Short sales have become the solution of choice for homeowners who can no longer afford to stay in their house. It allows them to sell their property for less than the principal balance while avoiding a foreclosure. Short sales have also helped buyers into homes that just a couple years ago might have been out of reach. Despite a rocky start, both lenders and the federal government have pulled out all the stops to ensure short sales are successful – and timely – for both buyers and sellers.
By knowing the answers to these questions ahead of time, you can help simplify the process:
- What’s the foreclosure timeline? The earlier you start the process and paperwork, the better. That ensures the buyer will have financing in place and can close in time.
- Who owns the lien(s)? With as many times as some paper changed hands, this may be easier said than done. The best place to start is with the loan servicer(s) – the company who the checks are written out to. Make sure you account for lines of credit and seconds or thirds!
- How much is the property worth? Check the bank’s numbers against recent comps, and don’t be afraid to ask for a review if there’s a significant gap between the two.
- Do you have all the necessary paperwork? Typically, you’ll need a Letter of Authorization (allowing the agent to speak on the seller’s behalf), Listing Agreement, Purchase Contract, Short Sale Agreement, HUD Estimate, Lender Approval(s), as well as pay stubs, tax returns, and bank statements. If either party qualifies for lender and/or federal assistance, additional applications and documentation may be necessary.
- Do you plan to move before closing? Many lenders require the borrower to occupy the home until the short sale is complete.
Successful short sales can lead sellers and buyers down fulfilling new paths, both financial and psychological. By setting out a map early in the process, they can minimize or avoid any dead ends or detours along the way.
One tool that doesn’t seem to be leaving the technology world anytime soon is Foursquare. Foursquare is a geo-local, mobile application that allows you to “check-in” at locations around your community. Once you check-in, your connections can see where you are, what places you frequent the most, and if you hold any mayorships (an award given out to the person who visit the location the most). Not only can this tool be fun, but it can also aid in building your business.
Become a Community Expert: It’s a known fact that consumers like working with professionals who know their area, and Foursquare allows you to do just that. If you frequent the local Starbucks each week, take a few moments to check-in. Chances are you’ll increase your chances of gaining the mayorship. Wouldn’t it be great to have a client see that you are the “mayor” of 20 different places within the area they are hoping to buy or sell?
Connect With Your Sphere: Like Facebook and Twitter, Foursquare allows you to connect with friends, business acquaintances, and past/current clients. People enjoy seeing what their friends and family members are doing via this application. In addition, Foursquare also allows you to take photos and attach them to the location you are at. People can then comment on your location and engage with your check-in. This is just one more way to connect with those who matter most in your business.
Make It Known Where You Work: If your office isn’t already a location on Foursquare, create one. Once you’ve created the location, plan on checking in when you’re at the office. In addition, you can leave tips for the location. Perhaps, every Monday you mention a new and exciting listing. Users get accustomed to tips and will come back to see more each week.
California SB 183, requiring all single family California homes and rental units to be equipped with carbon monoxide detectors, went into effect on July 1, 2011. Carbon monoxide detectors must be installed in all homes by January 1, 2013. The presence/absence of carbon monoxide detectors must also be disclosed in the transfer of residential real estate.
More details of SB 183:
- Requires the seller of the home to disclose whether or not the property has one or more carbon monoxide detectors
- Requires a seller to certify the property is in compliance with laws requiring smoke detectors and the bracing of water heaters
- Failure to install a carbon monoxide device is an infraction
- An owner must be given a 30-day notice to correct the violation and can face a fine of $200 for each offense if not corrected within that time period.
- Tenant must notify landlord if the tenant becomes aware that the device is inoperable or deficient
- Landlord is not in violation if he/she has not received notification from the tenant
- Landlord may enter dwelling unit for the purpose of installing, repairing, testing, and maintaining carbon monoxide devices
To download the entire bill, visit leginfo.ca.gov
Refinancing a home can seem like the perfect solution for homeowners when interest rates are low. Often times it is a great decision, but they are also several things to be aware of prior to making the decision. The following items are extremely important to keep in mind if you are in the process of refinancing or are considering it.
Lack of Research
Research is key when refinancing. Homeowners should also compare annual percentage rates, in addition to the quoted interest rate. Simply looking at the quoted interest rate can result in an inaccurate interpretation of the loan cost. Also, ensure you are comparing equal metrics when looking at various numbers and data.
Selecting the Wrong Type of Loan
Keeping in mind long-term life circumstances is an important component of refinancing. If job loss or change in income may occur within a few years, lowering the monthly payment should be a key concern. Ensuring the selection of the right loan for unique circumstances is critical, so weighing out pros and cons of different loan types is extremely important.
Finding the Best Deal
In addition to basic research, homeowners should also think outside of one lender. It’s recommended that borrowers look into at least three different lenders. Often staying with the same lender is ideal, as less paperwork may be required, but, at the same time, borrowers should complete their due diligence to ensure it’s the best route to take.
Refinancing Isn’t Always the Best Decision For Everyone
Homeowners should keep in mind that refinancing isn’t right for everyone. If a homeowner doesn’t intend to stay in the home for several years, it can actually be a big mistake. Homeowners should speak with a professional to determine if it is actually the best decision for their unique situation.
Although there have been some significant shifts in real estate over the past several years, 72% of American renters still state that owning a home is among their top priorities. According to The National Association of Realtors (NAR) 2011 National House Pulse Survey, renters still believe that renting is only a temporary solution, with home ownership being the ultimate end goal.
One of the biggest challenges currently preventing these people from purchasing homes resides in obtaining the credit needed to do buy. This may continue to be a problem, and grow worse, if the proposed Qualified Residential Mortgage law goes into effect. The law would require a 20% down on all home purchases. According to the NAR study, 51% of middle class homeowners stated that if they were forced to put 20% down on their home purchase, they wouldn’t have been able to buy.
Of course, the housing marketing and the economic climate are tightly aligned. The current national unemployment rate is hovering around 9%, with an even larger number of people who are actually currently unemployed. This statistic, in addition to the proposed law, could make the dream of homeownership a bit more challenging. On the reverse side, the purchase of homes would ultimately increase consumer spending and assist with jobs.
Ultimately, the study shows that homeownership still matters a great deal to individuals who do not currently own one. The feeling of safety and stability are things that can be hard to find in a renting environment. In addition, owning a home provides financial security over the long-run.