In one of our recent blog posts, we laid out part one of our short sale roadmap (which, of course, emphasized the importance of working with a La Quinta short sale expert). If you followed the first part of our guidelines, now you should be ready to continue with the process. Read on for some more steps to take to make your prospects of completing a short sale transaction a reality.
1. Research all mortgages and liens on the property. You need to make sure the seller has given you all the information regarding any liens on the property and determine which lender is the primary lien holder.
2. Plan your financing. How you are going to pay for the property is one of the most important things to determine. As your La Quinta short sale expert will tell you, you need to be able to move fast with a short sale transaction as most lenders require closing as quickly as 20 days—so get all your ducks in a row. If you have good credit, the existing primary lienholder may be willing to give you a loan and even expedite the application process.
3. Contact the lender. Once you find a property that you’re interested in, you or the real estate professional you’re working with should contact the loss mitigation department or the resource recovery department of the mortgage bank and find the decision-maker. You’ll need to get a notarized letter from the owner that authorizes the lender to discuss the mortgage with you.
4. Complete the application. Once you speak with the lender, you will need to fill out their short-sale application.
5. Put the proposal together. Next you’ll need to put the proposal together, based on the lender’s guidelines. This typically consists of the authorization letter, completed application and a variety of other financial information.
image: iliveinthebayarea.com
More
Many people find themselves in unfortunate circumstances where they are having trouble making payments on their property. If you find yourself in this situation, you may consider short selling your property as a last resort in order to avoid foreclosure. Whether you are planning to list a short sale or are considering buying one, it’s essential to work with a certified expert in short sale investments—you don’t want to make mistakes due to misunderstanding these often complex transactions.
Recently, Fannie Mae changed its regulations regarding the waiting period in a clause that is important to understand. Starting August 16, 2014, the waiting period for someone who short sells their home or goes into foreclosure has increased from two to four years. At present, the waiting period is two years, if the buyer’s credit is clean and they can come up with a down payment of 20 percent.
If you recently went through a foreclosure or executed a short sale of your property, four years may seem like a long time period to wait. However, there is a caveat that benefits such prospective buyers—those interested in buying after four years from the date of their short sale or foreclosure will be able to follow standard Fannie Mae guidelines. This means if their credit stays clean, they only need to make a five percent down payment on the purchase of a new home. Additionally, if a buyer can provide certified documentation that proves that their short sale or foreclosure was the result of extenuating circumstances such as lost wages or unemployment, the waiting period may be reduced to two years.
No matter whether you’re a buyer, seller or both, it really helps to have a certified expert in short sale investments in your corner to help you navigate such a complicated transaction. As you can see, regulations change and the process can take a lot of work, so you need to work with an expert to minimize risk and execute a successful transaction.
image: advantagelegalgroup.com
More
Are you having trouble paying your mortgage? Is there a chance your home may go into foreclosure? If so, you may be a good candidate for a short sale. This is when a property is sold for less than the balance owed on the mortgage—it can be a win-win for many sellers who want to avoid foreclosure and lenders who want to cut their losses as much as possible. When deciding if this is a feasible option for you, it can be very helpful to enlist the help of a certified short sale expert.
It’s important to be aware that a short sale may not entirely save your credit score. While it can be better than having a foreclosure on your record, a short sale will still be recorded as a not “paid as agreed” account and factor into your FICO score.
When proceeding with a short sale, it’s important to determine whether if it will cancel all the remaining debt on the mortgage or not. There are two elements of a mortgage: 1) Your promise to pay the lender and 2) the lien on your property. So when you can’t pay your lender, they have the right to sell the property to pay off the loan. When a lender approves a short sale, they agree to release the lien on the property but may not necessarily cancel the seller’s obligation to repay the balance of the loan. You’ll need to enlist the help of a professional to get through all the fine print and ensure that the lender does not reserve their right to collect the remaining debt balance. The key to this part of the process is to find out in advance if your lender will let you off the hook for the rest of the mortgage payments and to get their answer in writing.
At this point, you should be able to decide if a short sale is the best option for you. If it is, then start looking for a certified short sale expert right away so that you can get the property on the market as soon as possible.
image: franklinteam.com
More
Navigating a short sale can be complex and confusing, which is why it’s imperative to have a professional in your corner. If you’re looking for property in the desert cities, be sure to seek a Palm Springs area short sale expert so that you can benefit from their local expertise. They will have information about comparables in the area and can help prepare you for the intricacies of such a transaction.
Here is our part one of our basic roadmap series for preparing yourself to buy a short sale property. Good luck!
1. Identify potential properties. Start by researching pre-foreclosures in the area and letting your Palm Springs area short sale expert know what you’re looking for. You can also search online, peruse courthouse listings and look for legal advertisements.
2. Identify candidates. Once you’ve identified some properties that you’re interested in, try to figure out how much debt exists and what the actual value of the property is. If the debt is high, it could be a good candidate for a short sell. On the flip side, if the owner has a lot of equity, the lender may prefer to foreclose on the property and try to sell it for a price closer to the actual value.
3. Schedule viewings. Find out when the properties are being shown and start looking. Check the property thoroughly and try to gauge its condition as best as possible so that you can get an idea of what repairs and renovations may costs. Be realistic—if there is too much to fix, it might not be a good fit for you.
4. Perform your research. Have your real estate professional find out what the property is truly worth and try to figure out what your potential for profit would be if you resell it later on. Get estimates from local contractors and vendors to determine how much any repairs and renovations you want to make will cost so that you can factor that into your budget as well as your potential profit margin.
image: northsoundproperties.com
More
Take it from our Palm Springs area short sale expert, as sweet as a short sale deal can be, there are some common mistakes that many buyers make, no matter how many warnings you give them. While discounted foreclosures can change the game on your hunt for a dream house, there are some potentially expensive items to look out for and seriously consider.
Read on for three of the most common short sale mistakes that our Palm Springs area short sale expert warns against.
- Bypassing the home inspection. This is one of the most important things you can do on both a foreclosed or short sale property. Hire a seasoned home inspector with good references and local expertise to examine the property you are considering buying. Ask lots of questions, and whenever the inspector finds a problem or issue, ask what they think the repair may cost. Then go home and do some research online and even call local repair specialists to get quotes. It’s very easy to underestimate how much repairs can cost. Keep in mind that, with short sales, some prospective buyers hire a home inspector before they even make an offer.
- Ignoring damage. If you notice large scale issues, such as leaks in the roof, sloping floors or cracks in the walls around doors and windows, you may need to hire a structural engineer to come in and do an assessment and make recommendations on what is imperative to repair. Issues such as termite damage or mold can end up being extremely costly and even dangerous to the health of your family. Spare no expense to determine if the home you are looking at is at risk for these issues.
- Ignoring property issues. Most of the time, those who have had their property foreclosed are very upset and frustrated about their situation. Unfortunately, some of these former owners unleash their anger on the property and actually spend time destroying aspects of the home. On the flip side, if a property has been abandoned for a time period, there could be issues of neglect, or worse, squatters living on the property for months on end, causing damage that no one has any knowledge about and creating filthy conditions that may be difficult to clean up. Again, this is where hiring professionals to evaluate the property can truly save you money in the long run.
img credit: allstate.com
More
The first half of 2014 has seen a lot of real estate sales—and according to our local Palm Springs area short sale expert, the valley has seen many as well. What’s happening throughout the country is that a lot of buyers are purchasing homes at depressed price levels. According to the National Association of Realtors, short sale transactions made up between 45 and 50 percent of all home sales during February of this year.
While it sounds exciting and like something you can’t afford to miss, it’s important to be very careful while navigating a short sale, as they can be trickier than a normal home purchase. Often times, due to the common occurrence of complications, short sales can take longer than other transactions to close. If you are looking for homes in the Coachella Valley, a Palm Springs area short sale expert will be instrumental in the process and can make it much less stressful.
A short sale is when a home is sold for less than the amount of money owed on it. It’s often confused with a foreclosure, which is when you buy a property that is owned by the bank. As you can imagine, this can be an amazing deal for buyers. It can also help sellers avoid having a full foreclosure on their record. It can be tricky, however, as the lenders involved will need to approve the deal—and they will be taking less than the total amount that the owner needs to pay off their mortgage. In the flip side, if they don’t agree, they may receive no payment at all. Yet many times short sales move slower than molasses and can fall through altogether.
Finding a great short sale deal can take a lot of patience, luck and the help of a real estate professional with expertise in short sales. For best results, do your research and keep your eyes wide open.
img credit: realestate.answers.com
More
If you are considering listing your Indio real estate this year, there are some steps you should take before you list it that will help you make sure that it shows as well as possible and is listed at the best price. This will get you ahead of the game and make the process easier, for both you and the real estate professional you decide to work with, whether it’s a listing agent, broker or realtor specializing in short sales.
To start, it will help for you to get an idea of the current value of your home. If you don’t want to get an appraisal right now, you can determine your price range by researching the value of comparable homes in the area. Make sure to find properties with similar features, such as square footage, lot size, and of course, number of bedrooms and bathrooms. You can definitely factor in any significant improvements you’ve made on your home, such as a new roof or even a swimming pool. However, you don’t want to price yours too much higher based on smaller features you may have added—the last thing you want to do is to price your house higher than all the comparable properties on the market. Some sellers even go to open houses in their area to see for themselves what differentiates their home from other similar houses. Amenities and upgrades can definitely make a difference in price. If you’ve already found a real estate professional to work with, it will definitely help to get their professional opinion on pricing.
The next step is to determine what you need from the sale of your home, which goes above and beyond the cost. Also make sure that you factor in closing costs, taxes and fees that you will need to pay to your realtor or agent. Determine the exact amount you actually need to get in order to make the sale doable, and then also find the number you want to make. This requires you to assess all your financial obligations, especially your current mortgage.
Once you’ve determined what you need from the sale of your Indio real estate, and have found an agent or realtor specializing in short sales to work with, you’re officially ready to start this exciting, life changing process.
image: realestate.aol.com
More
While recent years were not the easiest for real estate professionals and the construction industry, even when it came to ultra-desirable properties that are typically in great demand, such as La Quinta and Rancho Mirage real estate, 2013 is shaping up to look like a great time for prospective home buyers, sellers, and the agents, brokers and short sale realtors who work with them.
The following information was excerpted from the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI):
“74.9 percent of homes sold between the beginning of October and end of December were affordable to families earning the U.S. median income of $65,000. This was up nearly a percentage point from the 74.1 percent of homes sold that were affordable to median-income earners in last year’s third quarter.”
In addition to that good news, research indicates that nearly three quarters of the local markets in the United States are improving. As all of our local markets move further down the path to recovery, potential buyers, especially those considered median-income, are building confidence that owning a home in the near future is a plausible goal. Here in Palm Springs, we’re seeing growth and positive movement as well, especially when it comes to La Quinta and Rancho Mirage real estate.
Another positive trend that brokers, agents and short sale realtors are all consistently reporting is that low interest rates are increasing affordability, which obviously can make it a lot easier for prospective buyers, especially those considering buying their first home. Additionally, sellers have become more realistic when it comes to pricing their properties. This makes the process much easier for real estate professionals as well— when buyers are confident and assertive, and sellers are realistic with their expectations, it’s hard for everyone involved not to have a win-win experience.
It sounds like 2013 is indeed your year to buy a home!
image: buildreliant.com
More
Sometimes it’s impossible to prepare for the challenges that life brings, which is why many families unfortunately find themselves owing more on their mortgages than their property is worth. In these cases, working with a short sale realtor may be the only way to avoid foreclosure.
A short sale is a very time-consuming transaction and can be a difficult one to navigate. To start the process, make sure you find a short sale realtor who will stay on top of all the details and has a lot of experience with these tricky transactions. Otherwise, you’ll be taking on a lot of stress and will subject yourself to some unpleasant consequences if everything isn’t done properly. Take the same amount of time you would allocate to hiring an agent to find your dream home in Indian Wells, if not more. Interview prospective realtors thoroughly and get referrals whenever you can.
Different states have laws that vary, so make sure to find out whether the lenders involved can go after you for the balance once a short sale is completed. If the lender agrees to waive the difference, you want to make sure this is clearly represented in the contract. You also may want to consider looking into the Home Affordable Foreclosure Alternatives program (HAFA) to see if this program can help you avoid paying the deficient balance.
Another reason why it helps so much to have a short sale realtor with strong expertise is that they can coordinate the transaction with the bank and help prepare you for what to expect from the process. When it comes to tax implications and protecting assets, it may behoove you to also hire an attorney or tax expert to ensure that you are doing everything correctly.
Last but not least, if you are considering a short sale, don’t stop paying HOA fees or other dues—they will continue to accumulate and can be a deal breaker when you find a buyer for your home in home in Indian Wells or another part of the region.
image: voklaw.com
More
If you’re considering buying a home, then it’s time to arm yourself with a game plan. Whether you’re interested in finding a beach house, a condo or luxury properties in La Quinta, there are some strategies you should put into place and information you should seek when preparing for such an important transaction.
The most important step on this checklist is to find a real estate professional that you trust and that has the right expertise for your transaction. Deciding to hire the right kind of broker, short sale realtor or other type of agent for the type of purchase you want to make is what will make the difference between a stressful transaction and one that moves forward smoothly and productively.
One of the next most important things is to get your credit score as high as possible. The higher it is, the lower both your down payment and monthly payments will be. Depending on the market, many experts say that to avoid paying huge fees and having to put down a sizeable down payment, you should probably strive for a credit score of 700 and above. While there are many qualified buyers in lower ranges, this is a good number to work towards. Pull your credit reports and dispute any discrepancies, and stop applying for new credit for about a year before you plan to start looking for that gorgeous beach house or luxury properties in La Quinta.
Next up on our checklist: seek a price range that’s within your financial comfort zone. Certain financiers require your monthly payments not to exceed between 28 and 31 percent of your monthly income. This is a good formula to work with when assessing the home you can afford—you should calculate the potential payments for a property in your price range and add in any increased expenses, such as insurance or HOA fees, and see if you can live with the difference.
Finally, start saving now. Most real estate professionals recommend saving around 20 percent of the intended price range for a down payment. Obviously, some lenders accept much less, but a larger down payment may be better for your future. Start saving now, even if you’re not in the market yet. When you do enter the marketplace, and if you’re working with a good short sale realtor, you may need to move faster than you thought when some incredible deal comes your way.
image: kgi.org
More
In one of our recent blog posts, we laid out part one of our short sale roadmap (which, of course, emphasized the importance of working with a La Quinta short sale expert). If you followed the first part of our guidelines, now you should be ready to continue with the process. Read on for some more steps to take to make your prospects of completing a short sale transaction a reality.
