Real Estate Information

The Housing Market You’ve Been Saving For

There are even some hints the present combination of historically low rates and more reasonably priced homes are beginning to slip away in some markets. For example, the National Association of Realtors’ housing affordability index, while still high, has dropped nearly six percentage points in the past few quarters as existing home prices in many areas have reversed course and begun to rise again.

Like a rare astronomical event, America is experiencing a conjunction between very affordable home prices and historically low mortgage rates that hasn’t been seen for half a century. Since nobody knows how long this will last, today’s market is a rare buying opportunity for working families with stable incomes and good credit.

If you or someone you know needs to sell their home but owes more than it is worth in today's declining market, look at this quick commercial and attend our seminar. Click on the link below. You will also find the information under the Seminars button on my homepage.

Whatever you do, do NOT walk away from your home and let it go into foreclosure without speaking to me first!

http://www.youtube.com/watch?v=xRMng-fFKI0

IF you're thinking of selling your home, and you expect that the total amount you owe on your mortgage will be greater than the selling price of your home, you may be facing a short sale. A short sale is one where the net proceeds from the sale won't cover your total mortgage obligation and closing costs, and you don't have other sources of money to cover the deficiency. A short sale is different from a foreclosure, which is when your lender takes title of your home through a lengthy legal process and then sells it.

1. Consider loan modification first. If you are thinking of selling your home because of financial difficulties and you anticipate a short sale, first contact your lender to see if it has any programs to help you stay in your home. Your lender may agree to a modification such as:

·          Refinancing your loan at a lower interest rate

·          Providing a different payment plan to help you get caught up

·          Providing a forbearance period if your situation is temporary

When a loan modification still isn’t enough to relieve your financial problems, a short sale could be your best option if

·          Your property is worth less than the total mortgage you owe on it.

·          You have a financial hardship, such as a job loss or major medical bills.

·          You have contacted your lender and it is willing to entertain a short sale.

2. Hire a qualified team. The first step to a short sale is to hire me, Dave Oswald, and a real estate attorney who specializes in short sales. Short sales have proliferated only in the last few years, so it may be challenging to find attorneys who have handled a lot of short sales. You want to work with those who demonstrate a thorough working knowledge of the short-sale process and who won't try to take advantage of your situation or pressure you to do something that isn't in your best interest.

I can:

·          Provide you with a comparative market analysis (CMA) or broker price opinion (BPO).

·          Help you set an appropriate listing price for your home, market the home, and get it sold.

·          Put special language in the MLS that indicates your home is a short sale and that lender approval is needed (all MLSs permit, and some now require, that the short-sale status be disclosed to potential buyers).

·          Ease the process of working with your lender or lenders.

·          Negotiate the contract with the buyers.

·          Help you put together the short-sale package to send to your lender (or lenders, if you have more than one mortgage) for approval. You can’t sell your home without your lender and any other lien holders agreeing to the sale and releasing the lien so that the buyers can get clear title.

3. Begin gathering documentation before any offers come in. Your lender will give you a list of documents it requires to consider a short sale. The short-sale “package” that accompanies any offer typically must include

·          A hardship letter detailing your financial situation and why you need the short sale

·          A copy of the purchase contract and listing agreement

·          Proof of your income and assets

·          Copies of your federal income tax returns for the past two years

4. Prepare buyers for a lengthy waiting period. Even if you're well organized and have all the documents in place, be prepared for a long process. Waiting for your lender’s review of the short-sale package can take several weeks to months. Some experts say:

·          If you have only one mortgage, the review can take about two months.

·          With a first and second mortgage with the same lender, the review can take about three months.

·          With two or more mortgages with different lenders, it can take four months or longer.

When the bank does respond, it can approve the short sale, make a counteroffer, or deny the short sale. The last two actions can lengthen the process or put you back at square one. (Your real estate attorney and I, with your authorization, can work with your lender’s loss mitigation department on your behalf to prepare the proper documentation and speed the process along.)

5. Don't expect a short sale to solve your financial problems. Even if your lender does approve the short sale, it may not be the end of all your financial woes. Here are some things to keep in mind:

·          You may be asked by your lender to sign a promissory note agreeing to pay back the amount of your loan not paid off by the short sale. If your financial hardship is permanent and you can’t pay back the balance, talk with your real estate attorney about your options.

·          Any amount of your mortgage that is forgiven by your lender is typically considered income, and you may have to pay taxes on that amount. Under a temporary measure passed in 2007, the Mortgage Forgiveness Debt Relief Act and Debt Cancellation Act, homeowners can exclude debt forgiveness on their federal tax returns from income for loans discharged in calendar years 2007 through 2012. Be sure to consult your real estate attorney and your accountant to see whether you qualify.

·          Having a portion of your debt forgiven may have an adverse effect on your credit score. However, a short sale will impact your credit score less than foreclosure and bankruptcy.

Note: This blog article provides general information only. Information is not provided as advice for a specific matter. Laws vary from state to state. For advice on a specific matter, consult your attorney or CPA. 

WOW! Those who were hanging back, waiting for the right time to buy, have jumped in with both feet. First time home buyers are definitely "in the market" now and hoping to take advantage of the $8000.00 federal tax credit. Yes...it is a tax CREDIT, not an income deduction. Home buyers who buy and close before December 1, 2009 can reduce (or even eliminate) their income tax liability for the year of their home purchase by claiming the credit on their tax return. Of course, as with any mortgage application, certain qualifying criteria must be met. And, for the tax credit, there are also several qualifying criteria:

• A first time home buyer is defined as someone who has never owned a principal residence or has not owned one in the last three years. If married, both parties must qualify under this rule.
• Available to single taxpayers with annual incomes up to $75,000 ($150,000 on a joint return)
• Partial credit available for taxpayers with annual incomes from $75,001 to $95,000 ($170,000 on a joint return)
• Available ONLY for the purchase of a single family home, townhome, condo or new construction that will be used as a principal residence (investment properties or vacation homes are not eligible)
• The tax credit does not have to be repaid if you stay in your home for 3 years or longer. If sold before the 3 years are up, the first time home buyer (now the seller) must pay the IRS the entire amount of the tax credit at closing.

This is such a sweet deal for those who qualify! Imagine this scenario: Junior meets all the qualifying criteria but he lacks cash. He (or she) asks Mom & Dad for $8000 so he can make the 3.5% FHA required minimum down payment on that $228,500 home that his Realtor, Dave Oswald, helped him find. The sellers of the home are paying his closing costs and they'll close before December 1, 2009. Junior promises to pay his folks back the eight grand as soon as his federal tax refund comes in after he files his return for 2009. He gets the tax credit and turns it right over to Mom & Dad. They get repaid and launch Junior out of their house (finally!) and he can live his own life out from under the microscope (finally!) Everybody wins and the U.S. economy gets another stimulating shot in the arm!

You should consult your tax advisor for a detailed assessment of your personal income tax situation and to verify your qualifications for the First Time Home Buyer Tax Credit. Then, you should call me if you or anyone you know is looking to buy or sell real estate. Thank You!

The Parade of Homes - Spring Preview started this past weekend. Buyers - some serious and others not-so-serious - are showing up and seem eager to get a good deal. Our Mittelstaedt Brothers Model (see my listing at 19720 Embers Avenue) in Farmington saw good traffic in the weeks leading up to the Parade and even better Saturday & Sunday. We recently reduced the price by over $45,000.00! Now THAT'S a GREAT deal! It's a lot of house for $342,100 on a spacious, walkout, pond lot. There's always a market for high quality new construction priced to sell! Come see this impressive two-story home Noon to 6PM, Thursdays through Sundays during the Parade ending March 22nd.

Did you know???? Historically, the peak of the home selling season occurs between January 15 and May 15th. Most people assume the peak is in the summer months but, that's not the case. Approximately 60% of all MLS listed, previously-owned properties sell during that 120 day period. (Builders will typically sign 75-80% of their home building contracts for the entire year during this period.) That also means the sales of the other 40% of previously-owned homes are spread over the slower, remaining eight months. So, if you are thinking of selling and can be ready for the market soon, now is the best time while there are three times as many of those coveted buyers out there shopping! Also, if you've had your eye on a particular property, now is the time to act so you can beat out the other buyers! Interest rates are terrific today and prices are lower than they've been in years!

Selling or Buying or Both? Call me today on my cell phone at 612-801-2224.

Yeah! Hooray! The real estate market is alive again!! The market continues to show signs of renewal as the number of listings is decreasing and the number of sales are increasing. Trust me; if this housing market continues at its current pace, we will be on track for a recovery in a lot of other sectors of this nation's economy.

My own business is on the increase and I am delighted as properties are selling. Yes, prices are still sliding a bit and yes, it will take some time to work through the current inventory levels but we are headed in the right direction! Over the last two weeks, I have seen several of my listings go under contract. Some have been on the market for over 8 months! And, we're beginning to see some activity in new home construction with our builder, Mittelstaedt Brothers Construction.

What a great time to buy! Prices are low, interest rates are low and selection is outstanding! It's a trifecta!! First time buyers and investors are jumping with joy. Families wanting more space or a different layout are moving up. By accepting the reality they are taking less than they'd like on their current home, they are able to more than offset their lower equity with the savings they achieve on their "move-up" house.

Call me if you want to get in on these tremendous opportunities. 612-801-2224. If now isn't the time for you but you know of someone looking to buy, I am ready to show them some fabulous deals in new and previously owned houses, townhouses and condos. I also have lots ready for your builder or mine!