Posted on February 27th, 2010 by Richard. Categories: For Home Buyers, For Home Sellers
Everyone has probably heard the term “Short Sale” in the last few years. You’d think that those kind of sales are commonplace, but that type of transaction is probably one of the toughest deals to put together if you want to buy or sell a home. Unlike a REO or bank owned property which is a property that has actually gone through foreclosure with the bank emerging as the actual owner, a property that is a short sale candidate is still owned by the homeowner. Typically the owners are behind on the house payments several months and foreclosure proceedings may or may not have begun. The chances of a transaction being successful on a Bank Owned home is a lot greater because you’re dealing directly with the owner.
The reason they are called a Short Sale is, for one reason or another, the amount that the sale of the home will bring on the market is “short” of what the Sellers owe to the lender. For that sale to work, the lender has to decide if they are willing to take less than what is owed so that they will release the current lien for the new sale to proceed. That’s not easy to get done. Every lender has their own policy about how to approach that and every home and sale has unique circumstances. Even if the lender decides that they would be willing to take less to get the property sold, the original home owners usually are required to pay back the difference, so they are not off the hook.
If someone wants to buy a home that is a possible short sale, they must be in a position where they can wait for the outcome and decision of the current lender. If it works great, if not, then it’s not critical. And they must be in a situation where they do not have to move by a certain date. So if this fits your situation and you found a home that you really want that’s a possible Short Sale and you are willing to step through the process to see if it works, then I’d say to go for it. Your wish might just come true.
Posted on February 25th, 2010 by Richard. Categories: Nature
It was a great day to work inside on all things large and small that needed starting or finishing, and I was happy for the opportunity to do that as I’ve been so busy running around lately it seems. The visuals through the windows were so wonderful though that my boots finally convinced me to put them on and get out into the swirling snow. It fell so hard at times I could barely see through it as I went for my walk. “Go ahead” I laughed. “Is that all you’ve got? I can take it. It’s almost Spring and you’ll be just a memory soon”. A good one though. It will be fun later when it’s warmer and look back at these photos just like it is to look back at summer photos now. Have you noticed that all photos get better with age?
Posted on February 23rd, 2010 by Richard. Categories: Real Estate Perspective
I hosted a Brokers Open today at a home I have listed. A Brokers Open is an Open House except only agents are invited. The idea is to have other agents see your listing, gather their ideas on marketing, improve their awareness of it and possibly match the home with one of their buyers either now or the near future. The unusual part for me is that I rarely go to them when other agents have them, let alone host one. If I have a possible buyer, I can tell a lot about a home by looking at the info available to me online as a Realtor, and food doesn’t work as an inducement to get me to go anywhere. But two other agents I know and like have listings in the same neighborhood, and so we all hosted ours at the same time to increase the possible turnout. We are all from different offices and areas of town and know different agents to invite. Because of that it was fun as it was a different kind of Brokers Open than you normally see. It was scheduled from 11:30 to 1:30. One home had the appetisers, the other the main course, and I had desserts, which to me was the best of the three to do. If you’ve read earlier posts or the ‘About Me’ page, you know that I like creating things in the kitchen, so the fun part was getting to bake things. I couldn’t decide what to make and I wanted it to be classy, so I called a good friend of mine who is a caterer for ideas. They ended up walking me through the whole thing: possibilities on what to make, how to prepare, serve and present. I can hold my own in my own kitchen, but all the aspects of planning and carrying out an event like this was new to me.
I ended up meeting some other agents I didn’t know which was enjoyable. And I heard some different perspectives on marketing the home which can’t hurt. I’m not confident it will actually produce a buyer. It might…we’ll see. But I have a whole lot of extra chocolate cheesecake and chocolate-pecan crunch bars left over!
Posted on February 22nd, 2010 by Richard. Categories: Nature, Photo Flash
The temps have warmed and the snow pack is receding but it’s still kind of overcast and dull outside. So I just felt like seeing something colorful and alive to balance that out. I took this photo last summer and have been saving it in a special folder with others that I’m also attached to for some reason. I thought the timing seemed right now to take it out for a spin. I’m hoping that someone knows what the name of this flower is though. I tried to search for it and couldn’t find one that seemed to match it’s characteristics.
Posted on February 20th, 2010 by Richard. Categories: Just for Fun, Sports & Recreation
No one will argue that in order to win the Superbowl, the whole team, and especially all your best players, have got to be healthy. And, having home field all through the playoffs can be a huge advantage. Seeing as how the strategy of resting and protecting the starters, even at the cost of giving away a chance at the perfect season, seemed appealing to those calling the shots this last season, then I’ve got a plan I think they will love.
You have to remember that Indy is hosting the Superbowl in two years in January 2012. I think they should consider putting into motion a plan to rest the starters all through next season. Don’t play them at all. Oh, maybe a few series here and there possibly, but nothing too dangerous. Just imagine how healthy and hungry they will be then for the following season in 2011, where they could play for home field advantage all through the playoffs and including the 2012 Superbowl itself.
Posted on February 19th, 2010 by Richard. Categories: Financing
PMI, or Private Mortgage Insurance, is a fact of life these days if a buyer wants or needs a mortgage to purchase a home that is greater than 80% of the purchase price. PMI insures the lender for the amount over 80% in case there is a default. Without this coverage, lenders would be hesitant to give a mortgage to anyone with a lower equity position. PMI simply reduces the lender’s risk.
A PMI pemium is based on the loan amount. Typically, on a median priced home, it adds about $50 to $100 per month to the house payment. That’s not a huge amount of money, and often well worth it in order to be able to purchase a home. PMI premiums however can add up to a lot of money over time. It’s good to know then that while PMI might be unavoidable for some, at least it’s something that doesn’t have to remain forever. Usually in about 5 years, the home has increased in value and the mortgage balance has been paid down enough that the combination of the two results in the mortgage balance being below 80% of the home’s value. Also, there may have been improvements or updates completed that have added value to the home further increasing the value. If this is the case, the homeowner can ask the lender to remove PMI. Due to laws passed in 1998, if the mortgage was obtained after then, the lender must remove PMI automatically. If someone feels they meet this criteria they can petition the lender to remove PMI without waiting for automatic removal. The lender typically will then order an appraisal. If the appraisal supports that the mortgage balance is below 80% then PMI will be removed.
There is a way possibly to avoid PMI altogether. Some lenders may offer a piggyback loan, like an 80-10-10. This is an 80% first mortgage loan plus an additional second mortgage for 10%, with the borrower investing 10% down payment, thus avoiding PMI. Some may even offer an 80-15-5 which would require only a 5% down payment. But sometimes the interest rate is higher for the second loan and/or it’s spread over a shorter amortization resulting in a total payment that’s actually higher than a single loan with PMI. You just have to do the math. There are income tax questions too that weigh in slightly. PMI is sometimes deductible and other times not, and everyone’s financial situation is different, so if someone really wants to fine-tune the answer on the differences or benefits of using a loan with PMI it’s best if they consult their tax professional or trusted financial advisor.
Posted on February 18th, 2010 by Richard. Categories: Nature
I haven’t seen the record books or stats, but it just feels like this has probably been one of the snowier and colder Februaries in years. Someone I know remarked optimistically today that if the average high temperature normally is 40 this time of year (which it is I’m told) then we are due for some 80 degree days soon to balance out what we have had so far. Don’t hold your breath for that to happen.
The weather itself is a great teacher. You can’t do anything to change it, and complaining doesn’t help. So the only logical thing to do is to enjoy it. All of it. Every day, no matter what it is. Then taking that a step further and applying that truth to other aspects of living. Well, you get the idea. Easier said than done sometimes…but if you can, it makes the whole ride more fun.
