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Short Sale Stress?

Buckeye Short Sale News

In Arizona’s real estate market, you don’t have to look very far to find a short sale. In my area of Buckeye, Arizona it is not uncommon for one to find a development with 50% to 70% of the homes on the market listed as a short sale. The good news is that banks are getting better at handling the large volume of distressed property sales. However, the bad news is that these transactions have many more pitfalls then a traditional home sale. In this article, there are five things you need to know when buying a short sale that will help you throughout the buying process.

The first and one of the most important things to know about buying a distressed property is the experience of the agents involved. The listing agent is responsible for the pricing strategy, submitting the paperwork to the bank for approval and advising the homeowner throughout the process. Having a listing agent experienced with short sales will go a long way in improving the odds that the home owner will be approved for a short sale transaction and then close the deal. Having your agent, also known as the buyer’s agent, familiar with the short sale process is also an important factor. An experienced buyers agent will know which questions to ask the listing agent to help guide you through the process and improve the likelihood of the deal reaching the closing table.

The second question you need to consider, what is your timeframe? If you were my client and you told me that you would like to be in a house in 30-45 days, I would tell you maybe a short sale might not be for you. However, there are certain situations when the timeframe may be shorter for a short sale. If for example, there was a previous offer submitted on the property but by the time the bank approved the offer the buyer had found another property to buy . If your timeframe is flexible and staying in your current location for a few months is feasible then pursuing a distressed property could be a great deal for you.

Thirdly, you need to know how many parties/lenders are involved in the distressed sale. It is not uncommon for there to be two different mortgages on a property, a first and a second. In addition there may also be a home equity line of credit to deal with or a mortgage insurance company. The fewest number of parties that need to approve the transaction the better. Your agent should ask the listing agent what parties are involved and then based on their answers you can make an informed decision on whether or not to move on to the next property.

Fourthly, the listed price of a property should be evaluated. If it sounds too good to be true, it just might be. In a normal market the pricing of a house is part art and part science, but in today’s distressed market, pricing can be fraught with danger and bait and switch strategies. The typical approach for the listing agent to price a short sale is on a formula based on the amount owed on the property plus the commissions for the sale, attorney fees, penalties and taking into account the amount of time until foreclosure. But wait, you may realize at this point it would put the property well above market price, and you would be right. This is the listing agent;s way of proving to the bank that they attempted to get the best price for the property. Once the house has been on the market for a period of time without a full price offer, the agent will aggressively reduce the price of the property until they finally get a fair offer. The other approach used by listing agents is to price the property well below the current market value in order to get offers to start the short sale process, knowing full well the bank will not accept an offer at that price. If the buyer has not read this article they may not be aware of this tactic and not understand that there would be little chance of getting the property even though they have made a full price offer to the Seller. Your agent should know their market, the other comparable properties and the amount of money owed on the home to help you determine if the property is a legitimate deal or not.

Final thing you need to know is how your offer will be handled once submitted. If the property is at fair market price and your offer to the Seller is accepted, two things can happen. The listing agent will submit your offer with the short sale package to the bank for acceptance, and change the status of the property to a contingency status which will alert other buyer’s agents that there is an offer on the property. Or the listing agent may submit your accepted offer with the short sale package to the bank for acceptance but keep the property on the market leaving the door open for another buyer to offer a higher amount. The bank approval of the original buyer’s offer can take 2 months or longer to be finalized; in the meantime if the bank receives a higher offer for the property yours may be denied or countered.

Distressed properties are a reality of the current market. In the best scenario it’s a win-win-win, for the seller they avoid having a foreclosure on their credit record, the buyer who gets a good price on the house and the bank who saves the cost of going through a lengthy and expensive foreclosure process. Armed with the knowledge in this article, you can now make a more informed decision when considering the purchase of a home that is a short sale.

For more information about Buckeye short sales and Buckeye foreclosures, please contact Robert Luce at West Valley Pros.

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Phoenix Realtor – West Valley Pros: 20832 W Werner Place, Buckeye, AZ 85396
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Buckeye Homes for Sale, Buckeye Real Estate, Buckeye Realty, Buckeye Short Sales, Buckeye Foreclosures, Buckeye Short Sale, Buckeye Foreclosure, Buckeye House for Sale, Buckeye Realtor

Phoenix Realtor – West Valley Pros: 20832 W Werner Place, Buckeye, AZ 85396
Phoenix Realtor – West Valley Pros: 4324 E. Hamblin Dr, Phoenix AZ 85050

One out of five hundred households today are faced with a foreclosure problem. This dropping scenario of real estate clearly shows the need to really save money. Problems of bad loans, however, remain for first-time homebuyers out there.

Also, there is still the problem where brokers downplay how grave variable rates are to increase personal profit margins. Therefore, try not to get caught in the crazy frenzy of purchasing real estates. Instead, act with lots of precision to avoid the foreclosure problem. Not paying for monthly fees, with a mortgage, over a certain time period might cause serious problems such as foreclosure. This would mean that you would lose your property’s title and your overall credit report would be impacted.

To avoid a foreclosure and save some money at the same time, read on:

- Lots of untoward scenarios can be completely avoided through contacting your lender the minute you realize you will be making a late payment. – Do not ignore your lender’s calls or letters. Ignoring this problem will not send it away. Instead, it will make your situational crisis worse. Try having candid discussions with your personal lender to get yourself out of this situation. – Oftentimes, reinstatement is cited as a temporary solution in avoiding the foreclosure problem. – Lastly, to avoid the foreclosure problem, go for consistent counseling programs.

Documentation tends to play an essential part when it comes to avoiding the foreclosure problem. Therefore, you have to have these financial details handy:

- Proper statements of your existing financial circumstances.

- Detailed statements regarding your existing status of income.

- Detailed lists of your overall household expenses.

Therefore, if you wish to avoid the foreclosure problem, begin by saving some money immediately.

Begin with a regular bank account to reap long-term rich harvests. Money does tend to bring about happiness, as well as ease everyday stresses to a huge extent. Along with properly designed investment and saving products to meet customer needs from different society segments, this will no longer be a hard task. Therefore, you should begin to help your money in making even more money – just for you.

… I want to highlight some key points of success:

We have signed contracts with over 45 servicers, including the five largest. Between loans covered by these servicers and loans owned or guaranteed by the GSEs, more than 85 percent of all mortgage loans in the country are now covered by the program.

Over 570,000 trial modifications have been offered under the program. Over 360,000 trial modifications are underway.
…
[W]e recognize that any modification program seeking to avoid preventable foreclosures has limits, HAMP included. Even before the current crisis, when home prices were climbing, there were still many hundreds of thousands of foreclosures. Therefore, even if HAMP is a total success, we should still expect millions of foreclosures, as President Obama noted when he launched the program in February.

Some of these foreclosures will result from borrowers who, as investors, do not qualify for the program. Others will occur because borrowers do not respond to our outreach. Still others will be the product of borrowers who bought homes well beyond what they could afford and so would be unable to make the monthly payment even on a modified loan.
It is that third category that is key – that is all the homeowners far underwater who bought homes they could never really afford.

Last year was a record year for bankruptcies. Delinquent payments on mortgages, according to the Mortgage Bankers Association of America, reveal a coming wave of foreclosures on the horizon.

There’s opportunity now for investors to step in and benefit from these properties that are about to hit the market. However, despite all the hyperbole, investors can lose money in real estate – a lot of money. If you have some cash itching a hole in your bank account and you’re looking for positive cash flow and possible high returns on investment, be sure to avoid these pitfalls in the foreclosure investor field.

Paying too much for a foreclosure. Many VA and HUD foreclosure buyers have found themselves getting caught up in the excitement of auctioning up on properties and watch, without even knowing it, their supposed cash cow die right in front of them. I have personaly seen happy investors bidding on a property in Malibu Bay, Pembroke Pines,Florida up to $158,250. I met them the next day and asked them why they just overpaid for a property with a market value of $150,000-$152,000. By the way, next door was on the market for an asking price of $154,900. If you must have a 20 or 25 percent spread to make money on the purchase, then stop bidding when the price gets below that spread amount.

In simple terms, if you’re bidding on a property with a $150,000 value and you intend to sell it for a 20 percent gain, then stop bidding when the price gets above $120,000. In a hot market, even foreclosures will sell at market price, but then the new owner must move in and most likely fix up a dilapidated property that has been neglected by the former owners. (Usually, when an owner is headed toward foreclosure, fixing the leaky roof or basement is the last thing on his mind, leaving it up to the ‘bank’ to fix instead.)

Getting a house without clear title. Since I’m not an attorney, I won’t go deep into this point, but make sure you can get clear title to a property before you put your $10,000 earnest money deposit into the deal. Order a title search by an attorney to find out if you’re going to have any problems taking title to the property. If you can’t get title, you can’t sell the property.

Negative or unprofitable cash flows. The whole idea behind buying a foreclosure is to buy low enough so that rent checks will cover the investor’s mortgage payment, taxes, insurance and fees each month and then leave the investor some profit at the end of the month. Unless the property is in pristine condition and all the systems will last repair -free years, you’re setting yourself up for financial hardship if an air conditioner breaks or the refrigerator has a compressor attack.

The monthly cash flow should include enough to finance any breakdowns or repairs while the tenant lives in the dwelling. Negative cash flows are not deductible expenses.

Not taking care of little problems before they become big problems.

Don’t take the cheap way out on being a landlord. A house starts deteriorating from the day the builder completes its construction. Your new investment property is creating cash flow – take care of it. Keep it painted regularly, clean carpets and floors between tenants, fix broken windows, repair leaks promptly, replaced rotted wood, etc. If you let the property deteriorate until you can’t rent it out any longer, you’ve waited too long to fix these items. In addition, to fix defects early on will save you money if you wait and the bill doubles or even triples.

Failing to educate yourself on tax benefits of owning investment properties. If you’re going to invest in rental property, talk with professionals in the field who know how to maximize your financial benefits form this new form of investment. Accountants, attorneys and real estate practitioners are all worth their fees as they help you avoid pitfalls, increase your gain and keep you out of trouble.

Claude Thomas
http://www.articlesbase.com/real-estate-articles/how-to-lose-your-shirt-in-foreclosure-investing-107092.html

There are many foreclosure home remodeling projects being undertaken everyday by professional contractors. These repair teams specialize in turning a foreclosed home into a resalable real estate commodity within 45 days of repossession or closing. Many foreclosure home remodeling projects are cosmetic and can be finished well before the 45 day deadline.

Other foreclosure home remodeling areas are more difficult to finish and will take almost all of the allocated time to complete. The foreclosed home may have been neglected for a long period of time, and rodents may have entered the home and chewed holes through walls, woodwork and attic spaces. The items that will need to be replaced, and the repairs that must be accomplished, must be determined before foreclosure home remodeling efforts can even begin.

Professional contractors have a good idea of what damage has been done by viewing each area of the home. They realize the materials that are behind the walls, and how many rolls of insulation are in each wall space. A foreclosure home remodeling project might include repairs to the ceiling areas due to water leaks. If the roof is leaking, then shingles will need to be added to the list of supplies that will be needed to complete the foreclosed home remodeling project on time.

Buckled flooring will definitely require further investigation because this is an indication of structural damage that extends to the support system under the home. The cement slab may be cracked by broken pipes, or the land might have shifted underneath the home from recent storms and a poor drainage system. This type of foreclosure home remodeling problem might delay the home from being listed on the market at all.

Home building contractors do not worry very much about peeling paint and dirt and grime. These are easy fixes for me, and this fix will allow a foreclosure home remodeling project to proceed as planned. Walls can be resurfaced if they are rough and unsightly and the white wall finish will make these walls look brand new after a few coats of paint. A foreclosure home remodeling project can require plumbing skills too. If the piping system in the home is broken, then there is going to be accumulated water somewhere under the home. Broken pipes have to be repaired before a home is placed on the market for sale.

Some of the foreclosure home remodeling projects – are very simple, and some are quite costly. In some cases, the cost of repairs will liquidate, the cash that the owners hope to make on the property, and cost of them more to repair than they will ever be able to recoup. In these cases, it is better to stop the foreclosure home remodeling project and tear the building down and start fresh.

The materials that are used to build the new home might not have as many outstanding features as it would normally have, such as Jacuzzi bath and marbled countertops in the kitchen, but the investors have to cut costs at every turn to recoup the monies they have lost. The new home is like to sell quickly if an attractive price is listed, and it will definitely sell because people love buying brand new homes. The new owners can start their own remodeling projects when they settle in to their new home.

Jena Luthovski
http://www.articlesbase.com/internet-articles/foreclosure-home-remodeling-128901.html

Successful foreclosure investing requires more than simply locating properties and contacting the owners. In most cases, you’re going to need a plan for consistent follow-up.

Remember, foreclosure investing requires a particular response from the property owner. Namely, you want to negotiate a deal that gives you control of the property at an attractive price, while at the same time helping the owner avoid full foreclosure proceedings. Putting together a deal that meets these specifications will take more than one contact with the owner.

To begin with, the owner is under a lot of stress as they face the prospects of foreclosure. There’s a good chance that the foreclosure has come about as a consequence of poor financial management or wrong financial decisions. This may make the owner reluctant to make any more decisions about money, even if it appears to be in their favor.

Foreclosures are often only part of the owner’s overall financial situation. They may be enduring numerous calls and letters from creditors and collection agencies. Your initial contact with the owner could easily get lost in the flood of communications the owner is trying to deal with (or ignore).

Even if your contact does rise above the roar, the owner may view your offer with suspicion. Any offer to help at this point in their situation will seem too good to be true, so they may fear a scam of some sort. Your only alternative in foreclosure investing is to be persistent. You should have no expectation of a quick response from the homeowner. You will need to plan for repeated contact attempts.

The secret to successfully getting the owner’s attention is lots of regular, consistent contact. In fact, you need to plan to correspond with the owner every other day, and you need to keep it up until the scheduled public auction. That’s a lot of contact, even if you’re only working on one property. If you are tracking more foreclosure investing opportunities, that will multiply the number of follow-ups you need to track. You’re going to need some sort of system for keeping up with each contact and where each property is in the stage of the foreclosure process.

Foreclosure investing requires regular, consistent follow-up with multiple property owners who may not be interested in what you have to say. Follow-up contact is not an optional activity. Your communication with them must be designed to create the desire within them to avoid foreclosure. If you fail in your efforts to contact the owner, there will be no deal for the property.

This may sound like a great deal of work and it will certainly take organization. But when it comes to foreclosure investing, the fortune IS in the follow-up.

Sal Vannutini

http://www.articlesbase.com/non-fiction-articles/foreclosure-investing-the-fortune-is-in-the-followup-122822.html

If people took necessary steps before hand and knew how to stop foreclosure, very few people would lose their homes. There are a certain guidelines that should be followed, if you wish to stop a foreclosure. These could come handy to stop the foreclosure of your home way in advance or just before the auction.

1. Do NOT ignore savings
Many people opt to save, to be prepared for any kind of emergency. Some emergency or the other always stares at us in the face every other day, very often, when we least expect it. When it comes to homeowners, they ought to have at least six months of mortgage payments kept aside as savings.

2. Do NOT get caught without a Home Equity Line of Credit in place.
More than 90% foreclosures might have been delayed or prevented, if home equity lines of credit were activated before hand. Setting up of a credit line at no extra cost can lock rates as low as 4%. There are cases when you dont access the line, but are yet asked to pay for it. When such emergencies occur, it could get hard at times to acquire a loan. This is when a home equity credit line comes handy. You at least have access to money whenever you need it.

3. Do NOT miss a mortgage payment.

Skipping mortgage payments is a serious issue, more serious than missing a credit card or utility payment. Do not spend frivolously, neglect bill payments or spend the savings before the mortgage obligation.

4. Do NOT fail to ask for help.

When you feel that it is high time you ask for assistance from someone, do so. Feeling embarrassed or scared that the request for money would be turned down would only increase the possibilities of losing your home to foreclosure. Usually people do not admit that they have a foreclosure coming up.

5. Do NOT ignore the lender.

Many people harbor wrong notions about moneylenders. However, in times when you are left in the lurch, the moneylenders are the first to come to your rescue. In fact, moneylenders appreciate the individuals initiative to contact. They need to know the reason for the financial emergency and the securities in place.

6. Do NOT overlook the fact that you have a problem.

If you ignore something, it does not just go away. Whether it pertains to daily life or a major financial upheaval, problems do arise at the least expected times. If you are under the wrong impression that the problems will pass by if you dont pay any heed to them, you are wrong.

7. Do NOT be under this impression that you dont have options

There are options to foreclosure woes. You could keep your house and stop the foreclosure. However, timely action is the key, the sooner you act upon this the better.

8. Do NOT spend what money you have on other bills.

Many end up using the minimum resources they have in paying other bills. Do not ignore foreclosure. There could be a time when you will need the money to save your house.

9. Do NOT stop making payments.

Until and unless the bank decides not to take any more payments from you, you should continue with the repayment.

10. Do NOT miss bankruptcy-filing deadlines.

If you file Chapter 13 Bankruptcy in time, you can stop a foreclosure before it gets you. If a person fails to make any payments, the creditors have no option but to initiate the foreclosure.

Kris Koonar
http://www.articlesbase.com/non-fiction-articles/10-things-not-to-do-if-you-want-to-stop-foreclosure-on-your-home-119878.html

Regardless if the housing market is celebrating a boom, people always prefer buying houses available at foreclosures. Some people prefer to buy them right away, while some want to become investors. In both cases, bargains are available, but are not easy. There are three stages of foreclosure home sales, they are pre-foreclosure, auction and real estate-owned property or REO.

The first stage is the pre-foreclosure stage, where homeowners have defaulted on their mortgage payments. A period is provided to the pre-foreclosure homeowner to respond to the bank about whether he would be able to manage to pay back the debts or get a buyer for his home or property. Buyers and investors searching for houses in default should visit the local courthouse, where all the defaults are registered. These buyers and investors can directly deal with the homeowners to get a better price. Only a few pre-foreclosure bargains exist among the most desirable homes. Properties that are available at a 20 percent to 40 percent discount rate usually need repairs or are in unstable communities. At this stage, buyers have about 90 days to take action, after the default notice is posted and another 21 to 25 days, after the auction date is published.

The auction is carried out when the homeowner fails to settle the debts within the limited time allotted by the mortgagor. The foreclosure home is now opened for sale and is auctioned in the country courthouse. The highest bidder gets the foreclosure home.

However, not all auctions are held on equal terms and conditions. If the loan was guaranteed by the U.S. Department of Housing and Urban Development or HUD, then the department takes complete ownership of the home and sells it through a real estate agent or auctions it on the Internet.

In the case of the auction being hosted by the bank or private lender, the investors should not turn up without prior preparation. All investors should have a good knowledge of the state’s laws and the details of the property. Finance is not the only problem for buyers at a foreclosure auction. In some extreme cases, some of the homes would still be occupied and the potential buyer has to deal with the eviction.

If the foreclosure home is not sold at the auction, the investors can buy it as a real estate-owned or REO property. Lenders and banks generally avoid the REO stage. For most banks, an empty unsold property is a non-performing asset. The longer a house remains unoccupied, the more its value depreciates. For such long pending foreclosure cases the bigger banks dont deal with the buyers directly and prefer to hand over the properties to real estate agents. However, smaller banks prefer to save on the commission and directly deal with the buyers. In either case, The REO procedure for the buyers is simpler and the property prices are flexible.

Experts suggest that even if the house is already bought, a buyer could send a letter to the bank president, offering him a higher price for the property. The bank may want a quick turnover, since it would help to maximize the profit. The fact remains that foreclosure homes are much cheaper and easily available.

Kris Koonar
http://www.articlesbase.com/non-fiction-articles/the-stages-of-foreclosure-home-sale-104407.html