Here is a great article from The New York Times that our California Association of REALTORS® shared for your information.....

Getting back in the black
More than 2.6 million households are at least 60 days delinquent on their mortgage payments, according to the nonprofit coalition Hope Now. While those who are delinquent 60-120 days can make back payments to help them become current, those who are more than two months behind may need to employ other means to catch up.

Making sense of the story

• Beyond the obvious threat of foreclosure, falling behind on a mortgage can be costly:  Lenders charge late fees as well as legal and administrative costs, and the borrower’s credit score will suffer.  Experts say the sooner a delinquent borrower deals with the situation, the better the chances are of making a full economic recovery.
• Borrowers who are determined to stay in their home but cannot immediately make back payments need to start by contacting their lender or a credit counselor to discuss available options.  Among them are devising a repayment plan, modifying the loan, doing a short sale, and adding what is owed back into the mortgage balance.
• The first step borrowers should take is to assess their financial situation by looking at the amount of money brought in each month versus what is spent.  Many credit and housing counselors have worksheets on their websites to help with this.
• Next, borrowers should collect pay stubs, documentation on other income, two years’ worth of tax returns, two months of saving and checking account statements, and mortgage records.  If the borrower has experienced a hardship, such as a layoff, a divorce, or an illness, they should gather evidence of that, such as unemployment insurance receipts, medical bills, a copy of a doctor’s letter to their employer, or a divorce decree.
• Finally, borrowers should talk to their lender, servicer, or an adviser.   The federal Dept. of Housing and Urban Development certifies counseling agencies that provide free advice and assistance, and has a list of them on its website.  Counselors can offer alternatives and prepare a budget to see if the homeowner can afford to stay in the house.

·        Before agreeing to a repayment schedule, it is important homeowners understand how their lender treats partial payments.  Some credit partial payments toward the balance immediately, while others hold the money in a “suspend account” until the full amount is received.  Some will return the check to the borrower, and some will stop accepting payments after the mortgage is seriously delinquent. In those cases, borrowers may be foreclosed, or work out a short sale, or get a family member to help them repay the entire balance.  But whether you agree to a reduced payment schedule, borrow money from family, or raid a retirement account, Ms. Yopp said, “if you haven’t resolved the reason for the delinquency, you’re still in trouble.”

        Whatever path you choose to take, do NOT wait until the last minute to contact your REALTOR or attorney to seek assistance and answers.  If you wait too long, there is nothing they can do to help you stop the process if you have run out of time.  Also, do NOT pay someone upfront for services without asking for references, checking their credentials, or talking to someone who has had experience with them.  There are many legitimate services out there, and some of them are free; but there are also many scam artists.  Be smart and ask questions.  Happy New Year 2012 Everyone!!!!  Dawn

Investors….. They STILL don’t get it!

I recently had a short sale go south. This is so sad because now the Buyers lost an opportunity to become homeowners and the investors lost the chance to recoup almost 75% of their money. The property will now go into foreclosure; the lender will get less; the buyer will not own the home; the seller will have a bigger ding on their credit; all the work 2 agents performed for the clients will not be compensated and we still hear that REALTORS® are the only ones who benefit from short sales. We work for free a good percentage of the time.
I have personally put about money and 100 hours into this short sale with my seller and to have this happen just shows how broken the process is. Here is the scenario:
Property listed at $475,000 – Good FMV for condition & comparables
Offer came in low at $420,000 – Low but good solid buyers
2 months after getting all the paperwork to the lender we get a negotiator
Negotiator says the investor wants $575,000 ($100,000 OVER list)
Buyer said they will come up to $450,000 as it needs about $80,000 work
Investor declines and takes it to foreclosure

Bottom line is that it MIGHT sell for $400,000 to $450,000 down the road but that is more time under the bridge and no one in the original scenario will be involved with the outcome. What a HUGE waste of time and money!

The only ones that benefit from a short sale are the REALTORS®

The only ones that benefit from a short sale are the REALTORS®

These are the words a very good client and friend told me her bankruptcy attorney said to her. At first I was really angry and decided to sleep on it until I could write about it objectively so here goes…..

YES – REALTORS® do profit from the sale – Eventually AND Sometimes. Fact of the matter is that, (from personal experience), 10 times the work goes into the process even before the work on the regular contract begins. All documentation needs to be collected from the sellers and maintained until the bank(s) decide to move on the request. All financial records need to be maintained for the seller during that time and, many times, repeatedly faxed/uploaded/mailed to the lenders because they lose them.

NO – the seller actually will benefit from doing a short sale versus a foreclosure in their credit score. The impact can be significantly lower on their FICO score as will the length of time one will carry that stigma around with them. A short sale is typically reported as “paid in full, or settled”. Only the late payments on the mortgage will be reflected after the sale is paid or negotiated.

Since there are so many short sales that take so long and many that never close, the income for many REALTORS® has significantly declined or dried up completely. There are a lot less of us out there today trying to help clients get through this economy. We joke, but it is not funny, that we might make $.36 per hour on a short sale IF we are lucky.

The best thing a seller can do if they think they need to sell their home and they are upside down in the payments or equity is to call a REALTOR® sooner rather than later to see if we can help you through this process.

I heard recently on a webinar that the estimate of Americans needing mortgage assistance, needing help with a short sale or going into foreclosure has increase by 600% to 800% over the past 2 years.

If you know of anyone who needs help, please have them call me or another REALTOR® experienced in short sales before it is too late to help.

Image by silverhawk42532 via Flickr

$399,888 BUCKINGHAM! AVAILABLE TO RENT AT $2,000 PER MONTH.


Location! Location! Location! BEST COMP VALUE!
2889 BUCKINGHAM DRIVE in premier Buckingham, Kelseyville, Lake County, CA
For more pictures see www.2889BuckinghamDr.com
• ALL NEW REMODEL
• 2,000 sq ft (estimated)
• 3 large all new bedrooms, 2 beautiful all new baths
• Gorgeous views -- Buckingham Golf Course and Black Forest
The photos don’t do it justice! Must be seen! This elegant home on Buckingham Drive has incredible style and designer everything. Completely remodeled in a classic palette that you can take in any direction – wine country elegant to lake life to golf and leisure to traditional to urban cosmopolitan, it’s turn-key and it’s a beautiful, blank canvas.
This house is open and spacious and easy to maintain both inside and out. The interior was designed for peace of mind, which makes it a perfect primary or secondary residence. Eco-friendly, maintenance-free landscaping makes life a breeze. Garden if you like, or let it be!

The house has a private lower entrance and the most architecturally versatile floor plan possible. Both floors offer optimal traffic flow for perfect living and entertaining family and friends.

Two levels spanning nearly 2,600 square-feet offer a spacious kitchen with a dining area that flows into a huge great room. Each of the three large bedrooms has double closets for maximized storage and organization.

The two lovely, custom bathrooms boast crisp white Kohler fixtures, designer Azuvi ceramic tile set in a classic pattern, beautiful mirrors and glistening light fixtures, including a crystal chandelier.

The kitchen is brand new and has all the details that matter. The appliances are Consumer Reports’ top-rated line of Kenmore Elite Stainless (don’t be fooled by low-end stainless). The kitchen counters are polished granite. The cabinets are luscious maple with double pantries, occasional glass doors, a built-in wine rack and designer iron pulls. This is a polished kitchen designed for any chef!

The spacious lower level is the perfect opportunity for a home business and home office, guest suite, teen retreat, kids’ play room, media room or home theater, sewing or crafting room, the man cave, billiard room or whatever you desire!

The floors are tiled in a tasteful 16x16 pale travertine and carpeted in a patterned designer Stainmaster with the best, thickest padding available.

The huge “4-car” garage is just waiting for cars, golf carts, boats and other toys! New Liftmaster garage door openers raise two Northwest 10’ by 8’ (standard doors are only 8’ by 7’), double-sided, insulated, steel garage doors, rated as some of the best garage doors in the industry.

The rooms are flooded with light through abundant Viking / Pella ThermaStar vinyl windows, which are the same windows seen in Sunset magazine’s idea house. Oh, the views! The large windows showcase Lake County’s main attraction -- the outdoors! Beautiful trees and magnificent boulders dot the spacious yard. Environmental harmony! Part of a handsome streetscape, the views of the Buckingham Golf Course and the Black Forest make the greens and blues of every season lovely.

This house is your chance to own in Lake County’s premier Buckingham neighborhood at the best price on the market. There is no comparison to homes of this size and quality in this price range.

Homes in this neighborhood run into the millions, but this one can be yours for a fraction of the price…but not for long. The sellers have adjusted the price to attract the buyer who understands the value. If the home does not sell promptly at this price, the sellers will take it off the market and hold it.

Don’t miss this market or this opportunity!

For more information contact:
Dawn O'Neal
Realty World Executive Advantage
Phone 408-923-7758
Cell 408-221-0575
Dawn@DawnONeal.com

What do you offer on a foreclosed property?

A client asked: In a situation like this, (so many days on the market) does one bid lower?? at asking price?? higher??

ANSWER: There is no easy answer regarding what you offer. You just have to look at all the angles.

#1 – What is it worth to you to purchase it? Without looking at the price as a challenge to get the lowest price only for the sake of getting the lowest price, (and I don’t think you do this by the way), look at it to see what it is worth to you. What figure would you be happy with that you paid for the home and walked away with it.

#2 – Let’s look at the sales in the area – this is what the bank is going to do – and they are not going to negotiate much lower than the price in the MLS as they have already gone through all the process of putting this through foreclosure and back on the market. As long as it does not sell they will continue to reduce the price but at some point it will reach the investor’s interest and the “all cash” offers will come in and you won’t have an option to bid on it.

#3 – To offer too much will put you in jeopardy with your lender. If the FMV is not as high as you offer then you have to come up with the difference of your offer and their appraisal – which is the amount they will lend on the property. Not a good idea either.

Once you see this property then we will pull all the comps in the area to see what is a realistic offer for you and analyze that price per the above criteria.

Short Sale Question from Trulia Reader

QUESTIONS:

So in other words..... When an MSL listing is listed as a short sale for say 400,000 and you offer 400,000 that price has not been bank approved?
Why even bother looking at these listings then. It wastes my time- the realtors etc.

Dennis Olson
Both Buyer and Seller
Pendleton, OR

Dennis, You hit the nail on the head. The bank has not even been notified in many instances that the seller is trying to sell it, unless perhaps the seller is behind in their payments. The seller may not have started the process by presenting an offer to the lender that is going to pay the lender less than the seller owes - that is what makes it a "Short Sale". Then the long process starts to get the low offer accepted by the lender rather than the lender spending much more to take the property through the foreclosure process. Short sales I have listed last year took 8 months. This year my shortest one is 2.5 months but most are still 3-6 months.... AND you never know for sure that you are in contract until the bank decides to give you that agreement letter.

Sometimes you need to look at the comparable sales in the area as sellers/agents will list the house really low to get a bidding war going.

What we are finding is that the homes in this price range in California's Santa Clara Valley at least are drawing in the all cash buyers and they are buying them as investments so they do not have the same angst in waiting for approval since it is a business deal and not their new residence.

If you want a home and want it within a reasonable amount of time, yes, stay away from short sales. We, as REALTORS, will appreciate that too - but hey, everyone needs to be helped and that is why we do it also. All joking aside, you just really need to KNOW all the upsides and downsides and be willing to wait if you want to buy a "Short Sale".

Dawn O'Neal
Realty World Executive Advantage
408.923.7758
Dawn@DawnOneal.com

Bittersweet Assistance ~ Another Short Sale Closes

Today we closed escrow on another short sale for some of my clients but they don't get any easier. The process does but the feeling for the clients do not. It is satisfying knowing that I have helped them through a rough process but at the same time it hurts knowing I could not do more to help them keep their home. The only satisfaction that I can make myself believe is that now the worst is over and they can move forward to rebuilding their future and perhaps even have it turn out better for them by starting over without this pressure hanging over their heads.

Short sale processes are getting a little bit better depending upon the mediation company you choose to work with and the lender(s) involved. IF you need to go through this, make sure you either get a referral from someone who has been through it or ask lots of questions to make sure your agent/mediator keeps in communication with you. Be prepared for long stretches of time without news but if you have a good team working together, it will be rather painless once the mountain of paperwork is submitted.

If you are currently going through your own personal short sale process or facing foreclosure, just know you are not alone out there. Sometimes you just need to let go and move on to the next adventure that life has in store for you and reduce your stress that you have no control over. Unfortunately we cannot always know the reason why things happen but we can choose how we react to them.