Virginia

Discover Why Short Sales Are Becoming Popular Choice To Stop Foreclosure

Homeowners who are facing foreclosure will use the short sale method to stop it from occurring and ruining their credit entirely. This especially true of homeowners where interest rates on their loans skyrocket, either doubling and/or tripling their house payment with them unable to afford the home any longer. Real estate investors also like short sales because of the deep discounts they receive from them.

Sellers will negotiate a short sale with their lender, who may require the seller to explain why they are unable to make the normal monthly payments. Not too long ago, home foreclosures rose because the 2004-2005 adjustable rate mortgages that were written were resetting. The problem with short sales is that they are complicated and are likely to stay complicated with lenders having to deal with them. Those homeowners who used the equity in their home while the real estate prices were inflated are now feeling the pain.

How Lenders Work In Short Sales

Lenders understand that home repossession is costly; after all, they have to spend tens of thousands of dollars to deal with the home including the maintenance, refurbishing, marketing and selling the home. The only issue is that there are no guarantees that they’ll be able to recoup their losses, not like they can from a short sale.

Lenders want physical proof that the homeowner is unable to pay their monthly bills and actually needs relief from the home payment. Homeowners and lenders see short sales as the last resort before the foreclosure or bankruptcy processes.

While lenders don’t want to hold onto problem properties, they certainly don’t want to lose the home for very low prices.

How Sellers See Short Sales

What seller wouldn’t want to get the most out of their house? They certainly don’t desire to sell their home for a lot less than the home’s market value or less than what they initially purchased it for. This situation could turn dire if an unforeseen event takes place that generates a financial hardship for the homeowner. For instance, they lost a job, are diagnosed with long-term illness or have a sudden rise in living expenses. These are just three of the reasons that homeowners see themselves in a cash-strapped situation.

Some sellers are lucky enough to convince the lender to do a short sale as the best way to handle the problem but there is a downside they must understand. That is… some lenders may claim the forgiven debt as a loss on the company’s taxes and give the seller a 1099 form for that amount.

A Look At Foreclosures

Remember that in 2004-2005, there were millions of loans written for adjustable rate mortgages, many of them resetting in 2007,2008 & 2009. As a direct result, short sales also rose. Lenders have differing views on how to handle foreclosures and short sales workouts.

More and more short sales are taking place and anybody who has completed short sales understands, it’s rough ride for the sellers who are already feeling topsy turvy. However, if you understand what short sales are all about, you can opt to go this route to avoid foreclosure.

About The Author:

EJ Harris is one Managing Partners at Community HomeSolver, which is a home buying company for “Sell House”.  Harris has many interesting articles written on this very topic. People expect to find all kinds of interesting data when they are trying to find out how to sell their home or sell their house. Yet, it’s not always what they are searching for even when they type in “How To Sell Your Home”, “Privately Sell Your Home” or “Sell Homes Online”.  You may not get everything you want from this article but you’ll be surprised by what you do learn about “Sell House”, “Sale Home” even if you made a mistake in spelling while searching for a particular topic such as “hpw to sale your hom fast” or “seling yur home quicly”.

Community HomeSolvers buy homes and houses in and around areas of Williamsburg, VA. We Buy Houses in Newport News, Hampton, Norfolk, Virginia Beach, Portsmouth and Chesapeake! We are also now seeking homes in and around Richmond, Henrico, Chester, Chesterfield,  Highland Springs, Colonial Heights

Virginia

How To Spring Clean Your Home For The Wintertime

Virginia

Why Foreclosed Homes Are A Home Sellers Biggest Competitor

When you are trying to sell your home, you might initially think you’ll get what you’re asking, maybe a little more. This is in spite of a rising number of people out of work and foreclosures at never before seen levels. The entire world wonders if the United States will be able to pull itself out these trying times. Measures are in place to help curb these problems but these are going to take some time to work down to the people who need help. During this time, how are you going to stop your biggest competitor from taking your home before you even have a chance to really sell it? The biggest issue facing homeowners is your biggest competitor. Who is that?

What Is A Homeowners Biggest Competitor?

A homeowner’s biggest competitor is actually foreclosure. How do you keep foreclosure from winning over you? Many people are under the assumption that time will stop the falling housing prices but it could actually take more than one or two years to stop this monster altogether and keep more than one million or more homes from falling into foreclosure. Most people think they are not affected by other peoples’ foreclosure but that’s not true.  More and more people are buying foreclosed homes but why?

 Foreclosed Homes Are Seen As Bargains

Is it because purchasing a foreclosed home is seen as a bargain? Look at your hometown. How many foreclosed homes do you see? Now do a search on how many sold homes were actually foreclosures. Does it seem like more people are looking for the bargains they find in foreclosed homes? It would seem so. It would seem that foreclosed homes have a higher selling rate than homes not in foreclosure. Many buyers will ask a real estate agent, “I want a foreclosure home”. Do you think the agent is going to argue with them why they shouldn’t get a foreclosed home? They’re going to abide by their wishes. Buyers and investors of foreclosed homes look at them like lottery tickets; who doesn’t want a lottery ticket that always wins?

Many homeowners looking to sell their home will boost the price of the home to more than what it’s actually worth. They know by doing so they’ll have to negotiate. However, the problem with this is that agents and buyers are looking for deals. If you’re asking more on the home than what it’s worth, you’re not going to show it to potential buyers. If most neighborhoods, buyers are seeking out the best deals such as square footage, best condition, lower price, etc. They believe foreclosed homes can give them all of them.

Sellers assume that foreclosed homes are rundown homes and that their homes are in much better shape so they can ask for more money. However, this is a false believe. Look at the homes in your neighborhood especially the ones foreclosed on. Do they look rundown to you? The truth is is that sellers have no real clue about how to price their house and they don’t know the overall condition of it. Many sellers who have marked up the price on their home blame the real estate market. However, this isn’t a good place to lay blame because people who don’t price their homes high are selling them.

Sellers are often misled about how long houses stay on a market because of the method their real estate agent uses. For instance, one home is on the market for a period of one year but another is sold within a month of going on the market, the real estate agent will take the total number of days they both sat on the market and divide it by two.

 Why Do Some Homes Sell More Quickly Than Others

It’s really crazy how many homes are on the market. For instance, in Hampton Roads, Virginia, there are close to 20,000 homes; that’s a lot of competition to buy a home. Most homes that have been sitting on the market for some time are indeed overpriced. Until the housing crisis settles down, it’s going to be difficult for any seller to sell their home.

If you want to sell your home, you have one rule you must understand and that is: Be truthful about the happenings in the market. When you’re friends tell you they want to sell their homes but they won’t give it away, they are certainly not looking at the big picture. Each month they have that home… it’s costing them money. It isn’t always about the monetary gains or losses that you need to look at. For instance, families who have children who would like one parent to stay at home are unable to because they refuse to lower the price of their home. They also run up credit card debt to deal with this vacant house. A seller’s peace of mind is not at rest until the house can be sold.

 Choices To Help Sellers With Their Homes

When you have a home and you can’t seem to sell it, you have choices. For starters, you can rent it out. Make sure to hire a property manager so that he/she knows what they are doing. Don’t let the home sit empty because you run a risk of three things:

•  Burglary
•  Fire
•  Vandalism

 On top of these things, sitting there empty will cost you money. You can always ignore the issue and hope that everything is settled quickly. You could also sell it for a lot less. You may ask yourself how much should you discount it at?

That doesn’t have an easy answer. The best way to deal if your price is too high is gauge how many people are coming to your home. If you aren’t getting offers on your home, there may be another problem altogether. You could also have problems after a contract has been signed such as inspection challenges or your buyer qualifying for a loan.

Some investors will buy the house as-is. However, the majority of sellers don’t like this route unless they plan on going into bankruptcy or foreclosure if they believe an investor won’t give them much for it. It’s riskier to deal with a buyer than an investor especially with the market the way it is currently. After all, these kinds of offers are low and they have less experience with inspections or obtaining money for the home. When you’re home is in need of repairs, banks tend not to loan money unless the home is fixed beforehand. However, experienced investors will have the money all lined up since this is what they do. While an investor wants a deal so does anyone whose anyone in the market.

 

Virginia

Act Now To Stop Foreclosure And Save Your Home

The biggest mistake you can commit when you fall behind on your mortgage payments is to wait too long to tell your lender what is going on. It’s never too late to do anything but to prevent foreclosure, it is better to be proactive than reactive.

Acting fast is very important. It is extremely important to contact your lender as early as possible, after you find yourself unable to make your loan payments. Most of the major lenders have programs for mortgage modification, forbearance, or other remedies that can help you prevent foreclosure. More than half the people who go into foreclosure never respond to letters from the lenders, nor contact the lenders. Your options become limited as time passes by. Contact your lender immediately and tell the lender about your situation. Once you contact your lender, they can allow payment delays, mortgage modification, and come up with new repayment plans, or they may negotiate a lump-sum payment.

When it comes to preventing foreclosure, every minute counts. Early contact – within the first 15 days of missing a payment – is critical in saving homeowners from the devastation of foreclosure. More than half of those in foreclosure did not call for help when they fell behind in their mortgage payments. Do not hesitate to contact you lender. There is nothing to fear about or be embarrassed.

You can get emotional or fear contacting the lender when you face foreclosure. But you must contact the lender. You are not alone. There is nothing to be embarrassed about missing a mortgage payment.

Remember your loan servicer – who you get your monthly statements from may be different from the one who actually owns your loan. If you are not sure whom to contact, call the number on the statement and they will advise you.

Explain your situation to the lender. Once the lender appreciates the situation, he may come up with a workable suggestion. Remember, all this time his aim would be the same as yours – you are able to pay and the house remains in your hands. This can be done by increasing the number of installments which you were required to pay. This will ease the situation for your and lender’s money also remains the same. In fact, as a simple calculation may tell, the lender gains financially. Depending on your situation and the status of your mortgage, there may be different options available to you including

• restructuring

• refinancing

• selling your home

• deed in lieu of foreclosure

Be honest about your situation, so they can help you find the right solution. Lenders usually offer a variety of solutions for people who have fallen behind on their mortgages including temporarily reducing or waiving payments, setting up short-term repayment plans to help you make up the deficit, adding the unpaid balance to the principal of your loan and increasing your payments slightly to cover the extra amount, refinancing the debt, arranging a repayment plan or modifying the loan by adjusting the interest rate or extending the terms to make it more affordable. These options are discussed in detail in the following chapters.

However, if your situation is really bad, the lender may even agree to make other concessions. For example, the lender may be willing take less money in settlement of your dues. Once the lender realizes that the situation of the borrower has become very unviable, it is time for the lender to retrieve whatever possible from a potentially bad situation.

If the lender feels that the only way of saving the situation is to reduce the financial burden on the homeowner, the lender may also agree to reduce the interest.

The lenders have even been known to reduce the principal. It all depends on what sort situation the borrower finds himself in. It goes without saying that the lender will not be happy to do this, but then again, he has to reassess the circumstances and then decide.

 If you cannot keep your home, your lender can work with you to avoid foreclosure and reduce the negative effect on your credit reputation. For example, the lender can permit a qualified buyer to take over your mortgage debt and pay the mortgage payments, even if the mortgage is non-assumable. As a result, you may be able to sell your property and avoid foreclosure.

Don’t just sign your home away and walk out. Negotiate. Whatever be your situation, never ever enter into any deal without consulting an attorney. Never make an impulse decision. Your instincts will drive you to make quick decisions in order to resolve defaults as soon as possible. Before taking any decision, weigh the pros and cons.