Posts Tagged ‘short sales’

Real Estate 101 Glossary V-Z

December 31, 2009

The last blog  of the year with the last letters of this glossary.  Thank you for joining me this year and have a Happy, healthy and prosperous New Year!

VACANCY RATE   The current percentage of vacant properties in a given area, regardless of why they are vacant.

VA MORTGAGE  A mortgage that is guaranteed by the Department of Veterans Affairs (VA).

VARIANCE   An exception to municipal zoning regulations granted for a specific time period to allow for non-conforming use of the land.

VENT PIPE   A pipe allowing gas to escape.

VESTED   Having the right to use a portion of a fund such as an IRA. Typically vesting occurs over time. If you are 100% vested, you have a right to 100% of the fund.

VETERANS AFFAIRS, DEPARTMENT OF (VA)   The successor to the Veteran’s Administration, this government agency is responsible for ensuring the rights and welfare of our nation’s veterans and their dependents. Among other duties, the VA insures home loans made to veterans.

VOLTAGE   An expression of electric force, or pressure. One volt being the force needed to move one amp against one ohm resistance.

WALK-THROUGH INSPECTION   A process whereby an appraiser examines a property in preparation for estimating its value. Also, the process of inspecting a property for any damage prior to that property being bought or sold.

WARRANTY   An affidavit given to stipulate the condition of a property. The person giving the warranty assumes liability if the condition turns out to be untrue.

WATT   An expression of amount of electrical power. Volt times amps equals watts.

WEAR AND TEAR   A term used to indicate the normal damage inflicted on a property through every-day use.

WEATHER STRIPPING   Material used around windows and doors to prevent drafts.

WEEP HOLE  Drainage hole that allows water to escape.

ZERO LOT LINE   A municipal zoning category wherein a building or other fixture may abut the property line.

ZONE   A specific area within a municipality or other jurisdiction which conforms to certain guidelines regarding the use of property in the zone. Typical zones include single-family, multi-family, industrial, commercial and mixed-use.

Advertisements

Real Estate 101 Glossary N-O

November 22, 2009

Let’s take a bite out of the N’s and the O’s.

NATIONAL ASSOCIATION OF MASTER APPRAISERS (NAMA)  A non profit professional association organized in 1982, dedicated to the advancement of professionalism in real estate appraisal.

National Association of Realtors (NAR) A non-profit professional association for real estate agents.  Not all agents are Realtors. Realtors follow a code of ethics. and promotes professionalism within the association

NATIONAL SOCIETY OF REAL ESTATE APPRAISERS  An organization founded in 1956 which promotes standards of professionalism in its members.

NATURAL VACANCY RATE  The percentage of vacant properties in a given area that is the result of natural turnover and market forces

. NEGATIVE AMORTIZATION  When the balance of a loan increases instead of decreases. Usually due to a borrower making a minimum payment on an Adjustable Rate Mortgage during a period when the rate fluctuates to a high enough point that the minimum payment does not cover all of the interest.

NEIGHBORHOOD LIFE-CYCLE The evolution of neighborhood use and demographics over time. Economic fluctuations, municipal zoning changes and population shifts can effect the life cycle.

NEIGHBORHOOD  A subsection of a municipality that has been designated by a developer, economic forces or physical formations.

NET LEASABLE AREA  The space in a development, outside of the common areas, that can be rented to tenants.

NEW ENGLAND COLONIAL  An architectural style dating from early American history typified by a two-story building with clapboard siding.

NO-COST LOAN  Many lenders offer loans that you can obtain at “no cost.” You should inquire whether this means there are no “lender” costs associated with the loan, or if it also covers the other costs you would normally have in a purchase or refinance transactions, such as title insurance, escrow fees, settlement fees, appraisal, recording fees, notary fees, and others. These are fees and costs which may be associated with buying a home or obtaining a loan, but not charged directly by the lender. Keep in mind that, like a “no-point” loan, the interest rate will be higher than if you obtain a loan that has costs associated with it.

 NO-POINT LOAN  A loan with no “points”. The interest rate on such a loan will be higher than a loan with points paid. Also sometimes refers to a refinance loan where closing costs are included in the loan.

NON-CONFORMING USE  The use of land for purposes contrary to the applicable municipal zoning specifications. Often occurs when zoning changes after a property is in use.

NONLIQUID ASSET  Any asset which can not be quickly converted into cash at little or no cost.

 NOTE  A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.

NOTE RATE  The interest rate stated on a mortgage note.

 NOTICE OF DEFAULT  Formal written notice from a lender to a borrower that default has occurred.

 OBSOLESCENCE  The process of an assets value diminishing due to the development of more desirable alternatives or because of the degradation of its capabilities.

OCCUPANCY A physical presence within and control of a property.

OCCUPANCY RATE  The percentage of properties in a given area that are occupied.

OCTOPUS RECEPTACLE  An outlet with too many devices plugged into it, using a power strip or other device to multiply the outlets.

 OFF-SITE IMPROVEMENTS  Buildings, structures or other amenities which are not located on a piece of property, but are necessary to maximize the use of the property or in some way contribute to the value of the property.

OFF-STREET PARKING  Designated parking spaces associated with a particular building or other structure which are not located on public streets.

OLD TERMITE ACTIVITY  Where no termites are currently active, but indications of past activity can be seen.

ON-SITE IMPROVEMENTS  Buildings, structures or other amenities that are erected on a piece of property and contribute to its value.

OPEN SPACE  Any land which has not had any significant buildings or structures erected on it. Most often used to describe desirable neighborhood features like parks.

OPEN SPLICE An uncovered electrical connection.

ORIGINAL EQUITY  The amount of cash a home buyer initially invests in the home.

 ORIGINAL PRINCIPAL BALANCE  The total amount of principal owed on a mortgage loan at the time of closing.

ORIGINATION FEE  Refers to the total number of points paid by a borrower at closing.

 OWNER FINANCING  A transaction where the property owner provides all or part of the financing.

 OWNER OCCUPIED  The state of property wherein the owner occupies at least some portion of the property.

HUD secretary meets w/RE/MAX head about short sales

September 10, 2009

a REMAX logo

 
RE/MAX Chairman and Co-Founder Dave Liniger met with Housing and Urban Development Secretary Shaun Donovan on Sept. 4. They had a conversation on a variety of topics related to the current state of the real estate market, but focused primarily on recommendations for streamlining the short sale process.“We feel strongly that if short sale transactions can become more like normal real estate transactions, we can make significant headway in reducing the number of vacant and foreclosed homes on the market,” Liniger said. “Because most homeowners aren’t aware that they have this option and loan servicers haven’t made it a priority, we feel that the federal government should facilitate an effective national initiative.”Also present at the meeting, held in Secretary Donovan’s office, were FHA Commissioner Dave Stevens and Laurie Maggiano of the Treasury Department’s Chief of Homeowner Preservation Office. Accompanying Liniger to Washington was RE/MAX Senior Vice President, Mike Ryan.

Learn more about short sales Real Estate Insider is hosting a Webinar, “Short Sales Demystified,” on Sept. 24. Click here for the details.

A short sale can occur when a lender allows a homeowner to sell a home for a price that is less than what is owed on the mortgage, if the homeowner is experiencing a financial difficulty that would make monthly mortgage payments a significant burden.  Unfortunately, nearly 70 percent of homeowners facing foreclosure never list their home for sale, even though a short sale has many benefits over a foreclosure.

RE/MAX has made assisting such families a high priority and has undertaken a comprehensive, targeted agent training program. In March, Liniger set a goal of having 7,500 RE/MAX sales associates earn the Certified Distressed Property Expert (CDPE) designation by the end of the year. The actual number has already passed 7,000 and represents 62 percent of all CDPE agents in the United States.

Surveys show that after earning a CDPE designation, agents are twice as likely to be able to keep families in their homes. With the CDPE designation, agents are also able to cut the time in half that it takes to close a short sale.  The average CDPE agent closes about 10 short sale transactions a year.

“Secretary Donovan has a very good understanding of how short sales can help this market, and he was certainly open to our specific recommendations, especially in the area of agent training and public awareness. We’re expecting an announcement will soon be made about procedures to facilitate a streamlined short sale process,” Liniger added. 

Short sales could be the best solution for homeowners who are facing a foreclosure, have been turned down for a loan modification, or who have lost their job and can no longer make their mortgage payments. Homeowners who find themselves in one of these difficult positions should contact a real estate professional who is specifically trained to handle short sales to find out how the process could result in a positive outcome. A CDPE agent is especially aware of this critical process.

A streamlined short sale process could benefit the entire real estate marketplace and offers a much better alternative to foreclosure. Lenders often experience greater losses taking a home to foreclosure, neighborhoods suffer greater losses in home values with foreclosed homes, which are often vacant, and homeowners sustain more severe damage to their credit as the result of foreclosure.

The real estate market will not recover until the number of foreclosures is reduced and home prices start to rebound. An efficient short sale process can have a significant impact on foreclosures, which remain at record high levels. RE/MAX hopes that a standardized, national short sale process will soon be in place to promote a lasting housing recovery.

Short Sale Update

May 21, 2009

The bank took so long to approve, now the buyer’s appraiser cannot appraise at the contract price.  There were two recent sales in the building that were below our contract price.

We have to re-write the contract and submit to the bank again for approval.

Back to the drawing board. Urrrrr

 

a REMAX logo

Avoid Foreclosure Press Release

May 16, 2009

CDPE logo colorclip art houseDonna Benton EARNS PRESTIGIOUS DESIGNATION TO HELP HOMEOWNERS IN DANGER OF FORECLOSURE

 

Donna Benton “D.B.” of RE/MAX Marquee Partners has earned the prestigious Certified Distressed Property Expert (CDPE) designation, having completed extensive training in foreclosure avoidance and short sales. This is invaluable expertise to offer at a time when the area is ravaged by “distressed” homes in the foreclosure process.

Short sales allow the cash-strapped seller to repay the mortgage at the price that the home sells for, even though it is lower than what is owed on the property. With plummeting property values, this can save many people from foreclosure and even bankruptcy. More and more lenders are willing to consider short sales because they are much less costly than foreclosures.

In the Los Angeles area, a number of homes are in danger of foreclosing. It is happening in all price ranges. Local experts say that even high-priced homes are not immune.

“This CDPE designation has been invaluable as I work with sellers and lenders on complicated short sales,” said Benton. “It is so rewarding to be able to help sellers save their homes from foreclosure.”

Alex Charfen, founder of the Distressed Property Institute in Boca Raton, Fla., said that Realtors® such as Donna Benton with the CDPE designation have valuable training in short sales that can offer the homeowner much better alternatives to foreclosure, which virtually destroys the credit rating. These experts also may better understand market conditions and can help sellers through the emotional experience, he said.

The Distressed Property Institute opened in January 2008 and provides training on-site and online. The CDPE is the premier designation for Realtors helping homeowners in distress and handling short sales.

Our goal is to educate as many people as possible so we can help as many homeowners as possible,” Charfen said.

For a confidentional and FREE  consultation contact Donna directly at 310-398-2332.

a REMAX logo

The Fed’s Alternative to Foreclosure

May 15, 2009

This was excerpted from the California Association of Realtors press release:

This pretty much mirrors the FHA and VA policy for Short Sales.

clip art house

Good news from Washington, D.C., today. The Obama administration announced new details under its Foreclosure Alternatives Program (FAP) enabling servicers and borrowers to pursue short sales and deeds-in-lieu (DIL) of foreclosure in cases where the borrower is generally eligible for a Making Home Affordable modification but does not qualify or is unable to successfully complete the three month trial period. The program, effective through 2012, requires that prior to proceeding with a foreclosure, servicers must determine if a short sale is appropriate. We’re gratified that the administration has recognized the need to streamline the short sale and deeds-in-lieu processes, and has provided viable options to homeowners who have fallen behind on their mortgages but owe more than their homes would sell for in today’s challenging market. We also appreciate the efforts of our colleagues at NAR for keeping this issue front and center in our nation’s capital. Incentives in the FAP program include $1,000 for servicers for successful completion of a short sale or deed-in-lieu of foreclosure; $1,500 for borrowers/homeowners to help with relocation expenses; and up to $1,000 toward the cost of paying junior lien holders to release their liens ($1 from the government for every $2 paid by the investors to the second lien holders). The FAP includes streamlined and standardized documents, including a Short Sale Agreement and an Offer Acceptance Letter to minimize complexity and increase use of the short sale option. Servicers will independently establish both property value and minimum acceptable net return, in accordance with investor requirements, based on an appraisal or one or more broker price opinions, issued no more than 120 days before the date of the short sale agreement. In the Short Sale Agreement, servicers must give borrowers/homeowners at least 90 days to market and sell the property, or up to one year, depending on market conditions. The property also must be listed with a licensed real estate professional with experience in the neighborhood, and no foreclosure may take place during the marketing period, of at least 90 days, as specified in the Short Sale Agreement. The Short Sale Agreement also must specify the reasonable and customary real estate commissions and costs that may be deducted from the sales price. The servicer must agree not to negotiate a lower commission after an offer has been received. Servicers may not charge fees to borrowers/homeowners for participating in the program. Servicers have the option to require the borrower/homeowner to agree to deed the property to the servicer in exchange for a release from the debt if the property does not sell within the time allowed in the Short Sale Agreement, plus any extensions. Additional details will be forthcoming. Please check C.A.R.’s Market Response Center for updated information as it becomes available.

a REMAX logo

Short sales

May 9, 2009

clip art houseWhat is a short sale?  This occurs when a seller is in finacial straits, is unable to continue making mortgage payments and the existing  loan(s) exceed the value of the property. A knowledgeable agent (me) can assist the owner by marketing the property, entertain offers, prepare a package of documents for the existing lender(s) and negotiate with the lender.  In order for this transaction to close the lender has to agree to pay the closing fees of the seller and take less than is owed on the property.

There can be an outright refusal, the lender may require the seller to kick in some funds or the lender can absorb all of the costs.  When there is a second mortgage; even if it is with the same lender as the first mortgage, both loans have to be approved.    The loans are genreated in different departments.  Many times the first lender will pay the second lender a fee towards their fees, but this is usually a nominal fee, usually about $3,000.  The first lender would pay all of the closing fees for the seller.

It is time to change the name to Long Sales, as it take take many months to negotiate these transactions.  I just closed two transactions that were tied together and it took the seller a year to finally close.  It took my buyer about six months to finally close the deal.  Any time there is any change it has to go back to the negotiator for approval.  In that time frame the buyer can lose faith and go on to another property or if they love the property they can stay with the transaction.  Sometimes the value of the property has decreased and another round of negotiations can begin.  All along there has to be a monitoring of the trustee sale (in California) where the property can be sold to an independent party at the courthouse.  This is also another department. 

 I have had this present transaction trustee sale delayed three times.  The second mortgage wants the seller to put in $4,000 which the seller does not have.  Presently, she is running out of money every month and has no extra money and has maxed her credit cards.    I have requested that the first pay the second more money.  We shall see how it goes.

a REMAX logo

San Pedro Closing

March 27, 2009

 

I can hardly believe that we will be closing this transaction soon.  We started escrow in November, 2008.  It was complicated by the fact that it was a short sale with three different lenders and two different lots.  With some  hard negotiations and patience from my clients, it should close next week.

This is called the “Rock House” and was built in the 20’s from stones that were brought up from the ocean.  It has a long and varied history of rum running during prohibition.  There is even a secret room (probably where the rum was stored).  Catalina Island is featured in the main windows and recently we saw whales spouting.  I am sure my clients, a lovely couple, will have a wonderful life in this unique home.  I am waiting for the first meal.paseo-del-mar4paseo-del-mar-25                                                                               Donna Benton

RE/MAX Westside Properties

310-398-2332

Short sales again

March 21, 2009

clip-art-house2Just got word that the lender approved one of our short sales.  They were supposed to send a fax, but instead we received a letter by Fedex, 2 days later.  We submitted 4 offers on Jan. 26th, almost two months later we get a respone.  One offer backed out.  The bank  took the offer with twenty percent down, not with the higher price.  More of a chance to qualify for a loan.   We have 35 days to close the deal.    They also refused to pay the property tax, association fees and some other small fees, they expect the seller to pay.  She works sporatically and has two children.   I put together a two page response today.  I hope it does not take long.  We have a well qualified buyer, I would hate to loose him.  His sister owns a condo in the building.

Short Sales

March 18, 2009

clip-art-house1

I am presently involved in two short sales.  I am changing the name to Long Sales.  From the time you put it on the market to closing could be 4-6 months, sometimes longer.

 

What is a short sale/long sale?  This event occurs when an owner of a property is unable to continue with their mortgage payments due to a financial hardship.  They have exhausted other avenues such as a loan modification with their existing lender or lenders, and the property is worth less than the mortgage amount.  Owners can contact HUD for assistance-800-569-4287; contact their lender and their Realtor®. After all avenues have been exhausted, the owner can place their home on the market with their Realtor®.  It is always best to work with an agent that has experience with short sales.  Realtors® do not charge any upfront fees to the seller, we are only paid once the transaction finalizes.

 

Typically, a seller would be responsible for paying all fees associated with the sale of their home.  With short sales the lender will pay the expenses.   A short sale can prevent foreclosure of the property, and can have less of a detrimental effect on your credit report.  Some lenders may require that the owner sign an unsecured loan to pay back some of the fees.  This can be triggered when there is a second mortgage on the property. 

 

Owners are advised to begin the process as early. 

 

                                  Donna Benton

                                  RE/MAX Westside Properties        cid_image6

310-398-2332