Real Estate and Beyond Blog

HOA TAKES ON ANOTHER MEANING IN REAL ESTATE WHEN DOING SHORT SALES

I just closed on a short sale today. Yes, it took all of us time and patience to close this deal. Wow, real estate is a team sport on this deal. We had to deal with the HOA in this transaction. What is a HOA? HOA stands for HOME OWNERS ASSOCIATION. What does an HOA do? That is a great question. Their number one job is to govern a residential community. Many of the board members volunteer their time. The HOA enforces the standards all agreed upon within a community. It is a great experience for anyone to sit on a HOA board for a term. You will learn a great deal.

Let's look at the following fees that were on the final approved HUD

• Advance Assessments $155
• Late fee to HOA $15
• Outstanding Assessment to HOA $232
• Reserve Fee to HOA $155
• Resale Cancel Fee to Property Management $75
• Statement fee to Property Management $50
• Transfer fee to Property Management $150
• Resale Disclosure Fee to Property Management $150

This added another $922.00 of closing costs to the entire transaction. This is with me negotiating with them to lower their fees. They know the transaction will not close until they are paid in full. Yes, many HOAs and property management companies were furt financially during the foreclosure boom. It seems they are finding other ways to make it up.

We are becoming a fee society in all industries.

I have a new one HOA-HOLD ON AMERICA

Is this same practice happening in your local real estate market? Love to hear from you on this one.

AMERICANS HAVE TO MAKE HARD DECISIONS WHEN IT COMES TO SHORT SALE OR NOT THEIR HOME

Experts state that there are over 11 American households under water when it comes to their mortgage. Also, 7 out of 10 people that have experienced a foreclosure never contacted a professional Realtor to assist them. I believe we all want to do the right thing. However, we have to admit things have changed dramatically in America

• National unemployment rate just under 10%
• 118 banks have been closed of August of 2010
• Issues with Fannie and Freddie moving forward
• America still at war in the Middle East
• Overall economy growing very slowly compared to other years
• Banks continue to foreclose on homes at record pace
• Loan modification program not working for troubled home owners
• Presidents overall popularity with Americans has dropped to 41% in favor

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We all had an Etch A Sketch when we were children. Heck, my own kids have an Etch a Sketch. The purpose of this game was to draw a picture. Then, we could shake it up to have a blank screen to draw another picture. Many people who I have consulted wish it was only these easy. We have Americans hurting financially at the present time. They are too embarrassed to receive assistance because they believe everything will be OK. HOPE is not a game plan. The home owner upside in their current home only has the following choices at the present time:

1. Keep the present home and ride out the market
2. Loan modification
3. Short Sale
4. Deed In Lieu Of Foreclosure
5. Foreclosure

Real estate is a team sport. I would advise home owners to consult with the following professionals to obtain needed information to make an informed decision when considering to short sale their home:

• Realtor
• Mortgage professional
• Certified Financial Planner
• Real estate lawyer
• Certified Public Accountant
• Credit restoration professional

I believe the Seller needs to collect all the information from the following experts to make an INFORMED decision for their family. It really is a personal decision since each short sale has its different hardships. Yes, Americans are forced to make the tough financial decisions. I just want to let everyone know that they are not alone in their pain. Reach out to local professionals in order to gain vital information in order to bounce back financially down the road. We will all get through this together.

CONTACT HARRY FOR MORE INFORMATION

I AM NOT HELPING OUT MY LANDLORD NO WAY

I met an interesting couple the other day while I was showing my listing as a rental. I met two ladies who were looking for a rental. They gave me many compliments on the house. I informed them of the monthly rent, required deposits and background checks. They seemed perfectly fine with this procedure. It is very normal under the current circumstances. I asked them if they were in a current lease or not at the current time. They informed me that they are in a current lease. However, the know that the owner of the house is being foreclosed upon.

So, I continue to ask them more questions about their current rental. They told me that the seller is six months behind in payments. They have never missed a rental payment. Both ladies are quite mad because seller will not fix anything at the house. Well, I am sure the seller has no money to fix repairs. So, these two ladies want to secure a roof over their heads before they get kicked out of their house. Hey, they are just looking out for the families. They are furious with their landlord. It is not a win win scenario in their minds.

It seems like the seller needs a Realtor to discuss options on the current house. So, I ask the ladies for their seller's phone number in order to set up a meeting with the seller to discuss a possible an Arizona short sale. Plus, the tenants may possibly be able to stay longer in the home. Here was her response to me

"I AM NOT HELPING OUT MY LANDLORD NO WAY."

Again, I was just offering my services to both parties. I was thinking of my grandfather who always believe in the GOLDEN RULE IN LIFE- treat others the way you want to be treated. It is sad for both sides in this current scenario.  

There are people out their in your local community who need your services right now when it comes to real estate.

www.ArizonaShortSaleAndBeyond.com

TOP 6 THINGS TO KNOW AS A SELLER WHEN CONDUCTING AN ARIZONA SHORT SALE

Arizona has experienced many bank foreclosures over the past three years. Arizona short sales continue to increase here in the Phoenix real estate market. The Real Estate and Beyond Team is ready to help home owners who are in need to do a short sale on their home due to hardship. While selling property through a short sale is generally a better financial and personal decision for many homeowners there are still some potential negative implications that may arise when you complete a short sale. If you are concerned about any of these issues, CONTACT HARRY TODAY.

www.ArizonaShortSaleAndBeyond.com

If you are considering a short sale, then the seller needs to know TOP 6 THINGS WHEN CONDUCTING AN ARIZONA SHORT SALE

1. Short Sales are never guaranteed. While we have an extremely successful closing ratio there is no one who can guarantee a short sale will be approved and/or successfully close.

2. Your credit will be affected. Although the affects of a short sale are usually far less severe than those of a foreclosure you should know that you will likely face at least some impact to your credit. There is no way to determine the impact a short sale will have on your credit, however, the attached chart shows how much of an impact most people can expect to see. If you are interested in repairing your credit after completing your short sale we can refer you to an extremely reputable credit repair company that offers a discount to our clients.

3. In most cases you can obtain another Fannie Mae backed mortgage in 2 years. Due to new lending guidelines there is now only a 2 year waiting period to receive a mortgage backed by Fannie Mae, one of the largest investors in the country - and you may be able to receive a mortgage through other investors even sooner. A foreclosure will prevent you from receiving a loan through Fannie Mae for up to 7 years.

4. If proper release is not obtained your lender may seek a deficiency judgment. We always make every effort to obtain a full satisfaction of mortgage from your lender and receive written documentation stating that they will not seek a deficiency judgment or attempt to seek payment on the deficiency.

5. Your lender may ask you to sign a promissory note or contribute money to close. Although rare, some lenders and private mortgage companies will require you to sign an unsecured, interest free promissory note or bring a cash contribution to the closing table. Because our network consists of investors and a professional negotiation company we are able to negotiate with your lenders and/or avoid this requirement completely. If your lender requests that you sign a promissory note be sure to read the note carefully - in many cases the lender can obtain a judgment or attach the note to any of your real or personal property.

6. In rare instances there are tax implications related to a short sale. The Mortgage Debt Relief Act protects most sellers from potential tax implications; however, if the loss is over $1 million or you are selling property other than your primary residence you should seek the assistance of a tax professional.

There may be additional issues that could affect you when completing a short sale that we have not mentioned here.  We strongly encourage anyone that is considering completing a short sale on their home to speak with their attorney, tax professional, financial planner and any additional trusted advisors and professionals that may be able to further assist you in making the right decision for your personal situation.

CONTACT HARRY TODAY

COST OF NEGATIVE EQUITY IN REAL ESTATE 

We have 11 million American households underwater when it comes to what they owe on their mortgage vs. the value of the home. Many people are walking away from their home because they become frustrated with the whole system and just want it to be over. So, they take matters into their own hands. Statistics show us 7 out of 10 homeowners who have faced foreclosed did not contact a professional Realtor to assist them. The Real Estate and Beyond Teamhas create a web site dedicated to assist people who wish to learn more about their options before being foreclosed upon by the bank.

www.ArizonaShortSaleAndBeyond.com

Have you ever thought what it is costing someone to have negative equity in their home? When considering a short sale many homeowners overlook the very expensive cost of carrying negative equity over a long term. What many people don't take into consideration is that at the national average appreciation rate of 6%, it can take homeowners several years to recoup their loss just to break even! Here is an example of the cost of negative equity to the average homeowner:

Jane Seller purchased her home in 2005 for $200,000. Because of the market crash, her home is now worth $100,000. Jane put no money down on her home and owes just under $200,000 now. At the average national appreciation rate of 6% it would take Jane approximately 12 years for her home to be worth $200,000 again or 9 years before she could sell her home and break even, making $0 profit and paying her own commissions and closing costs.

If Jane sold her property in a short sale, she could rent a home for the next 2 years and then purchase her exact same home for nearly half the monthly payment. If she was paying $1,250 per month for her old home, her new home would be closer to $700 per month! That is $550 a month that she can put back in her pocket!  If Jane stayed in her home for the 9 year period it would take her to break even she would spend nearly $60,000 in higher mortgage payments and a total of $135,000 on mortgage payments just to break even!

The Real Estate and Beyond Team is here to assist all homeowners located in Arizona to define their options in a more detail manner in order to make a better informed decision.

START MY ARIZONA SHORT SALE TODAY

FREQUENTLY ASKED QUESTIONS GET THE ANSWERS

ARIZONA SHORT SALE AND BEYOND MAIN WEB SITE READY TO GO

We are beefing up our short sale business here in Phoenix, Arizona. We are on a mission to help homeowners who need a short sale completed. We have developed our main web site at www.ArizonaShortSaleAndBeyond.com. We are proud to present a team of local professionals ready to assist all home owners who wish to pursue a short sale on their current residence. It was sad to me to see that 7 out of 10 people who were foreclosed upon never obtained professional assistance from a Realtor. Folks! The Real Estate and Beyond Team is here to assist.

The Real Estate and Beyond Team is here to help all Arizona home owners who are upside down in their home. We saw the growing need as 75% of all distressed properties are now short sales. We recruited an expert to handle all short sales. This individual is an expert at short sale negotiations with the banks. Sellers need a short sale pro to negotiate with the banks to make sure the deal closes so they can move on with their life. Many people will need a second chance to recover from this real estate disaster.

We have developed the following sections to make it easier to obtain information on your Arizona Short Sale

• Things you need to know
• Frequently asked questions
• Short Sale vs Foreclosure
• Mortgage Debt Relief
• Start My Short Sale Today

ARIZONA SHORT SALE MOST FREQUENTLY ASKED QUESTIONS

We have 11 million American households under water with their current mortgage. Statistics tell us 7 out of 10 people foreclosed upon never contact a professional Realtor to assist them during their time of need. Banks continue to foreclose on properties in the state of Arizona. Real estate investors continue to purchase great deals at the Arizona Trustee Sales. We can assist you with your Arizona Short Sale. We have a team of experts standing by to get the most difficult questions answered by professionals in their field such as real estate law, tax and credit restoration.

WWW.ARIZONASHORTSALEANDBEYOND.COM

What is a short sale?

A short sale is an agreement with your mortgage lender to accept less than the total amount you owe on your home and allow the property to be sold. For example, if you purchased your home for $200,000 but now it is only worth $150,000 and you must move, you could negotiate with your lender to accept the current market value as payment in full.

How do you qualify?

Nearly everyone who is currently in a negative equity situation or behind on their mortgage payments can qualify for a short sale. Generally all the bank needs to see is proof of a financial hardship and a decrease in property value. Will I have to stop making my mortgage payments before the bank will approve my short sale? You do not have to stop making payments on your home in order for the bank to approve a short sale but it does help.
In some situations, such as a relocation, you may not need to miss payments for your lender to consider a short sale.

If I am doing a short sale am I in foreclosure or pre-foreclosure?

Not necessarily - a short sale is simply requesting the bank to accept a total payoff of your loan for an amount less than what you owe. You are only in foreclosure when you receive the foreclosure notice from the bank.

Can a short sale be completed if I have a second mortgage or home equity line?

Of course. The majority of people we work with have both a 1st and 2nd mortgage or a home equity line. In this situation the 1st mortgage generally approves an amount we are allowed to offer the 2nd and we negotiate between the two. The 2nd mortgage company is accustomed to taking a much lower payoff - generally less than 10% of the total loan amount.

Who pays the real estate commission, closing costs and past due taxes and HOA dues?

Your lender will pay all of the closing costs, commissions and any outstanding HOA assessments or past due taxes when the closing takes place. Sellers are never required to come out of pocket on a short sale transaction.

Will I have to make repairs to my home?

Your property will be purchased in As-Is condition which means the buyer cannot request you to make repairs.

Why would my lender agree to do a short sale on my home?

When banks foreclose on a property it is a long and expensive process and generally means holding the property in their inventory as a non-performing asset. Banks have a limit to the amount of non-performing assets they want to hold. Once this limit is exceeded, they have strong incentives to get rid of the properties at discount prices. For a lender, agreeing to a short sale avoids many of the costs associated with the foreclosure process. Attorney's fees, delays from borrower bankruptcies, damage to the property, costs associated with resale, property tax, insurance, etc., must all be paid by the bank during a foreclosure. In a short sale scenario, the lender is able to reduce their loss by avoiding additional legal fees, repair costs and utility bills and often times selling the home faster and at a higher price.

CONTACT SHORT SALE LISTING AGENT TODAY

ARIZONA SHORT SALE REQUIRED DOCUMENTS FOR THE SELF EMPLOYED

We continue to assist many sellers who wish to Short Sale their Arizona home due to the recent Real Estate Bubble and the high unemployment rate. Home owners are feeling the crunch and are losing help. They do not know who to call to aid them during their time of need. Statistics are that 7 out 10 home owners who were foreclosed upon did not contact a professional Realtor. Why? The Real Estate and Beyond Team is here to assist in an Arizona Short Sale.

We have a great deal of self employed individuals here in Arizona. Are they still able to do an Arizona Short Sale on their home? Yes, we just need to collect the following paperwork from them:

• Two months bank statements all pages front and back
• Last two years 1099s or 10940s
• Profit and loss year to date from tax professional
• Hardship letter
• Authorization letter signed and dated by seller
• Recent mortgage statement
• All legal notices sent to the seller for review

The only difference we witness here would be the 1099s and a profit/loss statement from tax professional. Again, we have to paint the picture of ones financial snapshot for the bank to consider the short sale. We ensure we submit a complete package to the bank to let the bank know that the seller is serious and needs this burden lifted in order to move on with their lives.

CONTACT HARRY FOR A FREE ARIZONA SHORT SALE CONSULTATION

FANNIE MAE CRACKS DOWN ON STRATEGIC DEFAULTS

ARIZONA SHORT SALE TIMELINE TO CLOSE

ARIZONA SHORT SALE CONTRACT DATE AND AGREEMENT DATE UNDERSTANDING THESE TWO DATES ARE VITAL TO SUCCESS

We are in the middle of another busy real estate season. We have bank owned properties along with Arizona Short Sale homes that are showing active in the MLS. Realtors can no longer ignore Arizona Short Sales when working with buyers. Recently, I have been educating myself when working with Arizona Short Sale homes from both the buyer side and seller side. Why? I can no longer ignore this part of the business. I see distressed homes being the majority of the business for the next three years. So, I have assembled a short sale team to assist home owners who are in need of a professional Realtor.

Fannie Mae has decided to crack down on strategic defaults. Why? They are trying to avoid more and more people from walking away from their home who can afford the mortgage payments. We have discussed a reasonable TIMELINE FOR CLOSING AN ARIZONA SHORT SALE. Also, a seller is informed on the items needed to start a short sale by collecting financials along with other information that the bank will need to consider a short sale. We need to continue from this point to obtain a successful offer on the property.

There are two important dates when it comes to an Arizona Short Sale accepted offer. This is when the buyer and seller have both signed off and agreed upon the final terms. Then, this offer is sent over to the bank to review and finalize.

CONTRACT DATE: This is the date when seller and buyer have a fully acceptable offer between two parties. This offer is sent to the bank for consideration and approval.

AGREEMENT DATE:This is the official date of the banks acceptance of the short sale offer. All contractural time periods shall commence the following day after buyer agent has received this official notice. Buyer will open escrow to beging process of closing short sale transaction.

Clarification of these two terms assists everybody in the transaction to have a successful close of escrow.

ARIZONA SHORT SALE SELLER TO BRING MONEY TO CLOSING TO SATISFY THE SECOND LIEN HOLDER

We continue to obtain more and more Arizona Short Sale Homes due to many people being upside down in their mortgage and/or of hardship being experienced from the Seller side. We have people who have not paid their mortgage in months and they do not know what to do. Again, statistics show us 7 out of 10 people who were foreclosed upon did not contact a professional Realtor for assistance. That was a shocking statistic to me. We can no longer ignore short sales. There are people out there that need our assistance. The Real Estate and Beyond Team is prepared to assist those that need proper counseling to see if the short sale route is the best one for them. We encourage all Sellers to visit a real estate attorney, CPA, tax attorney and credit restoration specialist to become fully informed when making decisions moving forward in life.

There is nothing easy when it comes to processing an Arizona Short Sale when negotiating with the banks. Every bank deals differently when it comes to an Arizona Short Sale. Many people do not touch short sales that have two liens on it. Hey, we will take a shot in negotiating all liens on the property. First, we qualify the seller before we take on each listing to ensure there is a Win-Win for all parties involved in the transaction.

We were assisting this one seller who had a first and second lien on the property. It took us about three months to finally agree with the first lien holder. Then, we started with the second lien holder to commit. Well, they wanted the seller to come in with $20,000 at close of escrow to satisfy the lien. That was not acceptable to the Seller. We negotiated another two weeks to get them down to $8,000. Personally, this took some negotiating skills witht the bank. Seller contacted their lawyer for consultation. Seller refused to bring anything to the table. She stated that she was protected under the law. Second lien holder said I will see you in court. Property is heading to the Arizona Trustee Sale.

Is she protected or not? Will the bank sue her for the remaining debt? I guess we will find out in court. The Arizona statue of limitations on second lien holders is six years. The Seller asked me what I would do. So, I told her to bring the $8,000 to close of escrow to move on with her life. I told her she will be spending more than $8,000 on lawyer fees for represenation. Furthermore, who wants to drag it out another six years just to be right? There are times when you have to pay up and just move on with life.