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Pros and Cons of Cash Buying

All-cash home purchases hit a record in the first quarter of 2014, reaching 43 percent, according to RealtyTrac, which has been tracking cash-buying trends since 2011. This latest figure represents a 19 percent rise from last year—a number industry watchers attribute to stricter mortgage qualification standards coupled with high buyer demand and competition. If you're thinking about buying your next home with cash, you might be wondering how this option stacks up against a mortgage—not to mention, how you'll come up with the money.

Why Cash? Pros & Cons

On the pro side, using cash lets you sidestep mortgage loan qualifications and much of the paperwork and administrative fees. This accelerates the buying process and makes you more attractive to sellers who are eager to close. You have better odds of out-competing other buyers and better leverage to negotiate a lower price. Finally, the prospect of not having to pay monthly mortgage obligations and interest is appealing.

On the other hand, the cash you tie up in your house won't be as readily available for emergency spending. This could place you in a position of needing to sell or mortgage your home in the event of an emergency, and convincing lenders to extend a mortgage or equity loan could be difficult if you lack a steady income, a situation many retirees face. One way to address this issue is opening a home-equity line of credit after you buy your home to make sure you have emergency funds available. A reverse mortgage can also help in a pinch.

Another issue is whether the amount you save on mortgage interest might be better invested. Buying a house with cash amounts to investing in a bond with an interest rate equivalent to what you would pay with a mortgage. Compare this interest rate with other investment options to evaluate how buying your home with cash affects your long-term savings.

Finding Funds

If you want to pay for your home with cash but don't have a lump sum handy, how do you find the money? Options include:

• Realtor suggests a few strategies, including investing in a long-term CD, a method that can be combined with CD laddering if you don't want to lock up all your cash.
• For current home owners, another option is refinancing your existing mortgage into a larger one, known as "cash-out refinancing." Zillow recommends weighing this option against others, such as home equity loans and lines of credit.
• If you're receiving regular payments from an annuity or structured settlement, you may be able to sell all or a portion of your future payments to a financial services firm and put the money toward your home purchase.

What About Taxes?

Paying for your home in cash precludes the tax breaks you would get from your mortgage interest payments. Use the calculator at Mortgage101 to estimate the potential tax benefits of a mortgage so you can weigh this against buying with cash.

How to Buy Investment Properties with an IRA - Step by Step (Part 4 of 4)

Using a self-directed IRA to buy real estate is a sound investment strategy for many people. The ability to buy assets that can provide strong returns is appealing to a wide range of people. Listed below are the basic steps necessary to buy a property in compliance with the IRS rules governing the use of an IRA account.

1. Contact a financial firm that has experience with self-directed IRA’s. Working with a firm that is familiar with these accounts and the real estate transactions is the most important step.

2. Understand the IRS rules. A property bought via the IRA must be an investment home. Second homes, vacation homes and primary residences are strictly prohibited. Furthermore, distributions from the account are not allowed until the owner of the IRA is at least 59 ½

3. Deposit funds into the account. One of the important rules about buying property with an IRA is that all funds for the purchase as well as any other expenses has to come directly from the IRA. The owner cannot chip in extra money to help cover property tax or replacing the roof, in example.

4. All revenue received on the property must be deposited to the IRA account. The revenue cannot be given to the IRA owner or relatives.

5. Take time to preview multiple properties. It is wise to enlist the assistance of a real estate agent who has knowledge with these types of transactions. An agent can recommend properties in areas that have strong rental history. Furthermore, the agent can help calculate the return on investment based on average rent payments for the area.

6. Once you have picked out an investment property it is time to put down an offer. Contact the custodian for your IRA account and tell them you want to buy a property. The custodian will then fill out the necessary forms and sign all real estate documents on the behalf of your IRA account.

7. It is a wise idea to get a contract with a property manager to handle the finances of the property. This will prevent you from collecting the rent payments and making any necessary repairs yourself. A property manager can keep all the transactions clean and legal and free you from the headache of property management.

It is important to understand the rules concerning using an IRA to buy and manage real estate investments. Failing to follow the rules can lead to penalties and possibly loss of the tax advantages associated with an IRA account. When in doubt consult a tax professional before making any decision or transaction with the IRA funds.

This is Part 4 of a 4 Part Series.

Part 1: How a Realtor® can help you invest in your IRA

Part 2: Purchasing Investment Properties for your IRA

Part 3: How to invest in real estate using an IRA

Part 4: Step by Step Guide to Buying Homes with your IRA

Rarely Discussed Tips for Buying that First House

1. Tips on Buying Your First Wisconsin Home Tips on Buying Your First WI Home Getting that first...
2. Tips for Buying a Wisconsin Short Sale Tips for Buying Your First Short Sale A short sale...
3. Bad Choices People Make When Buying a Home Bad Choices People Make When They Buy a Home All...
4. Tips for Picking the Right Wisconsin Home Tips for Picking the Right Home Finding the home that...
5. Tips for Purchasing a Foreclosure Tips for Purchasing a Foreclosure The housing slump that has...

How to Purchase a Home in 2013

As this new year begins many people are setting goals, making resolutions and generally planning for a better year. If you are one of the people considering a home purchase in the upcoming year there is some sound advice to follow in order to make the process smoother and ensure that you get in to a home that truly makes you happy.

Be Realistic About Your Finances

If you are currently renting a nice place for $650 a month then it would seem unreasonable to think that you could afford a home with a loan payment of $1,000. WHY, you may ask? Because the expense of owning a home goes well beyond the monthly payment. There are other things like mowing the lawn, keeping the furnace and air conditioner maintained, repainting every few years, updating the bathroom, replacing an appliance or two, and the list goes on. Understanding the expense for these items will help you set your budget accordingly and hopefully prevent you from getting in to a home that you cannot afford.

Talk to an Experienced Mortgage Broker

After determining how much you can comfortably afford for a home, it is time to chat with a mortgage broker. The broker can look over your finances, your credit history, employment history and the length of time you have lived at your current address and determine the best loan for your needs. A broker can also get offer from multiple lenders in order to get the best rate for your mortgage.

It is wise to let the broker know how much you are comfortable paying each month so that they can use this information to establish a price range for your home. Most people can financially afford more than they are willing to pay. Having the right budget amount will help when you begin looking at homes.

Talk to an Experienced Real Estate Agent

Now that you are firm in the amount you can afford monthly for a payment and you have an approval from a mortgage lender it is time to talk to an experienced real estate agent. A good agent will sit down with you and listen to your wishes in order to decide which homes could meet your needs. Using the price range provided by the mortgage lender, the agent can focus on homes that fall in your budget and prevent wasting time on homes that are too expensive. An agent can also focus on other parameters such as a specific school zone, homes with particular features, size of the home and other things that are important to you.

Don’t put it off any longer. Sit down with a calculator and decide how much you can afford. Then make the decision to make 2013 the year that you become a homeowner!

Related posts:

1. Getting Pre-Approved for a Mortgage Before Looking for a WI Home 
   
   
2. Using FHA 203K Loan to Purchase a Fixer-Upper
   
   
3. 4 Tips to Determine How Much Mortgage You Can Afford
   
   
4. Keep Your Home Purchase on Track
   
   
5. Tips on Buying Your First Wisconsin Home

Greetings!  I want to quickly update everybody on some new Real Estate news that everybody needs to know:

1. The Attorney General of Nevada launched a “new” program called Home Again.  It makes it easier for distressed homeowners in Nevada facing foreclosure to determine what state or federal assistance may be available to them with a single “one-stop”, free resource – long over do! It is a single source for all distressed homeowners in Nevada to contact. It is specifically aimed to:

• Homeowners seeking loan      modification
• Borrowers current but      underwater
• Those who lost homes to      foreclosure
• Households working towards      homeownership

Friends, family, neighbors just need to call 1-855-457-4638

For more information, go to www.homeagainnevada.gov or to the Attorney General’s website.

Upon calling the toll free number (I waited for about 15 minutes on hold,) then spoke to a very knowledgeable person that explained the process. Upon reaching someone at the Home Again program, they will give you some information on the phone and then you will be transferred to a HUD approved counselor to make an appointment.

1. Short Sales remain a staple in our market and for the foreseeable future.  Congress has extended the certain provisions of the Mortgage Forgiveness Debt Relief Act, HR 3648, until December 31, 2013. This gives debt relief on your income taxes for just one more year!  This act benefits qualified homeowners who may have otherwise owed taxes on forgiven debt after going through a short sale.  If anybody is thinking about doing a short sale this is the time to act.  Who knows, with prices going up a short sale may not be necessary!  Call me – Kevin Bown!

If your friends, family and/or neighbors are facing possible foreclosure, have them give me a call 775.813.2387. There are alternatives. There is help out there with the HAFA, HEMP, and other Federal programs.  The state’s Hardest Hit Fund Program (they still have funds available!) is another great resource.  My advice is free.  Your referrals are appreciated! 

It is a great a time to buy and to sell!

The Consumer Financial Protection Bureau is finalizing the “Ability-to-Repay” rule which requires lenders to obtain and verify information to determine whether a consumer can afford to repay the mortgage. Our belief is the 2013 ATR final rule will dramatically alter the residential mortgage market making it more difficult to obtain another mortgage.

"It should be emphasized that a mortgage loan that is not a "qualified mortgage" and that does not meet the ability-to-repay requirement would subject the creditor and subsequent assignees to, among other things, civil liability under TILA and provide the borrower with a defense to foreclosure. In addition to actual damages, statutory damages in an individual or class action, and court costs and attorneys fees, the Dodd-Frank Act also amended TILA to include special statutory damages for a violation of the ability-to-repay requirement equal to the sum of all finance charges and fees paid by the consumer, unless the failure to comply was not material.^2"

Based off this information, we can infer that lending practices will be tighter and obtaining another mortgage will be more difficult for most to-be homeowners. If creditors now have penalties in the event that they do not fully qualify the borrower, then we can reasonably assume they will shift their lending to only those who they deem are “low risk.”

"A creditor shall not make a loan that is a covered transaction unless the creditor makes a reasonable and good faith determination at or before consummation that the consumer will have a reasonable ability to repay the loan according to its terms."⁴

To be clear, we are not criticizing or opposing this new rule as we don’t want to see another subprime mortgage crisis on our hands. However, current homeowners need to understand that their actions with their current home will determine their ability to obtain another mortgage in the future.

Rather than going through the whole foreclosure vs short sale debate, we’ll make this simple. Put yourself in the underwriters shoes and the new ATR rule now passed. You have two applicants with one credit report showing a Foreclosure and another showing “Paid for less than original amount.” According to Experian, most lenders typically report a short sale as a “settled” account.

Who do you think will obtain the loan and get to live in their new house?

Feel free to comment on what you think about the new Ability to repay rule. Thanks!

Peter

Rock Realty Client Testimonials

"Approx 4 years ago.. I was having some financial strain. I wasn't able to keep up with a first and second mortgage alone as a single mom.

Through friends and family, I was introduced to Mike and Matt.

I didn't want to have to go through the foreclosure process, because I knew that I would be able to pull through the mess I was in within a few years and I didn't want to have that looming over me.

Matt and Mike were able to take over and help me with a short sale. They worked with me directly. They both came to my home, sat down, helped me understand this delicate process (which remains total Greek to me), and they were extremely efficient. My bank worked with me and these gentlemen, and withing approx 3 months, my home was sold in a short sale.

I remain amazed at their abilities and their continued efforts to help me.

Now, 3 years later, I'm looking to purchase... I have looked them up again... and they are helping me find a home that I'm looking for within my specifications and they also have resources to assist with lending.

Couldn't ask for more!!

Thanks so much my friends!! you do an awesome job... Keep up the great work!"

Kari B.(Cross Plains, WI)
Rock Realty Seller & Buyer Client

Thanks for the kind words Kari! We look forward to finding you the home perfect for you!

Changes in Popularity of Features in New Homes

The national economy runs through cycles similar to the fashion industry. Things that seem irresistible and trendy this year may be old news by the time next year rolls around. As a result of the economic down turn from the past few years most home builders are turning their attention to items that are practical instead of luxurious.

Sunrooms

As a whole, sunrooms are declining in popularity. According to Rose Quint, a representative of the National Association of Home Builders (NAHB) “Builders are focusing on features that add immediate value and make a home more practical.” For example, most builders are choosing to add linen closets and walk-in closets in place of a sunroom.

Separate Living Room

Most builders feel that a formal living room will not be very prevalent in new construction for the upcoming year. Families would prefer to have one giant open area that encompasses the living room, dining room and kitchen.

Media Room

Along with the living room, the media room will also likely disappear. The extra cost of the equipment, along with heating and cooling another room that is used sparingly, is just not appealing at this time. What is more likely to appear in new homes is a hidden away station that holds all of the DVD players, cable controls and charging stations for cell phones, tablets, and other media devices.

Two Story Family Room and Foyer

Since builders are approaching new homes with more practicality, it makes sense to cut down on unused space. While a family room may be bigger in new homes to include the dining and kitchen areas, it is unlikely to be two stories tall. The same goes for the elegant foyers that stretch toward the sky with large windows. Both of these features of a home may be lovely in appearance, but they each have a lot of space that is not used by a family of four or more.

Whirlpool Bathtubs

A large tub designed for relaxation and luxury is less likely to part of a new construction in the upcoming year. A separate tub laid out in a classic style is more useful and can be used to make a fashion statement while also having an everyday use.

Luxury Bathroom

Large bathrooms that include walk-in showers and multiple shower heads, as well as lots of floor space, will be harder to find in a new house. Instead, the shower will be smaller, with a single head, and the kitchen will likely include a double sink.

Outdoor Kitchen

The outdoor kitchen will probably disappear from lots of new homes. While it can be a nice place to gather with friends or family for a birthday party or to watch a football game, it also requires having an extra appliance or two. Most families would rather prepare the food inside and simply transport it to the patio and save on the cost of the additional appliances.

The SMART Way to Buy Your First Short Sale

Buying a short sale in Madison Wisconsin is quite common right now. The impact of the financial recession has resulted in numerous foreclosures and has left some people with no option but to sell their home for less than the mortgage balance. Buying a Madison area Wisconsin short sale will require a bit of patience and a smart plan.

Understanding the Short Sale

Obviously, the best reason to buy a short sale is for the savings. Most of these properties are discounted as much as 20% off the market price. Buyers can save a considerable amount of money by negotiating the right deal with a motivated seller. However, a good price should only be one consideration. There are other things for the buyer to be aware of such as:

* In order to get a contract on a short sale, it is best to be the first person to contact the seller or selling agent. Being first puts you in more control of the transaction.

* Just because a property is being offered as a short sale does not make it a great deal. Some properties may need extensive work before they can be deemed a safe living environment.

* Banks typically frown on ridiculous low offers. A successful short sale will require you to offer a reasonable amount. This is where an agent can really come in handy.

* Based on the current number of short sales, banks are swamped with these requests. The process for moving the offer through the chain of command does not always progress in an orderly fashion. This requires the buyer to be flexible about a closing date.

All of this means that buying a short sale requires a solid plan; a plan that will get you in front of the right seller, with the right offer.

Putting Together a Good Plan

Follow this outline to help you develop a plan for buying your first short sale.

1. First and foremost, you need to meet with a real estate agent that has experience in short sale transactions. This will save you lots of time and trouble throughout the process. The agent can have a conversation with you to determine the type of house you need and look for possible short sale targets.

2. Determine a plan for responding when a short sale becomes available. Decide with your agent how the information will be communicated to you and how soon you can look over the home.

3. Set up a meeting with a local mortgage lender. Getting the financing secured ahead of time will help get your offer approved. A lender that is familiar with short sale transactions would also be beneficial since the closing may happen at any time and the lender will need to be prepared.

Understand that a short sale which seems like a good deal will likely draw attention from several buyers. The person that responds the quickest, with the best offer and the best plan in place, will likely win the bidding war.

Bad Choices People Make When They Buy a Home

Are you in the market to purchase a home this year? Homebuyers and investors are now presented with prices at unprecedented lows and interest rates that have never been so desirable. For those who are now “looking,” the big questions to ask would be, did our housing market really hit rock bottom and should I look into these cream of the crop deals AKA short sales, reo’s & foreclosures?

So, have we hit rock bottom? 

The housing market showed signs of improvement this 2012 year. Non-distressed properties show on average a 1.7% increase in prices according to a recent HousingPulse survey and experts are optimistic for the latter half of 2012.

Does this mean the only direction house prices can go is up from here on out? Not necessarily. One of the key factors that result in house prices increasing is the decrease of supply in the market (less supply, more demand). Although it may seem our nations shadow inventory is decreasing as investors are rapidly buying homes at all-time low prices, a new wave of foreclosures are set to flood the market again as a result of the robo-signing scandal. This incident caused many lenders to lag behind in listing their foreclosure properties and ultimately pushing them through. One could reasonably presume prices to halt its gain again or drop even lower.

However, this does not mean that now is not a good time to purchase a home.  If your financial status suffices to buy, looking into short sales and REO properties can win you an outstanding deal in today’s market. Mortgage rates recently hit another all-time low. According to Freddie Mac’s Primary Mortgage Market Survey released on July 5^th, 30-year fixed-rate mortgages sunk down to 3.62 percent which is a considerable decrease from a 4.6 percent just one year ago. Concurrently, rent prices have gone up on an average of 5.4 percent over the last 12 months according to real estate website, Trulia.

Washington State (Seattle-Tacoma-Bellevue, WA), is in the top 20 nationwide for rising short sale discounts. The average sales price is $224,294 with an average discount of 31.35 percent.

*Before you begin putting offers on properties, I highly recommend following Dave Ramsey’s guide prior to purchasing a home.

Our team of agents specialize in short sale and reo properties and have been extremely successful in helping clients purchase discounted homes in the Washington State area. If you are looking into purchasing a home this year, contact our team of local agents to find the best deals in your desired location(s).

Peter

Many homeowners are now capable of purchasing a home with the all-time low home prices and interest rates. Short sales and Foreclosure/REO properties offer cream of the crop deals that are difficult to simply pass by. If you are looking into the housing market, it is wise to adequately educate yourself especially when looking into distressed properties.

The big question we’ve been getting is, is a short sale or a foreclosed property the better deal? Below is a large pros and cons list for both short sales and REO properties.

*Information derived from Foxbusiness, ABC ActionNews, RealtyStore, WhisselRealty

Pros

• The seller of the property is a bank that has no emotional attachment to the property…they are all about the numbers.
• They are often priced aggressively as the bank wants to sell the property as quick as possible.  They want to stop the business of managing and selling property, and get back to the business of lending money.
• These homes are typically vacant and are very easy to show.
• The banks will usually respond to your offer in 3-5 business days.
• If the home is owned by Fannie Mae, it may qualify for HomePath financing which only requires 3% down and does not require an appraisal or mortgage insurance (MI).

Cons

• Because these homes are aggressively priced, they often received multiple offers.  This is where it becomes important to work with an agent that has a strong understanding of how to write your offer to make it stand out from the competition.
• These homes are sold as-is and the bank will often make no repairs.  As you have probably seen in the news, many of these homes have been stripped by the previous owner and/or vandalized by criminals.  Because of this, they may not qualify for FHA or VA financing.
• You will also have no disclosure forms from the previous owner with REO properties, nor will you be able to get good answers about the neighborhood with repossessed homes as simply as you would through the normal process with a realtor and private seller.
• In these post-bubble days, a bank may also not own the repossessed homes as cheaply as was the norm in previous economies. They may also try to recoup some of their expenses from the foreclosure process as well as the monthly costs of owning and carrying REO properties.

Short Sale Properties: Homeowner sells for less than what is owed.

Pros

• Many agents will not show short sales due to the long response time which opens up opportunities for those buyers that are not in a hurry to buy.
• These homes are typically in better condition than bank owned homes because the homeowner is usually still occupying them and taking care of the home.
• The banks will often accept less than market value because they do not want to foreclose on the home and take on the task of managing and selling the home.

Cons

• The process of negotiating a short sale with the mortgage bank typically takes 1-6 months.
• The bank is under no obligation to approve a short sale offer.  Less than 50% of short sales that are submitted to banks are approved.
• Often times the banks will not pay off all of the liens against the property (HOA dues, property taxes, ….) and the buyer may be asked to pay for these items.

In conclusion, one of the main discrepancies between a short sale vs an REO property can be described by the scenario of buying a used car either from a dealer or from a private owner. If you get it from an owner (REO), you may get the vehicle at a more discounted price but the quality of the asset is a gamble. You may end up spending a lot in repairs because the vehicle’s engine hasn’t been maintained.

In many cases, an REO property is vandalized and/or the previous owner out of spite, trashes the property prior whereas in a short sale, the property is significantly less likely to be vandalized or mistreated prior to transferring the home.

What do you think? Which would be the better deal? Short sale vs Foreclosure

Rent rates are continuously increasing in our country while home prices and mortgage interest rates have hit unprecedented lows making home buying more feasible. Home buying now would be a great investment if your specific financial situation permits but let’s explore the time frame of this window of opportunity.

Am I losing my chance to snatch me a discounted home?

To be blunt, NO ONE can say for sure where the direction of the market will go. However, you may infer predictions based off a few key factors:

• Overall health of the economy – i.e. employment (or lack thereof –un and -under)
• Interest Rates
• Supply & Demand of the Housing Market

Keep in mind there are a number of other factors that affect the housing market such as demographics, government policies, consumer confidence, and etc.

Mortgage rates have consecutively hit lower percentages for some time now. Based off data from bankrate.com (last checked 8/8/12), 30 yr fixed rate had a slight increase to 3.81% and a 15 yr fixed at 3.00%. These are premium low rates and it is unlikely that it will move further down than the current rates.

Meanwhile, based off information from dsnews.com, unemployment rates stands at 8.3%. There are also issues with underemployment. For more information, please read the article Economy Surprises with 163k New Jobs in July, Unemployment Rate Up from dsnews.com.

Supply and Demand is also big factor for the fluctuation of home prices. Supply has decreased especially in this 2012 year as properties flew off the market by investors. However, there is a worry about the ominous shadow inventory that experts are afraid will drag prices even lower (supply increase, demand & prices decrease). The influx of distressed properties is largely due to the robo-signing scandal which occurred earlier this year. This incident caused many lenders to lag behind in listing their foreclosure properties and ultimately pushing them through. Still, Freddie Mac gives assurance by saying the “shadow” over the housing market is not as long as some may think.

Bottom Line: Again there is no way to give a 100% accurate prediction of where the housing market will go. Based off a few factors such as interest rates being low, -un and –underemployment rates remaining constant, and supply & demand showing positive signs exempting the shadow inventory fear, one can be optimistic about the housing market now.

In my personal opinion, I believe that although the housing market is rebounding, we will not, as Robert Shiller stated in the video above, be expecting a U shaped recovery. Although history doesn’t repeat itself exactly, based off the historical housing cycle, we have time with this window of opportunity.

The worst thing an individual can do is purchase a home without being financially prepared. We will be regressing into the subprime mortgage crisis era if we are purchasing homes we are not able to afford. Just because someone is able to afford the mortgage payments, does not mean you are able to afford a home. In fact, the monthly mortgage payment amount should be a third of a homeowner’s monthly income. We should also take into consideration taxes, insurance, HOA dues (for condominiums), maintenance costs, upkeep, and more. Lastly it is wise to have accrued 3-6 months’ worth of emergency prior to purchasing. These are all factors to consider prior to looking into homes. A great place to start would be www.daveramsey.com.

Do not rush into a home just to seize the opportunity. Make sure you are able to afford the opportunity first and then move forward.

If you believe you are able to afford purchasing a home, contact our distressed properties experts in Washington State for more information on these cream of the crop properties! Submit your information here and our experts will get in contact with you within 24-48 hours.

Peter

Full article at:www.seattleshortsaleblog.com

Next Article: Is A Short Sale or A Foreclosure/REO property a better deal?

Tips for Buying Your First Short Sale

A short sale is a fairly simple procedure, at least in theory. A homeowner sells their home for a price below the current mortgage balance. The bank agrees to take this lesser amount as payment in full of the mortgage in order to avoid the heavy cost of a foreclosure. Here are some tips for buying your first short sale.

Short Sale prices are determined by the Market

Banks determine which offers to accept by reviewing the current market conditions. They will look at the prices of homes that have recently sold in the nearby area. This information will provide the lender with solid data for the average price of a home in that vicinity. How low will they go? This depends on how quickly they would like to sell the home. If they determine that they would prefer to sell the home now, and not proceed to foreclosure, they may agree to sell the home at below market value.

Ask your Realtor® for their Price Opinion

Before you submit a low-ball offer to the seller, ask your Realtor® for their price opinion. This is a good way for a prospective buyer to find an appropriate price range for an offer. Your agent can look at recently sold comparable homes and give an opinion on what they feel the home should sell for. This is similar to a Comparative Market Analysis, or CMA.

Multiple Mortgages Can Cause Problems

When a home has a 1st mortgage and 2nd mortgage that are held by separate lenders then a short sale could take a very long time, if it gets approved at all. Unfortunately, this type of scenario is out of the hands of the real estate agent and the seller. Whether or not the two lenders agree to the short sale offer is totally up to them.

Approved Prices are Usually Processed Faster

If a lender has already determined a price that they will accept, this can speed up the process. Usually, this is an indication that the seller has been in contact with the bank to discuss the possibility of selling the home. If an offer within that price range is submitted to the bank, the short sale is far more likely to be approved quickly.

Prepare for the Bank to say No

While short sales can help buyers get a home at a discounted price, the process can stretch out over time. The sale can get turned down by the bank for a number of reasons. This is why people looking to buy a short sale should be prepared to move on to a different property in the event that the bank denies the short sale. Keep an eye open at available homes during the short sale process. If the bank does say no, you will then have a list of potential houses that may also be an option.

While a short sale transaction may span a few months, it is a good way to buy a home at a friendly price. Talking to an experienced Realtor® about the available short sales in your area could put you in line to get a good home at a great price.

Buying a Short Sale - Original Post

Why It is a Good Idea to Choose a Realtor®

While there are a lot of licensed real estate agents in most locations, the industry is quite tough.  A large number of people who apply for their license end up leaving the industry in a short time.  This means that there is a small number of Realtors® with licenses who have the experience and knowledge to truly help a person buy a home.
The NAR (National Association of Realtors®) shows that sales people with the Realtor® designation are sworn to uphold a set of Ethics.  They also participate in various training sessions each year and have access to information about the local community and other houses for sale.  Members of the NAR are normally visible participants of their community.  They usually have a membership in PTA, volunteer for neighborhood organizations and/or participate in local government boards.  This type of involvement helps Realtors® stay in touch with the area and keep tabs on improvements and changes.


Realtors® Help Clear up the Confusion

It could seem that browsing through a few internet sites aimed at real estate listings could be enough to help a person find their next home.  However, every home is unique.  Homes are like snowflakes in that way.  Even homes that seem similar on the outside and were built by the same contractor will have different features.

In addition to the differences in the home, each transaction is unique.
 Home purchase contracts,
 closing costs, mortgage loans and inspection requirements will vary from home to home.  This complex assortment of loans, contracts, legal forms, pricing, negotiations and inspections can be quite overwhelming.  That is why so many people seek out the advice of a professional Realtor® who is established in the community and has a track record of helping people buy homes.


Picking a Realtor®

Since the real estate market normally has a large numbers of Realtors® there is quite a bit of competition among agents. That is why it is a good idea to speak to other people that have used a Realtor® and get recommendations.  Using an experienced Realtor® with a successful track record of finding homes that meet the buyer’s needs and makes the buyer happy should ensure that you are using a Realtor® that can do the same for you.


What the
 Realtor® Can Do for You

After you have asked around to some friends and read over testimonies from happy clients, it is a good idea to set up a meeting with the Realtor® for a first consultation.  Establishing the right relationship with the Realtor® is important to help your home purchase, or sale, go smoothly.

The Realtor® will explain to you their method for marketing homes and finding homes for buyers and also disclose the agency’s rules.  This basically establishes the contract between you and the Realtor®.

Once you have established your contract with the agent the Realtor® can begin to inform you of the current conditions of the market as well as prevalent lending options that are currently available.

It happens every year. Agents tell their sellers that they should wait until after the holidays to put their homes on the market. They say no one is looking during December so don't bother. Translation: Agent wants much needed and deserved time off during the holidays, or seller has a lot of family coming and does not want people traipsing through their home with all of the activity going on.

Other side of the equation: Very busy professional gets some down time the last two weeks of the year. Or, out of town relocation buyers are coming to the area to look for a place to live in the new year.

It doesn't take a rocket scientist to see the problem. The only inventory left on the market at this time of year tends to be overpriced or weird which does not help the buyers who finally have time to look. 

I was with one of these too busy for the last 3 months buyers today. You would not believe some of the weird stuff we saw in San Carlos today. A house with a kitchen with gorgeous newer cherry cabinets, and a tiled blue stone counter that would hold bacteria in its many ridges forever. Why someone spent the money to tile a kitchen counter with these impossible to keep clean tiles when they could have put a slab of granite on for the same price is beyond my comprehension. this same home had replaced the asbestos wrapped heating ducts in the entire house, except for about 5 feet under the house. Why? If you are going to spend the money to remove asbestos on yards and yards of ducting why leave a few feet undone? Another home had 7 different kinds of flooring, on a 1400 square foot home.  A third home had removed the bathtub from the main hall bathroom and installed a double vanity. They then added a full bath with tub in the family room completely on the opposite side of the house from the bedrooms.

I was with a pre-approved buyer who can afford a million dollars with time on his hands to buy a home, and there is nothing for him to consider. 

I know I am not the only one frustrated by this disconnect between buyers and sellers.

So I am putting my money where my mouth is and putting a short sale condo in downtown San Jose on the market on Dec 26th. It is not overpriced or weird.

So sellers, next year put your home on the market in December if you want to attract hard working qualified buyers who have time to look.

If you have any questions about buying or selling a home in Santa Clara or San Mateo County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@mrcymoyer.com

650-619-9285

As the tax credit deadline of contracts signed by April 30th with the close of escrow deadline of June 30th, we are starting to see a lot of questions again about whether or not a buyer in the market now can still take advantage of the Home Buyer tax credit. Here is a post on Trulia bringing up this question.

My understanding according to the IRS website is that a binding contract must be signed by April 30th and bank approval will obviously be needed to close in time for the July 1st deadline.

Has anyone learned of any additional reasons why someone who signs a binding contract in the next two weeks would NOT be able to obtain the credit if bank short sale approval were issued in time for the buyer to close by 7/1/10?