Real Estate Search and Sale LLC

Many home sellers contact me when they are facing foreclosure or contemplating a short sale.  It is essential to know the ramifications of each situation.

If you do nothing, you don’t pay your mortgage and you don’t make arrangements with the bank to get out of a foreclosure status, you will be foreclosed on.  Many home owners are so overwhelmed by the stress of debt that they don’t have the mental and emotional stamina to work things out with the bank. 

This is unfortunate because filing for bankrupcy or selling your home at a short sale will produce a better outcome.  Especially, when the homeowner is responsible for the difference between what the bank sells the home for and the loan amount plus legal fees.

 If you would like to stay in your home, I suggest that you contact your bank to see if you can negotiate a refinance.  They will ask to examine your financial circumstance with the hope that you can afford to repay the loan if the terms are more favorable.  If they decline to refinance your home, I suggest that you talk to an attorney about filing for bankrupcy.  The funny thing about filing for bankrupcy is that you need money to pay for the attorney.

I suggest that you keep paying your mortgage and find money from other sources to pay the attorney.  Falling behind on your mortgage can only hurt you.

If your income has declined significantly since you obtained the loan then it is unlikely that you will qualify for a refinance.  The loan terms are much more strict than they were.  If you were a borderline borrower, or if you were provided a loan that you know you should not have qualified for, then it is unlikely you will qualify now.

If you are trying to determine whether to keep your home or not, you may want to consider how much it would cost you to rent a similar home.  It is often three quarters of the mortgage amount if you had 100% financing during the height of the market.

The short sale route- you’ve had enough stress and have decided to move on with your life.    I suggest that you determine whether you should have qualified for the loan when you applied.    If you don’t believe that you did, I suggest that you list your home for just below market value.  When you list your home, you MUST state that the acceptance of the offer is only upon third party approval.  The third party is the bank.  You can not sell the home for less than what is owed to them, unless they agree to accepting less or you are planning on coming up with the funds out of pocket. 

Banks will tell you that you have to repay the amount that you are short.  I have negotiated on behalf of my clients to demonstrate that they should not have to pay the amount that they were short, because they never should have qualified for the loan in the first place.

 I prevailed. 

You must take the stance of an injured consumer that knows how things work and that you are no longer going to be taken advantage of.  There is a bit of paperwork that must be completed, but it will payoff.  Just keep hanging in there.  

Once the bank is presented an offer, they will send out an appraiser to determine that the house is valued as low as the offer price.  As stated earlier, they will ask for your income and employment records.  You must provide this in a timely manor or the home buyer will walk away from the deal. 

If you take the effort to do a short sale you may be able to walk away debt free, whereas the debt from a foreclosure will follow you.

FSBO Part II

Time to create a timeline and budget for your home sale. 

Microsoft Project is an ideal tool for reaching your goal, as many tasks will occur both consequtively and simultaneously.

Before you grab your clipboard, consider that you are in a serious position of potential liability.  If there is a problem with the home, such as a leak in the basement, and you don’t either make the necessary repair or disclose to the client that there is a current leak in the basement, you may be liable for ALL damages and legal fees.  You may also want to get a home inspection prior to putting the home on the market, so that you will have a better idea of the current condition of the home.

Grab your clipboard and your home seller check list and walk outside.  Keep walking.  Go all the way to the street and turn around.  This is how the potential home owner is going to view your home through their criticle eye.  This is called curb appeal.  If you can’t get the shopper out of the car don’t waste your money on the interior of the home.

Now work your way back in the house.  Go through each hall and room, continuously referring back go the home seller checklist.  Make sure that you write down everything that has to be cleaned, organized or repaired.  RESIST the tempation to perform the work as you are taking note of each task. 

Now determine how much time and expense it will take to make each repair.  Make a note as to who will perform the work.  Do you have a reliable handyman? If you are planning on doing the work yourself, you should keep in mind that you are going to have a lot of other responsibilities.  You may have to manage the contractor; pick up materials; learn how to market your home; organize and clean.  You may also want to budget time for eating and sleeping.

Be sure that you read over the checklist thoroughly!  Then look over it again.

Who will keep the house clean and the yard groomed when it is on the market?  If you are going to hire a maid and lawn service add this into your budget.  Do the calculations and add 15% to the time and 15% to the money that you think that you will need to get your home ready.

Property Tax Assessment  

Many home owners just received a property tax assessment and don’t like the increase in taxes.

Most of you found that the assessment was about $100K over what the homes are selling for in your neighborhood.  You can petition your local tax assessment office to reduce the assessed value of your property, so that you don’t have to pay as much in taxes.  It is likely that you will get the taxes reduced if you can substantiate your claim with documentation, which will demonstrate that the Fair Market Value for the home is less than the assessed value.

The best way to do this is to produce a copy of the HUD I, if the property was purchased within the last six months or get a CMA.   A CMA is a competitive market analysis.  This is created by taking recent home sales in the area, which have features that most closely match yours.  It is NOT an appraisal, which may only be provided by a licensed appraiser.

We can do the comparables for you.  We need:

1. Your address
2. Style of your home
3. Number of bedrooms
4. Bathrooms
5. Condition of your home
6. Best way to reach you?  

There should be at least three recent home sales, with similar criterion to prove our case.  Several neighborhoods which have not had a home sold in OVER a year.  The analysis must be on homes sold.  Utilizing homes that are currently available for sale does not have any credibility and is not to your advantage.  This is great for your tax argument, but terrible for your property value.

If your home has not been updated nor needs major work, you should make sure that you let us know and put this in the letter to the assessment office.  I have been successful in getting assessments significantly reduced by working with the assessor to realize the legitimate state of the property.  This saved my client over one thousand dollars on his property taxes EACH YEAR. He was receiving a tax reduction for other purposes as well. If this was not the case, the savings would have been greater.

The CMA I provide will have two professional price opinions.  One is the lowest price at which I think your home may sell for if you put it on the market and sold it today.  The second will be the highest price I think that your home may sell for.

The following links have assessment appeal instructions:
times to appeal.  There is additional  jargon that states that it may be by petition or review.  Which I infer to mean anytime!  Go ahead and file for your assessment.  What do you have to lose? 

Carolyn Thompson, Broker of Intellagent Realty Services  is a consumer advocate. 

Please remember her when it comes time to buy or sell a property.

Equal Housing Opportunity!