Who are you to believe?

   I am sure everyone is hearing the new of the recovering economy, right? I see articles written on a daily basis stating that "Housing prices on the rise!", or "Housing market rebounding!". So where is all the evidence of the improvement in the housing market? Well, here is just one article that actually gives some statistics. There have been some encouraging signs of a potential improvement, but what constitutes a "recovery"? Are increasing prices the only thing that indicate a recovery? Here is a sample of the performance in Baltimore County. The numbers are encouraging, but like the early season success of the Baltimore Orioles, I am optomistically cautious to say that the clouds are lifting and the sun is once again shining on the real estate market in Maryland.



   If you would like complete statistics for all areas of Maryland, visit my website, www.allhomes4me.com, or follow my Facebook page, www.facebook.com/timmontoyarealtor.

Belcamp Townhouse for Sale!

Affordable, move in condition and updated. Can I get you anything else? Oh, I forgot, this is also an end-of-group unit. Price to impress and sell quick. Don't wait. Call Tim @443-463-3592 to make an appointment today!


www.1245independencect.com

Visit www.allhomes4me.com for an all inclusive property search and information on many more listings.

Also, visit our Facebook page for up to date real estate information.

Do I qualify for a short sale?

 

If you are like many home owners in the U.S., your home has lost thousands of dollars in value and with it, some of your equity. Well, what if you want or need to sell your home and you now owe more than what a sale would net you or the bank? The answer to this is to attempt a short sale.

   In short, no pun intended, a short sale occurs when an owner sells a property and the net proceeds of the sale do not satisfy the note on the property. I would say that short sales make up roughly 40% of the home sales in Harford County during the past 12 months. How do you complete a short sale? What is the short sale process? These are very common questions and can have both direct and simple answers, but sometimes can have very difficult and drawn out resolutions. There are several lenders in the U.S. who have borrowers asking for short sales and each lender can have a slightly different process.

   So what is the process? Well, the first step of any home owner looking at the potential of needing a short sale approval is to contact a licensed and experience short sale real estate agent. An agent experienced with successfully completing short sales is your most important resource. Look for either a Short sale and Foreclosure Resource (SFR) agent or a Certified Distressed Property Expert (CDPE). I recommend the later certification because it is a more thorough and intensive certification process and offers an ongoing resource to the agent, which can aid the agent in staying up to date with the changing guidelines. Make sure the agent you choose is has completed several short sales and you will not be this agent's guinea pig seller.

   The agent you choose will interview you and determine your chances of qualifying for a short sale and will also show you information which will allow you both to determine the market value of your home. During this process, ignore the difference in your homes current value and your loan balance. The disparity of these numbers does not impact the approach to selling your home. Your Realtor will also ask you questions about you reason for selling. This part of the process is usually difficult for you, the home owner, because you may be asked to rehash the events leading to your financial hardship. Even though this may or may not be difficult for you, it is one of the more important steps because the agent needs to insure that there is a good reason or a need to attempt a short sale. Banks typically require some type of hardship in order to agree to allow a short sale. This hardship may be a loss of employment, under employment, medical emergencies or complications resulting in loss of job or delinquency. A relocation, which if not agreed to, may result in loss of job or maybe the impending layoff from your job. You do not have to be behind on payments or have a current financial hardship, but the proof of a future hardship can be sufficient.

   There are several situations where a short sale is allowed and the banks will certainly consider any unique situation that you may not think qualify, so don't hesitate to contact a Realtor and investigate your options.

   The second step to getting a short sale approved is to list and market your home. Your agent will recommend the list price to you. This price will typically be slightly lower than the actual market value. The reason for this is that there has to be a concession made for the "defect" in your property, or more accurately, the "defect" in the process for a buyer to purchase your property. The short sale process can be a very long and drawn out process. With this in mind, you have to entice buyers to commit to such a long and emotionally draining purchase. I have had the privilege of participating in short sales that were completed in 30 days or less. I have also been cursed with transactions that have taken over 12 months to complete! Although the time it takes to complete a short sale can vary greatly, the average time is 90-120 days.

   The third step, in the process of selling your home utilizing the short sale option, is to accept a buyer's offer. This is, to me, the easiest of all of the steps involved. Keep in mind when reviewing offers, that you want to insure that the buyer is aware of the fact that you are applying for a short sale. Your agent should be able to point out any aspects of the offer that may not allow for a short sale. The buyer should be made aware that the lender may or may not approve the proposed sale price and all the other financial aspects of the buyers offer. I have seen banks remove any seller contributions towards buyer's closing costs, ask for an increase in the sales price and even reduce the real estate commission. Just make all parties involved aware that the bank has the final say, and to be patient and be flexible. Along with getting a signed contract and estimated HUD-1 document, the bank will require some or all of the following documents from you, the seller:

          -Last two (2) years federal tax returns

          -Two (2) most recent bank statements

          -Two (2) most recent payroll stubs

          -A complete financial statement outlining your monthly expenses

          -A signed and dated hardship statement/letter

An experienced short sale real estate agent can easily assist you in composing the financial statement and hardship letter. These items are non-negotiable. Every bank requires these docs and some require more. This is the most important part of the process. Neglecting to submit one or several of these documents can lead to delays and ultimately to a buyer walking away or a bank closing a file.

   The final step in completing a short sale is to complete the purchase side of the deal. The buyer will follow through with their promise to apply and complete their financing, conduct their inspections, if any, and have a title company research the history of the property and order a survey. This step usually consumes the final 30-40 days of the transaction, which is typical.

   All in all, a short sale is not a difficult thing to complete as long as all parties are educated on the process, informed of any changes and updates and cooperate with all parties involved to work to a resolution to any hiccups that may occur. 

   If you think a short sale is right for you, give me a call and I will be happy to walk you through the process and answer any questions you may have.

Tim Montoya

443-463-3592 mobile

www.allhomes4me.com