I wanted to post this and share as a good FYI if you need short sale information.
HUD Announces New Short Sale Requirements
10/03/2013 ARTICLE By: Hugh Moore
Effective October 1, 2013, HUD has announced the following changes to their Federal Housing Administration (FHA) short sale requirements.
To be eligible, one must successfully complete a short sale under the FHA short sale program. The borrowers must meet the following requirements: 1) They cannot list the property with or sell it to anyone with whom they are related or have a close personal or business relationship. In legal terms, it must be an “arm’s-length” transaction. 2) Any knowing violation of the arm’s-length requirement may be a violation of federal law. 3) Your mortgage must be in default, on the date the short sale transaction closes.
Before closing, any additional liens against the property must be released. A lien holder who demands a payment to release its lien must submit a written statement, and an agreement to release the lien if that amount is paid.
For a standard preforeclosure sale, servicers must use a Deficit Income Test (DIT) to determine a homeowner’s financial hardship. The IRS Collection Financial Standards is used to verify homeowners expenses not reflected in their credit report. Only owner-occupied properties are eligible for the standard preforeclosure sale.
Homeowners eligible for a streamlined short sale may not be required to submit financial information or have a financial hardship. Principal residences, second homes, investment properties, and service members who have received Permanent Change of Station (PCS) Orders are potentially eligible.
The appraisal of one’s property should be completed within approximately ten business days. After the appraisal, the short sale file will be updated and prepared for review. In some cases, approval may be required by the investor and/or FHA, which may take more time.
As a new condition, one might be required to make a final payment (sometimes called a cash contribution) before closing. This payment will reduce the deficiency balance.
If one is an owner-occupant, acting in good faith, and successfully selling one’s property, one may be eligible for an incentive of up to $3,000.
The revised FHA short sale addendum must be signed and dated by all parties. Under this addendum, all parties agree that the subject property must be sold through an arm’s-length transaction. An arm’s-length transaction is defined as a short sale between two unrelated parties that is characterized by a selling price and other conditions that would prevail in an open market environment. Also, no hidden terms or special understandings can exist between any of the parties (e.g., buyer, seller, appraiser, sales agent, closing agent, and mortgagee) involved in the transaction.
SELLING YOUR HOME IN THE WINTER
If youre planning to sell your home, whether now or before winter officially ends, now is the time to pay attention to the elements and those items that need to be addressed for weathering Michigans cold months. Routine maintenance items, if neglected, can be a source of potential deal breakers. So, a good place to start is by checking for drafts and indoor air leaks around the house to ensure cold air is not coming in and/or heat is not escaping. Check for daylight streaming through cracks in and around utility items such as outside dryer vents or anything that leads out of or comes into the house. If so, be sure to caulk, fill, and seal properly. This also helps to keeps rodents out too. Consider having your utility company provide a home energy audit. If you are away from your home, have it winterized.
Do you have a home generator or snow blower? This is a good time to test and make sure both are operating properly. Check your outdoor extension cords and make sure there are no exposed wires which could cause a fire. This is also a great time to change or clean your furnace filter, whichever action is required for your type of furnace. Clean your gutters out also to prevent ice buildup. If tree limbs are hanging over your roof, you may want to have those limbs cut away to avoid potential roof damage from heavy limbs (due to the elements) that can break away. While you are at it, check the condition of your roof and your chimney? How is your flashing? Again, inspect your attic for cracks of daylight and seal them if necessary. Soffit vents need to breathe so check these too. Improper grading around homes without downspouts is a small fix that can become a big ticket item. Having adequate insulation is another. If you are selling, the number one thing you can wisely invest in is a private home inspection before placing your home on the market. At the end of the day, the $295 to $350 you pay for a professional inspection and what you will spend on fixing these items can be a bargain compared to a sale price that is thousands of dollars lower than what you expect because of these unresolved items.
Clean up your yard as much as possible and have pictures displayed for your showings. Buyers can appreciate these pictures if you have wonderful landscaping with your prized perennials and annuals that cant be appreciated during the darker winter months. Winter can be a great time to sell with the inventory being as low as it is and choices for buyers being more limited. Multiple bids are also normal in this market. To be as competitive as you can amongst other sellers, rule out as many possible objections to your home as you can.
Winter time is not a bad time to sell. I sell homes throughout the year and with the climate we find ourselves in, there are more buyers than homes. However, just like at any other time, sellers need to pay attention to the details that can cause your home to sit on the market. Routine maintenance can be the difference between a listing and a SALE!
Provided Courtesy of Karen Walls for Move-In Michigan
Renters be on the lookout for Scam Artists!
Rentals now in this climate of foreclosures have escalated. Unfortunately, there are scam artists who are taking advantage of those seeking to rent and these scammers are marketing some of these homes at unbelievable low prices! I was helping a fellow REALTOR place an ad to sell his listing on Craigslist. After entering his listing, we noticed there was a second listing for his identical property. At first, we thought perhaps the Seller had placed a for sale by owner ad and was not sharing that information with the REALTOR. However, upon confirming this with a frightened and angry seller, we discovered it to be fraudulent and law enforcement was called. Someone designed an ad with his or her own phone number. We called the number and it was now disconnected, placed under a phony real estate company name. The kicker, this home was listed for $400,000 and the offer to rent was $800.00 a month. Now the majority of us would say that if it looks too good to be true it probably is! Some of us could clearly see red flags everywhere. Without victims, scammers could not thrive so we have to be mindful.
What can you do to protect yourself against being a victim? Well, again if it looks implausible, research. I would research either way before I plunked down dollars. I would want to know who owns the home, and there is a plethora of websites, which provide free information in this regard. You have the right to ask the owner to provide identification before you hand over money and sign a lease. It is a good idea to hire a REALTOR. They can research a home and ask the necessary questions and speak for you in putting together a lease to weed out the scammers. Check to see if the Real Estate Company and agent exist before you put up money. Furthermore, reference the listing on a MLS system or call a real estate company to see if the same home is listed with another company or if on the MLS with any company. In the case of assisting my REALTOR friend, we found that neither the agent nor the company existed, and we are sure the number was operable for a day or so, just long enough to pull off the scam and get easy money. It is never wise to wire money to an account, or deal with someone out of the country. Once you wire, there is no recourse, you just sent your cash. If you are unable to see a home for any reason, do not put up money. It never hurts to ask the neighbors if they know the owner, have they noticed the home being for rent for a day or so. Simply by asking a few questions, you may run into a wonderful nosey neighbor who is willing to share additional information on the owner and their whereabouts. Ask that the property owner provide a letter that says they are in good standing with their mortgage company, which serves two (2) purposes; it shows the home is not in foreclosure status, and payments are up to date. Secondly, the only person able to obtain this information is the owner with their account and social security number. The owner or Selling agent should not put up any objections in providing this for your reassurance, and I have not yet had a problem obtaining ID for my clientele. Make sure this letter is up to date and current. Two to three months back dated is not acceptable. It only takes three months to become behind in payments, for an account to become delinquent, and for the home to go into foreclosure status. So pay attention to the date. Optimally, you want a letter dated before you sign a lease and place down any monies. If you are using a rental agency, do some checking. If you feel pressured and everything must happen extremely fast, be cautious! Just because someone has keys or can gain entry to a lockbox does not mean they are agents. Scammers can easily have locks changed or setup with a lockbox for the purpose of defrauding you.
Staging and curb appeal in this case takes on a completely new meaning, for the scam artist and the trappings could cost you! Beware, be cautious and ask many questions, do your homework to avoid being a victim. It is just as easy with your own due diligence not to become one! Good Luck!
When it Comes Time to Sell Your Home
Choosing the Right Realtor
For most families, selling your home is one of the biggest financial decisions they will ever make. The process can be daunting, with many important questions that need to be answered. Choosing the best Realtor to market and sell your home can make all the difference, turning an otherwise difficult, stressful process into a comfortable, informed experience that you are in control of. As a top Oakland&Wayne County area Realtor, I will make sure that you get the best price for your home, in the least amount of time.
I analyze and determine home values in my market every day. As a top real estate expert in this market, I can help you determine exactly what your home is worth in the current market. Then, as an experienced professional, I'll market your home and negotiate on your behalf to sell your home at the best price possible.
I will aggressively market your home not just locally, but on a national basis. Through my professional contacts and affiliations, as well as my advanced technology tools, I can instantly put your home listing in all of the places qualified buyers are looking. Within minutes, I can alert every Realtor in your specific area, as well as national firms that specialize in helping people relocate to new areas.
I will come to your home and personally advise you of how to best prepare your home to get the highest price, in the shortest amount of time.
I will protect your best interests throughout the entire process. You can leverage my years of experience as a top real estate professional to answer all of your questions about every aspect of the selling and closing process. You will be informed and in control, every step of the way. It's my job to make sure your home selling experience is as comfortable and painless as possible!
Getting Ready to Make Your Home Purchase ?
Before You Look at Your First House
Experienced home buyers know that one of the first-steps in beginning a successful search for a new house is taking a hard, objective look at finances. Determining how much money you can dedicate to the purchase of your new house affects almost every aspect of buying a new home - including how we write the offer, which mortgage programs you will qualify for, shopping for the best mortgage loanand which homes are truly in your price range.
Here are the questions that each home buyer should ask:
How much cash is available for a down payment? The amount you have available for a down payment will affect what types of loans for which you can qualify.
Am I ready to write a check for the earnest money? Earnest money is a cash deposit made to a home seller to secure an offer to buy the property. This amount is often forfeited if the buyer decides to withdraw his offer.
How much additional cash will be available to pay for closing costs? There are certain standard costs associated with closing the sale of a house. These fees are split between the buyer and the seller, as spelled out in the sales contract.
What is the maximum monthly mortgage payment that I can afford? Most lenders will use the 28/36 rule to determine the maximum mortgage payment you can afford.
The 28/36 Rule No more than 28% of your gross income can be applied to your mortgage, real estate taxes and insurance. And no more than 36% of your gross income can be applied to your mortgage expenses plus your regular debt expenses (car payments, credit cards, other loans, etc.).
Graduate Realtor Institute Members
Why Choose a Member of the Graduate Realtor Institute?
My GRI is to your Advantage!
You Have Found the "Walls" you deserve is a tag line I use on most of my printed materials. To me, this motto means that you deserve a full-time agent who is knowledgeable about the Oakland/Wayne County real estate market, one who has made the investment of both time and money to earn the GRI (Graduate of the REALTORS Institute) designation, and ASHI and Builders courses, and one who has established good working relationships with other REALTORS.
That is why I have worked so hard at keeping my skills up to date. I continue to take courses and seminars to keep me on top of what is happening in financing, negotiation skills, marketing, advertising, fair housing, buyer''s agency, etc.
Because you deserve the best, I will work to see that your home-buying or home-selling experience is as easy and hassle-free as it can be and that your transaction is handled in a professional manner.
A GRI has received one of the most comprehensive training programs available today to REALTORS? in the nation.
A GRI has additional knowledge of real estate marketing and has acquired skills that sets them apart from other REALTORS.
In todays competitive business environment a REALTOR needs more than just motivation and initiative to succeed. A GRI has the advantage of the education received in the GRI program.
The GRI program is continually refined to provide entry-level and experienced REALTORS with the information that will help them succeed in today''s market.
A GRI is knowledgeable in many aspects of Real Estate that allows them to overcome obstacles that can jeopardize a transaction.
A GRI has access to a large base of referrals.
A GRI has demonstrated his/her commitment to professionalism in the real estate industry.
If You're Thinking of Purchasing a Short Sale
Are short sales good deals?
Every now and then a good deal will come along. Often times people hear the words "short sale" and automatically think of a seller that is insolvent and must sell their house fast to avert further financial problems. This is sometimes the case and can be an opportunity for a buyer to take advantage of another's misfortune. Alternatively, a lender may consider a short sale even if the seller is current with their mortgage, but property values have depreciated. In cases such as these the "bargain" price may in fact be consistent with true market values rather than below.
How do I buy a short sale?
Always do your research before making any offers. Using a qualified REALTOR® from RE/MAX Classic to assist you with researching a property can help you make informed decisions. We can help discover to whom the property is titled, how much is owed to the lender, and whether or not a foreclosure notice has been filed. Obtaining this data can help you make a decision about how much to offer.
Get a real estate professional with short sale knowledge. The real estate agents at ReMax Classic can aid you in expediting the transaction and ensure that you're protected. Don't let inexperience slow down the closing process. Put our experience and knowledge to work in your favor.
Even in the best of situations and with an experienced real estate agent, buying a short sale property will generally take longer than a typical real estate transaction. Know that most short sales will not close in the customary 30 days or less. Remember that you're not only having to satisfy the seller, but the lender must also agree to the terms of the sale. Commonly, your offer will go before a committee to approve or disapprove which will add time - sometimes even 2 to 3 months.
Home protection warranties, buyer credits and allowances, and closing cost concessions are typically not negotiable when dealing with a short sale. The lender will sell the property just the way it is which means the lender isn't going to pay for repairs. Be sure to reserve the right to have the property inspected for pests, HVAC, electrical, and other critical areas. At RE/MAX Classic, when we write an offer, we're looking out for your interests first and foremost and will always recommend that you make your offer contingent upon the outcome of the inspections.
Confused About Short Sales
Time to short sell your home?
Don't know what a short sale is? A short sale happens when the value of a home is less than what is owned. This situation is usually caused by home values in a market rapidly deflating.
For many homeowners, a short sale is an ideal way to avert foreclosure or bankruptcy when they can negotiate with the lender to write off the remainder of the loan.
How do you proceed with a short sale?
First, figure out the true market value of your property. For those whose finances are already pushed to the limit, engaging a licensed appraiser may not be an option. Therefore, a qualified local REALTOR® that knows the current conditions of the real estate market is a sound way to get a realistic estimate of what your home could sell for.
Need an honest idea of what your home today's market? Contact me today to find out how you can get help.