Selling Your Home Short Sale

The biggest disappointment of the housing collapse has been those homeowners that lost their home through foreclosure. These families went in with good intentions and had their dreams shattered due to faulty loans, lost jobs or crumbling home prices. Those homeowners that had their home repossessed by the bank, had their credit destroyed and a loss of dignity. Given a choice, these families might never want to or be able to buy a property again. There are options for any homeowner facing the prospects of a possible foreclosure. Loan modification is one avenue, sell your home for market value and pay the difference, but the best alternative is a short sale. A short sale is defined as an outstanding loan obligation against a property that’s greater than what the property can be sold for.

Every short sale is handled differently depending on the individual bank or banks involved. A large number of owners take out a first loan and a second loan for down payment purposes. If the first and second are being financed by the same bank or mortgage company, the short sale is much less difficult. Short sales are not guaranteed and each case will be judged as a separate entity based on the sellers hardship. Short sales that are approved can take four months or longer. Here’s the protocol to achieve results and expedite the process.

Find A Realtor: An experienced short sale agent will be a valuable asset as a counselor, negotiator, mediator and advisor. Your realtor will wear many hats during this stressful situation and you get his expertise at no cost. The negotiated commission is paid by the bank.

Contact Your Lender: Proceed with the knowledge that you will have to make numerous phone calls before speaking with the supervisor that can actually make decisions. Make sure you keep records of your conversations and who you spoke with. This supervisor will not make a decision on the short sale approval at this time. They will inform you of what is expected to eventually get approval.

Authorization Letter: Lenders will need your written permission to have the realtor negotiate on your behalf. This letter should include the realtors company and name. All correspondence should have your name and loan number. With the large number of short sales being processed, don’t be surprised or frustrated that paperwork is lost or misplaced by the short sale department. Confirm receipt.

Hardship Letter: The letter will describe your hardship and is basically a plea to the lender to accept less than full payment. Honesty is the best policy. Lenders have become more sympathetic to the economic blight many homeowners find themselves in.

Documents Required: The same documents required to buy a home are the same they need to determine your eligibility for the short sale. Proof of income and all assets. Copies of bank statements including any retirement accounts and stocks in your name and taxes over the last couple of years.

Realtor Requirements: A comprehensive market analysis showing an estimate of value. This is a factual estimate substantiating the reason you can not pay off the loan in full to the lender. A listing agreement signed by both seller and their agent and a purchase contract with an agreed sales price signed by the seller and buyer. An itemized net sheet showing fees and cost associated with the sale are required with the accepted offer. Lenders will then decide what if any fees, repairs or cost they will pay. At this point is when the lender will approve the short sale. Both foreclosures and short sales have an adverse effect on your credit, short sales to a lesser extent. There are documented cases of short sale participants buying another home within two years. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my informative blogs and easy access to view local area homes for sale in Davis, California and the surrounding communities.

Home Price And Property Condition Intertwined

As we slowly recover from the housing market debacle and the plethora of foreclosures and short sales, one element has created a strain and curtailed a quicker comeback. Many home prices and the general condition of that property are not conducive to a home actually selling. This dilemma has had a negative impact on our recovery. When homes linger on the market, this sends a bad message to home buyers. They become cautious and more likely to delay buying a home until prices come down.

Today’s home buyer will not blindly bid on a home without knowing the activity surrounding that property including properties that have sold and active listings on the market. Condition has become an important factor whether a home sales or becomes a casualty of the housing recession. Unfortunately, it’s common for a property to sit on the market for months and become stale, then out of frustration the owner decides to pull their property from the market.Those sellers are disappointed with the successes other neighbors have had selling their home, but fell to realize those neighbors had properly priced their home on par with the condition.  

Every home does not have the luxury of the perfect location, therefore sellers have to be conscious of their homes price and condition. Just because the home down the street received a full-price offer in seven days does not mean you’ll be so blessed. Step outside the box and look at your home subjectively or have friends give you an unbiased opinion of your homes condition. Armed with this information, then have your listing agent take you out and view the properties in your immediate neighborhood.

The concept of pricing high, we can always reduce it later is a strategy that many homeowners live to regret. The first few weeks on the market are the most critical time. Properties that usually garner full-price proposals do so during this small window. A well-maintained home, combined with a competitive price will be attractive, regardless of the time of year or the economic environment. Most buyers will bypass houses that have been sitting on the market too long, even though those sellers might have made price adjustments throughout the process. A number of homes will transfer this year and the glaring fact will be the price and condition were in line with buyers expectations. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my other informative blogs and easy access to view local area homes for sale in Davis, California and the surrounding communities.

Buying A Home From Start To Finish

Every situation has a beginning and an end, a start and a finish. Buying a home is no different. The purchase of a home will be by far the biggest ticket item a family will buy in their lifetime. Owning a home is a long-term financial commitment that requires time and patience on the part of the prospective home buyer. Whether you are a first-timer or repeat buyer the process can be exhausting and overwhelming, but with such a large investment, buyers have to take it one step at a time and follow the time proven blueprint that will ensure a successful cost saving experience.

Pre Approval: If done correctly, this step will take time and is almost as important as the home itself. Most lenders have fairly equal rates, it’s the fees they charge that differentiate themselves from each other. The most cost-effective approach is to interview multiple banks or mortgage brokers, making them aware you will be comparison shopping. Request a “Good Faith Estimate” from each lender and allow no credit checks during this preliminary stage. This method allows buyers to then compare each estimate and be assured they have the very best loan with minimum upfront fees. The only credit check will be done by the lender that you decide to do business with.

Choose Your Agent Wisely:All realtors are not created equally. Using an agent that has successfully worked with friends or a family member is one avenue. An experienced realtor can be an advisor and a valuable source of information that is worth their weight in gold. if the friend or family referral is not possible, then meeting an experienced realtor at weekend open houses is a good start. The chosen agent should keep you updated and available at all times for questions or to view new homes on the market. If it appears this realtor takes numerous vacations or not available more times than not, then switching agents in midstream is acceptable. Remember to choose your agent wisely.

Your Dream Home: It’s time to get busy finding that near perfect home. You have your realtor, lender and pre approval letter and have probably already seen a few properties that meet your requirements. Most homes for sale have virtual tours on the Internet and can easily be accessed through the numerous real estate sites. Location is still the most important criteria. The condition can be improved over time, but location can’t be changed. Some home prices are negotiable, unless there are competing offers, then you have to assume a full price offer is in order.

Inspection Contingency: The California Residential Purchase Contract has numerous contingencies in play for the buyers protection, one being the seventeen day inspection contingency. A buyer has that amount of time to perform as many inspections as  they deem necessary. This allows the buyer the satisfaction of knowing the home they purchase is free of major defects. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my informative blogs and easy access to view local area homes for sale in Davis, California and the surrounding communities.

Selling A Home Today And The Buyer It Attracts

The traditional seller today has a lot on their platter prior to marketing their home. Most owners start weeks or months in advance researching the market trends and sizing up the competition. Your realtor can be a source of valuable information and knowledge. The pre-listing period gives the homeowner a chance to exhale and gather data that will help determine the type of buyer your property attracts. The old adage ” there’s a buyer for every home” still carries weight in today’s real estate. Here’s a summary of the type of buyers that now control the market and what a seller can expect when negotiating with these contrasting personalities.

All Cash Buyers: Even with interest rates at historical lows, there are still all cash purchasers on the market. Many of these buyers are investors taking advantage of the plummeting prices or the limits on the outstanding number of loans investors can carry. Some all cash buyers sold their home and were able to purchase a replacement home without obtaining financing. With no loan or appraisal contingencies, these all cash buyers realize how attractive their offers are and expect major price and term concessions from the seller.

FHA Buyers: The polar opposite from the cash buyer. Some of these FHA programs allow buyers to purchase a home for as little as 1/2 percent down. These buyers have to occupy the property. FHA requires all amenities in the property to be in working order and an “as is” home is virtually impossible. Sellers have to be cognizant of any defects in the property and a quick closing is not likely with this buyer.

First Time Buyer: More of these buyers are now active on the market and are taking advantage of the low-interest rates and home prices. The lower end and mid range priced homes have been attracting these consumers. To ensure a smooth process, sellers should be patient and prepare themselves for a litany of questions and the possibility that small issues with their home will be magnified in the eyes of the first-timer.

Empty Nesters: This crowd has owned a number of homes in the past and want a home that might be the last. They are shrewd and wise, but understand no home is perfect. They are normally looking at downsizing and smaller one story properties or condos are the preference. Since these buyers have owned a home before, sellers can expect an easy process with the empty nester.

Bargain Hunters: Just as the name suggest, a bargain captivates this buyer. Patience is a virtue is their motto and they will wait until the right home falls in their lap.  These buyers are focusing only on properties that are priced below market value. This is the least desired buyer because it probably means the sellers are dealing with their own personal or housing repair issues. Sellers should familiarize themselves with each type of buyer, more than likely, you’ll be dealing with one of these buyers in the future. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my other informative blogs and easy access to view local area homes for sale in Davis, California and the surrounding communities.

Selling Your Home: When To List It

Those homeowners that dared put their home on the market over the last five years might have questioned their sanity, based on the drop in home prices plus the length of time it took to get the job accomplished. The housing sector has had a huge effect on the sluggish economy, along with the high unemployment rate. That combination has been a difficult hurdle for the well-being and recovery from the recession our country has experienced over the last few years. There are signs of hope on the horizon. The national unemployment rate took a drastic turn for the better and home prices have been fairly stable. There is certainly light at the end of the tunnel.

The California Association of Realtors is predicting slightly over two percent sales increase statewide. As is often the case in real estate, location is the key factor. Davis, California will benefit from increasing employment in the Sacramento region and growth in local jobs at UC Davis. The region’s projected employment growth provides more prospective buyers who can afford the higher priced Davis homes. The optimistic expectations are about a six percent increase in home sales for 2012 compared to the 2011 numbers.

The good economical news has parlayed into a robust start in Davis housing since the beginning of the new year. Sellers have taken advantage of the surplus of buyers infiltrating the market, just as buyers have benefited from the historically low-interest rates. The biggest complaint coming from buyers right now are the low inventory of sellable homes on the market. Many buyers are no longer sitting on the fence waiting for prices to drop, but have held back due to the low number of houses for sale. The well-priced homes have sold quickly and a few with multiple proposals.

Well maintained, ready to move into homes, priced fairly will garner a premium price today. Supply and demand is certainly in favor of the seller through the first two months of 2012. It’s common for most homeowners to wait until Spring or Summer to start the marketing process. For those owners that have no time restraints, breaking the normal cycle and listing your home now could be a financial profit. Home buyers are anxiously standing-by for that properly priced home to hit the market. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my informative blogs and easy access to view local area homes for sale in Davis, California and the surrounding communities.

Home Buyers: New Home Or Established Neighborhood

There are number of valuable lessons a realtor learns early in their careers, maybe the most useful being, what a buyer prefers to buy and what they end up buying are significantly different in most cases. This old truism has stood the test of time and will continue as long as homes are bought and sold. There are certain characteristics that a buyer will not relinquish, a buyer looking at downsizing will not pursue a larger property, buyers that want a one-story home will not magically change their mind, the home buyer that desires no restrictions will not be satisfied with a condo that has a Homeowners Association. Another amenity that fits in this category would be the new home or established neighborhood buyer. There are pros and cons with either of these choices.

Neighborhood Outlook: Purchasing a home in a new subdivision has many advantages with your ability to determine what upgrades are included and knowing the builder will stand by their workmanship with warranties. The unknown would be the potential of not knowing who your prospective neighbor could be. Might a family move-in next door with dogs that bark all night or a family with a kid starting a band that uses the garage as a studio. These are liabilities that a family can not be aware of when buying a new home. There are certainly pluses with the more established neighborhoods, you are very much in tune with the dynamics around that home and can question other neighbors and get a first hand report on the good and bad surrounding that property. The downside with the established neighborhood are the homes are more dated and will eventually need some of those upgrades that the new home offers upfront.

Property Taxes/Assessments: Using homes in Davis, California as an example. The newer subdivisions have a higher tax rate with assessments and bonds that are not prevalent in the older neighborhoods. These assessments can add hundreds of dollars a month extra to your monthly mortgage payments. This could be monies spent toward home improvements on the dated property. The best way to describe these additional taxes are, either you pay the tax man on the new home or you pay the contractor for home improvements in the dated home. Your choice.

Property Location: This is the most important factor when evaluating any house purchase. With numerous subdivisions built over the last fifteen years, newer subdivisions have been pushed to the outer limits of most communities. The positive aspect of so much building are the inclusion of newer schools, parks and shopping malls that make those newer neighborhoods attractive. Location has always been the linchpin in determining a homes desirability. Every home buyer will make their own decision when it comes to what type of home they purchase, weigh all the options and personally research any subdivision before making that move. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my informative blogs and easy access to view local area homes for sale in Davis, California and the surrounding communities.

More Layoffs Loom For Davis School District

With the Measure C ballots now disbursed and due back on March 6th, the added pressure of not just lost classroom programs, but the potential job losses of 87 teachers ranging from English and math teachers, plus school nurses and food preparation specialist. This parcel tax would be accessed to single family homeowners at a rate of $320 a year and $150 a year for apartment residents. This would generate an additional $6.5 million annually, enough capital to keep those elementary courses such as music, art and science or cutting social studies and foreign languages and the prospects of losing excellent teachers that will take their valuable talents to other school districts.

Measure C is an easy choice if you still have kids in Davis schools, we all want our children to have the best scholastic opportunities and the passing of this parcel tax assures that our schools continue preparing our kids for future success. What’s in it for those Davis residents that no longer have kids in school or those families that moved to Davis, whose kids attended other school districts and no longer have a vested interest in our schools. Each individual will have to weigh the pros and cons for themselves and determine if our highly acclaimed school rating will continue being the envy of other school districts.

The passage of Measure C is vital for those Davis homeowners, whether you have children in school or not. Even though our housing prices are nearly double that of our neighboring communities, schools are the most important element in keeping buyer demand strong and home prices stable. The quality of Davis schools is the most often stated reason for home buyers selecting Davis over our surrounding communities. This parcel tax is an important investment in Davis. For less than a dollar-a-day, we keep our top-notch teachers, counselors and instructional aides, smaller class sizes and the critical school programs.

The state of California is still swimming in red ink and state and local schools have been part of the budget cuts. With these cuts comes the inevitable neglect that now has our entire state school rankings near the bottom nationally. We can continue keeping Davis unique and one of the most desirable small towns to live in the country, by voting yes on Measure C. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my informative blogs and easy access to view local area homes for sale in Davis, California and the surrounding communities.

Selling Your Home In These Tumultuous Times

On average homeowners will sell their home about every seven years. Each sellers situation is different, some transfers are due to a job relocation or empty-nesters looking at downsizing, growing families needing more space or the unfortunate economically induced short sale or foreclosure. No matter the reason, timing is everything. David Crowe chief economist with the National Association of Home Builders predicts a U.S. housing market turnaround beginning this year, building toward a solid recovery in 2013. The good news continues with the latest unemployment numbers standing at 8.3% and a drop in the number of Americans seeking jobless benefits to 2008 levels. There’s enthusiasm on Wall Street where stock prices for home builders have jumped 20% to 134% since August even though housing starts are expected to only rise 15% to 20% this year.

With all this encouraging news on the home front, why are so many traditional sellers (not short sales or foreclosures) hesitant and apprehensive about the prospects of selling their home in 2012, especially with the recent home buyer activity since the beginning of the year. Everything being fairly equal, buyers much prefer negotiating with a seller rather than a bank. Any homeowner that bought a home in the last six years, the hesitancy is understandable with so much home depreciation during that time. For those owners that purchased back in the early 2000′s or before, home values more than doubled in some markets and this includes the downturn that began in 2006. For instance, Davis, California’s average sales price in 2000 was $265,734 and the sales price in 2011 stood at $477,000, that’s an astounding 79.45% increase in that span of time.

For those homeowners that were fortunate enough to have bought a home and lived through the housing boom, where home prices jumped from 10% to 15% a year for a six consecutive years, the downturn has caused many families to hold on to their home for the immediate future in hopes the market will change directions. The days of yearly double-digit appreciation are long-gone. When the housing market fully recovers, normal year-to-year appreciation will be in the range of 2%.

Some sellers have taken advantage of the limited amount of inventory and have successfully gotten their home sold for a decent price and in a timely fashion. Home buyers have confidently migrated back to the market and this has increased the need for more properly priced houses. For those homeowners that have chosen to hibernate and delayed the process of selling their home, now could be the right time. Please visit my website at www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my other informative blogs and easy access to view local area homes for sale in Davis, California and the surrounding communities.

Buying A Home Today And What To Anticipate

The thrill of owning a home seems to have resurrected itself after years of home buyers regretting their choice of buying a home or out-right rejecting the thought of even considering purchasing a property. Prospective home buyers now feel confident that buying a house will not lead to a financial catastrophe and have a sense over the long haul that homeownership is again, the American Dream. Buyers are more optimistic than in the recent past and many factors have changed the dynamics of buying a home now compared to the last few years.

Interest Rates: Mortgage interest rates have steadily crept to record lows over the last few months and now stand at 3.87%, the ninth time over the last year that rates fell to record lows. Interest rates in February of 2011 stood at 5.02%. Buyers are taking advantage of these opportunities with a renewed fervor. Ben Bernanke repeated the Federal Reserve’s plan to hold interest rates near record lows until at least late 2014.

Housing Inventory: The normal supply of homes have historically been low the first couple of months of a new year and this year is no different. Presently the supply and demand factor favors the seller, with demand outweighing supply at this time. The majority of homes come on the market in the Spring and Summer. More correctly priced homes are garnishing multiple offers with the low surplus of available inventory being the logical reason. Open houses are now gushing with serious prospects that would like too or will be buying a home this year.

Low Down Payment: The assumption that buyers need 20% down payments are inaccurate. The FHA loan has been around since 1934 and a down payment can be as low as 3.5% of the purchase price and most of your closing cost and fees can be included in the loan. For those fixer-uppers, FHA has a loan that allows you to buy a home, fix it up and include all the cost in one loan. In a few cases, investors can qualify for a FHA loan. Lenders still require a 20% to 25% down payment for investors using conventional terms.

Home Prices: Housing prices have tumbled nationally and locally. Since 2006, homes in Davis, California have adjusted by 20% and our surrounding neighbors have plummeted by 50% or more. Over the last three years, Davis has stabilized with less than a 2% price difference. We now have the triple threat or the perfect storm for home buyers, historical low-interest rates, low down payment requirements and the huge price drop. Add in the fact that some sellers are offering buyer incentives such as assistance with closing cost or credits for home improvements. Please visit my website at www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my informative blogs and easy access to view local area homes in Davis, California and the surrounding communities.

Home Sellers Expectations Versus Reality

When a homeowner starts the process of selling their home, their expectations are we want the maximum value, little inconvenience, no concessions and not much coin toward home improvements, then reality sets in. This mind-set is not universal, but a concept that happens more happen than not. The sell of a home does have a psychological angle. It has been shown in scholarly studies that what we own, we value more than what we do not own. For example, scientists took groups of subjects and ask what a nice cup is worth and they say $5. However, they gave a group of matching subjects the cups. Then they asked the same question, what the cups are worth, and they valued it at $8, mainly due to the ownership theory.

Similarly, when we own a property, we have an emotional attachment which distorts an objective view. Sellers decide to wait for their higher price. While this may appear to be a good idea, the higher offer may not arrive and it introduces a delay in a sale. They need to make an objective evaluation. With the housing market down, now is a great time to buy a property, but it’s only a good investment if the price is right. Sellers have to be logical and waiting for your price can often be the worst decision, knowing human nature is to increase the value of what we own. Enough with the psychology.

Homeowners feel their home is unique and put more emotion than logic into the pricing aspect. Sellers can control the initial asking price, but can’t control the eventual sales price. Sellers can make their home more marketable by creating price, condition and terms that fall into market trends. A real estate professional can evaluate the market and provide the knowledge, skills and tools necessary to determine an accurate assessment of fair market value. Homes that are priced too high miss their target market. Some sellers will take the “Let’s try it and see what happens” approach, we can always adjust the price later. This manuever will end up costing the owner in the long run, since the first four to six weeks are the most important during the marketing stage. After this point, most buyers and agents lose enthusiasm, as other newer and better priced properties come on the market. The longer a home is on the market, the lower the selling price. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my informative blogs and easy access to view local area homes for sale in Davis, California and the surrounding communities.