What should a seller expect in a Short sale

We started talking about Short Sales last week and I said we would break it down for the seller and the buyer. The Short Sale transaction can be frustrating for everyone involved. I think most of the frustration comes from expectations not being met. The short sale is not your every day  real estate transaction.  This is relatively new territory for most real estate agents and definitely a new venture for the seller. This should be one of your last resorts. Talk to your bank. You might be able to renegotiate your mortgage. Again, back to my point banks don’t want to own real estate, they just don’t realize it yet. They are going to fight you tooth and nail to keep the current condition and hope you find a way to pay. A well trained real estate agent in foreclosures and short sales will be able to assist you in this process.  Again I want to repost my disclaimer.

Disclaimer; I am not a tax expert, CPA, financial planning expert, nor a lawyer. I suggest before you decide if a short sale is right for you, that you seek professional advice from your CPA, tax expert and lawyer. What I am giving you here is a peek into what could happen if this is the right choice for you.

There are a few things that you should be prepared to do before venturing into a short sale transaction. The bank has to deem your situation worthy of a short sale. Remember, they are going to ultimately take a loss on this. If they approve, they will pass this short fall onto you as a 1099 at closing. The government sees this as income to you and expect you to pay taxes on it. (Tax laws are changing on this regularly, check with your Tax preparer)  You might not have to anymore.

Your agent will be needing a copy of a few things from you to help streamline the whole process.

1. Authorization to talk to you lender(s)
2. Most recent mortgage statement.
3. Most recent tax return.
4. Two most recent pay stubs.
5. Bank Account Statement(s)
6. A Hardship letter written in your own words.

The banks will want to see these items in order to consider your request.  If there’s a second mortgage, most likely both will have to approve the short sale.  Remember you agent will do their best to get the approval, but there’s no guarantees  that they will accept it.  It is not uncommon for one or the other lender to force it to foreclosure.  The loss mitigation department sometimes have a mind of their own.  They have secret formulas that they use to determine which route is more beneficial to the bank.

Your sellers agent will submit this again with another pile of documents when an offer comes through.  It makes it easier on the Loss Mitigation Officer to see everything at one time (again or maybe for the first time)  They have hundreds of these request coming across their desk monthly.  The more your agent is organized, the quicker the response time to the sale approval.  I say quicker with a little tongue and cheek.  The approval process could take anywhere from 30-60 days.   You don’t need any more delays than that.  Especially if the foreclosure process is closing in on you.  Buyers and Buyer’s agent need to be aware of this. We’ll talk about their expectations next week.

This is an emotional process, your agent should be able to help keep things in perspective and work through the hiccups of the transaction.   Ultimately, you want to get this property off your books.  So you can regain control of your life.

The Squirrels are telling us to Get ready for Winter

My grandfather always told me to pay attention to the squirrels.  They are telling us what the winter will be like.  Sure they are scurrying for nuts all the time.  Look at the tails, are they bushy?  Thick and bushy, don’t you think they want to be warm this winter?  How about their nest?  Higher in the tree, worse the winter.  (he said that about the paper hornets nest too!)  Thicker the nest, worse the winter.   I don’t know about Channel 7 News, but I like to believe my grandfather…not that it came true all the time…I just liked to listen to his wisdom.

And with that I must say, vacant home owners need to be ready…How many times has a Buyer’s agent taken their client to show a houses and couldn’t get in? That’s frustrating for the buyers. This buyer might need to find something real soon and your house wasn’t ready for show. Worse off, your house was perfect for them.

Here are a couple tips to remember with your vacant house.

1. Shovel the sidewalks – This is just asking for problems. And not only that, you can be fined by the city (with in the city limits)
2. Winterize the house - If you think you home will be vacant for a long time, call a plumber to removed the water from your pipes. This way if the furnace breaks down while it is freezing outside, you don’t have problems.
3. Visit a couple times – Either send someone or do it yourself. Pick up the free publications and pizza notices from the driveway and the door.
4. Vacuum – While at the house at least once or twice a month, vacuum up leaves or dust bunnies that might have been tracked into the house.
5. Remove Toilet Paper – WHAT? Believe me, if you don’t turn off the water, you are going to want to remove the toilet paper. If available sometimes, people will use the bathrooms. What no plunger? You get my drift or the next visitor will.
6. Call your Insurance Company – this is for your protection. Not all insurance companies offer the same coverage when the home is vacant. You will need to clear this up before an accident happens.
7. Hire a Home Stager - Yes it cost some money, but a stager will be able to make the empty home look homey and that’s all it might take to sell your home.

Now these are only a few suggestions, but they will help you with the successful sale of your home.

Good Luck, be patient, price right and make it best of show.

Do you feel like a Nation of Sheep?

I came across this video before I realized it was a sales pitch. He makes some pretty valid points. Freedom of speech allows me to write this blog.

I started to think how his points even apply in Real Estate. Sure its not the government that is leading everyone to the Kool-Aid, but the media. They are making everyone believe that this housing slump is National. Real Estate has been and always will be local. It even drills down a very local level. One neighborhood might be selling in Frederick, while another one a few miles down the road isn’t selling as well. Sure, we are seeing above average Foreclosures in Frederick County, but we are no where near the number of foreclosures as seen in Southern Florida, Detroit Michigan and around the Denver area. The national average was 1 out of 189 homes are in foreclosure proceeding. The last I heard in Maryland, we were around 1 in 290 homes. Bad, but not horrible. Don’t listen to the media…listen to your REALTOR®. If the time is right for you to buy, there is no time like the present. (remember if you’re selling in a bad market, you’re buying in one too. Obviously, the same applies when you sell in a great market…so it’s a wash either way)

[youtube:http://www.youtube.com/watch?v=Gs9GTbMtJ3E]

Casual Dress Friday or is it -Staging your home

OK, Its Friday…time to poke a little fun. You have heard of the old saying “You can put lipstick on a pig, but its still a pig” I didn’t have a picture of a pig in my photo collection, so I am using a black cow. OK not just any black cow, but Black Angus Cow. No matter how you dress him up…(Yes, he is in “Drag”) He is still a cow. Since, they were marketed so well, the Black Angus Beef was the preferred Steak in your stores and restaraunts. Don’t believe me look at the shelves in your meat department and the ones that stand out are the ones that have the big seal on it that says Certified Angus Beef. Well, some farmers jumped on that wagon and started to breed “Black” Cows…not Angus, but just black cows. Why?? They were preferred!!! Beef purchasers paid more…because they “look” like Black Angus Cows.

You can do the same thing with your house. Dress it up and make it more attractive to the “Beef Purchaser” In real estate, we call it staging. By staging, you set focal points in your house to make buyers see your house through a different light. Maybe, its matching towels and floral arrangement in the Master Bathroom or rearranging your furniture and wall fixtures to maximize the usuable space in a room. In todays market as a seller, you really need to have the upper hand on your competition. It has been proven that “Staged” homes have sold for more and much quicker than “unstaged” homes. Here’s a trip outside of Frederick to Rockland County NY for example of what staging can do for you. Click Here. Maureen Henry runs a successful business helping Sellers attract more buyers. You can see what a little effort does to the home. Unfortunately, plenty of homes that I have seen in Frederick County don’t show well because of simple things like a good cleaning…and they are still on the market. Well, we aren’t in Rockland we are in Frederick. One stager I can recommend is Gigi Giles…she’s local and has a great eye for making your home attractive. Her profession is organization and Staging. You can reach her at 888-No-Clutter (662-5888) or email here at gigi(at)roomdini.com.

No cows were hurt in the making of this blog post. Bob Carney only supports local cows from Middletown, MD. Black Angus Cow #556 approves this post.

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