Investors Looking For Short Sale Steals, Move Along!

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Article Courtesy of Stephen Wilde of Wilde Law Firm

Carolina Living Real Estate has sold numerous Short Sales and we are huge advocates of using Wilde Law Firm to represent our sellers and assist them with getting their home sold. As Stephen has said, Realtors should not be handling these transactions by themselves due to liability. We know that with regard to banks and short sales in NC, Stephen knows his stuff. Thus, we have chosen to publish an article he wrote in his newsletter.

Enjoy!

If you are an investor in the real estate market looking for steals then you might want to skip short sales and head to the courthouse steps. Short sales require a “market price” offer and have for several years now. Seriously, I am not kidding. Just so you know, the bank/servicer has heard all of the arguments….”Well if you don’t take this offer it will go to foreclosure”…”That is ridiculous. You will never get that for the property”…”Well look at what it will cost to get this property up to livable standards”…”If you don’t give us a discount, my buyer will walk”…etc. None of these arguments will result in an approval below market price.

Bank/Servicer. Remember that we are usually dealing with a loan servicer who does not own the loan but is merely servicing it. The loan servicer must strictly follow the note holder’s guidelines. The loan servicer will be audited and if they have deviated from the guidelines at all, like approving a short sale below market price, they will suffer the consequences monetarily.

Why? The main reason for this strict guideline is that the note holders do not want to establish a ‘sold comp’ in that neighborhood below market price because it negatively affects all the other property values….many of these properties also have loans secured by the property. Prior to Fannie Mae and Freddie Mac establishing this ‘market price offer’ requirement we had a falling market. After this guideline change we finally saw the market become more solid in most areas.

Market Price. “Market price” is usually defined as what other properties have sold for in that neighborhood or in a one-mile radius of the property in the last 3 months. Pull the ‘sold comps’ and you will come up with the range that the short sale offer needs to be in. That is correct, there is no discount for a short sale. Note: If it is an FHA or VA short sale the appraiser assigned to provide the value of the property is not usually allowed to use distressed sale comps (short sale or foreclosures) in the valuation.

“Let’s just see what the bank/servicer says.” This is a strategy that many take when approaching a short sale. In other words, “let’s base our entire short sale strategy on the bank making a mistake.” This strategy usually ends up shooting the Seller in the foot with a valuation at the top end of the ‘sold comps’ range…or even higher.

Property Condition Issue. If there is a major defect or issue such as a roof, foundation, HVAC, water damage, mold or Radon, then we can usually get an approval that takes into account the amount it will take to fix that specific issue. However, a certified home inspection and several estimates will have to be presented at the BPO/appraisal appointment in order to get the market value established lower than the comps. Note: It is important to establish the condition issue and the repair costs prior to the BPO appointment, not after the short sale approval letter is issued. After the Approval Letter has been issued the bank/servicer generally does not reconsider the valuation or renegotiate price.

General Fix up. Please understand that the bank/servicer does not own the property or even the loan, most of the time. They are not going to put in new carpet, paint, refinish floors, upgrade kitchens, buy appliances, mow the lawn or clean the pool so do not think that you are going to get a reduction in market price for these items. The only thing these issues will do is establish market price at the lower end of the ‘sold comp’ range.

I don’t give you this information to be difficult or to cozy up to the bank/servicers. I am just attempting to inject some reality into the market. Our approach is always to try to understand the bank/servicers as much as possible and give them something they can say yes to at every step of the process so that we can get the parties to closing as quickly as possible. Arguing with the driver of the bus is far less successful. We may have to roll up our sleeves and get into a scrap on occasion but I feel that approach should be used sparingly, not as the first and only strategy.

Pricing Your Home to Sell – Get The Best Value

By admin

Getting ready to get into the real-estate market?

Most sellers today are nervous and unsure. They wonder: is taking a loss on our house inevitable?

The answer is no! A strategic sales plan, coupled with a smart buy in your new location will ensure that you recoup the maximum value for your home.

Your Strategic Sales Plan

Consult with an expert, Carolina Living Real Estate real estate agents ensure your house is priced competitively and well-staged. Why? Because while there are always three factors to getting a home sold—location, price, and condition—only two are under your control: price and condition. Of the two, which is more significant? Price. Remember that price will correct bad condition, but condition will never overcome a bad price.

Act fast. Every month that price on your home may decrease, your costs remain the same. For example, I Sell Homes, Inc and Carolina Living’s research shows that sellers who listed their home at the price the agent originally recommended, sold the home 38 days faster. This is over a month of mortgage and tax payments! For a home that cost $200,000 at time of purchase, with 20 percent down and an interest rate of 6.5 percent, selling a month sooner results in a savings of $1101.31 for the mortgage alone, not including the taxes and insurance that the homeowner would be paying during this time.

Don’t worry about where the market has been, keep your focus on where it is going. The price your neighbor down the street got six months ago is not relevant in a market where your house is competing with others from all across town. Again, a local real estate agent will have the kind of long-term, wide-ranging data that will help you decide how to pinpoint your price with precision.

Your Smart Buy

Move up. Whether you are moving to an area where prices are in a downturn, or dreaming of nicer, bigger, home in your own town, selling your house now can get you into the home of your dreams. Falling home prices are a great opportunity for a savvy homeowner looking to move up. Even though your house price may be lower, the smaller loss at sale can be made up by greater savings at purchase. For example, let’s take that same $200,000 home, and imagine that it has decreased in value by 5 percent, reducing the sales price to $190,000. At the same time, let’s imagine that you would like to move up and the $400,000 home you have had your eye on has also decreased by 5 percent. That’s a savings of $20,000, and it is a home that is likely to be better positioned for appreciation when the market rebounds.

To Rent Or Buy In A New City?

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You’re officially making the big move from one city to another. Maybe you’ve landed a new job or have decided you want to travel to a new city to explore and live a little. All your bags are packed, you’ve said goodbye to friends and family and you’re ready to hit the road to the new city you will soon call home. One of the biggest decisions you will come across is whether you should rent or buy. Here are a couple of reasons why renting is better than buying for the first couple of years living in a new city.

It takes time to learn a new city, new neighborhood, and possibly even a new culture. Within the first month, you may be completely in love with your new city. It’s easy to be blinded by the excitement of living in a new place because it’s all brand new to you. After living there a few months, things could change. You could end up hating the area that you are living in. If you were renting, it would be much easier to move to a different neighborhood than if you were tied into making monthly payments on a mortgage for a house.

A lot can change in a year. You could end up hating your new job and your new boss. What if your old boss wanted to hire you back? It would be easier to move back home for your old job if you were only renting a place for a year versus if you had purchased a home. If you had bought a house, you would most likely be coughing up your own money to pay off your mortgage and pay for closings costs because your home had not increased in value in such a short amount of time.

All in all, it’s best to give yourself a few years to really learn a new city, in every aspect, before making a long-term commitment, like purchasing a house. Give yourself time to explore the city and all that it has to offer. Maybe after your first year, you’ll find an even better neighborhood to live in that fit your needs perfectly.

Article by Tom Miller Escape Somewhere

How To Prepare For The Big Move

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Once you’ve found the perfect home, it’s easy to think its all downhill from there. While its true enough that securing the home of your dreams is a fantastic feeling, there’s one last obstacle that stands in your way: the dreaded moving day. As scary as it sounds, moving day is not an impossible feat. In fact, by taking a bit of our advice, moving day can be a piece of cake.

The problem with most movers is that they wait too long to get started. Once you have solidified your new home choice, you may want to relax, but you actually have a whole new list of things to do. For starters, you can start packing away any seasonal clothing you won’t be using. Spring and summer are often considered the moving seasons, so in these cases its best to pack away your heavy coats and other winter clothing. If you happen to be moving in the fall or winter, you can apply the opposite logic and start packing any summer wear that you have. You could also begin the processes of canceling and/or transferring services. This includes things such as newspaper subscriptions, internet service, bank accounts, etc. Just because you can’t break out the cardboard boxes doesn’t mean you can’t do these menial tasks early on! As far as your utilities go, you’ll want to talk to your service provider to make sure that your services will be turned on the day before you move in. After all, no one likes moving in to a new home without running water and electricity.

You’ll also need to decide whether you will hire a moving company or enlist the help of your friends. Both have their pros and cons. Wit ha professional service, you have the assurance that it will be fast, efficient, and hopefully a guarantee that if anything is broken it will be covered. If you decide to enlist your friends, it may not be as efficient and you run the risk of damaging special items, but you will also save some money.
About two weeks before the big move, you should start packing everything- not just your seasonal belongings. Be sure to pack smartly, using a color coded system or some other markings so that whoever helps you move will know which room to set the boxes in. On the day before, create emergency boxes. What we mean is, for each member of the family, have access to clothes, toiletries, etc. You should also plan out what you will be eating in your new home as your unpack, even if its primarily take-out for the first few days.

By following these preparation tips, moving day can be just as manageable as any other day of the year. Start early and plan thoroughly and everything will be fine.

Article by Tom Miller
New Home Source

Major Home Builder Has Bullish Opinion On Housing

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According to Business Insider, Homebuilding giant PulteGroup reported Q3 net income of $117 million or $0.30 per share. This was a big improvement from last year’s $0.34 net loss.

According to Pulte CEO, Richard Dugas: “In past cycles, the U.S. housing industry proved to be a powerful engine that could help drive the economy forward and accelerate the pace of a recovery. A similar scenario could again be unfolding, as the industry is responding to increased sales by hiring additional workers and purchasing more building materials. While we are mindful of any potential impact from global or domestic economic issues, we are optimistic that the combination of ever higher rental rates, record low interest rates and limited housing supply can continue to support the improved housing demand.

In Charlotte, we have seen an increase in closing and a decrease in inventory pointing towards a very minor switch from a buyers market to a sellers market. However, we are very mindful of the still looming Charlotte Foreclosures and Lake Norman Foreclosures that still impacts the ‘everyday’ Charlotte area seller.

Why Realtor’s Hate Short Sales

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Carolina Living Real Estate

Recently, I have spoken to many buyers and sellers about the pros and cons of buying and/or selling a home in short sale. Based on some recent deals (of lack thereof), it is becoming increasingly difficult to give positive recommendations to pursue this direction.

While closing on a transaction of this type can result in a positive outcome, it can also be very frustrating for both buyer and seller.

Case #1

We recently (10 months ag0) listed for short sale an awesome home for a group of investors that the value had dropped so significantly due to market conditions. After one of the major banks accept an offer within about 3 months, the buyer then could not qualify for a loan. We then waited on the major bank to sell the loan and in the meantime secured a new offer. After another 4 months, the bank accepted the offer only to have to wait for the PMI insurance company to then make a decision. Upon finally getting everyone on board, this second buyer started to waiver until, magically, several things happen that preventing his continual pursuit of this home. As a part of the banks acceptance, we had a very stringent timeline to get the deal done before foreclosure.

So here is the dilemma:

Do we continue to advise our seller clients that a short sale is a valid alternative? The biggest challenge beyond just being patient deals with earnest monies and/or due diligence fees. You see the theory is that due diligence fees are not paid for these type of transactions. The question is ‘Why give the owner money when they are no longer making the mortgage payment’. Valid question. However, there are people that have really tried to do the right thing and do not want a foreclosure on their credit. Since the buyer has NO skin in the game they can just wait on the bank to make a decision and then just say ‘OOPS never-mind’. Granted they may have some funds spent for inspections but the cost to the buyer is far less than the cost to the owner.

Lastly and less important, these type of scenarios have driven Realtor’s out of the business. Many man hours are spent on these transactions and when a buyer walks no one gets paid.

Case #2:

We listed a home for sale with a short sale in mind in Spring of 2010. In the interim, we have had six buyers come and go as they have gotten tired of waiting. Now we are in late summer 2012 and we finally have a buyer that was patient and we have had mortgage company #1 (actually #2 since the loan was sold) finally accept the offer. Low in behold, we have then had to wait for the second lien holder give us an approval. When the approval came back, there was a $2500 difference in what the First was willing to give up and what the Second wanted. So after over 2 years we are $2500 apart. Amazingly the buyer has agreed to pay the difference. However, this could easily have fallen apart!

Why in the world has it taken over 2 years to get an answer. Who knows? No one knows and no one can predict. So, what do we tell our clients.

At Carolina Living Real Estate, we are committed to helping our clients with these decisions. As in any Real Estate transaction, disclosure is key. We disclose the pros and cons of what may or may not happen. However, giving advice either way is not something we have a growing confidence in doing.

Carolina Living Real Estate Accepted Service Providers

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JH3 Technology (704 253-32510- For all your networking and computer needs

An Excellent Handyman Service, INC (704 526-9644) For HVAC repair, appliance expertise and much more.

Be A Carolina Living Real Estate Service Provider

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If you share our enthusiasm for honesty, integrity, and quality of service, we’d like to help market your services to homeowners in the Charlotte and Lake Norman areas. We need your business description, including details,website if any and testimonials. If accepted your contact information will be provided to all customers who search for your business category on our website.

Here are a few tests we require that to be on our list:

Pass reference checks and business license verification
Maintain general liability insurance
Earn satisfaction rating from our customers when we follow-up

Charlotte Real Estate – Comeback Time

By admin

Even though uncertainty exist throughout the world, real estate is primed for a comeback. What most people don’t know ui that real estate is emerging as sure thing.

Only a couple of years ago real estate seemed the biggest gamble in town. We have seen recently, especially for those looking for high end deals, an increase in those looking at real estate in a different light. Dare I say it,maybe a sure thing.

A new property management client of Carolina Living Property Management is a General in the Air Force with 3 years until retirement. He just purchased a beautiful home on Lake Norman that has tax value around 1 million and he purchased it for approximately 300K less than what these homes traditionally sell for. He has decided to rent because the rental market is so strong and the deal he was able to get was too good to pass up.

Quite a few buyers took advantage of this situation as uncertainty grew in the stock market.

All of the factors affected 2011 in a positive way with regard to real estate and point to an even better 2012. Already in 2012, Carolina Living has had several closings in what is considered the high end market. This is a good sign for things to come.

To support this data, the Institute of Luxury Home Marketing conducted a survey of U.S. agents that work in the luxury market and it is showed a better than 75% increase in activity in 2011 to 2010.

It is predicted the we will see even more high end properties become distressed sales as owners choose strategic default or lose their home to foreclosure. Sadly one persons heartache can offer another’s opportunity.

We are betting that 2012 becomes even better on 2011. For this reason we have created two very important websites that give our savvy buyers a place to shop.

Free Lake Norman Foreclosures

Free Charlotte Foreclosures