Monday, January 26, 2009

Real Estate Myths

If you watched The Today show this morning, they had a Real Estate expert talking about the top 5 (buyer/seller)Real Estate Myths. I didn't actually get to see the segment, but they are good. My favorite is about buyers waiting until the market bottom's out. Well, you don't know if the market is at the bottom, until it's started to go up! So, if you are waiting for the market to hit bottom, you may actual miss out!!

Below are the Myths they talked about:

The truth about the housing market
In today’s uncertain market, fear runs rampant on both the buying and selling sides of the fence. Many myths need debunking. Here are five untruths held by buyers, and five held by sellers.

Buyer myth No. 1: The longer the house is on the market, the more you can negotiate.
When buyers ask, “How long has this property been on the market?”, they think “six months” means they can negotiate the price down. It more often means the seller is stubbornly holding on to their price.

Buyer myth No. 2: The sellers today are desperate.
Most aren’t. Always ask why the sellers are selling. It’s the key to finding how motivated and anxious they are. “I’m being transferred to Dallas” is a very different answer than “We’d like to find something bigger.” The first homeowner is hot to trot.

Buyer myth No. 3: You can’t buy a home today with less than 20 percent down.
FHA loans require only 3.5 percent down, and you can even ask the seller to pay the closing costs.

Buyer myth No. 4: You need good credit to get a good loan.
Once again, the FHA to the rescue! They’re happy to lend money to buyers with bad credit

Buyer myth No. 5: You shouldn't buy before prices have bottomed.
You can’t sharpshoot the real estate market. Once you identify the “bottom,” prices have already moved up.

Seller myth No. 1: Now’s the absolute worst time to sell.
Not necessarily. It depends upon where you live. Many of the worst hit markets, like Las Vegas, Phoenix or San Diego, are already beginning to turn around. And if you’re a homeowner who wants to trade up, the loss you’ll take on your current home will be more than offset by the bargain you’ll get on the next one.

Seller myth No. 2: Never respond to a low-ball bid.
All buyers today feel obligated to put in low-ball offers to see if the seller bites. If you respond with a reasonable counter offer, most buyers can be convinced to come up in price and make the deal.

Seller myth No. 3: The first offer is never the best offer.
Most sellers believe that it’s smart to hold out for something better. But four times out of five, the first offer is the best you’ll ever see.

Seller myth No. 4: 'I can always reduce my price later.'
Sellers often price their home high for a few weeks just to test the market. But buyers shop by price bracket and if your house is in the wrong one, you’ll just help sell everyone else’s home while yours sits there overpriced. And reducing your price later in small increments puts you in the position of chasing the tide as it goes out.

Seller myth No. 5: Before you refinance, shop around.
You can if you want, but you’ll usually get the best deal from your current lender. And you’ll be able to negotiate your closing costs

to watch the video:

Thursday, January 22, 2009

Sweat plus sacrifice equals success

As many of you know, I'm on a major workout kick. In a typical week, I workout 6 times. It's "me" time. I may not always be enjoying myself while I'm doing it, but I feel great afterwards and know I'm doing something good for my body (physically and mentally).

I started taking a weights class on Tuesday nights last week. It's a killer!! It's 1.5 hrs long (the last 30min is abs/back) and it is NON-stop!! I am usually shaking at the end...but I know I've gotten a good workout. At this weeks class, she mentioned how she gives out "thoughts of the day" to her other classes. This weeks thought was "Sweat plus sacrifice equals success". My first thought was...that is great, I'll make it my facebook status! (which I did) But the more I thought about it (it's much easier to think about something when doing weights then you don't concentrate on your muscles hurting!) I realized how great it was. It doesn't just relate to working out, but to life. Success doesn't just have to work for it! Sometimes that takes sweat and sacrifice. What a great thought of the day! Thanks Jennifer!!

Wednesday, January 21, 2009

Short Sales vs Foreclosures

With a lot of homes going into Foreclosure or up for a Short-Sale, I thought I would share a little information about both procedures and the affects on your credit. I have taken a few courses on this matter. I hope this information helps. Please let me know if you have any questions.

And remember, NOT everything in the market is a foreclosure or short sale!

The following article is from and written by Elizabeth Weintraub

Sellers may wonder whether letting a property go into foreclosure would be easier and smarter than going through a short sale. With a foreclosure, and depending on state laws regarding foreclosure, a seller could stay in the property, essentially rent free, for four months to a year before being forced to vacate. But that fact alone does not mean a foreclosure is better.

Whereas a short sale involves offering the home for sale, generally listed through MLS. Potential home buyers will make appointments to view the home, some will make lowball offers, agents might hold open houses and, in general, a seller's life will be disrupted, all in the hopes that a buyer will buy the home.

Basics of a Short Sale

Short sales happen when a lender agrees to accept less than the amount owed against the home because there is not enough equity to sell and pay all costs of sale. Not all lenders will negotiate a short sale, and that is why a real estate agent or a lawyer can be a tremendous help by contacting the lender's loss mitigation department to find out.

You can't just wake up one morning and decide you're going to sell your home at a loss by asking for a short sale. It used to be that lenders wouldn't even consider a short sale if your payments are current, but that has changed. However, realize that lenders will be more agreeable to negotiation if your payments are in arrears. Plus, if you have cash assets, the lender might try to tap those accounts. Doing a short sale is not for the faint of heart.

How is the Seller's Credit Affected?

According to David Steep, division manager at Vitek Mortgage, Sacramento sellers, as well as sellers in other states, will take as big a hit on their credit report by going through foreclosure as giving the lender a deed-in-lieu of foreclosure, providing you are more than 30 days in arrears. Steep says the points lost on a FICO score are as follows:

Foreclosure or Deed-in-Lieu of Foreclosure: Both of these solutions affect credit the same. Sellers will take a hit of 200 to 300 points, depending on overall condition of credit. This means if a seller's FICO score before foreclosure was 680, it could dip as low as 380.

Short Sale: The effect of a short sale (providing the sellers are more than 59 days late) on a seller's credit report is identical to that of a foreclosure. The ding on credit will show up as a pre-foreclosure in redemption status, Steep says, which will result in a loss of 200 to 300 points. This means a short sale with a previous FICO of 720 will see it fall from 520 to 420.

Catherine Coy, a mortgage broker in southern California, agrees. "The effect on a consumer's credit report -- foreclosure vs. short sale -- is the difference between being hit by a train or a bus," says Coy, speaking about borrowers who are a few months in arrears.

Waiting Period Before Buying Another Home

Foreclosure or Deed-in-Lieu of Foreclosure: Steep says a seller who wants to buy another home after foreclosure will end up waiting about 24 to 72 months before a lender will offer any kind of interest rate that makes sense.

Coy says, "The good news is a short sale will allow the consumer to obtain an institutional loan for a new home within two years".

For more information, see the Fannie Mae Selling Guide online. Click on the PDF link in the yellow box and see page 75.

Short Sale: Some agents say the good news for short sale sellers is the wait is much shorter before buying another home, and new Fannie Mae guidelines make that a true statement.
Can a seller buy again under two years? Partially true, says Coy, "It's an utter myth that a consumer 'can buy again in about 18 months at a good interest rate.' However, new Fannie Mae guidelines now require only 24 months' seasoning, and that's good news for agents who specialize in short sales."

Note that Fannie Mae guidelines allow a seller to immediately apply for a new loan to buy another home if that seller kept the payments current and had no 60-day late pays or greater on record.

Short Sale / Foreclosure Deficiency Judgments

The bad news is a seller could be subject to a deficiency judgment for the difference between the loan amount and the amount paid. In general, a trustee's sale wipes out the right to a deficiency, except for certain junior lienholder conditions. In California, purchase money loans are not subject to deficiency judgments; however, some hard money loans, equity loans and refinances are, providing certain conditions apply. Some other states have laws regarding personal guarantees, which could also result in a deficiency judgment, if the home owner is held personally liable for loan repayment.

The lender has sole discretion whether to pursue a deficiency judgment in those instances when the judgment is permitted. To determine whether a pending foreclosure or short sale is subject to a deficiency judgment, talk to a real estate lawyer.

If you're a seller trying to decide whether to let a home go through foreclosure versus attempting a short sale, salvaging your credit may not be an advantage to doing a short sale, if you've fallen behind in your payments. Coy says that according to "Score Factor Code #22, there's no credit score advantage for a delinquent borrower on a short sale over a foreclosure." The only advantage is being able to buy another home within two years over the three- to five-year period required for foreclosures. But seek legal and tax advice before making that decision.

Friday, January 9, 2009

Happy 2009!!!

Happy New Year!! Sorry I have been so bad about blogging. I guess that's what happens when the holidays come around. I didn't even do much, but the lack of a consistant schedule really wasn't good for me!! BUT, it's a NEW Year, a NEW week and I'm ready to go!!!

I just completed my first round of a six week mailer and I'm feeling pretty positive about that. Hopefully many of you will be getting it in the next few days. Make sure you send it back!! (hello, I included a SASE!!!)

Every year on Jan 1 people start making resolutions. I personally haven't made one for years. I just try to continually improve. :)

Oprah has started her "Best Life" Series this week. I taped & watched Monday's show. It was a little long, but had a great message - BALANCE. You must have balance in your life. You must put yourself first and schedule "me" time. I think this is very important. I try to do this for myself each day by going to the gym. That's the time I can get in a good workout, feel good about myself and usually catch up with a friend or to. I hope everyone takes a little time each day for themselves!

Here's to a GREAT 2009!!!!