I don't usually like talking about short sales and foreclosures, but they have become a way of life in the Sarasota area. I have successfully completed 3 short sales in the past month.
One was difficult to get done as it had a 1st lien, 2nd lien, Condo fees owed and an IRS lien. It took about 3 months to complete, but with the help of several others, the property will be closing on 4/23/2013. What makes this particular short sale unique is the fact that the second was a credit union and we got them to waive the deficiency on the balance of the loan amount. The trick was to get the first to put in writing that they would only give $6,000 to the second if the second waived their right to seek a judgment on the balance. Since Credit Unions rarely waive their right to seek a deficiency when they do a lien release, I thought it a significant victory!! My client was thrilled. He completed his short sale without an additional tax burden and got the potential deficiencies waived.
The other interesting pre-foreclosure involved a client who had let their foreclosure drag on for nearly 3 years and thought they were in good hands with a local attorney. The ball had been dropped several times and the owner was now faced with a trial that was only 2 weeks away. At this point in the foreclosure process very rarely is a short sale completed or a modification accomplished by the Defendant. I referred her to another attorney who believed that, while he may not be able to stop the foreclosure, he could get a ruling that favored the Defendant. He argued that he could get the deficiency waived at this late stage of the game. In a matter of a week, he had successfully subpoenaed several bank executives and the bank agreed to waive the deficiency. In essence, because of his efforts, the Defendant was spared a potential deficiency of nearly $400,000.
People tend to just give up on these foreclosures thinking they will not get them done, BUT THEY CAN GET DONE! It takes work, but as you can see from these two stories, they are possible.
If you are in a situation like this, or know someone who is, have them call me. I can assist or refer them out to someone who can!!
Friday, April 19, 2013
Thursday, February 14, 2013
Tips on Disputing Credit Report Erros
Yesterday, I received a call from a client who had sold their home over 3 years ago as a short sale. They were reaching out because they were interested in purchasing a new home in Idaho. They had made an offer and were in the process of applying for a new loan. The loan officer informed them that they would only qualify for an FHA loan which would require that they carry PMI insurance. The loan officer informed them that they had a foreclosure on their credit report.
I made a call to a mortgage broker to inquire as to whether this was a common occurrence and if it was something that could be fixed. He told me that these mistakes happen all the time, and with credit harder to secure, this was a huge issue in underwriting. He shared with me that there are several options for the consumer if they believe a credit agency has made a mistake.
This mistake can cost you as it can lead to higher interest rates on loans and credit cards. Yes, the task of repairing your credit can be time consuming and frustrating, but the effort can save you thousands of dollars.
Here are some tips that I saw in an article that was recently published on this timely issue.
Get your credit reportsThe first step is to get a copy of your credit report from each of the major credit reporting firms – Experian, TransUnion and Equifax. Consumers are entitled to a free report every 12 months from each of the credit bureaus. You can get copies at www.annualcreditreport.com.
It’s important to review your credit history periodically. For one thing, lenders can make errors when they report client accounts to credit bureaus. And if an identity thief opens an account in your name without your knowledge, that can hurt your credit until you discover what’s happened.
Get your credit reports The first step is to get a copy of your credit report from each of the major credit reporting firms – Experian, TransUnion and Equifax. Consumers are entitled to a free report every 12 months from each of the credit bureaus. You can get copies at www.annualcreditreport.com.
File a dispute If you believe there’s an error in a report, you can submit disputes online at http://www.equifax.com, http://www.experian.com, www.transunion.com. (Link all three of these to their respective websites.) You can also submit the dispute by mail or phone, the address or number should be on your credit report.
The FTC’s study found that four out of five consumers who found erroneous information in their credit report and filed a dispute with the credit bureaus had a correction made to at least one of their credit reports.
Be patient Once a dispute is received, credit bureaus are required to respond within 30 days. The credit bureau will contact the lender that provided the information that is under dispute. At that point, the lender looks into the matter. If a fix is made, the lender must alert all three credit bureaus of the error.
When the investigation is complete, the credit bureau must provide written results and a free copy of your report if the dispute results in a change. This report does not count as your free annual report.
Contact lenders Another option: Reach out to the lender on the account where the error showed up and ask that they update the credit bureaus with correct information.
Avoid credit repair firms The Federal Trade Commission has warned consumers against firms that offer services claiming to improve a person’s credit report for a fee. Such firms can’t do anything that you couldn’t do yourself.
I hope this helps.
I made a call to a mortgage broker to inquire as to whether this was a common occurrence and if it was something that could be fixed. He told me that these mistakes happen all the time, and with credit harder to secure, this was a huge issue in underwriting. He shared with me that there are several options for the consumer if they believe a credit agency has made a mistake.
This mistake can cost you as it can lead to higher interest rates on loans and credit cards. Yes, the task of repairing your credit can be time consuming and frustrating, but the effort can save you thousands of dollars.
Here are some tips that I saw in an article that was recently published on this timely issue.
Get your credit reportsThe first step is to get a copy of your credit report from each of the major credit reporting firms – Experian, TransUnion and Equifax. Consumers are entitled to a free report every 12 months from each of the credit bureaus. You can get copies at www.annualcreditreport.com.
It’s important to review your credit history periodically. For one thing, lenders can make errors when they report client accounts to credit bureaus. And if an identity thief opens an account in your name without your knowledge, that can hurt your credit until you discover what’s happened.
Get your credit reports The first step is to get a copy of your credit report from each of the major credit reporting firms – Experian, TransUnion and Equifax. Consumers are entitled to a free report every 12 months from each of the credit bureaus. You can get copies at www.annualcreditreport.com.
File a dispute If you believe there’s an error in a report, you can submit disputes online at http://www.equifax.com, http://www.experian.com, www.transunion.com. (Link all three of these to their respective websites.) You can also submit the dispute by mail or phone, the address or number should be on your credit report.
The FTC’s study found that four out of five consumers who found erroneous information in their credit report and filed a dispute with the credit bureaus had a correction made to at least one of their credit reports.
Be patient Once a dispute is received, credit bureaus are required to respond within 30 days. The credit bureau will contact the lender that provided the information that is under dispute. At that point, the lender looks into the matter. If a fix is made, the lender must alert all three credit bureaus of the error.
When the investigation is complete, the credit bureau must provide written results and a free copy of your report if the dispute results in a change. This report does not count as your free annual report.
Contact lenders Another option: Reach out to the lender on the account where the error showed up and ask that they update the credit bureaus with correct information.
Avoid credit repair firms The Federal Trade Commission has warned consumers against firms that offer services claiming to improve a person’s credit report for a fee. Such firms can’t do anything that you couldn’t do yourself.
I hope this helps.
Monday, January 7, 2013
Debt Forgiveness Extended Through 2013
Lots of people who have been in the short sale process have been waiting for the government to make a final decision as to whether debt forgiveness would be extended into 2013. If the government did not extend the debt forgiveness act, many people in their primary properties would not be able to escape the 1099 they would be getting at the end of the year from the IRS.
As it stood, the resolution allowed up to $2 million in debt relief on a primary property. The resolution was set to expire at the end of 2012 and would expose millions of people to additional tax burdens when they could little afford the additional expense.
People would have to make some very tough decisions about their short sale. They could close them and hope for the best or they could just let them go to to foreclosure. My bet is most people would just let them go to foreclosure.
With the extension, people now have 12 months to get a short sale done and not have to incur any additional taxes as a result of the sale of their home.
To read more about this provision, please read the attached article:
http://www.housingwire.com/news/2013/01/02/mortgage-industry-fares-well-fiscal-cliff-deal-debt-forgiveness-law-survives?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+housingwire%2FuOVI+(HousingWire)
If you had put off a short sale on your primary home, now would be the time to reconsider selling it. If you have any questions, feel free to call me or email me.
As it stood, the resolution allowed up to $2 million in debt relief on a primary property. The resolution was set to expire at the end of 2012 and would expose millions of people to additional tax burdens when they could little afford the additional expense.
People would have to make some very tough decisions about their short sale. They could close them and hope for the best or they could just let them go to to foreclosure. My bet is most people would just let them go to foreclosure.
With the extension, people now have 12 months to get a short sale done and not have to incur any additional taxes as a result of the sale of their home.
To read more about this provision, please read the attached article:
http://www.housingwire.com/news/2013/01/02/mortgage-industry-fares-well-fiscal-cliff-deal-debt-forgiveness-law-survives?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+housingwire%2FuOVI+(HousingWire)
If you had put off a short sale on your primary home, now would be the time to reconsider selling it. If you have any questions, feel free to call me or email me.
Wednesday, October 24, 2012
Strong September Sales and Building Perils
The September housing market in Sarasota continued to show strength. Sales of existing homes stayed steady and applications for new construction rose last month. With all that in mind, there are still some concerns, especially with new construction. Several builders are failing and putting their clients at risk if they can't complete the homes they started.
As the inventory of homes drop, more and more people look for the opportunity to build something new. In order to protect yourself in the building process, Berlin Patten published an article this week that addresses this topic. Below are their recommendation:
While there is no substitute for engaging a qualified attorney to address the nuances associated with all construction contract negotiations, some general issues to consider prior to entering a contract for new construction are:
As the inventory of homes drop, more and more people look for the opportunity to build something new. In order to protect yourself in the building process, Berlin Patten published an article this week that addresses this topic. Below are their recommendation:
While there is no substitute for engaging a qualified attorney to address the nuances associated with all construction contract negotiations, some general issues to consider prior to entering a contract for new construction are:
- Construction
Timeframes. Does the contract provide for a definitive
commencement date and completion schedule, and are there penalties if the
builder misses those marks?
- Change
Orders.
Is the scope of the project very clear, and what is the written process
(and price) for requested changes?
- Deposits. Does the
contract require a substantial amount of upfront money be paid to the
builder?
- Draw
Schedule.
Does the contract provide for a sufficient number of draws so that the
money paid to the contractor is proportional to the work performed
to date?
- Inspections. Does the
contract permit inspections as a condition to each draw, and, more
importantly, as a condition to final payment?
- Punch
List.
Does the contract address the manner in which punch list items are to be
completed and by when? Does the contract require final payment prior to
the completion of punch list items?
- Lien
Waivers.
Does the contract require lien waivers as a condition to each draw, and
more importantly, as a condition to final payment?
- Holdbacks/Final Payment. Does the contract provide for an adequate holdback from each draw, as well as a reasonably sufficient final payment, to better insure that there will be sufficient funds to complete the project if the builder fails to perform?
If you are considering the prospect of building, these import considerations will help in ensuring you sleep better at night.
Monday, October 8, 2012
Buy It now!!!
September-November is usually a time when realtors in Sarasota are gearing up for the season and recharging their batteries. But this year is different. I was just talking to a realtor next to me and he had made 7 offers the past week on behalf of a client and he only got one. He got into highest and best offer scenerios and lost out on all of them.
That got me to thinking....Is It the Right Time To Buy?
I have said it before, but I am confident in saying it again, it is time to buy!!
Why?
The economy had hit its stride in the early 2000's, and Sarasota was red hot. Most people who wanted to buy at that time felt like they had missed their chance as properties had become too expense to buy. The window closed quickly and those properties were unattainable to the average person who visited Sarasota. They left in hopes of finding properties that were within their reach.
8 years later and prices have dropped by 50% in Sarasota. Interest rates that hovered around 6.5% 6 years ago are now at historic lows sitting around 3.5%. This may be the perfect time to purchase that second home.
In 2006 lots of people may have seen that perfect home when they were in Sarasota, but at $400,000 it was slightly out of reach. Today, that same home might sell for $250,000. When you also take into account that interest rates are nearly half of what they were 6 years ago, people have to give second thought to whether this is the right time to buy.
Let's look at the numbers and see what impact falling prices and rates have on a purchase today:
DATE PRICE INTEREST RATE P&I PAYMENT
2006 $400,000 6.50 $2,528..27
2012 $250,000 3.50 $1,122.61
If you are in a position to make a purchase, now may be the time!!!
That got me to thinking....Is It the Right Time To Buy?
I have said it before, but I am confident in saying it again, it is time to buy!!
Why?
The economy had hit its stride in the early 2000's, and Sarasota was red hot. Most people who wanted to buy at that time felt like they had missed their chance as properties had become too expense to buy. The window closed quickly and those properties were unattainable to the average person who visited Sarasota. They left in hopes of finding properties that were within their reach.
8 years later and prices have dropped by 50% in Sarasota. Interest rates that hovered around 6.5% 6 years ago are now at historic lows sitting around 3.5%. This may be the perfect time to purchase that second home.
In 2006 lots of people may have seen that perfect home when they were in Sarasota, but at $400,000 it was slightly out of reach. Today, that same home might sell for $250,000. When you also take into account that interest rates are nearly half of what they were 6 years ago, people have to give second thought to whether this is the right time to buy.
Let's look at the numbers and see what impact falling prices and rates have on a purchase today:
DATE PRICE INTEREST RATE P&I PAYMENT
2006 $400,000 6.50 $2,528..27
2012 $250,000 3.50 $1,122.61
If you are in a position to make a purchase, now may be the time!!!
Thursday, August 23, 2012
A Bike Ride Leads to a Startling Discovery
I just recently returned from my annual pilgrimage to Rangeley, Maine with my lovely wife, Marie, and our two boys, Zach and Chris. We had a wonderful time. While there, I love to ride my bike or get into my car and look at properties. It is just something I enjoy doing. I must have done it at least 3 times while I was in Rangeley.
One of the things I discovered on several of my bike rides was the number of properties that were on the market. I do not think I had ever seen so many active properties for sale. I spoke to one agent and he told me that he had 115 listings. That is just one agent in one office. Stunning!! My jaw hit the floor.
I began to wonder if things in Sarasota were going to look as bleak as it looked in Rangeley when I got home. So, upon returning to Sarasota, I got on my bike and started doing my daily ride from my house down to the end of Siesta Key. The last time I had taken my bike ride on that route was early July.....so nearly a month had gone by since my last ride. I was stunned. I could not believe how many real estate signs said, "Pending" or "Sold". I must have seen 10 or eleven signs that reflected a change status on property signs.
Upon getting home from my ride, I visited a house down the street that was having a garage sale. I asked the tenant if they were moving. She said the new owner wanted them to stay. I asked, "Did you just sell the house?" She informed me that her previous owner had put out a sign and sold the house in 3 hours. I looked out on Webber Street and noticed that several new houses on the market were already pending. To me, those would be the last houses selling with all the inventory on the market.
The market has changed. We are in a different place than we were in 12 months ago. The numbers released by the Sarasota Association of Realtors reflect a market that is red hot. We almost topped 1,000 closings again for the month.
If you are thinking about buying, don't wait. Most people are 6 months behind where the market really is. So, if you think it is at the bottom now, the bottom was probably 6 months ago and is now on the upswing. If you don't believe me, get out on your bike and try to find some properties that are not pending.
One of the things I discovered on several of my bike rides was the number of properties that were on the market. I do not think I had ever seen so many active properties for sale. I spoke to one agent and he told me that he had 115 listings. That is just one agent in one office. Stunning!! My jaw hit the floor.
I began to wonder if things in Sarasota were going to look as bleak as it looked in Rangeley when I got home. So, upon returning to Sarasota, I got on my bike and started doing my daily ride from my house down to the end of Siesta Key. The last time I had taken my bike ride on that route was early July.....so nearly a month had gone by since my last ride. I was stunned. I could not believe how many real estate signs said, "Pending" or "Sold". I must have seen 10 or eleven signs that reflected a change status on property signs.
Upon getting home from my ride, I visited a house down the street that was having a garage sale. I asked the tenant if they were moving. She said the new owner wanted them to stay. I asked, "Did you just sell the house?" She informed me that her previous owner had put out a sign and sold the house in 3 hours. I looked out on Webber Street and noticed that several new houses on the market were already pending. To me, those would be the last houses selling with all the inventory on the market.
The market has changed. We are in a different place than we were in 12 months ago. The numbers released by the Sarasota Association of Realtors reflect a market that is red hot. We almost topped 1,000 closings again for the month.
If you are thinking about buying, don't wait. Most people are 6 months behind where the market really is. So, if you think it is at the bottom now, the bottom was probably 6 months ago and is now on the upswing. If you don't believe me, get out on your bike and try to find some properties that are not pending.
Tuesday, April 24, 2012
Are Low Ball Offers a Thing of The Past?
This is always a tricky topic as everyone seems to have a differing opinion of the market and its stability. I like to think that we have stabilized and these low ball offers are tougher to come and harder to get accepted by Seller's.
I consider a low ball offer to be 25% off the asking price. Now, one must take into account that if the property is grossly overpriced, the offer may only be off by 10% in realty. When there is a glut of Seller's, as has been the case in the past few years, the prices were falling. But in the last few months, we have seen the inventory fall to less than a 4 month average. A healthy market is at about 6 months of inventory. That means that if no more new listings came on the market, it would take 6 months to sell everything. Ask local realtor's in Sarasota, and they will tell you they can't get enough listings.
If that is true, low ball offers are not even likely to be countered, much less accepted. What usually happens is a more realistic Buyer comes along and will pay what the property is worth. Or the Seller counters less than 1% of the asking price.
I have an example of someone thinking they could STEAL a property. The property was built in 2007 to the highest standards. It had all of the new updated impact windows, tile roof, gated community, etc. Under air was 3,548 square feet with a 3 car garage and an enclosed pool area. It needed about $7,000 in repairs. The bank asking price on the property was $279,000 or $78 a foot. To replace the house would have cost at least $100 a foot according to sources I spoke to in the building industry.
I took my client to the property and there were two other agents there. I told them it was a fantastic deal and I encouraged them to offer more than the asking price. They discussed it amongst themselves and offered $800 more than the asking price, or $280,000. I explained that there would be 6 offers on the house and they would not get it at that price. I suggested a price just north of $300,000.
Well, as you might have guessed, they did not get it. Now they call me and ask if they can offer more on the property.
I think people still believe that we are in a downward turn, but I would beg to differ. There are going to be a handful of deals out there, but guess what the other 5 people are doing who did not get that property? They are out there looking, too. It wasn't like just one individual had made an offer on the property, there were many.
Happy House Hunting!
I consider a low ball offer to be 25% off the asking price. Now, one must take into account that if the property is grossly overpriced, the offer may only be off by 10% in realty. When there is a glut of Seller's, as has been the case in the past few years, the prices were falling. But in the last few months, we have seen the inventory fall to less than a 4 month average. A healthy market is at about 6 months of inventory. That means that if no more new listings came on the market, it would take 6 months to sell everything. Ask local realtor's in Sarasota, and they will tell you they can't get enough listings.
If that is true, low ball offers are not even likely to be countered, much less accepted. What usually happens is a more realistic Buyer comes along and will pay what the property is worth. Or the Seller counters less than 1% of the asking price.
I have an example of someone thinking they could STEAL a property. The property was built in 2007 to the highest standards. It had all of the new updated impact windows, tile roof, gated community, etc. Under air was 3,548 square feet with a 3 car garage and an enclosed pool area. It needed about $7,000 in repairs. The bank asking price on the property was $279,000 or $78 a foot. To replace the house would have cost at least $100 a foot according to sources I spoke to in the building industry.
I took my client to the property and there were two other agents there. I told them it was a fantastic deal and I encouraged them to offer more than the asking price. They discussed it amongst themselves and offered $800 more than the asking price, or $280,000. I explained that there would be 6 offers on the house and they would not get it at that price. I suggested a price just north of $300,000.
Well, as you might have guessed, they did not get it. Now they call me and ask if they can offer more on the property.
I think people still believe that we are in a downward turn, but I would beg to differ. There are going to be a handful of deals out there, but guess what the other 5 people are doing who did not get that property? They are out there looking, too. It wasn't like just one individual had made an offer on the property, there were many.
Happy House Hunting!
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