Meet Lucy! She’s an experienced agent who joined our brokerage this month. Lucy is shown here at the reception held in her honor as a welcome addition to our company. Stop by and visit her when you’re in the neighborhood! She can be reached at 510-881-1234 or at Lucy@RealtyWorldNeighbors.com. CLICK HERE for more information about her.
Archive for the ‘Short Sales’ Category
The “What”, the “How” and the “Why” of a Short Sale
A short sale simply means that the homeowner will come up short when they sell their home compared to what they owe their lender. The property won’t sell for enough money to pay off the lender in full after all the closing costs are taken into consideration. “Short sale” does not necessarily mean that it will be a short and easy process. There are also tax and legal ramifications of a short sale, so read this post with several grains of salt as you seek proper legal and tax counsel.
There’s a reason my business partner/husband won’t work on our company’s short sale transactions. He HATES unpredictability and irrationality when it comes to a short sale lender’s need to request documents time after time after time, even after we’ve already sent the requested items multiple times. The start of whether or not a short sale will work depends on the true financial hardship of the sellers. We’ve known many folks who were fully employed with plenty of money in the bank who’ve desired and pursued a short sale. However, short sale lenders, for the most part, won’t necessarily automatically grant a short sale to borrowers who aren’t enduring a documented financial hardship.
In our experience, if a homeowner isn’t experiencing what the lender considers a legitimate hardship, the borrowers will have to be willing to ruin their credit by stopping their mortgage payments in order for the lender to pay attention to the fact that they’re no longer getting a dime out of the homeowners. (The analogy I’ll refer to here is the neglected teenager who strives for attention by “acting up”.)
We’ve turned down plenty of short sale listing opportunities in recent years. Why do we NOT take on certain short sale transactions? First of all, we need to feel good about what we’re doing in our lives and in our work. It gives us great pleasure to assist a struggling homeowner if we see there to be a legitimate need. We’ve turned down plenty of short sale transactions over the years because the homeowners simply “didn’t want to keep paying their mortgage” on a house that dipped dramatically in value.
My own home dipped in value dramatically for a period of time, and I could have pursued a short sale, no doubt. However, I made a commitment when I secured the loan and was too proud to stop making payments or even pay later. Pride comes before a fall, it has been said. Now, the home has increased in value again almost to what is was when purchased 10 years ago, and I’m glad we hung in there.
The Bottom Line
Short sale lenders look at their bottom line and weigh the benefits of granting a short sale vs. foreclosing on a home. The best of the best short sale lender we’ve worked with are the smaller, community banks/lenders. Fremont Bank and Bank of the West have been among the best and most responsive, in our opinion. Well, in my opinion. Greg won’t touch short sales…
“Anna & Greg were recommended to me by a mutual friend. The last time I had sold a home, I was not single and the process at first seemed daunting. I had to clear out the home I had lived in for many years and it took a while longer than expected. Anna & Greg were sensitive to this and helped to make me feel comfortable and at ease with the whole process. They offered to help by offering boxes, garage sale signs, etc. and were flexible with the postponement of the home being available because of all the work I had to get done first.
It was a short sale, so in addition to removing a near-lifetime of belongings, I also had to deal with the stress of the short sale that would not have allowed me to benefit from any proceeds. Luckily, Anna & Greg were familiar with short sales and I was able to benefit from a “HAFA Relocation Incentive” that allowed me to walk away with a few thousand dollars to help with my transition into a new place to live.
“My experience with them was just wonderful. I highly recommend them!”
Gloria “Kelly” Carter
Special thanks to Diana Cohn of Corner Office for the introduction!
It’s true. Once a home is put on the market for sale, it becomes a product you’re selling and no longer has the same status as being just your home.
You have no more privacy.
Your neighbors will judge you as they walk through any open house you might have.
You can’t leave the toilet un-flushed and the seat up any more.
There will be umpteen “drive-bys” making you wonder if someone is pulling a Bugsy Siegel on you.
I’ve often said that inviting guests over to visit provides an incentive to clean up. Putting a home on the market has the same effect.
Plus, we get rid of a lot of clutter.
Do you have a story to share about when your home was put on the market?
Recently in jest, I posted a line on Facebook about how amazed I am that pretty ladies often end up with goofy-looking guys. Let’s be honest. When you see this, don’t you wonder what makes the guy so special?
Take Ric Ocasek and Paulina Porizkova, for example. Anyone in my generation know who they are?
You’re probably wondering what this whole concept of having a beautiful woman on the arm of a goofy-guy has to do with real estate.
Imagine an ugly house. A REALLY ugly house. Then imagine a BEAUTIFUL house. A REALLY BEAUTIFUL house.
Now ask this question: Does the ugly house make the beautiful house look worse or does the beautiful house make the ugly house more tolerable?
A recent article in the New York Times goes into the effect that a down-trodden property has on a whole neighborhood. All it takes is one lousy-looking house to drag down the entire neighborhood’s image. Similarly, a too-beautiful house makes you wonder what the heck the homeowners were thinking when they over-improved a home surrounded by a sea of ugly ducklings.
Hopefully reading this post will motivate you to clean up your yards, trim the trees, pick up the dog poop left behind by yours or someone else’s canine, clear off the neighborhood juvenile’s WASH ME imprint on your car’s windows, etc. Getting involved in your neighborhood association helps too and so does knowing what the local ordinances are that help protect you from being the bad guy when neighbors need to be pushed to clean up their act.
Let me give it to you straight. Some real estate people give us a bad name. I remember the film “Poltergeist” when the dead bodies came out of the bottom of the swimming pool and learning that it was the agent who didn’t disclose that the new homes were built on a former cemetery!
That character was NOT a “REALTOR”.
The Poltergeist scene is an extreme dramatized version of the unsavory characters who mar my profession. I’m proud to say, however, that there is a BIG difference between REALTORS who are serious about serving the public in a fair and honest manner and those who steer clear of committing to the professional standards required and expected of a REALTOR.
This is the reason we are so involved in our local REALTOR groups with our REALTOR association and the Women’s Council of REALTORS. We see the importance of keeping our noses clean not only with the public but with each other too.
Would you like to know what we believe in and what is expected of us REALTORS? CLICK HERE for the Code of Ethics.
Note: “REALTOR” is two syllables only and should always be capitalized. There’s so such thing as a “real-a-tor”.
(Sigh.) I can’t tell you how often we hear questions like these in our business:
- “Got any good deals?”
- “I’m looking for a good deal.”
- “I only want to buy property if it’s a good deal.”
Then, there are folks who say:
- “Let me know if you have any good deals.”
- “I’ll work with you if you have a good deal.”
- “Maybe if you are the listing agent I can get a good deal.”
Let’s face it. EVERYONE wants a good deal. I doubt you’ve ever heard someone say “I want to get ripped off and pay way too much for a property!”
There are 7 days in a week and 24 hours in a day. In this time, our efforts will be used on our buyer and seller Clients who’ve committed to working with us and who are serious enough to have their financing and cash reserves in order before we see property together on an exclusive basis.
We take our role in representing our Clients seriously and our Clients take it seriously too. We find great satisfaction in helping to make things happen for them. We have no qualms about telling our Clients if we believe a property is overpriced or being clear that if they want the property, they’ll have to be willing to pay a premium compared to the competition of buyers for the same property. Our seller Clients appreciate that we sometimes counsel them NOT to take the highest offer but to focus on choosing the buyer who is most likely to close the sale, as long as the price is reasonable.
Now, about those good deals. When we do come across “good deals”, we’ll let our Clients know about them first. There is a huge difference between a “customer” and a “Client”, so we reserve our more in-depth communications for a select group. The last thing our Clients need is for our efforts to be diluted…
My husband’s recent quest to have a lonely, neglected spa removed from our back deck as part of ongoing home improvement and maintenance met me with equal parts nostalgia, relief and sadness. Over eight years ago after first buying the home, I remember sitting in the spa with my mom, looking up at the house with its warm lights shining through the windows down to where we were floating. The words from my mouth in that moment came from a sense of comfort and relief: “I feel rich” is what I remember saying to my mom as we sat there enjoying the hot, bubbling water.
Now, the empty void where the spa once sat reminded me of the Dr. Suess book titled The Lorax, where the Onceler sadly told the story of the way things were. During my time in this home, there have been numerous memorable events that took place around the spa, especially in the warmer months when anyone dared venture outside to enjoy it. There was the party when wine glasses were found at the bottom of the hot tub with countless wine bottles strewn about in the dark the night prior, the party guest who looked down at an inebriated guest thinking he jumped in fully clothed (when in reality, he was just a hairy guy)…and our own home wedding two years ago when the band used the hot tub cover for their equipment and staging area.
To deal with the loss of the spa, I’ve taken it upon myself to see it as a “mind-clearing” and “decluttering” event in my life. Being that the previous owners of our home had the darn thing hoisted over the neighbor’s property with a crane to get it to where it sat for many years, the relatively simple process of having it sawed into pieces and hauled off was quite liberating…
It’s a bit different now. Buyers are abundant and available homes in affordable price ranges are not. Homes garner multiple offers above asking price with many important contingencies shaved off the contract!
Here’s the deal. When a real estate professional tells you to BUY NOW, they’re not necessarily just trying to make a sale! Any of us agents who’ve been in business long enough have seen the ups and downs of the market and the frustration our clients face when they don’t get off the fence in a timely enough manner.
If you’ve set a goal for yourself to do something in life such as purchase a home or sell your home, PREPARE NOW! You never know when it will be too late to enjoy maximum benefits.
However, don’t feel pressured — the timing must be right for YOU…
For homeowners with a home that’s worth less than the balance(s) owed, what does this mean to you? This means taking the chance of the debt forgiveness law being extended past the end of the year or getting off the fence and exploring your options for a short sale now.
After a foreclosure or a short sale, the former homeowner is not taxed on forgiven debt under federal and state laws that will expire at the end of this year. In both cases, the lender likely ends up receiving less than the full amount of the outstanding balance. If so, the amount the borrower is no longer responsible for paying to the lender is considered “cancellation of debt” income and, thus, income to the borrower that – prior to the adoption of the federal and state protections – was subject to income tax. Those federal and state protections are scheduled to expire at the end of 2012.
Pride comes before a fall. We know of many people who have simply walked away from their homes that fall into foreclosure, perhaps because they are too proud to ask for help. Not only do borrowers ruin their credit unnecessarily with a foreclosure rather than pursuing a short sale, foreclosures are devastating to entire neighborhoods by dragging down property values of the homes around them. Do you know of someone in your neighborhood who needs help but is too proud to ask for it?
Short sales are a common part of the real estate landscape these days. The best thing we can do is to help get the word out about what homeowners’ options are so that they can make informed decisions…