Category Archives: how long do short sales take

Improve Your Chances in Multiple Offer Situations

multiple-offers, Sacramento Listing Agent, Elk Grove Listing Agent
multiple-offers, Sacramento Listing Agent, Elk Grove Listing Agent
(Guest article, Dian Hymer – Client Direct)

Some buyers in hot markets with a low inventory of homes for sale are losing out over and over in multiple-offer competitions. You can improve your chances of having an offer accepted by clearing up any issues that might cause a seller to look askance at your offer when compared to one from another buyer.

If your purchase offer is littered with contingencies that protect you, the sellers are more likely to see the contract as risky, especially if they are looking at other offers that contain fewer contingencies.

A clean contract is free of contingencies, which can give buyers a competitive advantage, especially if they are offering less than full price or are in competition with other buyers.

Timing is everything in the home sale business. Buyers often lose out on the opportunity to make an offer on a listing because they are traveling for business or vacation. One partner may see the home of their dreams, but the other won’t be back in town to take a look for days or weeks.

Making an offer contingent on the absentee buyer’s approval of a property is risky from the seller’s standpoint. If the seller accepts the offer, he takes his home off the market not knowing if the absentee buyer will like the house enough to buy it.

It would be very difficult to get such an offer accepted if there are multiple offers from buyers who have all seen the property. The Internet can give a great introduction to a listing, but it usually doesn’t include photos of items that might cause you to pass on the property, like a neighbor’s home that is in poor repair or a location close to a noisy freeway.

Some buyers buy property without having seen it. To get an offer accepted, these offers usually have a generous price, and close quickly. The buyers may later find problems that they could have discovered had they seen the property before making an offer. It’s better for both buyers and sellers if all potential buyers have seen the property before an offer is made.

HOUSE HUNTING TIP: Try to anticipate if there is any condition of your home purchase that would cause the sellers to shy away from accepting or countering your offer. If such conditions exist, try to address them before you make an offer.

For example, let’s say your parents are willing to give you a large amount of cash for a down payment to make your offer more competitive. Make sure this will be acceptable to your mortgage lender.

Find out what verification the lender will require from your parents. If the lender needs a gift letter that stipulates you don’t need to repay the money, have your parents write this letter and include a copy with your offer.

Sellers are always concerned about the buyer’s financial capability to close the transaction. Your offer should include a letter from your lender stating that you are preapproved for the financing that you need. The letter should stipulate that the lender has verified the cash you need for the down payment and closing costs.

If the verification of funds needed to close is not included in the preapproval letter, make a copy of a bank or brokerage statement that verifies the amount you need. Black out the account number and include a copy of this with your offer.

In some areas, buyers are making offers without any contingencies. That is as clean as it gets. However, there can be problems with contingency-free offers. Buyers can feel pressured into waiving an inspection contingency because they’re sure they can’t compete unless they do. The sellers could end up in a legal hassle with the buyers after closing if problems arise that weren’t disclosed to them.

THE CLOSING: Buyers should ask the sellers for permission to preinspect the property before they make an offer without an inspection contingency.

Real Homeowner Stories: A Miracle in the Form of a Red Envelope

Elk Grove Short Sale Agent, CDPE
Elk Grove Short Sale Agent, CDPE

For homeowners who are in danger of losing their home to foreclosure, it is common to feel like you are alone and that there is no one to help. This simply isn’t true. There are real people who have been in the same situation who have found solutions. Take, for example, Punipuao W. of Hawaii.

Punipuao found herself struggling to keep her home after her husband passed away. “With only my income, I was no longer able to make my monthly mortgage payment,” she said. Faced with the prospect of losing the home she and her husband had bought together, she began looking for alternatives to help her keep the home.

She pleaded with the bank for relief, “but their responses gave me little information and even less hope.”

The prospect of losing the home she and her husband had shared for over 20 years was difficult. “I was so distraught,” she said. “I did not know where to turn.

“Then, one day, my miracle came through a red envelope in the mail.”

In the envelope was a note from a local real estate agent with the Certified Distressed Property Expert designation (or CDPE). This designation meant that the agent was trained specifically to help people like Punipuao. She called the agent.

“About four hours after I made the call, he was at my door offering help. I told him my story.” In merely two days, she received a call from the bank saying that the president of the bank was reviewing her file. “That was a good sign,” she said.

A few days after that, Punipuao had been approved for a trial loan modification. “There were many tears of gratitude at the miracle that came to me in the form of my agent. I thank god for sending me that miracle.”

Punipuao’s story is just one of many. I have a report entitled “From Foreclosure to Freedom” which tells other stories of real homeowners who faced foreclosure and found relief. Download the report, read the stories, and then contact me for a free, confidential consultation.

Foreclosure: What It Really Means & How To Avoid It

Foreclosure: What It Really Means & How To Avoid It.

Ten Tax Tips for Individuals Selling Their Home

The Internal Revenue Service has some important information to share with individuals who have sold or are about to sell their home. If you have a gain from the sale of your main home, you may qualify to exclude all or part of that gain from your income. Here are ten tips from the IRS to keep in mind when selling your home.

1. In general, you are eligible to exclude the gain from income if you have owned and used your home as your main home for two years out of the five years prior to the date of its sale.

2. If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).

3. You are not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.

4. If you can exclude all of the gain, you do not need to report the sale on your tax return.

5. If you have a gain that cannot be excluded, it is taxable. You must report it on Form 1040, Schedule D, Capital Gains and Losses.

6. You cannot deduct a loss from the sale of your main home.

7. Worksheets are included in Publication 523, Selling Your Home, to help you figure the adjusted basis of the home you sold, the gain (or loss) on the sale, and the gain that you can exclude.

8. If you have more than one home, you can exclude a gain only from the sale of your main home. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.

9. If you received the first-time homebuyer credit and within 36 months of the date of purchase, the property is no longer used as your principal residence, you are required to repay the credit. Repayment of the full credit is due with the income tax return for the year the home ceased to be your principal residence, using Form 5405, First-Time Homebuyer Credit and Repayment of the Credit. The full amount of the credit is reflected as additional tax on that year’s tax return.

10. When you move, be sure to update your address with the IRS and the U.S. Postal Service to ensure you receive refunds or correspondence from the IRS. Use Form 8822, Change of Address, to notify the IRS of your address change.

For more information about selling your home, see IRS Publication 523, Selling Your Home. This publication is available at www.irs.gov or by calling 800-TAX-FORM (800-829-3676).

How Do You Value A Property?

This question was recently asked and here is how I answered:

If you are asking how to determine a property’s value, there are various ways to assist in detemining a property’s value. Ultimately the worth is determined by what was paid for it. How you gather information on what to pay for it depends on what you require the value for. The value of the property, no matter how the info is gathered, should be at or near the same price, no matter which tools you use.

There are currently three acceptable and most common tools of “gathering” that information:

1. CMA (Comparable Market Analysis) – Completed by a licensed real estate agent. When completing a CMA, agents should keep in mind three crucial factors,
a) Only use comps within a half mile radius of your subject property, this helps ensure you are using properties that actually fall within the same parameters (builder, style, year built, etc) of your subject property. It isn’t fool proof, but that’s where your knowledge of the area and market should kick in and adjust for any discrepancies.
b) Keep your filters (min/max sq ft, year, bed/ba, etc) as close as possible to the subject property for the best determination. For example, If your subject property is 1400 sq ft you would be doing an injustice to set your filters at min1000 sq ft and max 1800 sq ft because once you add or subtract 200 or more sq ft to a home (the size of another room), the case could be made that that home now is automtically valued less than or more than your subject property. In the event you need to contest a value determination by a lender (in the case of a short sale), you will be able to make a better case when you use “cleaner” filters.
c) Never tweak your CMA. In this current market, the decision makers are the lenders, not the sellers. All lenders have recruited the assistance of other agents (BPO agents, such as myself ) to ensure they are either getting the correct value to help mitigate their loses, or in the case of a buyer, are making the loan at the appropriate risk value. The bank that I do BPOs for is Bank of America (Landsafe Appraisals), and they have tightened down on their BPO agents so much so that they have actually let some agents go, and they monitor your BPO results on a regular basis to ensure you are being consistent in your formula, as well as share best practices for determining value.

2. Appraisal – These are completed by a licensed appraisal professional and the results are much more detailed than in a CMA and as a result can be used to contest a CMA or BPO if necessary.

3. BPO (Broker Priced Opinion) – Typically requested by Senior lienholders, these reports are usually completed using the senior lienholder’s BPO company’s form (usually electronic and online). A pretty detailed report, asking for info such as can you determine if the property is vacant or occupied, most recent comparable three “solds”, most recent comparable three “listeds” – dates listed/sold, year of build, beds/baths, sq ft, miles from subject property, etc), and normally includes pictures of the subject property, and sometimes pictures of the comparables.

Here is a short sale negotiating tip on BPOs: Currently, these reports are updated normally every three months. That is good information to know when you are negotiating and come to a bump over price. Sometimes a three month old report can mean the difference between a denial (if the buyer’s offer is too low), and an approval (if an updated BPO is completed and comes back slightly lower).

Just to reiterate, whether you are on the REO side, short sale side, or buyer side, the lender has the final say, and they are scrutinizing values more now than before – and rightly so. So just remember to keep your value determinations above board and you will be making the best decision for all involved.

Keisha Mathews
“The Short Sale Lady” TM

How Do You Value A Property?

This question was recently asked and here is how I answered:

If you are asking how to determine a property’s value, there are various ways to assist in detemining a property’s value. Ultimately the worth is determined by what was paid for it. How you gather information on what to pay for it depends on what you require the value for. The value of the property, no matter how the info is gathered, should be at or near the same price, no matter which tools you use.

There are currently three acceptable and most common tools of “gathering” that information:

1. CMA (Comparable Market Analysis) – Completed by a licensed real estate agent. When completing a CMA, agents should keep in mind three crucial factors,
a) Only use comps within a half mile radius of your subject property, this helps ensure you are using properties that actually fall within the same parameters (builder, style, year built, etc) of your subject property. It isn’t fool proof, but that’s where your knowledge of the area and market should kick in and adjust for any discrepancies.
b) Keep your filters (min/max sq ft, year, bed/ba, etc) as close as possible to the subject property for the best determination. For example, If your subject property is 1400 sq ft you would be doing an injustice to set your filters at min1000 sq ft and max 1800 sq ft because once you add or subtract 200 or more sq ft to a home (the size of another room), the case could be made that that home now is automtically valued less than or more than your subject property. In the event you need to contest a value determination by a lender (in the case of a short sale), you will be able to make a better case when you use “cleaner” filters.
c) Never tweak your CMA. In this current market, the decision makers are the lenders, not the sellers. All lenders have recruited the assistance of other agents (BPO agents, such as myself ) to ensure they are either getting the correct value to help mitigate their loses, or in the case of a buyer, are making the loan at the appropriate risk value. The bank that I do BPOs for is Bank of America (Landsafe Appraisals), and they have tightened down on their BPO agents so much so that they have actually let some agents go, and they monitor your BPO results on a regular basis to ensure you are being consistent in your formula, as well as share best practices for determining value.

2. Appraisal – These are completed by a licensed appraisal professional and the results are much more detailed than in a CMA and as a result can be used to contest a CMA or BPO if necessary.

3. BPO (Broker Priced Opinion) – Typically requested by Senior lienholders, these reports are usually completed using the senior lienholder’s BPO company’s form (usually electronic and online). A pretty detailed report, asking for info such as can you determine if the property is vacant or occupied, most recent comparable three “solds”, most recent comparable three “listeds” – dates listed/sold, year of build, beds/baths, sq ft, miles from subject property, etc), and normally includes pictures of the subject property, and sometimes pictures of the comparables.

Here is a short sale negotiating tip on BPOs: Currently, these reports are updated normally every three months. That is good information to know when you are negotiating and come to a bump over price. Sometimes a three month old report can mean the difference between a denial (if the buyer’s offer is too low), and an approval (if an updated BPO is completed and comes back slightly lower).

Just to reiterate, whether you are on the REO side, short sale side, or buyer side, the lender has the final say, and they are scrutinizing values more now than before – and rightly so. So just remember to keep your value determinations above board and you will be making the best decision for all involved.

Keisha Mathews
“The Short Sale Lady” TM

Our landlord is facing foreclosure and is short selling…

…I want to accomodate but I don’t want it to become invasive. Can I put a limit to the number of daily showings? What kind of notice am I entitled to move out?

Hi Mary

As a short sale listing agent I can tell you that your situation is not at all uncommon.

Overall it appears that you were not in receipt of all information; only as it unfolded, which is not your fault. You are to be commended for accomodating your landlord because many tenants make it difficult for the landlords to smoothly close the sales under these conditions.

Notice I say “smoothly”. The reason is this, although you can make it difficult, California tenant/landlord law states that once the property goes into escrow to exchange ownership, you can then be given a 30 day notice to vacate. The outcome of fighting that is just futile.

You are doing the best thing for your family by cooperating. As far as showings, you can use your one good card and let the listing agent know what is more comfortable for you. Keeping in mind of course that the goal is to be able to have the property shown.

I usually work with the tenant and offer them showing options:
1. Call tenant to schedule appointment, allow min 24 hr/ 2 hrs/etc
2. Showing only on ____ from __ to __
3. Make offer contingent upon showing (if tenant is irrate and not cooperating)

You can hold your landlord to this because, afterall, they want the property shown and you hold that power.

Below is the link to the CA tenant/landord publication I referenced earlier.
http://www.dca.ca.gov/publications/landlordbook/catenant.pdf

In addition, when looking for a new property, to assist in avoiding renting from someone in possible foreclosure trouble, ask the owner when was the last time they refinanced and how much do they owe on the property. If they say they refied within the past five years, that could spell trouble. Most people who have refied/purchased in the past five years are now upside down and facing foreclosure. Stick with homes that are older than five years, or recently purchased (within the past few months). These homes, where the loan is affordable, are a safer rental bet. No guarantee, but some guidelines that may save you from a repeated occurance.

Let me know if I can be of further assistance!

Keisha a.k.a. “The Short Sale Lady”(tm)

Our landlord is facing foreclosure and is short selling…

…I want to accomodate but I don’t want it to become invasive. Can I put a limit to the number of daily showings? What kind of notice am I entitled to move out?

Hi Mary

As a short sale listing agent I can tell you that your situation is not at all uncommon.

Overall it appears that you were not in receipt of all information; only as it unfolded, which is not your fault. You are to be commended for accomodating your landlord because many tenants make it difficult for the landlords to smoothly close the sales under these conditions.

Notice I say “smoothly”. The reason is this, although you can make it difficult, California tenant/landlord law states that once the property goes into escrow to exchange ownership, you can then be given a 30 day notice to vacate. The outcome of fighting that is just futile.

You are doing the best thing for your family by cooperating. As far as showings, you can use your one good card and let the listing agent know what is more comfortable for you. Keeping in mind of course that the goal is to be able to have the property shown.

I usually work with the tenant and offer them showing options:
1. Call tenant to schedule appointment, allow min 24 hr/ 2 hrs/etc
2. Showing only on ____ from __ to __
3. Make offer contingent upon showing (if tenant is irrate and not cooperating)

You can hold your landlord to this because, afterall, they want the property shown and you hold that power.

Below is the link to the CA tenant/landord publication I referenced earlier.
http://www.dca.ca.gov/publications/landlordbook/catenant.pdf

In addition, when looking for a new property, to assist in avoiding renting from someone in possible foreclosure trouble, ask the owner when was the last time they refinanced and how much do they owe on the property. If they say they refied within the past five years, that could spell trouble. Most people who have refied/purchased in the past five years are now upside down and facing foreclosure. Stick with homes that are older than five years, or recently purchased (within the past few months). These homes, where the loan is affordable, are a safer rental bet. No guarantee, but some guidelines that may save you from a repeated occurance.

Let me know if I can be of further assistance!

Keisha a.k.a. “The Short Sale Lady”(tm)