The Art of Selling Category
Movin’ on Up!
First Time Buyers, The Art of Selling
It looks increasingly likely that the homebuyer tax credit will be extended and expanded to include a $6500 credit for “move up buyers” who earn less than $125,000 a year and have lived in their homes at least 5 years.
Thats great news for those of you that fit the move up buyer profile. Not only would this give you an extra $6500 when buying a new home but the people shopping for the home you will be selling would have an extra $8000 to spend. You win at both ends! Need more good news? Your monthly payment could be very close, possibly even lower in some instances. If you have lived in your home over 5 years its very likely that your current mortgage interest rate is higher than what you would stand to pay on your next purchase. Check out this Historic Mortgage Rate Chart to see just how low todays rates are compared to those in years past.
You would also stand to benefit from our current market conditions. The first-time homebuyer market remains hot with lot’s of competition for good houses. In our market sales of homes priced at less than $250k are far and away the most active. Because of this competition the sales prices are boosted relative to the market as a whole. Not necessarily true with the price range of homes you would be shopping for as a move up buyer. Thats a slower market and because of this you have much more leverage to get a super deal on your next home.
It remains to be seen if this “move up” tax credit will have a boosting effect on home sales in the $250k to $300k range but certainly possible. For now those who fit this profile stand to find themselves in an enviable position.
Sphere: Related ContentAttempt Loan Modification before a Short Sale
Short Sales, The Art of Selling
Before rushing into any short sale we encourage those having trouble making their mortgage payment to consider attempting to negotiate a loan modification with their current lender. It’s possible that an agreement can be reached thats a win-win for all concerned. If you are in this situation please take the time to educate yourself on the options available.
The first thing you need to know about loan modifications is that help is free. Don’t fall victim to one of the many scams that target homeowners going through tough times. You should never be asked to pay an upfront fee for counseling and absolutly never be asked to sign over the deed to your home.
If you are struggling to make your house payment there may be help available to you under the Making Home Affordable program. This plan is designed to assist millions of homeowners who purchased their homes prior to January 1, 2009 with a first mortgage of $729,750 or less and a PITI payment that exceeds 31% of the family gross income.
Keep in mind that eligibility is not the same as approval. The successful approval of a loan modification depends on a number of factors including the borrowers ability to make payments at the modified amount.
Read the information on the Making Home Affordable site and feel free to contact us to discuss how to get prepared before contacting your lender with a loan modification request.
Even when successful there are times that the terms a lender may ask for on a modified loan are not sufficient to prevent a hardship. In the event you are unable to negotiate an acceptable loan modification then a short sale of your property may be your best option.
As always we encourage homeowners in this situation to consult a real estate attorney as well as a CPA. If it is determined that a short sale is your best course of action we can meet with you to go over the required paperwork and discuss your situation in detail.
Short Sales: A neccesary evil, sellers guide to success.
Short Sales, The Art of Selling
Whether you call it a pre-foreclosure sale or a short sale it’s pretty hard for sellers to get excited about the prospect of walking away from their investment with no equity and damaged credit. While it may be a hard pill to swallow it is still often the best option to start the recovery process.
If you find yourself in this situation its a good idea to get advice from multiple professionals including your CPA, Real Estate Attorney and perhaps the single most important decision for those who decide to sell their home via short sale, a knowledgeable Real Estate Agent to manage the process. Your Agent will be the person advising you on proper pricing and marketing strategy, negotiating with buyers agents and handling short sale lender negotiations. It’s a complicated process and much diferrant than a typical sale. Select the wrong Agent and your odds of success can be slim to none.
The short sale listing, marketing and escrow process is a specialty that requires a specific skill set, process knowledge and methodology. Not handled properly the opportunity for a successful short sale is greatly diminished and with the bank looming there may not be time for a second chance.
Just as you would not ask your family doctor to perform open heart surgery you should not assume that every Agent is capable of assisting you with a short sale. The fact is that very few Agents have the ability to achive positive results in this highly specialized field.
Using our proven system we have a track record of success in assisting sellers who find it neccesary to sell under these circumstances. Here are a few tips for a successful short sale.
In order to be prepared for a successful short sale it is important that you complete your short sale package prior to putting your home on the market. Hardship letter, financial statement, tax returns and pay stubs are a few of the items required (See SHORT SALE CHECKLIST). These items need to be sent to the lender along with any accepted offer. An incomplete submission to the short sale lender is a recipe for failure. Your Agent should be able to assist with obtaining the necessary forms.
Your initial listing price needs to be based on closed sales of similar homes in the area combined with active competitive listings. Your agent should be proficient in completing a BPO that supports initial listing price.
In order to be successful your listing contract should include a price reduction schedule that results in the highest best offer in a reasonably short time frame. Listing history and pricing is one of the considerations that many short sale lenders review as part of the approval process.
It is extremely important that your agent takes the time to review any purchase offer and negotiate terms with selling agent and buyers prior to acceptance. Contract and HUD should include terms and language most likely to be found acceptable by short sale lender.
As review process by short sale lenders can take from several weeks to months it is very important that buyers have been counselled on the process and have expressed a willingness to be patient and a commitment to the purchase. Buyers who are offering on multiple properties should be avoided if at all possible.
These are just a few basic tips specific to short sales. Please feel free to contact us to discuss your situation in more detail.
Sphere: Related ContentHow To: A Short Sale Guide
Short Sales, The Art of Selling
- Your neighbors need not know that your home for sale is a short sale. The home is marketed much the same as any other home for sale and all references to it being a short sale are in the private remarks section of the listing and only shared with real estate professionals and buyers interested in purchasing your home.
- There is no cost to the home owner to use the professional services of a Realtor to assist with the short sale process.
- A successful short sale will avoid the neighborhood trauma of foreclosure and blight and be a much healthier solution for your neighbors quality of life and property values.
- Not all Realtors have the experience or knowledge to successfully assist you through the short sale process.
- Your Realtor should be able to assist you with all the forms and documents required for a short sale, handle bank negotiations, understand how to complete an accurate BPO showing true market value and develop a pricing strategy that results not just in generating a buyer purchase offer but in a purchase offer that is acceptable to the mortgage holder (lender).
1. Authorization to Release Information to Agent. This will allow your Agent to talk with the lender on your behalf.
2. Handwritten hardship letter showing compelling need to sell.
3. Short Sale Listing Agreement.
4. BPO of comparable sales from Listing Agent.
5. Last 2 years W2 Forms all borrowers.
6. Last two years tax returns all borrowers.
7. Last two months bank statements all borrowers.
8. Last two pay stubs all borrowers.
9. Borrowers financial statement. Be sure to accurately list all expenses, as unaccounted discretionary income can be an issue with lender.
10.Detailed estimate for any repairs needed.
11.Fully ratified Purchase Agreement.
11.HUD 1 statement or NET Sheet showing the lender what their NET figure will be and any other expenses owed on the property.
Make Old Cabinets Shine for about $10
If you are purchasing a home or getting ready to sell a home and the kitchen or bathroom cabinets are looking shabby here is a great tip. Use Watco Danish Oil to give the cabinets new life. You can find it at your local home improvement center. For about $10 you can make the cabinets look practically new again.
I stumbled across this product while getting one of our rentals ready in between tenants. We had paid about $1,000 to have the kitchen cabinets refinished in one side of our duplex and we were getting ready to do the same thing on the other side during the next vacancy. It so happened that we had someone who needed to move in just two days after the previous renter had moved out and did not have the time to have cabinets professionally refinished. It’s important to us that our rentals are in superior condition and I really wanted the cabinets to look good so I picked up the Watco Danish Oil and gave it a try. Amazing! I’m serious, for about $10 and half a days work the cabinets looked like new. A couple of pointers if you want to give it a shot.
1) Get the cabinets very clean with TSP or similar.
2) Use a 3M Scotch-Brite to prepare all surfaces.
3) Rub in Watco Danish Oil
4) Buff with soft cloth
Your done! Try it and let me know how it works for you.
Sphere: Related ContentSaving Neighborhoods by Avoiding Foreclosure.
Short Sale Checklist
1. Authorization to Release Information to Agent. This will allow your Agent to talk with the lender on your behalf.
2. Handwritten hardship letter showing compelling need to sell.
3. Short Sale Listing Agreement.
4. BPO of comparable sales from Listing Agent.
5. Last 2 years W2 Forms all borrowers.
6. Last two years tax returns all borrowers.
7. Last two months bank statements all borrowers.
8. Last two pay stubs all borrowers.
9. Borrowers financial statement. Be sure to accurately list all expenses, as unaccounted discretionary income can be an issue with lender.
10.Detailed estimate for any repairs needed.
11.Fully ratified Purchase Agreement.
11.HUD 1 statement or NET Sheet showing the lender what their NET figure will be and any other expenses owed on the property.
Sphere: Related ContentCan $250 drag you away from the TV?
If you are out and about today make sure to stop by one (or all) of our Super Sunday Event open houses for the chance to win $250! I know we are going head to head with the first week of the NFL but do like I do, use the TiVo. I promise I won’t tell you the scores if you promise not to tell me!
Sandee and I are holding two open houses today. From 11 to 1 we will be at 980 Sierra Vista in Sunset Terrace. This house has ton’s of potential and is located in one of Redding’s most sought after established neighborhoods. Our other open house will be from 2 to 4 at 3329 Old Lantern in River Ridge. This “hardly lived in” house was built in 2006 by Ochoa & Shehan. An energy efficient Earth Advantage home it has numerous upgrades and mountain views from the landscaped back yard. Hope to see you there!
By the way, if you or anyone you know is thinking of selling their home they can take advantage of our marketing program to stand out from the crowd. Just let us know and we will be sure follow up.
Sphere: Related ContentReality Check – You won’t leave your home without it.
When discussing pricing with sellers we often hear the words “but my house is better” from sellers who are subjectively viewing their home as having a higher value to buyers than the homes of their neighbors. It does not really matter whether or not their home has any valuable upgrades or costly improvements for this to be the case either. Sellers often justify their beliefs more on how they feel about their home then any measurable data. Often we are confronted with this perception vs. reality discrepancy and how effective we are in working through this with the seller has a huge impact on how successfull we can be in helping them sell their home.
Of course every Realtor deals with this issue but until now no one had really measured just how pervasive this mind set is. Well, this just out. According to a survey of 1,361 U.S. Homeowners conducted by Zillow, an online home valuation site, 62% of homeowners believe their home’s value has increased or stayed the same in the past year despite the fact that statistics show that 77% of homes declined in value during that same period. The report is titled (you have got to love this title by the way) “The Home Value Misperception Index” and is worth a read by anyone getting ready to sell. What we already knew was that this optimism is likely fueled by homeowners feelings about their house more then their feelings about their neighbors house or the market in general. In fact 75% of homeowners surveyed thought that their home will increase or stay the same in value over the next six months but 42% of them also believe that home prices will fall during that same period. Go figure.
The truth is that homes that show to their best advantage throughout the listing, are priced correctly and marketed well will sell for the most money possible in any given market. The key is knowing your market, knowing the competition, working with the right real estate professional and accepting the fact that in a buyers market you will need to be prepared to negotiate.
This article from Consumer Reports is another good read. A little reality check before you get ready to sell will go a long way in determining your success. If you are thinking of selling your home please feel free to Contact Us to discuss preparing for a successful sale.
Sphere: Related Content
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Our Customer Satisfaction Rating, based on an independent survey, exceeds 97%. This is reflected in our 2008 "QUIE" Award recognizing the TOP 10 REAL ESTATE COMPANIES in NORTH AMERICA! REP/GMAC in #2.
