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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 properly evaluate a potential investment property

Life is full of sayings that seem contradictory at first.  Expressions like “a chain is only as strong as its weakest link” and a “team is only as good as its worst player” seem to make no sense until they have been analyzed and understood.  In flipping homes, you make your money when you buy.  Quite simply, if you buy a home at the proper discount then you have a much better chance of selling at a profit.  Here is a general outline to help you evaluate a potential home for investment.

First, Take a Casual Drive

It is a good idea to only consider homes that you can actually inspect.  Being able to drive by the home gives you a firsthand perspective. On your way to the home pay attention to the little details such as

• condition of the roads; are there large potholes, pavement patches, adequate street signs?
• local area; are there any schools, shopping, offices, or factories nearby?
• Appearance of the actual street; how do the other homes on the block look?
• The prospective home; what is your first impression when you see the place?

Second, take a Casual Stroll

Now that you have had the time to look at the home and surrounding area from the road, it is time to actually look at the property up close.  When you are in the home ignore things like carpeting and paint.  Take time to look over the roof, the foundation, the electrical box, the HVAC unit and any plumbing pipe that is easy to access.   Walk outside and see if the septic tank or well has any problem.  These are the areas that can cost major money to fix.  If there are any noticeable problems with these primary parts of the home you can use that to negotiate with the seller.

Third, crunch some numbers

Now that you have looked over the home and determined that it is a possible investment, it is time to do the math.  You need to have an idea of what the total repairs will cost along with how much the home should be worth after the repairs are completed.  Once you have these numbers you can make an offer to the seller.

When putting together your repair estimates it is always better to over price.  Trying to cut corners and dream that the kitchen can be remodeled for $2,000, or some other wishful hope, will cause you tremendous grief later on.

After you have looked at a few homes and talked with the same contractor a number of times you can start to get a feel for how much repairs will cost.  This one skill takes some time to master for those that are new to real estate investment.   Once you are comfortable estimating repair costs you will be much better at spotting a deal when it pops up.

Search for: Madison, WI Foreclosures for Sale

If you receive a letter from Chase Bank stating that you are eligible for a short sale incentive, please do not throw it away. It is not a scam. Distressed home owners have been receiving these letters for over a year now, and guess what? They are the real deal!


Real estate agents and Realtors® have been reporting that their clients are getting large checks cut to them at closing. In some cases, as much as $30,000! Yes, Chase Bank is not only forgiving the debt on a short sale, they are giving the current sellers/owners a check at closing. Don't believe it? See an example letter below:


My name is Michael Collins. If you are currently considering a short sale in Wisconsin, I would be happy to walk you through the process and answer any questions you may have. I am certified as a Short Sales & Foreclosure Resource through the WRA. REALTORS® who have earned the SFR certification know how to help sellers maneuver the complexities of short sales as well as help buyers pursue short sale and foreclosure opportunities. The certification program includes training on how to qualify sellers for short sales, negotiate with lenders, protect buyers, and limit risk. Call my cell at 608-921-8536 and we can see if you qualify for any of these incentives.


Original Post -
Chase Bank Short Sale Seller Incentive


Additional Short Sale Information


• 

• Is a Short Sale right for my home?
• 

• Half of Homeowners Underwater on their Mortgage
• 

• Buying a Wisconsin home after a Short Sale or Foreclosure
• 

• Benefits of Buying an Owner-Occupied Wisconsin Short Sale
• 

• Tips for Buying a Wisconsin Short Sale

If you have a home loan through Bank of America and you are currently concerned about making your payments or your home is worth less than you owe, you may qualify for a short sale incentive from BoA. They refer to it as an 'enhanced relocation assistance payment'. To qualifying home owners/sellers, this could mean a check given to you for up to $30,000 after a successful short sale closing! Trust me, this is no scam. Here is a recent email that was sent to Bank of America Short Sale Specialists, like myself.

My name is Michael Collins, real estate agent and broker at Rock Realty. If you are currently considering a short sale in Wisconsin, I would be happy to walk you through the process and answer any questions you may have. I am certified as a Short Sales & Foreclosure Resource through the WRA.

Realtors® who have earned the SFR certification know how to help sellers maneuver the complexities of short sales as well as help buyers pursue short sale and foreclosure opportunities. The certification program includes training on how to qualify sellers for short sales, negotiate with lenders, protect buyers, and limit risk. Call my cell at 608-921-8536 and we can see if you qualify for any of these incentives.

Also feel free to fill out our simple
Short Sale Home Evaluation Form

Additional Short Sale Information

• Is a Short Sale right for my home?
• Half of Homeowners Underwater on their Mortgage
• Buying a Wisconsin home after a Short Sale or Foreclosure
• Benefits of Buying an Owner-Occupied Wisconsin Short Sale
• Tips for Buying a Wisconsin Short Sale

Folks, as you may know, Borrowers (Sellers) are often required to make a cash contribution to the Investor or Mortgage Insurance Company in order for the Short Sale to be approved.

There are several reasons why the Borrower may be asked to do this:

1. They are not late on their payments.

2. They have a good credit score and are current on their bills.

3. It’s an investment property.

4. A contribution is required in order to Waive the Deficiency.

5. They have cash on hand and/or large retirement fund accounts.

This is by no means a comprehensive list but you can see the trend.

Recently, one of my Sellers was required to make a $10,000 cash contribution in order to avoid a possible deficiency judgement in the future. The Sellers had no money but were current on their payments and it was an investment property.

Our course of action was to:

1. Negotiate as best we could to get the amount lowered or removed.

2. Try to get the investor to agree to a promissory note instead of cash at closing.

3. Ask the Buyer to pay the cash contribution.

4. See if the Sellers could borrow the funds.

Unfortunately, none of these worked. So we had to revert to plan B, place the property back on the market and negotiate a new deal where the Buyer would pay the $10,000 Cash Contribution for the Seller. This is added to the purchase contract where the distribution of closing costs goes.

It took all of 3 days to find a Buyer agreeable to this. Now we simply place a $10,000 “Cash Contribution For The Lender On Behalf of the Seller” on line 104 of the Buyer side HUD-1. Then we place the $10,000 on line 404 of the Seller side HUD-1 as “Cash Contribution To The Lender”. Then we just add the $10,000 to the payoff amount to the Lender.

Done deal. Fully disclosed and approved by the Lender. And my Seller will avoid any future Deficiency Judgement on an investment property without having to miss any payments. Heck their credit score may actually go up!!! Sweet. Any questions?

Are you under water on your Florida mortgage?

Today in the Mercury News there was a story about how first time home buyers who need to purchase with loans are getting beaten out by investor cash buyers who often offer less than traditional buyers for foreclosures. www.mercurynews.com-www.mercurynews.com">http://www.mercurynews.com/business/ci_18853804?IADID=Search-www.mercurynews.com-www.mercurynews.com

Has this happened to you? If so, I may have the answer, buy a short sale!

In a short sale the seller owes more than the property is worth and has to have the bank forgive the difference between what is owed and what the house is worth.  The seller decides who has given the best offer, signs it, and sends it to the bank for approval.  THE BANK DOES NOT DECIDE WHICH OF SEVERAL OFFERS IS THE ONE THEY WANT, JUST WHETHER OR NOT THEY WILL ACCEPT THE OFFER THAT IS PRESENTED TO THEM.

Most banks have said very specifically they want the highest offer, and do not think cash offers are more attractive than ones with loans. This is in direct conflict with what they seem to prefer on foreclosures.

Since most investors try to pay significantly below market value if you make a higher offer, which is closer to market value then your offer will have a much better chance of being accepted, especially if there are not issues which would make the house unlendable.

Sure you have to wait longer for an answer from the bank, and some will not close, but lenders re speeding up the process and you can be happily ensconced in your home usually in 2-6 months instead of still looking 18 months and 15 offers later.

So if you are looking for good deal (though probably not a steal) on a home and are tires of losing to all cash offers find a short sale and enjoy home ownership.

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

Marcy Moyer CDPE

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E.  01191194

Brentwood Governors Club Seeing More Distress Sales
Well Known Gated Brentwood Tennessee Neighborhood Experiencing Increased Short Sale and Foreclosure Activity

Per my previous blog posts, Financial Distress Hitting Affluent Towns and Neighborhoods, Brentwood Distressed Sales Activity Increasing and Franklin Distressed Sales Activity Increasing, it is clear that exclusive, affluent, executive, luxury, gated, high-end and golf course neighborhoods are experiencing increased levels of Distress Sales (short sales and foreclosures). However, even with this information it is still surprising to such a prominent Brentwood Tennessee neighborhood like the Governors Club be hit with so many distress sales. Please consider the following sales figures which I obtained from the Middle Tennessee RealTracs MLS:

• There are currently 35 Active Listings (i.e. homes that are actively being marketed for sale) in the Governors Club. Out of those 35 Active Listings 4 are Distress Sales (i.e. short sales and foreclosures account for over 11% of the Active Listings in the Governors Club).
• There are currently 4 Pending Sales (i.e. homes that are under contract with buyers and are probable to close) in the Governors Club. Out of those 4 Pending Sales, 1 is a Distress Sale (i.e. short sales and foreclosures account for 25% of the Pending Sales in the Governors Club).
• Since 1/1/2010 there have been 31 Closed Sales in the Governors Club. Out of those 31 Closed Sales, 4 were Distress Sales (i.e. short sales and foreclosures account for almost 13% of the Closed Sales in the Governors Club).

While the numbers above are not staggering when compared to other parts of the country and even other parts of the Nashville Tennessee, for a neighborhood like the Brentwood Governors Club to have 11%+ distress sales in every sales category is really bad. It is clear that even ultra exclusive, affluent, executive, luxury, gated, high-end and golf course neighborhoods are not immune to the economic and housing market collapse, and, as a result are seeing increased levels of short sales and foreclosures. I highly recommend that these homeowners seek qualified professional real estate, legal and financial advice right away to avoid foreclosure. Since I understand that many homeowners do not want their neighbors to know about their financial hardship, I generally do not use For Sale signs on my listings. I also use short sale pre-qualification techniques to minimize the marketing period of my short sale listings by thoroughly researching the financially distressed homeowners' loan type and actual lender (i.e. the loan owner or loan investor) and communicate with my clients via their cell phone (calls and text messages) and personal email to avoid embarrassment. In short, I market my listings as the "Discreet Short Sale and Foreclosure REALTOR and Real Estate Expert".

Free* Short Sale and Foreclosure Help and Assistance for Nashville, Brentwood, Franklin, Nolensville, Spring Hill, Murfreesboro, Smyrna, La Vergne, Columbia, Mt. Juliet, Springfield, Gallatin and Middle Tennessee Financially Distressed Homeowners and Property Owners. Stop the Bank from Foreclosing with a Quick Cash Offer or Short Sale. If you are a Nashville Tennessee, Franklin Tennessee, Brentwood Tennessee, Nolensville Tennessee, Spring Hill Tennessee, Murfreesboro Tennessee, Smyrna Tennessee or La Vergne Tennessee homeowner, property owner, condo owner, real estate investor, home builder or real estate developer who cannot pay your mortgage payments (due to losing your job, having your income reduced, illness, health problems, adverse business conditions, slow sales, loss of investment property tenants, vacancy issues, lack of funds to complete the project, feuding business partners, etc.), know that you will not be able to pay your mortgage, have defaulted on your mortgage, are already in foreclosure, or owe more than your home is worth, please contact Jim to discuss a short sale (when the real estate sale proceeds are not sufficient to pay off the mortgages and liens on the property). Jim helps sellers (homeowners, property owners, condo owners, owners of high end homes and properties (estate homes, luxury homes and executive homes), real estate investors, home builders and real estate developers) of distressed real estate, short sales, pre-foreclosures, foreclosures, investment properties, failed new construction projects and struggling commercial real estate developments located in any Middle TN County (Rutherford, Williamson, Davidson, Maury, Sumner & Robertson). If you need to short sell your house or property, or you need a quick sale to stop a foreclosure sale, you can Get Free* Short Sale and Foreclosure Help and Assistance from a Nashville Tennessee and Middle Tennessee Short Sale and Foreclosure REALTOR, Real Estate Expert and Real Estate Investor. (*Free: In a real estate short sale, the bank or mortgage company usually approves and pays all of Jim's commissions and fees.)

Per my previous blog posts, Brentwood Distressed Sales Activity Increasing and Franklin Distressed Sales Activity Increasing, there are now larger numbers of short sales and foreclosures in wealthy areas as such as Brentwood Tennessee and Franklin Tennessee (both are located in Williamson County Tennessee). Both of these affluent towns were previously immune to the effects of the failing economy and housing market decline. The primary cause of these increased real estate distress sales are homeowners suffering from financial distress (i.e. job layoffs, and long-term unemployment). Recently, I have been contacted by two financially distressed homeowners who previously were earning in excess of $100,000 per year working in the health care industry. I say "previously" since both homeowners were recently laid off from their high paying jobs in an industry that was once thought of as a safe haven for employees. This is proof that almost no job is really "safe".

I think many financially distressed homeowners who are well educated and were formerly high income earners try to handle their mortgage delinquencies without the help of a real estate professional since they think that the bank will work with them at first. Of course, many will find out the unfortunate truth about how little the banks will do for them despite their once stellar payment history and credit. I think embarrassment is another reason why financially distressed homeowners who live in executive, luxury or otherwise high-end towns and neighborhoods delay seeking out professional real estate assistance from a short sale expert. In short, they do not want their neighbors to know about their financial hardship. This desire for discretion is fully understandable. The good news is that I am keenly aware of this concern. For example, several short sale sellers have asked me not to use a For Sale on their home. As a result, I don't use For Sale signs on my short sale listings. I also use short sale pre-qualification techniques to minimize the marketing period of their home by thoroughly researching their loan type and lender. Another way I keep the circumstances of my financially distressed seller clients as quiet as possible is communicate with these clients via their cell phone (calls and text messages) and personal email. In short, you can call me the "Discreet Short Sale and Foreclosure REALTOR and Real Estate Expert".

Free* Short Sale and Foreclosure Help and Assistance for Nashville, Brentwood, Franklin, Nolensville, Spring Hill, Murfreesboro, Smyrna, La Vergne, Columbia, Mt. Juliet, Springfield, Gallatin and Middle Tennessee Financially Distressed Homeowners and Property Owners. Stop the Bank from Foreclosing with a Quick Cash Offer or Short Sale. If you are a Nashville Tennessee, Franklin Tennessee, Brentwood Tennessee, Nolensville Tennessee, Spring Hill Tennessee, Murfreesboro Tennessee, Smyrna Tennessee or La Vergne Tennessee homeowner, property owner, condo owner, real estate investor, home builder or real estate developer who cannot pay your mortgage payments (due to losing your job, having your income reduced, illness, health problems, adverse business conditions, slow sales, loss of investment property tenants, vacancy issues, lack of funds to complete the project, feuding business partners, etc.), know that you will not be able to pay your mortgage, have defaulted on your mortgage, are already in foreclosure, or owe more than your home is worth, please contact Jim to discuss a short sale (when the real estate sale proceeds are not sufficient to pay off the mortgages and liens on the property). Jim helps sellers (homeowners, property owners, condo owners, owners of high end homes and properties (estate homes, luxury homes and executive homes), real estate investors, home builders and real estate developers) of distressed real estate, short sales, pre-foreclosures, foreclosures, investment properties, failed new construction projects and struggling commercial real estate developments located in any Middle TN County (Rutherford, Williamson, Davidson, Maury, Sumner & Robertson). If you need to short sell your house or property, or you need a quick sale to stop a foreclosure sale, you can Get Free* Short Sale and Foreclosure Help and Assistance from a Nashville Tennessee and Middle Tennessee Short Sale and Foreclosure REALTOR, Real Estate Expert and Real Estate Investor. (*Free: In a real estate short sale, the bank or mortgage company usually approves and pays all of Jim's commissions and fees.)

Missing a mortgage payment (i.e. defaulting on your mortgage loan) creates a lot of personal and financial stress. This stress is even worse if the financially distressed homeowner and borrower receives a foreclosure notice, Notice of Default, or Notice of Trustee's Sale (or Notice of Substitute Trustee's Sale) from the mortgage lender or bank, or an attorney representing the mortgage lender or bank. This stress is absolutely legitimate and understandable since foreclosure severely damages a borrower's credit, and, in many states, will leave the borrower open to the mortgage lender/bank pursuing the borrower for the deficiency balance (essentially, the amount of the mortgage loan owed by the borrower, but not recovered by the mortgage lender/bank upon the sale of the foreclosed property). Declining housing prices have left many homeowners in a situation where they owe more than the market value of their home. The deficiency balance is a serious issue since when mortgage lender forecloses and resells the property the amount they recoup can be substantially less than the amount owed by the borrower. However, there is some good news for homeowners in foreclosure. If the property is the borrower's home (i.e. principal residence / primary residence), the borrower obtained a Federal Housing Administration (FHA) Insured Mortgage Loan (either when they purchased the home, or when they refinanced the mortgage loan), and the borrower wants to sell the home, there is a way to possibly avoid foreclosure altogether and to ensure that they are never pursued for the deficiency balance. Since the FHA is part of the U.S. Department of Housing and Urban Development's (HUD), financially distressed homeowners can request help under a HUD Loss Mitigation Program known as the HUD Pre-Foreclosure Sales Program (aka HUD PFS Program). Some valuable information about the HUD Pre-Foreclosure Sales Program can be viewed here: HUD Pre-Foreclosure Sales Program Facts Sheet and HUD Pre-Foreclosure Sales Program Mortgagee Letter 2008-43. As these documents suggest, the HUD Pre-Foreclosure Sales Program has certain borrower financial and hardship requirements as well as property type, use and market value requirements. If a financially distressed homeowner is not sure if they qualify for the HUD Pre-Foreclosure Sales Program they should seek out the advice of an experienced short sale and pre-foreclosure real estate broker who has been through the HUD Pre-Foreclosure Sales Program before. If the financially distressed homeowner is not sure if their mortgage loan is FHA Insured, they can find out by looking at the Settlement Statement (HUD-1) from when they purchased the property, or refinanced the mortgage loan. In the first box on the top left hand side of the HUD-1 there is a box titled "B. Type of Loan". In that box the type of mortgage loan will be checked. If "FHA" is checked then the borrower's loan is FHA Insured, and, therefore, they may be eligible to participate in the HUD Pre-Foreclosure Sales Program. If the financially distressed homeowner does not have a copy of the HUD-1 then they should contact an experienced short sale and pre-foreclosure real estate broker since they should be able to look up this information, or at least help find out if the mortgage loan is FHA insured. If the mortgage loan is FHA insured then the borrower should apply for the HUD Pre-Foreclosure Sales Program. If the borrower is accepted into the program, they are protected from foreclosure for a period of not less than 4 months and will never have to worry about a deficiency balance. That alone is worth the time and effort spent on the HUD Pre-Foreclosure Sales Program application process. here again, an experienced short sale and pre-foreclosure real estate broker who has been through the HUD Pre-Foreclosure Sales Program before will be a great help to a financially distressed homeowner since they will be able to assist in the application process.

Free* Short Sale and Foreclosure Help and Assistance for Nashville, Brentwood, Franklin, Nolensville, Spring Hill, Murfreesboro, Smyrna, La Vergne, Columbia, Mt. Juliet, Springfield, Gallatin and Middle Tennessee Financially Distressed Homeowners and Property Owners. Stop the Bank from Foreclosing with a Quick Cash Offer or Short Sale. If you are a Nashville Tennessee, Franklin Tennessee, Brentwood Tennessee, Nolensville Tennessee, Spring Hill Tennessee, Murfreesboro Tennessee, Smyrna Tennessee or La Vergne Tennessee homeowner, property owner, condo owner, real estate investor, home builder or real estate developer who cannot pay your mortgage payments (due to losing your job, having your income reduced, illness, health problems, adverse business conditions, slow sales, loss of investment property tenants, vacancy issues, lack of funds to complete the project, feuding business partners, etc.), know that you will not be able to pay your mortgage, have defaulted on your mortgage, are already in foreclosure, or owe more than your home is worth, please contact Jim to discuss a short sale (when the real estate sale proceeds are not sufficient to pay off the mortgages and liens on the property). Jim helps sellers (homeowners, property owners, condo owners, owners of high end homes and properties (estate homes, luxury homes and executive homes), real estate investors, home builders and real estate developers) of distressed real estate, short sales, pre-foreclosures, foreclosures, investment properties, failed new construction projects and struggling commercial real estate developments located in any Middle TN County (Rutherford, Williamson, Davidson, Maury, Sumner & Robertson). If you need to short sell your house or property, or you need a quick sale to stop a foreclosure sale, you can Get Free* Short Sale and Foreclosure Help and Assistance from a Nashville Tennessee and Middle Tennessee Short Sale and Foreclosure REALTOR, Real Estate Expert and Real Estate Investor. (*Free: In a real estate short sale, the bank or mortgage company usually approves and pays all of Jim's commissions and fees.)

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