade shows, the Arizona Sundogs Hockey Team, motor sports, rodeo and some of the biggest names in entertainment.
Shopping is one of Americans favorite pass times and Prescott residents enjoy the benefits of small town living with large metropolitan amenities. Shopping opportunities include the Prescott Gateway Mall, The Village at the Boulders Mall, Frontier Village Mall, Costo, Home Depot, Lowe’s and well as a variety of food stores. Prescott’s historic Whiskey Row will provide hours of shopping and entertainment to residents and visitors alike.
Quality health care is provided to Prescottonians by Yavapai Regional Medical center and the VA Hospital of Prescott. Yavapai Regional Medical Center was named by Solucient as one of the top hospitals in the county. Prescott has a growing list of medical professionals, including cardiac specialists, cardiac surgery, rehabilitation services, wellness programs, and home health services. For more information click here.
Prescott’s offers many outdoor recreational opportunities and Prescott’s moderate climate if perfect for year round activities. Prescott offers 4 public golf courses and is challenging to all levels of golfers. Prescott’s Parks and Reaction hosts 15 city parks and year round activities including tennis, softball, baseball, soccer, basketball, a skate park, dog park and wildlife sanctuary. Miles of hiking trails through riparian and bird watching area are a great experience for the whole family. Camping and picnicking and great ways to take in Prescott’s great outdoors.
Yavapai County is one of the fastest growing counties in Arizona. In the last 15 years the population has increased by 80%. Prescott’s economy is robust and has grown at the rate of 3% over the past decade. Top employment opportunities exist in the medical field, retail, service industries, and tourism. With future development of the Prescott Air-park and Commerce Center, new opportunities will continue to arise in industrial employment. Construction and Real Estate are two major contributors to the growing Prescott economy.
Prescott is a wonderful place to live. Surrounded by natural beauty, fresh air, abundant opportunities and some of the nicest people you’ll ever meet. Come visit Prescott and see why some many people are making Prescott their home town.
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Is the bottom anywhere in sight?
February 19th, 2008 categories: Home Buyers, Prescott Homeowners, Prescott Real Estate Trends
Will the Real Estate pool ever be full again?
What the Prescott housing market needs is buyers! There are plenty of houses and land for sale, perhaps an all time high for the city.
Nationally, prices are falling, sellers are more motivated that ever, and builders are offering upgrades and all types of incentives.
Mortgage money is still at relatively inexpensive, and if you have good credit and a down payment, fairly easy to get.
But apart from those people who absolutely must move, for what ever reason, they just aren’t that many buyers out there.
One reason, of course is that buyers are afraid to dive in while housing prices are still adjusting downward. Who wants to buy a house for $300,000 today, and run the risk of it being worth $280,000 next month. And maybe less the the month after… That’s why potential buyers have taken themselves out of the market because they are waiting for the bottom.
It’s tough to know the exact moment when prices stop falling and start to stabilize. But there are indicators that buyers can look at to determine if the market is starting to turn around. Here are some vital signs that shows the buyers are back in town:
Number of homes on the market: Look for the number of “listed homes” to begin dropping
Existing home sales: Look at monthly averages for numbers of homes sold.
Mortgage defaults: This number will need to stabilize before the market turns around
Building permits: This is a leading indicator; the buyers are back when builders start pulling permits
This housing market will eventually turn around. It may be months, it may be years. But if you plan on staying in your home for a while, this is a good time to buy. Prices may continue to adjust, but if you are in the market to purchase a home today, in the long run, you’ll make money. The bottom may be today!
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