Pennsylvania Real Estate News, Views and Rants : Foreclosures, selling

The Art of Selling Homes in a Distressed Market

John Rainville — Mon, 02 Apr 2012 19:21:00 GMT

Ever since the economic melt-down beginning at the end of 2008, real estate markets around the globe have been experiencing tough times.

Within the United States, many cities have experienced sharp drop in prices while the prices have remained stagnant in the others.

Fewer cities across the country can boast of healthy real estate prices today. In neighborhoods that attract healthy prices from a sellers’ perspective, buyers are fewer and it takes several weeks before you can close a deal. Given these conditions, selling a home in a distressed market can be even more challenging. The following tips are designed to help you find that elusive buyer and close the deal.

This is the most crucial part of selling your home in a distressed market. The buyer – when he/she comes expects the pricing to be below the going market prices for an identical home. He/she is walking into a distressed market with price as a major driver. On the other hand, you cannot sell your home at a price that is ridiculously low. One way you can reach a middle path is by culling out the price movements in your neighborhood over the past several months and presenting it to the buyer. This way, it is easier to fix a threshold limit to start negotiation.

You know how important it is to ensure that you present your home to the buyer in a compelling condition. The manner in which you present your home should produce the ‘Who’ effect and do more of the talking by itself. Your kitchen is the most organized and well-kept place in the entire neighborhood and the baths are the envy of professionals in the hospitality industry. Strive to achieve these two goals and you are well past the major hurdles in selling your home.

A professional real estate agent can be immensely helpful in getting your home sold at a decent price. Choose your agent wisely. Examine his/her past performance and even try to talk to the past customers. Inspite of all the information that you can gather from the internet, your agent has access to more relevant information and the most recent happenings. The digital world can only supplement the human brain and not replace it. A professional real estate agent can also provide you with valuable information on staging your home, pricing, adding value to your offer and more.

Your mortgage lender is an interested party in the transaction. The buyer may have difficulties in obtaining a fresh mortgage to complete the transaction with you. Getting your mortgage lender into the act can be a smart move. You can potentially take away plenty of pains associated with obtaining a fresh mortgage and offer a tailored solution from your mortgage lender. Often times, this works even better than a discount on the prices.

Help the buyer get a feel that it is just that the markets are depressed and that your home by itself is still a good place to live in. Add some value by offering freebies like a car or other expensive gadgets that he/she can use. These small steps can potentially make the difference between closing the deal and losing that buyer who was almost ready to sign in.

Update on Real Estate Trends

John Rainville — Tue, 27 Mar 2012 21:18:00 GMT

We can’t argue that the housing market has been a bit of a roller coaster ride for the past year but it seems as though there are signs of hope in the future.

While figures seem to be holding at all time lows for housing prices, making it a great opportunity for buyers and a bit of a nightmare for sellers.

We’ve seen many people losing their homes because they’re underwater financially or the skittish economy has taken its toll on job and incomes. Almost anywhere you look the average amount of Short Sales has gone to record numbers; in most areas nearly 65% of sales are Short Sales within this past year and currently.

Agents are doing the same amount of business or even more but making only about half of the income they made before when homes were selling for much higher amounts. It’s a matter of more work that has to be put into a Short Sale, more negotiating, and simply more paperwork in general which in turn computes to more hours for less money in the end.

Oddly enough the same inventory is out there and available but because of the pricing decreases and extra work involved the money made on the inventory available isn’t nearly as lucrative as it was just a few short years ago. Most of the industry has seen more of “The Bad & The Ugly” than they have of “The Good & The Hopeful”; but many agents seem to have a positive attitude towards 2012.

Most agents are seeing fewer and fewer Short Sales coming in this quarter than they’ve seen in the past. They’re not seeing as many reductions in price either and while that may be attributed to the slower number of people putting their homes on the market currently it also is a positive effect of what most hope is a trend towards the positive.

At the moment many buyers think that the Real Estate market has pretty much bottomed out, offering houses at the lowest prices they’re going to see and interest rates at record lows; so they’re making their moves now to snap up the homes that are out there. While financing is still harder to get, agents with experience are finding creative ways to get financing when clients are being rejected by typical lenders. With this increase in sales and the decrease of homes coming onto the market out of necessity (Short Sales & Mortgages) the market is looking as if it may be on the upturn in the future.

According to a survey taken by HouseHuntâ¢ 29% of buyers in the last quarter of 2011 were first time home buyers. This was a slight increase from the 27% we saw in the 3rd quarter; many see this as a positive sign. They also reported that negative price reductions saw a small fall from 58% in the 3rd quarter to only 51% in the 4th quarter of 2011; again another positive sign in most realtors eyes. Each of these small changes in statistics, even if only slight, are definitely a sign of things moving in a more positive direction for the industry as a whole.

Agents are all saying they have a positive outlook for 2012 and hope that the small shimmering of hope they’re seeing in the marketing trend at the end of 2011 and the beginning of the 1st quarter of 2012 is a sign of things to come.

The reality of it all is that nobody expects a sudden explosion in the market by any means and they feel that the changes will happen slowly. Most don’t expect to see much of a real positive difference until at least the 4th quarter of 2012 but they do think that, although pricing remains stagnant and financing remains more difficult, by the end of this year we will experience a positive upturn and things will begin looking up.

For now agents are going to have to continue to put in more and more hours in order to maintain their former income levels and learn how to start utilizing incredibly skillful techniques to get their buyers financed. If they’ve stuck it out this long and maintained there’s not a whole lot of threat that they can’t survive a little longer but unfortunately with a lot more paperwork, hours, and inventiveness than they’ve ever had to do in previous years.

Deciding to Buy or Rent a Home

John Rainville — Tue, 27 Mar 2012 21:16:00 GMT

There are many advantages to purchasing a home, especially in light of the historic low rates that have become available.

Regardless of the fact that these rates dropped considerably as a result of the recent housing and financial crash, more and more people are driven to the path of home ownership versus renting.

There are a number of pros and cons associated with the recent industry crash. Scores of Americans are finally able to purchase a part of the American dream, as desired by so many. And the best part of all? Your money isn’t going straight into the can! This is just one of several benefits of purchasing a home instead of renting.

When you are considering your next move, it would be wise to consider your options carefully. One thing you should consider is the length of time you plan to live in your new home. If you are relocating for a few years for a job it would be wise to consider both purchasing a home as well as other options such as renting.

A number of studies indicate benefits of home ownership for not only the owners, but also for their family, neighbors, and community at large. Below is a brief list of other benefits to owning a home.

Locked In Cost – When you are dealing with a lease, you often have to worry about future rate changes. However when you buy a home with a fixed rate mortgage, your payments will not change, at least for the duration of your loan period. There is a chance you can see your taxes go up, but many homeowners don’t fret about their tax dollars going toward education or other core government tax-based essentials.
Tax Benefits – Another benefit homeowners have over renters is the ability to cash in on savings on their taxes. Homeowners are usually eligible for a significant tax reduction because they can deduct their mortgage payments and any paid property tax when they file their yearly income taxes. Though some may think they may not see a good return on their taxes from their mortgage, you’d be surprised by the savings that can be accrued just by interest rates and property taxes alone.
Debt Consolidation – If necessary, you have the ability to refinance your home’s mortgage in order to merge, or consolidate, other outstanding debt. This is also something you can deduct from you taxes and an opportunity that simply doesn’t exist for renters.
Build Equity – When you are paying rent every month, you are simply handing your money over for the roof over your head, and nothing else in return. However, when you are paying for a mortgage, your payments are going toward your principal [and any added interest]. Every year that you pay toward your home, you are paying toward the principal and are eligible to get the money back when you put your house on the market, later on. It’s basically a long term investment in the form of real property.
Peace of Mind – When you purchase a home, you can make your own decisions on everything from window trim and bathroom paint, to future plans for renovating that upstairs attic. You will be able to call all the shots without being worried that your land lord will be upset. You will have peace of mind knowing that you don’t have to depend on somebody else.

Buying a home is one of the most important decisions someone will make in their life. However, it is important to understand that owning a home comes with added responsibilities. For example, if you are used to renting a home, you probably never think about the landscaping work. You may not realize that your rental fees are helping pay a contractor to mow your lawn.

It is important that you evaluate all the facets of real estate before jumping in head first and buying property. Buying a home is a life-long decision. If you think you are prepared to buy a home or are simply sick of throwing away your hard earned money on rent, contact a real estate professional to help answer any questions you may have and to get you on the right track of home ownership.

Buying Homes in a Falling Market

John Rainville — Tue, 06 Mar 2012 14:27:00 GMT

Real estate markets across the United States have been south bound for over 3 years now. Fewer markets have experienced an occasional spurt in prices without sustainable momentum.

So far the beginning of 2012 appears too early to predict a reversal of the current trend and the numbers that are put out by several research agencies point out that a large number of homes remain unsold across the nation.

With mortgage lenders likely to add a significantly larger number of homes to the foreclosure list, the best that can be expected is some stability at the current levels. Serious buyers, though they are fewer, are also facing difficulties in obtaining fresh mortgage loans because the lenders have made substantial changes to their lending plans.

A 20% down payment has now become the rule with many lenders. Your credit history over a long period of time and not just the immediate credit scores also add to the list of hurdles to be crossed before you can get a mortgage loan. Put, together, if you have decided to buy a home, let us examine how you can get the best out of the current situation.

Though the chips are down across the nation and most prominent markets around the globe, real estate is driven more by local factors than the global or national indicators. Therefore, if you are buying into a neighborhood where prices have shown a steady rise in the last couple of years (after hitting the bottom in early 2009), your investment has better chances of appreciation in the immediate as well as long term.

In markets which have an inherent strength, the cause of the dip is only a reflection of the sentiments across the broader national spectrum. In these markets, you will be guided by the general economic conditions prevailing in the neighborhood, employment statistics, and the overall growth prospects.

In early 2009 most markets reacted sharply to the economic down turn taking real estate prices down. However, in some markets with potential buoyancy, the reaction was short lived and priced started moving up in a short space of time. One way you can amplify this picture is by looking at the price graph between 2009 and the current times. In markets where the prices have moved up continuously, you have minimal concerns because of the inherent value in these markets.

Buying homes in a depressed market is sharply different from buying homes in a strong market. The first step in such markets would be to examine the price movement to gauge whether the market has bottomed out or the trends holds further potential to go down. When the price graph shows up and down waves, there is an element of inherent strength in the market.

These markets have a strong potential to consolidate and move up when the national economy offer even small consolations and exhibits signs of improvement. Your task becomes tougher when your chosen location falls in a market that is perpetually moving south. Buying homes in these markets call for in-depth analysis and understanding of multiple factors that influence the price movements.

Your best bet to buy homes in a depressed market is to identify a reliable agent conversant with the neighborhood in which you propose to buy your home. With long years of experience in a specific neighborhood your agent is in a better position to guide you through an informed investment decision and help you get the best of homes, at a price point that is advantageous to you.

Selling Your Home in a Market Filled With Short Sales and Foreclosures

John Rainville — Tue, 06 Mar 2012 01:07:00 GMT

In many areas the housing market is inundated with homes in foreclosure and short sales. How can your home stand out and be noticed when buyers look everywhere and see homes selling for much less than their value, simply because of the situation the home owner is in?

Should you even bother putting your home on the market or better yet, what if you have to sell your home due to a particular reason, like relocating?

Begin by answering a question about the market itself. Are most of the short sales and foreclosures occurring in one particular area of town or are they occurring all over, including your own neighborhood? If you’re competing with homes in another area that is distressed you don’t have nearly as much to worry about. If the distressed sales are hitting a particular neighborhood then it’s a little more like comparing apples to oranges. However, if you’re competing with short sales and foreclosures directly in your neighborhood or even on your particular street then you’re unfortunately going to have to compete with distressed homes for sale.

The plus side of it all is that often distressed homes don’t show as well; especially if the home was literally abandoned by the former owners and left to the lenders. The negative side is the obvious, homes similar to yours are going to probably sell for under true market value and it will affect how you price your home. Hopefully you have an agent who knows how to price in this type of market and still get you the most money possible for your home. The first thing to do is remove yourself from your own shoes and step into the shoes of the buyer to look at your home to ask a few questions. The answers may surprise you.

First is there a reason a lender would appraise your home for more than a distressed home in the same area? The answer here depends upon both the condition of the distressed home and yours. Let’s say the bank owned home is priced at $225,000 but needs another $15,000 in repairs and improvements to be livable. Comparing with your home a buyer may decide that since the total value of the home would be about $250,000 to get the home in good condition, then that would be what they offer to you for your home in move in condition.

The assumption would be that in either case it will cost them $250,000 to buy a home in this neighborhood and they can do that by either waiting until the bank owned home is ready to move in or they’ll accept yours for the same price and not have to deal with contractors or doing the work. Either way, for the buyer both homes are only worth one price to come to the ultimate end which is moving into the home.

The tip here is to price your home slightly below market value. This technique usually results in people coming to look at the distressed homes in the area, noticing your home, seeing the value price that it’s being offered at and think in terms of your home not needing a lot of work that distressed homes will need. This will probably happen to various people and in the end cause a bit of a bidding war; ending with multiple offers and a higher sale price in the end.

Second ask yourself what would make a buyer choose your home over a bank owned home? The answer is probably going to be that your home doesn’t need a lot of work and for many people that’s a definite reason to buy your home before they buy the distressed home. Most people want to buy a home and move in. Life is hectic enough and adding on the stresses of construction and repairs while you’re preparing to move isn’t exactly an enticing thought.

Make sure you make it known to those looking at your home that unlike some of the homes that are in foreclosure or short sale your home is in move-in condition. What you don’t want to do is put thousands of dollars into updates hoping to entice the buyers to purchase your home. Chances are you will not get a return on the money spent to update your home so you may as well have just reduced the home’s price by that amount instead of pouring labor and money into updates.

Lastly, ask how much more is your home worth than the home in foreclosure or short sale. You will probably be surprised to see that in actuality your home is not worth a whole lot more. It may be a matter of a few thousand dollars in the end that puts your home at a slightly higher value. Many times banks will try to get true value out of the home because of the neighborhood. If the entire neighborhood is not distressed then chances are you will have the ability to price your home fairly close to the true value.

It’s obvious that selling your home while other distressed sales are all around you is not the best conditions. If you can hold off and don’t have to sell your home it may be a good idea to wait; but if you truly need to sell then make sure your agent understands how to sell in a market where your competition is distressed sales. Your agent should know where to price your home so it not only gets you the most money possible but actually may end up causing multiple offers to come through and end with a bidding war that gets you the money you deserve.

How Do I Find the Bargain Priced Homes?

John Rainville — Tue, 28 Feb 2012 14:55:00 GMT

Every buyer wants to find the best buy out there; but where do you start looking for homes that bargain priced?

First start working with a Buyer’s Agent. Buyer’s Agents usually are the first to know when there’s a bargain home out there.

They also can pull up listings that will have homes that are considered “Fixer-Uppers” which are generally sold for well less than their value if they should be free of any updates and fixes needed. Buyer’s Agents have a direct line to the real estate industry and open lines of communication with other agents who may have homes that they know must sell and can sell at a real bargain price. The only problem with all of this is that this is how almost everyone operates when it comes to finding the bargain homes. There is another way.

Ask your agent if they can access the inside investor market. Most Realtors don’t even know this market exists. The inside investor market is where the homes hit that are 40-50% off their actual value and hit this market before they’re even listed on the MLS market. If they make it that far, which is rare, then they’re usually not as hugely discounted as they could have been or they’re not as wonderful of a deal as you really want; otherwise they would have been scooped off the inside investor market. You may find that you can’t find an agent that is involved in the inside investor market in your area; should this be the case then you may have to go with a typical Buyer’s Agent who utilizes MLS listings to find their “bargain homes” but that’s not exactly a horrible thing. You have to work with what you have.

Short Sales are going to offer a home for less than what the owner owes on the home. This may or may not put the home in a highly discounted position because it’s based upon what’s owed on the home by the current home owner. With the market changing as much as it has lately many people own much more than their home will ever be worth so make sure your Buyer’s Agent pulls the CMA which gives you a marketing analysis on other homes in the area so you can compare the cost of the Short Sale home to the values of other homes in the area.

Foreclosures are generally offered at discounts but once again it’s not always the case. You need to be sure to utilize the skills of the Buyer’s Agent so you know what the houses in the area are going for and if this foreclosure is really worth it. Sometimes houses that are foreclosed on will go up for Sheriff Sale and be auctioned instead of listed. In these cases you need to be sure that the home hasn’t been vandalized and abused while it’s sat empty.

Auctions can happen to homes for various reasons. One of the most frequent reasons for a home going up for auction is unpaid taxes. These often end up being auctioned without the ability to go into the home and doing nothing more than a drive-by; basically sight unseen.

Another reason for a home to be put up for auction is to settle an estate quickly as opposed to waiting for the house to be put on the market. In either case you do have a chance to grab a house at a bargain price. The problem with auctions is that you don’t know who you’re going to go up against and you have to know the CMA for the area the auction is in so you know how high to bid. Another thing to keep in mind with auctions is that you will be bidding up against people from every walk of life; contractors, professional house flippers, first time home buyers looking for an cheap way to buy a house, and more.

Bank Owned sales often result in the bank taking almost any realistic offer on the home because simply put, they don’t want to own a home, they want the money. Again, your Buyer’s Agent can help you negotiate a good deal here.

Fixer-Uppers are a great way to purchase a home for a fraction of their value but you have to take into account what the value of the home in that area is worth and know how much it’s going to take to flip the house so you can resell it as quickly as possible. Obviously if you’re not the handy-man type this is probably not the kind of home you want to buy because when you add in the cost of labor to the costs of fixing up a house, that’s when the money starts going out. Be prepared to make a list of items that need to be done before the house is in the condition it needs to be in either to sell it for a profit or move in to. This is where it’s going to pay to have a crew whom you can trust to give you quick and accurate estimates on the work that needs to be done. Start with the obvious and architectural problems that if they aren’t addressed will have the capability to cause more harm to the house. For example a leaking roof should take priority over indoor plumbing which can be shut off until it’s time to work on it.

When you’re buying bargain homes there is a bigger sense of urgency to move on the home before someone else finds it. You are going to have to have complete trust in your Buyer’s Agent and listen to them as to whether or not this house is worthy of jumping on; otherwise someone else with the knowledge to know the difference between a bargain and a bad house that’s just priced right for its condition is going to beat you to the punch. So there is a definite urgency needed when you’re out looking for that super bargain deal when buying a home.

Selling YOUR Home in ANY Season!

John Rainville — Sun, 26 Feb 2012 18:26:00 GMT

There are benefits to selling your home in each season; winter, spring, summer, and fall. There are pluses and minuses in each but most of all there are definitely positive aspects to selling in each season. While many people think selling in the winter time is a bad idea, this isn’t necessarily true. Selling in the winter has many positive aspects like: The holiday season tends to create a time period when you put a little extra effort in cleaning and preparing for holiday visitors so the house is generally clean and tidy. The holiday season also provides for a cozy, warm, family atmosphere that gives an ambience that’s only around during the winter season. In winter people are familiar with certain soothing scents that make them feel reminiscent of days gone by such as cookies baking in the oven, pumpkin pies cooking, fresh Christmas trees wafting in the air, or baked apples and such. All of these scents are easily mimicked by scented candles, sprays, and potpourri available; creating an instant feeling of calm simply by using the buyers’ sense of smell. The warmth of a home is instant when coming from a cold outdoor climate. Mix that with a warm dÃ©cor that makes a person feel welcome and comfy and they can instantly feel themselves curling up on the couch in your home, especially if it’s staged properly to be inviting right at the entrance way. According to LendingTreeÂ® more homes are sold in March and April than any other month. June and July continue with a fair sales amount but the spring time has many reasons for being the #1 season for home sales: People have Spring Fever and are ready to get out of their house to do something. Open houses are a great way to get out of the house without spending any money, still take advantage of the sunshine of the spring day, and yet not have to worry too much about spring showers or cooler temps still being an issue. People who buy in the spring generally have their closings near the summer months. This gives them a better time to move and allows for an easier transition if they have children moving from one school to another without having to leave their old school in the middle of the year. Spring tends to bring color and happy feelings around. Decorating for the spring includes bright colors, freshly washed draperies and curtains and all the basics of spring cleaning. You can take advantage of that need to spring clean as a way to have your home in top shape for buyer’s to view your home. Opening the windows on a fresh and warm spring day allows for the house to air out. Smells trigger a lot of reactions in the human body and the fresh smelling air flowing through the house and perhaps a burning candle scented in lilacs or roses or any fresh floral scent brings good feelings to anyone. Dressing tables and mantles with fresh flowers, daffodils, tulips, lilacs and such brings a feeling of comfort to the home and again, a scent that brings happiness to anyone who smells it. Flowers just simply make you feel relaxed and fresh; who wouldn’t want to buy a home that’s fresh and clean looking and smelling on a bright spring day? Summer sales can be good because buyers can take advantage of everything positive about summer itself; such as: Longer days, allowing for more time to look at more houses in order to find their perfect home. Gardens and lawns can be kept up and become a huge selling point when presented properly. Backyards and patios can be turned into outdoor havens for potential buyers with simple and inexpensive fixes. A small fire pit on a patio with surrounding plants & flowers and nice outdoor furniture brings the home beyond the walls and into the outdoors so they not only fall in love with what’s inside but also with what’s outside. Moving in the summer is much more appealing in certain climates than moving in the winter. The longer days also allow for more time to get the work done on moving day; often getting the entire job finished in a single day with the right crew to help the buyer move. Their summer move can end with a relaxing evening on the front porch, swinging on the swing you just put up and sipping iced teas or cocktails with friends. Fall is one of those seasons that people tend to begin to literally snuggle in for the winter, preparing for the unavoidable cold. It’s also a time when there are certain aspects that appeal to those looking to buy a home. Fall can offer a number of positive effects that enhance the ability to sell your home such as: Bringing the colors of fall indoors gives the home a feeling of nature and indoors blending together as one in a bright and colorful palette. The warmth of the house on a crisp fall day or evening is very inviting; creating an atmosphere where a buyer can easily picture their family nestled in spending quality time together. The sweet smells of fall come in all types of scents; from a home cooked meal in the oven to the scent of fresh apples. While there may not be a good “Pot Roast” scented candle available, the fall scents that are out there such as apple pie or cinnamon bun create an atmosphere that makes the nose tell the heart that this is “home”. You can also cook a roast in the crockpot during an open house or bake some cinnamon buns straight from the fridge before showing your home and that warm cozy fall feeling will hit the buyer where you want it to! Fall weather can offer clear, crisp fall days to move instead of moving in the middle of a heat wave of a hot summer day. Moving in the winter can be a nightmare if you live in climates that get snow or ice and spring can present a lot of mud from rain that can end up being one big mess on your floors and carpets even from the most well-meaning friends. There’s something about ending a day of moving with friends, gathered around a fire pit in the back yard to warm you on a crisp fall night that just finishes off the welcoming feeling of moving into your new house. The best part is that that feeling is shared with friends and family who’ve helped you get moved in, creating an instant “this is home” feeling. Many people like to be moved in before the fall because they have kids. If your home is one that is more appealing to an older couple or younger couple who don’t have to worry about kids they may look at this time of year just because they don’t want the bother of a lot of competition when looking at homes. This means they’re probably more serious buyers who want to get the job done and be moved in before winter comes. As you can tell each season offers a plethora of positive reasons to put your home on the market so don’t be afraid simply because of the time of year it may be. Take advantage of the positive aspects of the season and make your home into an inviting house that grabs the buyer’s the minute they walk in the door.

Understanding a Short Sale

John Rainville — Fri, 24 Feb 2012 02:44:00 GMT

Short sales have become more prominent in the real estate business, in line with the burst in the housing bubble across the United States.

However, it could be a good option for a seller who’s facing bankruptcy or even foreclosure.

In order to understand if this is a reliable option for you, consider speaking with a realtor who can guide you through the process. If you are on the brink of foreclosure or have already filed for bankruptcy, you can talk to your attorney or find a real estate lawyer, who specializes in these types of cases.

During a short sale, the home lender (bank or mortgage company), accepts a payment from the perspective buyer that is lower than the total amount do. However, it is important to understand that not all lenders accept short sales and certain properties don’t qualify. In some cases, it makes more sense to move on with a foreclosure, so a short sale no longer is a viable option.

There is a benefit to the housing market crisis: it has created a good environment for perspective home buyers. Whether you are simply looking to make a change in your life, or you’ve been stashing away funds for that house down the block for more than 20 years, it really is, “a buyer’s market.” However, dealing with a short sale can be stressful for a current home owner, who can’t afford to stay in their home sweet home. If you are on either side of the fence, you should consider the following tips.

The first step you should take is to contact a real estate attorney. They can explain specific short-sale properties and particular tax ramifications. They can also help determine what other home buying options you might have based on your financial situation.

Even though mortgage companies and lenders have a range of requirements, they usually expect the borrower submit a substantial amount of documentation. Below is a small break down of what you can expect.

You might have to make a handful of calls before you actually find the person that is handling the short sale. Keep in mind that you want to go directly to the source. You will want to track down the name of the supervisor. If they are unavailable, leave a voice-message. Do not get bumped around from department to department, as this will only push you away from the person that is responsible for the sale.

Usually, lenders won’t disclose any information unless you produce written consent. If you are working with an attorney or agent, you could streamline the communication process by writing a letter directly to the lender, giving them permission to discuss the extent of the loan. Keep in mind that the letter should incorporate the following information: loan number, property address, your name and both your realtor’s and your lawyer’s contact information

This is a statement that displays the estimated sales price along with costs associated to the sale, unpaid balances on the loan, outstanding payments of late fees, and possible commission. Your realtor or agent should be the one to prepare the document.

You should provide a hardship letter that lays out your personal dilemma. The statement describes what got you into a financial crunch, while also making a plea to see if the specific lender can accept an offer that is lower than the full payment. In some cases, lenders are will understand if you lost your job, were in a serious vehicle collision, or got ill. It would be helpful to be honest and forward about your situation, so the lender can work with you personally.

Be prepared to review your bank statement with the lender. If your statements include substantial cash withdrawals and deposits that are unaccountable, this can serve as a red flag. The lender may also ask you to provide a line by line breakdown of each deposit to determine whether more income will be coming in.

It is also important to keep in mind that property values can fluctuate, depending on the location and world-wide economic state. The term comparative market analysis, also referred to as a CMA, displays the prices of homes that are similar that are either actively being sold on the market or sold within the past 6 months. Obtaining a copy of this analysis can potentially show a lender that you have been directly affected from market conditions. If the lender sees that you are not responsible for your home sitting idle on the market, this can work to your benefit.

Once the two have you have negotiated a fair agreement to finally sell the home to a prospective buyer, the lender or financial institution will request copies of both the offer and listing agreement. You should also be in the position to possibly renegotiate commissions or other payments related to home inspection. Be prepared to provide the lender with your credit report, even if you are worried about your score. Once you complete all these steps you will be ready to walk away from a short sale.

Single Women Buyers in the Market

John Rainville — Mon, 20 Feb 2012 00:41:00 GMT

Times have changed for sure. In a market that used to be mainly married couples purchasing homes we are seeing more and more single women in the market now. The trend seems to be one on the rise so realtors and sellers alike are starting to recognize a whole new marketing area to focus on. Most single women want 2 or more bedroom houses. They are much less likely to go with “new construction” as opposed to older homes or newer homes that have been built in developments. Single women tend to stay in the city areas as opposed to buying in suburban areas. Many prefer condos that are neat, crisp, clean, and come with a homeowner association. Many prefer the safety factor of a gated access or security system entrance area. Single women tend to spend under $200,000 They come to the board with a listing of their desired amenities and don’t usually budge too much on compromising them. Many will accept smaller sized homes in order to get the amenities they prefer. They prefer to be closer to shopping areas, stores, and local gym & fitness places. Single women are very particular about location and will not compromise the quality of the neighborhood to get what they want. Most women come into the buyer’s market very ready and buy within a matter of less than 30 days Oddly enough single women don’t necessarily fall into the category of those never married. Many who are classified under this type of buyer are divorced women, women with children and functioning as a single parent, and some have partners they live with but purchase the home themselves. Many live alone also and often these are the types that are interested in condo situations or areas that provide security. Sellers and agents alike have begun to realize that the single woman buyer is a new and expanding area to lock into and often hold seminars for women buyers. This is no longer a man’s world or a family world of business but has become one where single women make up a nice piece of the market to connect with. Many have a strong desire to move on with their life after a divorce; while others are looking for more security and space to secure a lifestyle they’re ready to begin. Those with children want to provide for their children and often have solid jobs that allow for them to begin saving money for down payments and the ability to make payments without worry. Ages range from early 20′s to late 60′s and everything in between. Some are looking for their final place to retire in while others are looking for their first place to begin. Either way, this is a new and untapped market that is rapidly trending.

When Is It Good To Refinance My Mortgage

John Rainville — Sun, 19 Feb 2012 18:41:00 GMT

People often wonder if they should refinance their mortgages when they start seeing newscasts that talk about the great buyer’s market and the falling mortgage rates.

But does this mean you should immediately jump on the band wagon and refinance your current mortgage?

Not necessarily. Make sure you have all your ducks in a row before jumping into the pond. Refinancing isn’t always an option or the right choice; while at other times it’s also the best choice. Don’t go about the decision blindly and don’t be afraid to find help.

You can contact a realtor to ask for some guidance towards who to ask the right questions to. Make sure you work with an agent you trust. Some can guide you with simply getting you in contact with a finance company they know and work with; while others can even help you through the process with minimal to no fees involved.

Some Requirements

First off in order to refinance your mortgage most mortgage companies require a minimum of 10% equity in your home. If you don’t have the equity in your home you’re going to end up having to pay the difference up front to bring your equity to at least 10%.

This means that often you end up having to come up with more money as an additional down payment as if you’re buying the home all over again. That’s generally not an appealing option for most people; not to mention it kind of defeats the reason for refinancing in general, which is to more money.

Most mortgage companies won’t even consider refinancing if you have any late payments due. Most require that you’ve had no late payments for at least the past 12-15 month period. Your credit score is important. Before you even think about refinancing you will want to pull your credit report and first, see if it’s accurate. Next you’ll want to repair any problems or negative points on your report. If your score is extremely negative you are most probably not going to be approved for a refinance loan.

What to Know

Compare Rates – Always compare the rates of various mortgages but it’s not just that cut and dry. You must take into consideration such things as points you may have to pay in order to refinance, refinancing fees, and other fees that may be placed upon you should you decide to refinance. Be sure you also know up front what you must pay for. You may be surprised to find that the lure of some lower rates also come with surmountable additional expenses that can be very cumbersome to take on.

The 2% Rule – The 2% Rule applies when the refinancing interest rate is 2% lower than your current rate you can make up the difference in any loan costs, assuming you have no plans of moving immediately. With the 2% rule you will save a reasonable amount in interest through the lifetime of the loan, while taking advantage of no-cost or low-cost loan options. The down side to these loans is that they are usually slightly higher in interest rates than the current lowest rates and options are often limited, especially if the current economic situation is unstable. The plus side is that you save on interest rates, enough to make a difference, you aren’t socked with tons of financing fees, points and costs usually associated with refinancing and you’ve lowered your rate by 2%. This 2% rule is actually a fairly “old fashioned” method of refinancing and while it still does apply to many situations, you can actually have situations where, especially with larger loans, you can save a substantial amount of money with as little as a half-percent. No matter which case, you always need to take into consideration if the amount you will save in the long run is worth the cost of refinancing.

Know Your Future Plans – You have to know your future plans. While none of us has a crystal ball that can tell us things like medical emergencies that can change our life or job changes, etc. but we can plan the future and have a general idea of what our plans are going to be. A general rule of thumb is that if you don’t plan on staying in your home for a lengthy period of time, it’s generally not worth refinancing your mortgage. Between the costs involved and the time and effort it takes you will never make back the money you’ll put out unless you plan on keeping your home for a longer period of time. Also, if you’re not going to be able to compensate for the costs of refinancing your mortgage within a reasonable amount of time you’re going to want to say “no” to the idea of refinancing. This is where comparing costs to savings and the end results should confirm what your decision is regarding refinancing.

The Easiest Way to Compare – The easiest way to compare whether it will pay off to refinance your current mortgage or stay where you are is a very basic rule of thumb. Like all financial decisions they should never be taken lightly. You should always seek professional guidance when making a decision as large as refinancing a mortgage.

That being said you can also have a very basic way to help you determine a first plan of action and making the decision if the refinancing is worth it. Take the total cost of refinancing (such as closing costs on a good faith estimate) and divide that by the amount of you will save each month on your payment. This will tell you how long it is going to take you to just break even with the costs of refinancing. After that, any amount after that is money you are truly going to be saving.

Here’s an example: Let’s say your refinancing costs you $4,000 to refinance a loan that is going to lower your monthly payment by $250. This means that 4,000 divided by 250 is 16; telling you it’s going to take 16 months of making payments just to break even on the $4,000 costs to refinance. That’s under 2 years to pay off the costs of refinancing; if you’re considering staying in the home you’re in for over 2 years it definitely would pay off to refinance your loan.

Now let’s look at another scenario. If refinancing is going to cost you $6,500 but only lowers your payment by $100 a month; it’s going to take you 65 months (over 5 years) just to pay off the refinancing charges and break even. As logic would tell you, this is probably not a smart idea. The problem is that many people only see the quick $100 less per month and that impresses them that their mortgage payments become $100 lower. But the reality is, you’re really not getting anywhere when you truly look at the numbers and figure what it’s going to take you to break even.

The Final Decision

The final decision comes down to many factors and is ultimately yours to make. You have to figure out the benefits of the actual refinancing in order to decide if it is worthy. Use the quick, basic figuring we explained of dividing the total cost of refinancing by the amount you are saving each month on your monthly mortgage payment. This will give you a quick look and answer to whether it is even worth taking any more time to consider.

Consult with a financial advisor or lender, but don’t always believe the numbers until you’re sure of what you’re seeing. As we showed you, the lure of a $100 a month less on your mortgage payment may seem wonderful until you realize it’s going to take you 35 years to pay the amount of the refinancing back. It’s always great to see a savings up front but the true savings comes when you figure out how much you are actually saving in the long run.
Don’t be bullied into doing something you’re uncomfortable doing. Go with your own instincts, judgment & gut feelings.

Bouncing Back From The Housing Blues

John Rainville — Fri, 17 Feb 2012 01:08:00 GMT

While we’re emerging into the third year of the housing crisis, there are some signs of recovery. However, selling homes still remains a challenge in widespread areas across the US.

A major challenge for sellers today is that many intending buyers are putting their decision on hold for various reasons.

A steady flow of poor home sales data across the nation only contributes to further dip in prices and promotion of the negative sentiments. Nevertheless, when you have reached the difficult decision to sell your home, you have fewer options and you must sell before you find yourself even deeper in the hole.

You have invested time, money and thoughts to make your home the best place to live for you and your family. But, what is best for you may not be what the prospective buyer is looking for. Take a tour of your home and take an inventory of needed repairs. You’d be surprised to learn that fixing broken window panes, getting that squeaky door changed, or even adding a coat of paint can not only add value, but attract serious buyers. It’s important to focus on both the internal and external appearance of your home, to make it appealing to a perspective buyer.

One way to cash in for your home is by considering a remodeling or expansion project. Adding an extra bathroom or play space can add extra space, and eventually a bigger price tag on your home. However, it takes money to invest in projects of this scope. That’s why it’s advisable to shy away from any value addition right away. Consider pitching the idea to the buyer and work it into the home’s sale price. Similar opportunities may exist in making the home more comfortable and potentially profitable. In addition, it won’t look too bad on your behalf that you’re willing to go the extra mile.

The digital world offers wonderful opportunities in getting your message across to millions of people. Using the social media to your best advantage may however need some degree of expertise. Remember, you are not the only one in your neighborhood that wants to sell their home. When using social media to attract buyers, using multimedia tools such as videos or pictures can be very helpful. This will not only help keep interested buyers on your page, it will also encourage them to contact you, if they are pleased with what they see. With that said, pay attention to how your pictures and videos are presented. A low resolution video could have an adverse effect if your viewers are struggling to watch the video.

If you lack the tech experience, as your real estate agent is he has experience in videography. This is important because your prospect may skip your presentation and look at another home if your video looks unprofessional or is poor quality. Notice how I referred to the videographer as an investment. This is simple because the money that you may spend on videos and other social media, can potentially pay you rich dividends when you find your buyer.

No matter how much personal value you may find in your home, the buyer will just see it as another house on the market. With that in mind, keep up with your competition. Do some research by finding the asking price online and consider going to a competitor’s open house. This is the most realistic way to see things from a buyer’s perspective. You will also see what sales tactics their using to lure buyers, which can eventually help you in the long run.

Banks Paying Homeowners Up To $35,000 To Avoid Foreclosure! Call me to discuss your options! John Rainville (717) 554-7430

John Rainville — Thu, 16 Feb 2012 18:49:00 GMT

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Banks Paying Homeowners to Avoid Foreclosures

By Prashant Gopal - Feb 7, 2012

Banks, accelerating efforts to movetroubled mortgages off their books, are offering as much as $35,000 or more in cash to delinquent homeowners to sell their properties for less than they owe.

Lenders have routinely delayed or blocked such transactions, known as short sales, in which they accept less from a buyer than the seller’s outstanding loan. Now banks have decided the deals are faster and less costly than foreclosures, which have slowed in response to regulatory probes of abusive practices. Banks are nudging potential sellers by pre-approving deals, streamlining the closing process, forgoing their right to pursue unpaid debt and in some cases providing large cash incentives, said Bill Fricke, senior credit officer for Moody’s Investors Service in New York.

Losses for lenders are about 15 percent lower on the sales than on foreclosures, which can take years to complete while taxes and legal, maintenance and other costs accumulate, according to Moody’s. The deals accounted for 33 percent of financially distressed transactions in November, up from 24 percent a year earlier, said CoreLogic Inc., a Santa Ana, California-based real estate information company.

Karen Farley hadn’t made a mortgage payment in a year when she got what looked like a form letter from her lender.

“You could sell your home, owe nothing more on your mortgage and get $30,000,” JPMorgan Chase & Co. (JPM) said in the Aug. 17 letter obtained by Bloomberg News.

$200,000 Short

Farley, whose home construction lending business dried up after the housing crash, said the New York-based bank agreed to let her sell her San Marcos, California, home for $592,000 --about $200,000 less than what she owes. The $30,000 will cover moving costs and the rental deposit for her next home. Farley, who is also approved for an additional $3,000 through a federal incentive program, is scheduled to close the deal Feb. 10.

“I wondered, why would they offer me something, and why wouldn’t they just give me the boot?” Farley, 65, said in a telephone interview. “Instead, I’m getting money.”

Tom Kelly, a JPMorgan spokesman, declined to comment on the company’s incentives.

“When a modification is not possible, a short sale produces a better and faster result for the homeowner, the investor and the community than a foreclosure,” he said in an e-mail.

A mountain of pending repossessions is holding back a recovery in the housing market, where prices have fallen for six straight years, and damping economic growth. Owners of more than 14 million homes are in foreclosure, behind on their mortgages or owe more than their properties are worth, said RealtyTrac Inc., a property-data company in Irvine, California.

Foreclosure Holdouts

Short sales represented 9 percent of all U.S. residential transactions in November, the most recent month for which data is available, up from 2 percent in January 2008, according to Corelogic. Bank-owned foreclosures and short sales sold at a discount of 34 percent to non-distressed properties in the third quarter, according to RealtyTrac.

As lenders shift their focus to sales, they are finding that some borrowers would rather risk repossession while they wait for a loan modification, according to Guy Cecala, publisher of Inside Mortgage Finance, a trade journal. In a loan modification, the monthly payment, and sometimes principal, is reduced to help prevent seizure. Homeowners facing foreclosure may live rent-free for years before they are forced out.

“That’s why the banks have got to pay the big bucks,”Cecala said. “The real question is why is the bribe so big? Is that what it takes to get somebody out of their home?”

Multiple Banks

Banks also pay a few thousand dollars to the owners ofsecond liens, whose loans can be wiped out by a short sale, to encourage them not to block the deals.

While JPMorgan is giving the largest incentive payments, other banks and mortgage investors are also offering them, according to interviews with 12 real estate agents in Arizona, California, Florida, New York and Washington. Lenders also provide incentives on loans they service and don’t own when the mortgage investor, such as a hedge fund, requests it.

JPMorgan, the biggest U.S. bank, approves about 5,000 short sales a month. It generally offers $10,000 to $35,000 in cash payments at settlement, real estate agents said. Not all of the sales include incentives.

Borrowers also can receive payments from the federal government’s Home Affordable Foreclosure Alternatives program, which in 2010 began offering as much as $1,500 to servicers, $2,000 to investors and $3,000 to homeowners who complete short sales.

Quicker Resolution

For banks, approving a sale for less than is owed on the home can cut a year or more off the time it takes to unload a property. From listing to sale, the transactions took about 123 days on average at the end of last year, according to the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.

Lenders spend an average of 348 days to foreclose in the U.S. and an additional 175 days to sell the property, according to RealtyTrac. In New York, a state that requires court approval for repossessions, it takes about four years to foreclose on a home and then resell it, the company said.

Lenders can often afford to forgive debt, offer the incentive and still make a profit because they purchased the loan from another bank at a discount, said Trent Chapman, a Realtor who trains brokers and attorneys to negotiate with banks for short sales.

Chapman, who also writes a blog on TheShortSaleGenius.com, said he’s heard about 50 homeowners who have received incentives from lenders including JPMorgan, Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc.

Wells Fargo

“My guess is they want to get rid of bad loans,” Chapman said. “If they short sale these types of loans, they have less of a headache and have some goodwill with the homeowner.”

Wells Fargo, based in San Francisco, offers relocation assistance of as much as $20,000 for borrowers who complete short sales or agree to transfer title through a deed in lieu of foreclosure “in certain states with extended foreclosure timelines, including Florida,” Veronica Clemons, a spokeswoman, said in an e-mail.

Bank of America Corp. sent letters to 20,000 Florida homeowners as part of a pilot program, offering incentives of as much as $20,000, or 5 percent of the unpaid loan balance, Jumana Bauwens, a spokeswoman, said in an e-mail. The program expired in December and the Charlotte, North Carolina-based bank hasn’t decided whether to introduce it in other states, she said. About 15 percent of the homeowners agreed to participate in the program, she said.

Citigroup Offers

“The bank is pleased with the response,” Bauwens wrote.“The state is experiencing higher foreclosure rates than other parts of the country and is therefore seen as a viable market to gauge incremental short-sale response and completion rates when presenting homeowners with relocation assistance at closing.”

Citigroup offers $3,000 to most borrowers who qualify for its program, but the “amount may increase based on the circumstances of each individual case,” Mark Rodgers, a spokesman for the New York-based bank, said in an e-mail.“Investor programs have different guidelines for relocation incentives, which we honor.”

Susan Fitzpatrick, a spokeswoman for Detroit-based Ally, didn’t comment specifically on incentives when asked about them.

Borrowers typically can’t negotiate the incentives, which arrive by mail, Chapman, the Realtor, said.

Tap on Shoulder

“It’s not really easy to identify the guidelines because Chase doesn’t tell you, they kind of tap you on the shoulder,”he said. “When I first saw it in January 2011, I thought it was a joke or a typo. I was convinced it must say $3,000, not $30,000.”

Offering enough for the homeowner to put down a deposit on a rental apartment is reasonable, said Sean O’Toole, chief executive officer of ForeclosureRadar.com, which tracks sales of foreclosed properties. Giving tens of thousands of dollars to delinquent homeowners sends the wrong message, particularly if they got into trouble by running up home-equity loans during the housing boom, he said.

“It may make sense for people to walk away, it doesn’t make sense for them to get rewarded for doing it,” O’Toole said. “It’s not the homeowner’s fault that house prices dropped so dramatically, but they have already received months of free rent, if not cash out.”

Cecala of Inside Mortgage Finance said he wonders whether lenders are making big payments on properties with underlying title problems. Evan Berlin, managing partner of Berlin Patten, a real estate law firm in Sarasota, Florida, said representatives of a large bank told him the incentives are primarily given to borrowers when it doesn’t have the proper paperwork needed to win its foreclosure case. He declined to name the bank for publication.

Incentive Disconnect

State attorneys general across the U.S. began investigating foreclosure practices in October 2010 following allegations that the nation’s top mortgage servicers were using faulty documents to repossess homes.

Berlin said his office negotiated about 400 short sales in the past year and about a quarter included an incentive, ranging from $3,000 to $48,000. In some cases, the payments aren’t incentives at all because they’re offered after the borrower has almost completed the short sale, he said.

“The idea is that this is relocation assistance,” Berlin said. “But when you’re offering $48,000, obviously it doesn’t cost $48,000 to relocate.”

Cooperation Sought

The size of the payment may have little to do with sales price. JPMorgan gave one Phoenix homeowner $20,000 after she sold her property in June for $32,000, according to Royce Hauger, the real estate agent who represented the seller and shared a copy of the settlement sheet with Bloomberg News. The bank also agreed to forgive more than $70,000 in debt, she said.

Kelly, the JPMorgan spokesman, declined to comment on the payment.

The homeowners are getting the money in exchange for their cooperation, said Kris Pilles, a Riverhead, New York-based real estate broker who represents banks, servicers and hedge fundsthat own distressed housing debt.

Pilles is frequently dispatched to the homes of delinquent borrowers to explain the benefits of avoiding foreclosure, he said. His clients have paid as much as $92,500. In return, the lenders expect the seller to clean the house before showings, and trim the grass.

“Money talks,” Pilles said. “From the bank side, it’s anything to initiate a conversation with someone who may not be listening to them.”

To contact the reporter on this story: Prashant Gopal in New York at pgopal2@bloomberg.net

To contact the editors responsible for this story: Daniel Taub at dtaub@bloomberg.net; Rob Urban at robprag@bloomberg.net.

CALL ME TO DISCUSS YOUR OPTIONS ! John Rainville (717) 554-7430

U.S. Real Estate Markets 2012 AND Beyond

John Rainville — Tue, 14 Feb 2012 14:00:00 GMT

Home owners across the nation may be looking for a miracle of sorts to shore up the sagging home prices.

Ever since the economic meltdown of 2008 home prices have remained under pressure though some segments did show feeble signs of recovery.

At the beginning of 2012, a critical analysis of the ground realities do not point to any marked improvement in the coming months and it could well be beyond 2014 before home prices can stabilize and commence its upward journey yet again. Here are our observations in a nut shell:

900,000 – Residential properties on various banks’ balance sheets.
600,000 – Residential properties waiting to reach the market.
1,200,000 – Properties in varying stages of foreclosure.
4,000,000 – Potential delinquency

These observations are based on surveys conducted by some of the best names in the industry, RealtyTrac.com and Trulia. The survey further points to the fact that a growing number of Americans feel that a recovery in the real estate markets can be a good 2-to-3 years away which actually makes it the perfect time to invest in a home now when prices are at historic lows.

The numbers presented above should have brought an avalanche of home buyers because at no time in recent history has there been so many choices at prices that are closer to historic lows in most major cities. But, there are several kill joys that accompanies the down trend. First of all, the median income in the hands of the common man has either stagnated or has dipped. Add to this, the rise in cost of living across the nation, for many individuals, personal finances are pitching below the comfort zone.

Those who are in comfortable jobs are eager to hold on to what they have than explore new pastures for fear of finding the right job and at the right place. In cities like Detroit the situation is even more challenging because the majority of the city’s population depended on the automobile industry whose fortunes were compromised by the economic meltdown and the sharp rise in oil prices.

If these were not enough disincentives for the home buyers, borrowing money to fund new home acquisitions has become more painful. Most mortgage lenders are now seeking a 20% or more in upfront cash margins. This singular measure has the potential to drive away a good percentage of intending home buyers.

The root cause of much of the troubles that the U.S. economy faces today can be traced to excessive supply of credit to support a consumption driven economy. Credit is good in the hands of people who have the consistent ability to repay and repay in time. In the real world today, it is the credit card companies who are laughing all the way to their banks. One look at the penal interest levied on belated credit card payments and you know why credit hurts. Then you have loans to pay off credit card dues, followed by credit repair schemes and all those helping hands reaching out to drill more holes into your wallet. These systemic issues cannot be addressed by any one individual. The nation as a whole will need to revisit the underlying infirmities and induce better fiscal discipline that can percolate down to the individual citizens.

If the pains at home were not enough for the U.S. real estate market, external factors such as the European Union debt crisis add further dimensions to the recovery process. As Wall Street continues to impact global financial markets the strength of the green back or the lack of it will reverberate across continents. From Gold to Oil the U.S. dollar is attached to far too many products and services around the globe. Therefore, while a vibrant economy in the immediate neighborhood can make positive contributions to the home, weaknesses in the same region can negatively impact our economy.