Archive for the 'Short Sales & Foreclosures' Category
What “AS IS” Means
September 24th, 2008 categories: Buyers, Short Sales & Foreclosures
With the increase in banks owned properties it is becoming very common to see properties that are being sold in “as is” condition.
For the most part “as-is” condition means that the property is being sold exactly as it is when you see it. It is a safe assumption to believe that the bank has never actually seen the property they are selling and that they are selling it making no representations to it’s conditions.
As a buyer, it is important that you do your homework. You can still do a home inspection on these properties and always should make your purchase contingent on having it done. Understand that your inspection is for informational purposes only but if you find something that you are not willing to pay to have fixed that you have a way out.
If you are doing a home inspection, make sure that the water to the property is turned on in advance. You cannot do a thorough inspection of the homes systems without running water. Especially if the home has been sitting vacant for any time period. If you are using FHA financing, the appraiser will not appraise the property if the water is turned off.
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4 Sacred Short Sale Tips
July 7th, 2008 categories: Sellers, Short Sales & Foreclosures
You have sucked it up, bitten the bullet, and it looks like you are heading down the dreaded route that you never thought you of all people could end up on. I looks like you are loosing your home. Well, lets make this as painless as possible and hopefully save your credit score as much as possible in the end.
Here are 4 Short Sale tips that will help:
1. Don’t Be A Loner- I promise that this is not a ploy for you to call me but you will need a Realtor on this trip. It is long, complicated, and you need a guide. One of the major hurdles with the bank is showing sufficient marketing to sell the home. You don’t have time for this one and it you won’t be paying the Realtor if it goes through any way- the bank will.
2. Make A File- If the banks has begun the foreclosure process you need all of that information. Any default information is helpful. Also call your bank and find out what your PAYOFF BALANCE is. If you have more than one lender involved get both balances.
3. Make File #2- Make another file with a copy of W-2 forms, proof of employment records, the last couple of years of banks statements, your last 2 tax returns, and be prepared to write a hardship letter.
4. Practice Patience- Patience during a short sale is not just a virtue it is a must have. It is important to understand that if handled properly a short sale stands chance of being accepted by the bank within time. However, expect that time to be up to 90 days longer than a typical resale.
Once you choose a Realtor to represent you during this transaction, you will need to be able to convince the bank that financial hardship is not from a living a lavish lifestyle or loan fraud. These document will help. If you have lived-it-up you still may have a shot so it is worth looking it to.
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What To Expect When Dealing With The Bank On Bank-Owned Properties
April 14th, 2008 categories: Short Sales & Foreclosures
There is a lot of confusion right now for buyers in knowing what to expect when placing an offer on a bank owned property. When banks place a home on the market they usually set their price according to a BPO (Brokers Price Opinion) given to them by a cooperating agent that is listing the home. If you have done your homework and the home is priced to sell compared to other homes for sale in the neighborhood then the home will usually sell very quickly. Here are a few things to remember when considering a bank owned property.
It is important to understand:
1. Bank Owned Properties priced well will usually get more than one offer within 2 weeks. The quicker your offer comes in the better.
2. The price will usually reflect the deep discounts that you are looking for so don’t expect a huge discount from the asking price if it is already priced well.
3. The Bank is not emotionally attached to the property. If the numbers work for them, you have a good chance. If not, you are wasting your time because some one will pay for the place.
4. The bank wants to wrap the deal up quickly. Settlements over 30 days out and with multiple contingencies like home inspections and sell of home are not favorably looked upon.
5. Banks will usually respond within a work week of an offer.
If you are looking for a list of bank-owned properties for sale in Ashburn, Sterling, Cascades, River Creek, Lansdowne, or other Northern VA areas contact me. I will be happy to email you over a list.
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Letting The Cat Out Of The Bag On Short Sales
April 3rd, 2008 categories: Local Issues, Short Sales & Foreclosures
There has been a conspiracy for years that Walmart will offer the lowest prices and when everyone else is out of business they will raise prices since we will have to use their services. I am not convinced of this argument, but their is a similar issue taking place in the housing industry.
How would you feel if you awoke tomorrow morning to find that the house that you are competing with in re-sale has dropped their price 70k below yours and is selling it as a short sale? Nothing new, so after a few curse words and frustration you decide to drop your price 40k lower and so do 3 other surrounding homes.
You wonder why people keep visiting your home but no one is putting in an offer. You begin to feel that the sky really is falling and that it is the Presidents fault.
QUESTION 1# How would you feel if you found out that the short sale that caused everyone else to lower their price had a low dummy price to get offers and that the bank wasn’t willing to accept it in the first place?
The seller no longer cares. The seller just wants out and isn’t making any money on the listing any way. They are just trying to save their credit a few points compared to a foreclosure.
QUESTION 2# How would you feel if you found out that the reason you aren’t getting any offers is because there are 6 contracts that are pending on the short sale and have been frozen while waiting 5 weeks for the bank to respond?
There really are people buying at this time. There is a good chance that you aren’t getting an offer because buyers already have contracts on other homes so they are FROZEN. They can’t put out multiple offers. They are also afraid to pull out from the short sale because their lucky side tells them that they could get a steel.
Believe it or not, we are paying a steep price for these types of transactions. Short sales are not bad on their own. Nor are all Short Sales listed at fake prices. But prices that a bank has not approved are detrimental to our market. It hurts neighborhood values which cause more foreclosures and short sales which ties up the only people that can help fix the issue: BUYERS (not government).
Our Century 21 Redwood Realty office is currently working with our local MLS board and NVAR to address these issues. Wouldn’t it be much better if the financial institution had already approved the listing price BEFORE it was advertised? The complaint will be that the bank doesn’t respond quickly enough to approve a price. Sorry…. It is not fair that buyers are being deceived and restricted because banks are slow and backed up.
Related Articles:
3 Reasons You Should NEVER CONSIDER A Short Sale
4 Terms You Must Know As A Buyer
Short Sales Are Fake Listings (By FranklyRealty)
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DC’s Foreclosure Comparison
March 26th, 2008 categories: Market Statistics, Short Sales & Foreclosures
Foreclosures are everywhere. Not just low income areas. From the smallest of homes to mansions, foreclosures have no preference.
How does the Northern VA market compare to other metro areas in the United States? Are we the only area struggling to move past this?
Here are the stats comparing us with other large metro areas in the US as of the last quarter of 2007 by Dr. Stephen Fuller.
(click image to enlarge)
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3 Reasons You Should NEVER CONSIDER A Short Sale
March 3rd, 2008 categories: Buyers, Local Issues, Short Sales & Foreclosures
I had a stroke of metaphorical brilliance this morning while speaking with a client.
The more I deal with and learn about short sales the more I see them as the worst thing that has ever hit the real estate market. The problem is that clients are easily allured by them like some kind of bright glow so I continually have to work with them: which I will.
I was able this morning to deter a client from even considering them by offering them a metaphor of what they are like. Afterwards, I felt so good that I decided to create a few more. Feel free to add to the list….
Trying To Buy A Short Sale Is Like…
- Planning your honeymoon cruise with a street vendor and not knowing if the ship will let you on until it is about to depart from the port.
- Buying a dog with fleas and a heart murmur with a questionable life expectancy because he is $30 cheaper than the puppy (this one is a stretch-sorry).
- Putting all of your retirement funds in to a lottery account and hoping that the guy that pulls the ticket out of the hat will choose yours 30 days before your retire.
There is no question whether or not some people will score a good deal from time to time with a short sale. However, the risk and percentage of transactions that are short sales that work out are questionably ever worth it. I do encourage buying a home that is a foreclosure or REO. The bank turn around time is much closer to 1-7 days instead of 45-60 days while everyone else puts in their offers.
Another great article that exposes some of the issues with short sales can be found at by Frank at Frankly Realty. Click Here.
If you are looking to buy a foreclosure property in Ashburn, Sterling, South Riding, Gainesville, Herndon, Leesburg, Fairfax, Brambleton, Belmont, Broadlands, Lansdowne, or Chantilly contact me as I would be happy to respresent you.
Related Articles:
Letting The Cat Out Of The Bag On Short Sales
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4 Terms You Must Know As A Buyer
February 28th, 2008 categories: Local Issues, Short Sales & Foreclosures
I attended an investor meeting around a year ago in the area. People were going around the room and talking about transactions that they were working on at the time. A guy spoke up to mention that he was working on a “short sale” transaction. The leader of the meeting interrupted him to take a count of people who understood what a “short sale” was.
At that time there were only around 3 people out of 200 in the room who had ever heard of a “short sale!”
Who would have thought that a year later, we would not only know more about them, but hundreds of the listings on the market would be “short sales?”
I wonder now how many people still don’t know what some of the terms we use mean? Here is a short list to help you understand 4 major types of sales transactions you may see when looking at homes online: (these definitions were taken from a friend over at the San Diego Housing Blog).
- Traditional Sale: Owner needs to or wants to sell and has equity. At closing, seller will receive proceeds from the sale.
- Distress sale: Owner needs to sell due to personal circumstances. Time is of the essence, they are highly motivated (not selling is not an option).
- Short sale: At closing, proceeds from the sale will be Read the rest of this entry »
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Avoiding Foreclosure
February 16th, 2008 categories: Short Sales & Foreclosures
If you are on the verge of loosing your home to foreclosure or defaulting on your loan, there is help. You can contact PROJECT HOPE. A voluntary alliance of major lenders who have agreed to assist qualified homeowners who are on the verge of default do to adjustable rate mortgages (ARMS).
Their Phone number is 888-995-HOPE.
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Someone At The Bank Is Losing It…
February 14th, 2008 categories: Local Issues, Real Estate News, Short Sales & Foreclosures
I don’t claim to understand all of the process that a bank goes through when foreclosing on a home.
Here is what I do understand…
A lot of them gave out loans that they shouldn’t have, to a bunch of people that shouldn’t have been able to get them. Fine. We all make mistakes and some buyers have dug their own ditch. So, both parties are responsible and we have to get passed pointing fingers and start coming up with solutions.
We don’t just have people who couldn’t afford their payments. We have people who can’t afford their payment once their ARM (adjustable rate mortgage) expires. You say… Why don’t they just refinance? Good question. The answer is that they can’t refinance because the home will not appraise for what they owe on it so a lender will not give them another loan. That sucks.
So, what happens?People stop making payment and end up in some level of foreclosure. When this happens to A LOT OF PEOPLE we end up where we are right now. In a recession because so much is tied to housing.
It seems to make a lot of sense that instead of banks loosing thousands and thousands of dollars on these foreclosures that they would just contact the owner of the home and re-negotiate the loan or extend the lock on the ARM. I know this can’t work for everyone but it would help. Its better to loose a little than a lot.
There are a lot of first time buyers that like the prices on these homes but are having a difficult time getting them financed because the bank won’t give a loan on a home that is in such poor condition (most are). It also takes SOOOOOOO long to get answers and responses from banks when putting in an offer on the homes.
So, the circle continues. Too much inventory, buyers can’t get loans as easily, homes won’t appraise for re-financing so people loose more homes.
I think a really good start would be for banks to have enough people on hand to handle these issues.
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