Tag Archives: repair

Mortgage Reform, Refinance, Really?

My Thoughts on the Current Real Estate Market: Mortgage Reform, Refinance, Really?

With interest rates at the lowest rate in history, and foreclosures bursting through the ceiling still at this writing, I ask myself, why is this still happening?  How does the 1-in-4 upside-down homeowner out there, staring at their bank and scratching their head, get help to avoid walking away?

The empty promises, or the so-called “helping hand” being offered by the banks and the government, is still a joke to say the least. For the people who sold their home in recent years, they are in a position to buy or have already bought another home and recovered from that stress of “What do I do?” while taking advantage of the low interest rates and prices.

upside-downIt still is not too late to make that leap and start over–because the faster you do, the faster you will recover. Property values are not expected to go anywhere for at least two more years, and the laws for selling short sales that protect homeowners will expire at the end of this year. Laws allow a purchase after two years of selling a short sale. With a consultation with me and strategy, you could pay off most of your unsecured debt, while not paying your mortgage. This can only be done with someone who has had experience with this. I have done this with clients that have recouped while living in their home for over 3 years without paying a mortgage.

The latest reform laws are offering a glimmer of hope; however, when and how these guidelines are implemented by the banks and government is clear to not happen for awhile.  The state governments will have to also be on board. At this time, California is weighing the settlement being offered for unlawful foreclosure practices from five of the larger banks that have agreed to pay a settlement.

My opinion is that any settlement should accompany a mandate that the banks must reduce every upside-down property out there to fair market values, to allow the homeowner an opportunity to keep their home; granted that the home is not dilapidated to the point that the owner does not have the funds to repair the home or care for it after the refinance. This exclusion is warranted to the extent that a home that is in bad shape is only dropping or keeping the values low in the neighborhood and should be taken care of. In a perfect world, the banks would allow the homeowner funds after the refinance to repair the home–heck, let’s go for it all!

As always, my gratitude to you for reading my blog.  Please share your opinions or questions–I look forward to any questions I can answer or help I can give!

John A. Silva, Realtor

(619) 890-3648 | www.JohnASilva.com

4 ways to attract more buyers

Some buyers are looking for a home that’s located in a specific neighborhood. Others have more flexibility regarding where they live. But most buyers share one thing in common: They want a home that’s in move-in condition.

Start working on attracting buyers to your home by putting the property in good condition before it goes on the market. In most cases, it’s not a good idea to show your home to a prospective buyer before it’s ready to be shown. Photos should also wait until your home presents itself well.

homes for salePay attention to “curb appeal”; first impressions are lasting. Some buyers drive by without taking a look inside if they don’t like the way a house looks from the street. The yard should be clean and tidy. Replace the front lawn if it’s dead; the same goes for plants that have seen better days. Flowering plants make your home look festive and inviting.

Peeling paint should be touched up, if possible. If an entire exterior paint job is called for, consider changing the color scheme to enhance the appeal. One seller repainted the exterior of his home before selling without consulting his agent or a colorist. He repainted using the existing color scheme, which was out of date. The house didn’t sell quickly. When it did, the first thing the buyers wanted to do was change the color of the exterior.

Repair deferred maintenance, particularly if it’s visible from the street. You want to convey the impression that your home has been well maintained. If you can’t afford to repair and paint the white picket fence in front of your house, it would be better to remove it than leave it.

Houses that don’t have much architectural appeal can often be improved by the addition of shutters. Houses that don’t show much from the street can be enhanced with an architecturally intriguing gate or entryway. You want to peak buyers’ interest in seeing what they can’t see from the street.

HOUSE HUNTING TIP: List with an agent who can provide wide exposure for your home, including extensive Internet advertising. The vast majority of homebuyers search for homes online. Buyers discount Internet listings that do not have photos, and they gravitate toward those with many photos and quality photos. Make sure that the agent you list with will not put your home on the multiple listing service or Internet without plenty of quality, representative photos — 15 or more is good.

The importance of Internet advertising should not be underestimated. The Internet is global and available 24/7. Buyers often find the listing they want to buy on the Internet before their agent has seen it. After surfing the Internet, some buyers decide to buy outside the area they were focusing on if they see something elsewhere that appeals to them.

Local marketing may work in some cases, but you wouldn’t want to cut yourself short. Broad exposure of your listing to the market is an integral part of selling.

Although the buyer for your home could come from anywhere, you do want it to be exposed to the local agents. Your agent should hold the listing open for real estate agents as soon as it’s ready to be shown. Repeat broker open houses may be necessary to make sure a representative number of agents see the listing.

Public open houses are good exposure. Some buyers still find the home they buy at an open house. However, they don’t pay off like they did during the bubble market. Encourage private showings, which require that you make it easy for agents to show your home to their buyers.

THE CLOSING: The best way to attract buyers to your listing is to price it right for the market. Otherwise, all of your efforts will be for naught.

Dian Hymer, a real estate broker with more than 30 years’ experience, is a nationally syndicated real estate columnist and author of “House Hunting: The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide.” View the article here.

If you want to sell, I’m the Realtor for you! Give me a call at (619)337-3262!

How to take advantage of a short sale

If you’re shopping for a home with a bargain-basement price, a short sale could be the answer.

This is where a lender allows borrowers who can’t keep up with the mortgage payments to sell their home
for less than they owe on the property. The bank or mortgage company takes whatever you pay to purchase
the home and forgives the remaining debt.
Short Sale
How low can you go and still expect a lender to approve the deal?

Lenders usually will accept offers that net at least 82% (after expenses) of the home’s  current fair market value, regardless of what the borrower owes, says Tim Harris, co-founder of Harris Real Estate University in Las Vegas.

Why would a lender do that?

Because it will lose less by allowing a short sale than by going through a foreclosure.

Taking advantage of a short sale is less risky than buying a foreclosure, because so many repossessed homes need tens of thousands of dollars’ worth of repairs. The worst of the bunch have been deliberately vandalized by angry owners just before they were evicted.

Here are 4 smart moves for buying a short sale property:

Smart move 1. Make sure you’re a good candidate for a short sale.

Short sales are all about presenting the lender with a deal it can’t refuse. Banks and mortgage servicing
companies are most likely to approve buyers that:

•  Have a substantial down payment.

•  Have been preapproved for a mortgage.

•  Place no contingencies on their contract, such as having to sell their current home before
proceeding with the purchase.

Smart move 2. Hire a real estate agent who’s experienced in short sales.

You need someone who can steer you away from short sales that aren’t likely to succeed.

Vincent Bindi, a real estate broker for ShortSalesASAP in Orange County, Calif., says your real estate agent should interview the listing agent to determine whether the seller has done everything that’s needed to win lender approval.

You need to know whether the home has been aggressively marketed — the bank won’t like it if the seller hasn’t made a good-faith effort to get a reasonable bid — and whether the bank has received a broker’s price opinion, which it will use to determine the home’s market value.

Smart move 3. Offer the right price.

Short sales aren’t the time or place to do a lot of dickering.

Lenders don’t have the time or staff to evaluate an endless bunch of bids, each a little higher than the last. If you deliberately lowball a bank or mortgage company, it will just write you off as a waste of time.

You need to come up with a cheap but reasonable offer, which the bank or mortgage company will accept, in one try.

Start by estimating the fair market value of the home for yourself, using comps (values of comparable properties that have sold near the home in the past few months).

Take the condition of the home into account and reduce your estimate if the home needs repairs. It’s a buyer’s market, and you don’t have to treat a fixer-upper like it’s in pristine condition.

Calculate 82% of the home’s value, throw in a few thousand dollars to cover the lender’s cost of doing a short sale (ask your agent what that typically is for your area), and you have a good starting point.

Now look at the quality of your comps.

If they’re straightforward deals, and the homes spent at least three or four months on the market, then you’re good to go.

But if all of the comps are foreclosures that sold within a few weeks of hitting the market, you’ve got to assume those were damaged homes being dumped at fire sale prices.

You’ll have to adjust your offer upward, perhaps all the way to the full fair market value calculated with those comps.

Check how close your offer is to the asking price on the home. Remember, the sellers won’t get any of the money, so they have no incentive to demand an unreasonable price.

They’re just trying to find a price you’ll pay, and the bank will accept, to relieve them of their debt.

If you’re close, then you’ve probably come to the same conclusions as the sellers and their real estate
agent.

If not, then your agent needs to have another talk with their agent to find out why.

Smart move 4. Be patient.

It almost always takes longer to close a short sale, because it takes so long for lenders to review and accept
your proposal.

We’ve heard of deals closing in as little as five weeks when the lender has preapproved the short sale and asking price and you agree to meet that price.

But that rarely happens.

Most sellers don’t seek the lender’s approval for a short sale until they have a signed purchase contract in hand. (Here’s a step-by-step look at what sellers must do to complete a short sale.)

More often than not, it takes two to four months to get a “yes” or “no” from the bank or mortgage servicing company.

Although lenders say they’re trying to process these requests more quickly, there still aren’t enough loss mitigation specialists to deal with the rising demand for short sales, and we’re not seeing a big improvement.

By Bonnie Biafore  |  Interest.com Contributing Editor