Archive for July, 2008

FORECLOSURE AVOIDANCE!

Published by Janeese Jackson on July 15, 2008 in Close-In Eastside 'hoods, Downtown, Lake Oswego & nearby 'burbs, Northwest Alphabet District and Pearl District. 0 Comments
I now have an agent working with me who is familiar with “Short Sales” or “Foreclosure Avoidance”.If you know someone who might need this help, please call or write!!  To begin with, let’s define a “short-sale.” In today’s volatile mortgage market, you might be hearing the term “short sale” tossed around.  A short sale is a real estate transaction where the borrower is “short” the required funds to close on their home sale. For example, let’s say a borrower owes $250,000 on their present home mortgage, unfortunately market values have declined in their area and most homes similar to theirs are only selling for $230,000. As you can see, there’s a $20,000 deficit (shortage) between value and mortgage. In some instances lenders are willing to forego the difference to help close the loan and get the bad debt off of their books

 
 
To effectively work short sales, agents & sellers need to be familiar in three areas:  
 
• The subject property
• The borrower
• The existing lender(s)
 
 

The subject property

  
 
 
The first step in working a short sale is to know something about the existing property being marketed. Does it qualify for a short sale? Most lenders will only allow short sales if certain circumstances exist. For example, will the subject property only bring a certain amount of money based on the local market area? Of course the value will need to be less than the current mortgage amount owed. To determine this, the lender will require a bare minimum of a Competitive Market Analysis (CMA) from the real estate professional. In many cases the lender may require a fully fledged appraisal; however you still need an agent to be familiar and competent on what the values are in your area.  
 

The borrower

  
 
 
The Realtor (and, ultimately the lender) will need to know what are the circumstances and why is there a need to do a short sale? These questions and many more will need to be answered and submitted to the lender for consideration. Understand that most lenders will not allow a short sale to someone who has made poor decisions and is just looking for relief from their home loan. Generally there should be some crisis situation or extenuating circumstance that has put the borrower in a compromised financial state with his/her mortgage.  
 

The existing lender(s)

  
 
 
Finally, you will have to find out if there is qualification for a short sale, and what documentation the lender will require to make this transaction possible. The Realtor and homeowner will have to find out if the lender will require a pay-back, or, if the short sale will go against the borrower’s credit report. Many lenders will have a checklist of the necessary items required to make a short sale possible. Don’t quit on one call, many times you’ll need to ask and ask until you find the right person who can authorize a short sale.  
 
In Closing  
A homeowner who might need a short sale should absolutely speak to legal counsel before proceeding with a short sale. That homeowner should consult with a tax attorney or CPA as a prudent step. Many short sales result in a 1099 being issued for the shortage the lender writes off on the transaction. Good advice from the proper channels in advance can save everyone future headaches and additional problems.  
 
Your Realtor should prepare a checklist of items that you should consider regarding a short sale. This will help to determine your eligibility. A little preparation in advance and valuable insight into new solutions for paying off a mortgage in a market where property values are down are the least you should expect from your Realtor. After all, no one wants to lose a home in foreclosure, and if the lender provides an alternative for relief to the seller, it might be an option to consider.  
 
Note that there are many more details and issues to explore and investigate prior to doing a short sale. This article is only a brief explanation of some of the issues and areas to consider regarding short sales.  

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IS IT ALWAYS A GOOD TIME TO BUY???

Published by Janeese Jackson on July 4, 2008 in Close-In Eastside 'hoods, Downtown, Lake Oswego & nearby 'burbs, Northwest Alphabet District and Pearl District. 0 Comments

Is it always a good time to buy real estate?  There is, of course, no absolute answer to this question as there are a million stories in the city!  Real estate stats & numbers are useful, but don’t paint the personal picture that we individually may need.  The particulars of any one person’s situation dictates the answer for the moment!  The first question is:  do you have to sell to buy?  It is definitely more of a buyer’s market than we’ve seen in years.  There is actually “negotiation” taking place in our local real estate market.  And, the Portland real estate market, in general, has not been hurt like some other markets.  But, don’t try to convince someone who is trying to sell a condo, for instance, of that fact.  As with a lot of life processes, it’s all about timing.  We can’t rely on general statements about the market without knowing the personal details of the individual’s situation.  It might be a good time to sell & buy, but it depends.  For instance, if you purchased a condo in the last couple of years you most likely do not have enough equity built into your home to be thinking of trying to trade in this market if you don’t have to sell.  The condo & townhouse market is stuggling presently.  Not to worry, the condo market will rejuvenate with time and the right opportunity will surface!  However, if you’ve owned your condo for a while and you can price for the 2008 market, not 2005, then you’re golden.  Detached housing needs to be priced competitively, staged properly and positioned in the marketplace to be perceived, at the very least, as a deal!  Having owned the home long enough to have acquired some equity definitely allows the seller to “price to sell”!   If you are an investor, there are some “steals” and “deals” out there.  If you are a first-time buyer, this is YOUR market!  In my opinion, this is one component that our present market adjustment is all about.  We needed to get the first-time buyer back into marketplace thru affordability and inventory to start the tiered progression of real estate sales!

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