by Short Sale Agent Jerry Gusman on 03/10/13
Short Sale Start ups slow in 2013, A sign Of The Times Ahead
Short sale start ups slow down in 2013. The Inland Empire which
incorporates the cities of Riverside, San Bernardino, Fontana, Rialto,
Rancho Cucamonga, Corona, Ontario, Chino, Chino Hills, Upland, Beaumont,
Moreno Valley, Perris, Yucaipa, Montclair, Pomona, La Verne, lake
Elsinore Murrieta, Menifee, Temecula, Once the hotbed of foreclosures in
the country, finally see the light at the end of the tunnel. According
to county records Notices Of Defaults are a fraction of what they were a
year ago. With all the emphasis put on helping distressed homeowners
avoid foreclosure both by legislative entities and the lending
industryit looks like the worst may have passed.
Although we will
still see a significant amount of short sales for the next 2-3 years,
this sector of the market is now wanning. The lack of foreclosures on
the market has reduced inventory and caused values and sale prices to
rise significantly. Turning this once strong buyers market into a
sellers market. There is one problem being felt in this transition
period. Appraisers can typically can only use sales up to 6 months back
as comparables. Thus making the new values and higher sales prices
difficult to confirm with many ssales being lost due to the appraisal
coming in lower than the selling price and the lenders not willing to
take a approve funds that cannot be appraised. Cash is KING in this
market, since no appraisal is needed. Once a home in the neighborhood
sells at the new values of today then the other properties can utilize
it as a comparable.
Are we coming into a traditional market? Get
Ready, if you have been thinking of selling your home this may be the
last chance to sell and rebuy at the low prices and interest rates of
the past few years. But Don't delay, DO IT NOW!
by Short Sale Agent Jerry Gusman on 03/10/13
This Valentine's Day, it's time to celebrate more than just the power
of cupid's arrow. We're toasting to these four marketing tips that will
make buyers fall in love with your home and have you on your way to
"sold" in no time.
1. Use Your Words.
Refresh your property's marketing materials every few months—including
your property listing and description. The best property listings are
short, simple and tell potential buyers what they want to hear. Make the
most out of your property listing with these valuable marketing tips
2. Make Your Listing Irresistible.
We've found that sellers who post more than six photos receive 35
percent more emails from potential home buyers. We offer packages with
Unlimited Photos, so you can upload as many pictures of your home as you
3. Remember the Details.
As you gather your home-related receipts in anticipation of filing your
tax return, make your life a little easier by copying any receipts,
contracts, permits and the like that could be relevant to a buyer,
inspector or appraiser. Visit the Disclosures and Closing section
of our Education Center for articles about the documents you need.
4. Know Your Local Market.
Nothing helps a home sell faster than a fair-market price. Due to
fluctuations in the real estate market, it is recommended that you
reassess your asking price every 3-4 months. Our automated pricing
report reflects immediate pricing trends, plus pulls data from public
records and other local sources to provide you with a snapshot of the
current market value of your home. Anyone can purchase a new report
, or if you already have a listing on ForSaleByOwner.com, click on "View Pricing Report(s)" in your Selling Center
Extra Tip: Don't Sell Yourself Short.
From a higher sale price to
the potential for monthly income, with the help of your financial
adviser, real estate attorney, or a tax professional, you might discover
some hidden advantages to seller financing for yourself. Ask these
questions and get as much out of seller financing as your buyer
In a way, selling a home is like online dating. When you see other homes for sale, what makes you take a closer look?
by Short Sale Agent Jerry Gusman on 03/10/13
Home values are going up, and many struggling homeowners are gaining
equity in their property. But nearly 14 million U.S. homeowners remain
underwater – with mortgages worth more than their homes.
More than 27 percent of U.S. homeowners with a mortgage, and nearly
20 percent in Orange County, had negative equity in their homes at the
end of 2012, according to a report by Zillow.com.
Many homeowners face foreclosure or are having a difficult time
making their payments and are considering options such as a short sale,
filing for bankruptcy protection or just handing the bank the house keys
and walking away from their debt.
The choices can be confusing.
"There is so much misinformation out there," said Doug Bickham, a
real estate lawyer in Lake Forest. "The law is constantly evolving and
even Realtors don't understand all the fine distinctions in the law."
The Register asked Bickham, managing attorney at Rasmussen Law Firm,
and Bob Hunt, broker at Keller Williams OC Coastal Realty and a longtime
member of the California Association of Realtors' board of directors,
to explain the most common misconceptions held by underwater homeowners,
or those trying to help them.
Here's what they said.
Myth: The new California Homeowner Bill of Rights keeps a
lender from foreclosing on a home regardless of whether the borrower is
pursuing a loan modification or a short sale.
Reality: The Homeowner Bill of Rights, which went into effect
in California on Jan. 1, is supposed to restrict lenders from "dual
tracking" – that is, repossessing a home while a homeowner is awaiting a
decision on a home loan modification application
But a short sale is a different situation, Hunt said. By the time the law kicks in on a short sale, it may be too late.
When a borrower sends in a complete loan modification application,
the foreclosure process should instantly stop. If the lender rejects the
application, the borrower has a 30-day period to appeal the decision.
The home cannot be foreclosed during that time, either.
In a short sale, however, the foreclosure process is halted only
after all the lien holders on a home agree to the short sale and the
prospective buyer gets financing. All of that can take months. The
bottom line: "A foreclosure could easily occur during the attempt to
bring about a short sale," Hunt said.
That means someone facing foreclosure and considering a short sale should act sooner rather than later.
Myth: A "deed-in-lieu" of foreclosure – in which the lender
agrees to take back the keys and lets you walk away – is better than
spending the time trying to do a short sale, especially because with a
deed-in-lieu, you now potentially can get a few months of free rent.
Reality: Mortgage giants Fannie Mae and Freddie Mac recently
came out with new guidelines for a deed-in-lieu of foreclosure. Now
homeowners with hardships can turn over the house keys and erase their
debt – even if they are still current on their payments. Some struggling
borrowers who relinquish their homes can live in them for up to three
months without having to make mortgage payments.
But even with the new rules, lenders rarely do deed-in-lieu transactions in California, Bickham said.
A primary reason is that California allows non-judicial foreclosures,
meaning the property is foreclosed through a trustee's sale rather than
the relatively lengthy judicial foreclosure process required in other
In addition, he said, lenders only approve deed-in-lieu transactions
if there is a single loan on the property or multiple loans with the
same lender, which also greatly limits their usefulness.
"In the vast majority of cases, it's usually not the most
advantageous foreclosure-prevention option for a homeowner, assuming a
lender will even agree to a deed-in-lieu," Bickham said.
It's better to do a short sale, he said, especially if there is more than one loan.
That's because striking a deal with a first, purchase-money lien
holder does not automatically get the homeowner off the hook when it
comes to second or other junior loans.
By contrast, in a short sale, all lenders must sign off, and
California law requires them to forgive any remaining balances after the
sale. "They (homeowners) are going to get the legal protections on all
of the loans, not just one of the loans," Bickham said. And, because
short sales can typically take three to four months, homeowners will
also get a few months of free rent, as well.
Also, in a deed-in-lieu agreement, a lender can require additional
cash contributions be made by the homeowner, which are illegal in a
Myth: A bankruptcy prevents a foreclosure.
Reality: "People always seem to think a bankruptcy is going to solve all their house-debt problems," Bickham said.
However, a Chapter 7 bankruptcy – the most typical bankruptcy
protection filed by individuals – will at best delay, but not prevent, a
foreclosure. Banks will typically just wait out the bankruptcy case,
then immediately proceed with the foreclosure upon discharge. Or,
occasionally, the banks will petition the court to release the property
even during the bankruptcy if it has no equity so they can proceed with
foreclosure, Bickham said. If the home has enough equity, it will be
sold as part of the bankruptcy case, with the proceeds going to
What a bankruptcy will do is convert all "recourse" loans – where a
borrower has personal responsibility for repayment – into "non-recourse"
loans, where lenders cannot sue a borrower to get repayment, Bickham
said. That's because a Chapter 7 bankruptcy will discharge the
borrower's personal responsibility for the debt even though it will not
release the liens on the property for the loans.
So while the bankruptcy does not eliminate secured home loans and a
homeowner can still be foreclosed on, all home loans, including second
mortgages and home equity lines of credit, will become non-recourse, and
lenders cannot sue the homeowners for any balance owed.
Myth: Doing a short sale will require money from homeowners.
Reality: "There's literally zero out-of-pocket costs to the
homeowner to do a short sale and, in fact, they can often get cash back
to help with moving expenses," Bickham said. "In a short sale,
essentially, the seller's lenders step into the shoes of the seller.
Most of the closing costs on the seller's side are picked up by the
That includes agent commissions, escrow fees, title insurance fees,
taxes and even homeowner association transfer fees. They'll only cover
so much, though, and the buyer will have to assume the rest. Many
programs are available now where lenders will actually give cash back to
homeowners who agree to a short sale, as well.
Short sale buyers should be prepared to kick in an additional 3
percent above the price of the home to cover any costs that the seller's
lender declines to pay, Bickham said. But buyers can typically purchase
a short sale property for 5 to 10 percent below full fair market value
even with the additional costs, he said.
Myth: A foreclosure absolves a homeowner of delinquent homeowner association dues.
Reality: "People often think that if a property is foreclosed
or it was given back to the lender as a deed-in-lieu, the homeowner will
be absolved of all back dues they owe the association. But HOA dues are
actually a homeowner's personal obligation," Bickham said. "Even after a
bank forecloses on a home, the HOA can still sue the homeowner to
collect on any unpaid back dues."
In a short sale, however, the delinquent HOA dues will often be fully
paid off or settled as part of the short sale negotiations, he said,
since all lien holders, including the HOA, must agree to release their
liens for the short sale to successfully close.