Eileen Rivera’s Blog

Short Sale Tips by Eileen Rivera

Real Estate Update
Hosted by Eileen Rivera

Foreclosures-Investors Wanted
Hosted by Eileen Rivera

 If a listing is a “Short Sale” the transaction is subject to lender approval.
This means, that at the listed price, the proceeds from the sale may not be adequate to pay all liens and costs of sale. Any offer made that does not fully cover the existing amount(s) owed to the lien holder(s) plus the costs of sale are subject to lien holder approval unless the seller is willing and able to pay the difference.  Although some banks, such as Wells Fargo, have stream lined their approval process many banks and secondary lien holders continue to take months to approve or deny a “Short Sale”.  Anyone Buying a Short Sale property should consider working with an agent that has Short Sale specific certifications and experience. Home Owners should also work with an experienced certified specialist. Our team has a strict policy when working with other agents on short sale listings, we always ask…

1.   Do you have any offers?
2.  How many short sales have you closed?
3.  How do you handle multiple offers?
5.  Have you hired a professional negotiator or are you handling the negotiation?
4.  Have you talked with the seller and are they willing to sign a promissory note?

Our team is standing by to help you with your Real Estate Purchase or Sale so let’s continue the discussion. Call me direct…Eileen Rivera 562-688-9809

Check out this stunning home it has in its own Hollywood Agent and it has stared in more commercials and movies than most actors!

http://www.youtube.com/watch?v=NrhSi75NhzQ

Did the Financial Crisis leave you…well in a financial crisis? So many normal everyday Americans that did nothing wrong but buy at the wrong time are upside down on their mortgage. And we are not talking by small amounts, many neighborhoods have dropped in value by 50%. So a $600,000 home may be selling for $300,000 and a $300,000 home may be selling for $150,000. In either case, it usually didn’t matter how much you put down, unless you had a ton, you are upside down. Now, if you have been through other hardships, what do you do? What are your rights? What can the bank do? Which is the best decision.

My goal this year is to seek out, get referred to and find 200 families in this situation and help them. I hope to assist 100 or more familes to find the path to keep their home. Many of these people are calling their bank and getting nowhere. It is very frustrating. You have to understand the banks are so busy, they have people answering the phones that many times are unable to answer your specific question. We are happy to help guide you in the right direction with our advise or a recommendation to a professional that is better educated to help you.

I mentioned above 200 families that I want to assist. For some of those people, Foreclosure and or Bankruptcy is actually the best path. But how do they know that? Talk to me, I will recommend the right professional to help you. When it comes to questions of law, taxes and accounting, I am not qualified to help you. But I must say, I have spoken to so many people that got poor advise from their attorney, CPA or tax advisor. The reason is many of these professionals don’t specialize in what is happening today. They may not know the current law or rules and usually that is because they specialize in something else.

For those families that can’t save their home and want to save their credit, Short Sale is the answer. Our team specializes in Short Sales. We just got another one approved this week. With a Short Sale, in many cases you can stay in your home longer without making payments. With a Short Sale you really save your credit. At first it will feel as bad as a Foreclosure or Bankruptcy. But after a year, the affects to your credit will diminish. For both Foreclosure and Bankruptcy, your credit is affected much longer, usually 5 to 7 years. It is possible to get a new FHA loan 1 year after a Short Sale. If you must loose your home, wouldn’t it be great to buy a new one in a little over 12 months and re-enter home ownership while prices are still unrealistically low!

No, your mom cannot buy your short sale.  Many ask why not?  They are in a terrible mess, and have no choice but to do a short sale.  Some homeowners have asked if a relative can purchase the short sale and then rent the home back to them, so they wouldn’t have to lose their house.

Banks will require an arms-length affidavit on the short sale.  The reason is that banks are trying to put a stop to mortgage fraud.  When people get into financial trouble, crooks come out of the woodwork.  Sometimes sellers make side agreements with relatives or friends to act as a straw buyer.  Then after the closing, the pretend buyers quickly transfer the title back to the seller (the people doing the short sale.)  This means, that the sellers have repurchased their home at maybe half the cost.

An arms-length affidavit is a document created by a bank in an attempt to prevent sellers from selling to a relative and to curb or prevent any fraud in the sale.  If you sign an arms-length affidavit on your short sale and then violate it, you could be held liable for mortgage fraud.  Mortgage fraud falls under the jurisdiction of the FBI.

An arms-length affidavit usually contains:

-names of the sellers, buyers, and agents.

-no party to the transaction is a family member, business associate, or a person who shares business interest with the seller.

-once the transaction closes, the seller will not rent back the home, and will not regain title to it.

-none of the parties will receive any compensation except for the commission paid to the agents.

A HUD home is a 1 to 4 unit residential property that is acquired by HUD as a result of a foreclosure on an FHA-insured mortgage.  HUD then becomes the owner and offers the property for sale to recover the loss on the foreclosure.

How does one go about purchasing a HUD property?  Almost anyone can buy a HUD property.  If they have the cash or can qualify for a loan (subject to certain restrictions) they can buy a HUD home.  HUD homes are usually offered to owner-occupant buyers, and then after a certain period are offered to all buys, including investors.

The listings for HUD homes are available for purchase through Internet websites under contract to HUD.  If you think you may want to buy a HUD home, you need to contact a real estate sale professional in your area who is authorized to sell HUD homes.

All HUD homes are sold ‘as-is’ without warranty, so a home inspection is greatly encouraged.  HUD will not pay for any repairs or correct any problems.  This may not be a problem if you are a do-it-yourself homeowner.  A HUD home may be what you are looking for.

Before you start making repairs and scheduling open houses, it is smart to have a home selling plan.  You need to speak with a real estate professional.  Interview at least 3 real estate agents and make sure they are neighborhood specialists.  They should be able to provide you with a marketing plan that will explain how they will market your home.  In addition, ask the agent to prepare a comparative market analysis for you, and provide advice about:

Prepare Your Home for Sale

You may want to remove bulky and excess furniture.  De-cluttering is very important.

Repairs Before Selling

Not all repairs will pay off.  You want to repair obvious maintenance issues and neglect.  However, you don’t want to spend too much on replacing or fixing everything.

Home Staging

You can get more money for your home if it is staged.  Ask you agent for help or you can hire a professional stager.

Home Pricing

Do not select an agent based on the suggested sales price they can offer.  Some will overbid each other just to get the listing.  Generally, homes that are overpriced often sell for less than market value, so do not overprice.

Net Profits from Selling

Ask your agent to prepare a breakdown of what you will net with a low price and a high price.  This way, there will be no surprises and you can be prepared for the worst and hope for the best.

1.  What does your inspection cover?

The inspector will ensure that the inspection covers all requirements of your state.  If there are any areas you want to make sure are inspected, be sure to identify them upfront.

2.  How long have you been a home inspector and how many inspections have you completed?

The inspector should be able to provide you with his/her professional history and have some referrals, or have more experienced inspectors to assist them.

3.  Are you specifically experienced in residential property?

Experience in construction and building is helpful.  But some are more experienced in commercial property.

4.  Do you offer to do repairs or improvements based on the inspections?

Some states allow the inspector to perform repair work.  Make sure, there are some regulations that strictly forbid this as it can be a conflict of interest.

5.  How long will the inspection take?

The average on-site inspection can be two to three hours.  Anything less than this may not be enough time for a thorough inspection and could be a red flag.

6.  How much will it cost?

Costs vary depending on your region.  HUD does not regulate home inspection fees.

7.  What type of inspection report do you provide and how long will it take to receive the report?

Ask to see examples.  Make sure you understand the type of reports the inspector issues.

8.  Will I be able to attend the inspection?

The inspector’s refusal to let you attend the inspection is a red flag.  You should be able to see the property through the eyes of a professional.

9.  Do you maintain a membership in a professional home inspection association?

There are many state and national professional associations. Make sure to see their membership ID and do some research on their standing.

10.  Do you participate in continuing education to keep your expertise up to date?

This is especially important if the home is older.  Continuing education is a good measure of his/her professionalism and service.

Remember:  Appraisals are for the lender, the home inspection is for you, the buyer.