What are the consequences for homeowners in distress?  What is the affect?  Foreclosure vs. Short Sale

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Foreclosure vs. Short Sale

Whether you are in a Short Sale situation or not, you are directly affected by the Short Sale’s happening around you.  With an average range, depending on area, of 25% to 40 % of homes on the market selling at a loss, the short sale and distressed market cannot be ignored.  Here is a quick overview on the Who, What, Why & How of Short Sales.

WHAT IS A SHORT SALE?

A “short sale” occurs when a mortgage lender or lenders agree to accept less than the total amount of money they are owed on a piece of real estate in order to facilitate the sale of that property. This is generally accomplished when the owners of the property have fallen behind on their monthly mortgage payments and a foreclosure of the property is looming.

A “short sale” allows the property to be sold and the lender to recoup some of its losses. It also allows the homeowner or property owner to sell the property and avoid having a full foreclosure further ruin their credit and potentially severely impede their economic future for years to come.

WHAT QUALIFIES A PROPERTY FOR A SHORT SALE?

The owners of the property, in most cases, must be at least thirty (30) days behind on their mortgage payments and facing a potential foreclosure action. Further, the owners generally must show a financial inability to get caught up with their mortgage payments as well as a further inability to then continue timely payments in the foreseeable future. A recent hardship, such as a loss of employment, may favorably play into the analysis. The property value on the open market today must also be less than what the owners owe their mortgage lenders.

WHY WOULD A LENDER ACCEPT LESS THAN WHAT IS OWED?

Foreclosures are a very expensive and time consuming legal action for mortgage lenders in our state. Once the six (6) month non-judicial foreclosure process is completed and all the fees are paid, the lender then has to sell the property to try to recoup its money. This involves the sale costs to the lender that the now foreclosed owner would have been facing if they tried to sell the property on their own. Repair costs, marketing costs, Realtor® commissions, appraiser costs, title fees, escrow fees, excise tax, property taxes as well as having their money tied up in a nonproductive asset are all borne by the lender who foreclosed.

In today’s declining real estate marketplace there is a very good chance that lenders will still end up selling the property for less money than they were owed except that now they have incurred all of these additional costs of foreclosing as well as all the carrying costs on the property, such as real estate taxes and utility bills, while the property sits vacant. Because of these many costs and the unpredictability of the declining value marketplace, a properly submitted and documented short sale can often be very appealing to a lender.

HOW DO I SELL A PROPERTY IF I OWE MORE THAN IT WILL SELL FOR?

Anywhere from 25% to 40% of homes on the market in our area are selling at a loss.  One homeowner in ten is behind on their mortgage right now.  This economy has caused a lot of unbearable stress and heartache for many people.  Most who sign a mortgage don’t intend to walk away from it.  Still, unforeseen circumstances – huge medical bills, lost jobs, divorce or eroding property values – can overwhelm even the best-intentioned borrower.

As a leading Short Sale specialist I work with a group of real estate attorneys, paralegals, legal assistants, limited practice officers, title examiners and escrow closers to negotiate with your lender an amount less than what you currently owe on your loan in order to get your house sold; and virtually at NO COST to you.

Contact me for a confidential consultation.

Mike Rozell ~ 206.799.3414 

From my family to you and yours, we wish you warmth in your home, happiness in your days, and peace in your world during the holidays and always. Have a wonderful Christmas and a prosperous 2009!

Best of success,

Mike Rozell

It seems to be a question that goes through every seller’s mind when the holidays roll around: Should I Take My Home Off The Market During The Holidays?  I think it is a fair enough question and certainly understand the temptation.  So lets think this through while keeping in mind the goal of Selling Your Home.  I love some of the thoughts pointed out in an article written by Blanche Evans.  Here are a few of the main excerpts:

It is understandable why you would be tempted to take your home off the market during the holidays. And the list of justifications is long. If you are too busy, buyers may be also, and you may find your efforts unrewarded by enough showings. And what if you do get an offer? You may be faced with the possibility of packing and moving during the busiest time of the year. Besides, you can give your house a rest, and it will have better momentum after the holidays. Better to just pack it in and start fresh in January, right?

But wait! Top-selling Realtor Jennie Ling says taking your home off the market during the Christmas season is a mistake. A vice president of the largest independently owned brokerage firm in Texas, Henry S. Miller, Realtors, and multiple Top Producer award winner, Ling exclaims, “The house sure isn’t going to sell off the market! What is the advantage of that? So you’re busy. Let your Realtor do the work. You can leave in the morning, go to work, go shopping, and let your Realtor take care of things.”

“The holidays are my best-selling period. Why? Because most people take off work sometime during the season. The husband and wife are both off and want to see houses. I showed homes on New Year’s Day last year. I like the holidays because the buyers have more time, and they can look at homes together.”

Before you take your home off the market, consider the following points:

Although buyer activity may appear to slow down, the buyers who are actively looking during the holidays are that much more serious. Ling believes the home market is no more affected at Christmas than during other “busy” period. If that were so, the market would shut down throughout the year as families concentrate on spring weddings, June graduations, summer vacations, and autumn back-to-school activities.

Many buyers deliberately choose to shop for a home after the busy spring and summer rush. They know that it will be easier to look, and that negotiations will be less stressful. They may not have children, or they may have grown children, so moving to accommodate the school year isn’t a consideration. Finding the right home at the right price, however, is.

Relocating families often don’t have a choice in when they can leave for their new destination. Although 68 percent of transferring families have children, many families have to transfer during the middle of the school year. These families are that much more motivated to get their families settled in before either before the January semester begins, or to arrange for the move during spring break in March. If you sign a contract by New Year’s Eve, the timing couldn’t be more perfect.

At Christmastime, our culture focuses on family and the home. Preparing for the indoor activities of winter is one of the most enjoyable periods of family life. Allowing buyers to view your home during this most hospitable of seasons lets them better picture their own family life in the attractive environment you have created.

When is your home ever more beautiful and inviting? You have cleaned and decorated, and your home looks like a picture postcard. If the results are good enough for family and friends, they will surely be good enough to impress your buyers. Get the family team on board to do a five-minute blitz pick-up every morning to keep holiday messes to a minimum.

With reduced inventories and motivated buyers, you will have all the members of the MLS on your team. You may find you have more showings than you would if your marketed your home during a busier time of the year.

If you do get a contract, you can arrange the terms to suit your needs. If moving during the holidays isn’t an option, you can put in the closing date of your choice. “Most people can close 30 to 60 days after a contract is written, so there is plenty of time,” Ling says. “Possession and closings are very negotiable.”

Mike Rozell ~ Realtor | Real Estate Agent
First-Class Service | First-Class Results
www.KennydaleRealtor.com

8 Reasons Your Home Hasn’t Sold Yet – Advice for Frustrated Clients 

In October 2005, David Raimondi put his 100-year-old Allendale, N.J., house and barn on the market, asking $525,000. It’s been almost three years, and the property has still not sold.

Raimondi, a housepainter who wants to move to a less expensive area, is one of the growing ranks of frustrated sellers whose homes have been on the market for more than a year. Though most sellers don’t stay on the market for years, Realtors say the average time between listing and sale has stretched out during the housing slump.

These sellers’ experiences show just how tough the market is. Still, real estate agents say, there are buyers out there, and it’s possible to sell a property if you take the right steps. Interviews with real estate experts, along with a closer look at Raimondi’s story, offer these lessons for sellers:

1. The First Offer is Often the Best Offer. There’s a reason this is a real estate cliché. Within a week or two after Raimondi first listed his house in October 2005, he got an offer for $495,000″“$30,000 less than his asking price. He turned it down, convinced he could do better. But the real estate market began to slide in late 2005 and has not recovered yet.  Continued… 8 Reasons Your Home Hasn’t Sold Yet – Advice for Frustrated Clients - Kathleen Lynn, RISMedia

Mike Rozell ~ Realtor / Real Estate Agent ~ www.MyLifestyleRealtor.com 

‘There’s No Place Like HOME’: Staging business helps homes sell 

Real-estate staging was once a foreign term to Sue Lunsford.

“Å“You need to do what?” That was Lunsford’s reply to the Realtor friend who asked her to stage a home.

It was the friend’s first listing, and she needed to fill the empty house. She thought of Lunsford’s Kennydale garage full of furniture and home accessories, collected over her 10 years as a representative for a home decor marketing company. Lunsford also has a degree in the fashion industry, with a minor in interior design.

Lunsford added some furniture, and the house sold in two days.

“Å“I thought to myself, “ËœOoh, there might be something to this,’” Lunsford recalls.

So she took some staging classes and started building clients.

Her company, There’s No Place Like HOME Staging, is now a 100-percent referral business. Most her business is with real-estate agents, but she also works with real-estate investment firms, and individuals inspired by shows like A&E’s “Å“Flip this House.”

She stages all over, in Carnation, Duvall, Federal Way, West Seattle, Bellevue, Renton and Auburn. A current client has a 6,000-square-foot estate in Carnation.

Her 1,000-square-foot warehouse in Renton has enough furniture and accessories to stage 12 homes at once. Included in the jigsaw-puzzle jumble of decor are 27 silk ficus trees “” she usually puts one in every major room “” and 10 or 11 telescopes, for homes with a view.  Continued… ‘There’s No Place Like HOME’: Staging business helps homes sell  -Emily Garland, Renton Reporter

Mike Rozell ~ Realtor / Real Estate Agent ~ www.MyLifestyleRealtor.com

Are you looking to sell your home but are worried about selling into the slumping housing market? By all accounts, the market is bad. A recent report out by the National Association of Realtors showed that sales of homes fell for the eighth time in the past nine months. Meanwhile, the supply of unsold single-family homes has risen to the highest level in 23 years. Given this environment, what is a homeowner looking to sell to do?

Though certainly not an easy feat, there are measures you can take to improve your chances of success. From Consumer Reports, here are five tips on how to sell your home in a difficult market:

- Pick the right broker. Look for local agents who are listing, marketing and selling in your community even if the market is slow. Ask several of them to make a “Å“listing presentation” to discuss your home’s value, justify their numbers and explain how they would market your property. Once you decide on a broker, you have three types of listing options. In an open listing, you reserve the right to sell the home yourself and not pay a commission, but you also allow one or more brokers to offer the property. With an exclusive-agency listing, you have one broker but reserve the right to sell the property yourself. An exclusive-right-to-sell listing gives only one broker the right to represent you during the listing term and guarantees the broker a commission. Most Multiple Listing Services will post exclusive-agency and exclusive-right-to-sell listings.

- Understand the real marketplace. To negotiate effectively, you need to know up-to-the-minute sale prices-not just what your neighbor’s house sold for last year-and the deal-making behind them. For example, two homes may each have sold for $400,000, but if one owner gave a 3% credit for deck repair and a new furnace, that’s a $12,000 reduction. Your agent should be knowledgeable about the details of sales in your area and be nimble enough to revise the marketing plan for your home to reflect changing conditions.

- Sweeten the deal. Sellers are reportedly offering some unusual sales incentives-plasma TVs, cars, boat slips, vacations and golf carts-but cash may still be king. For example, some sellers have agreed to pay condo maintenance fees for the buyer. Other ideas include covering moving expenses or a month’s mortgage payment.

- Be flexible on the deposit. To “Å“bind” a deal, the buyer should put down a deposit (separate from the down payment), which varies widely depending on the local market. You’d like the biggest deposit you can get, but in a slow market you may have to settle for less.

- Monitor and update your listing. If it’s April, you don’t want the photo of your house on the Multiple Listing Service displaying a snowman on the lawn. An out-of-season picture is a dead giveaway that your home has been on the market for awhile. And with many buyers doing their first “Å“look-see” on the Internet, the quality of the photos is paramount too.

© 2008, MarketWatch.com Inc.

Mike Rozell ~ Realtor / Real Estate Agent ~ www.MyLifestyleRealtor.com