The ins and outs of Real Estate

Banks Ask Courts to Return Empty Foreclosed Homes to Past Owners!

Broken Soul, originally uploaded by Weird Rock´n´Roll.

Banks are over-run with foreclosed properties that they have taken back from their previous owners.  With the current Real Estate depression, banks unwilling to cut the prices significantly enough to move foreclosed properties, and underwriting guidelines - used to qualify buyers for loans - being stricter, in many cases the homes remain empty for so long that they litterally start to fall apart.

As these non selling foreclosed homes fall apart they also accumulate code violations.  With banks now being the owners of record numbers of these dilapidated repossessed homes, they are beginning to ask the courts to vacate the foreclosure orders and return ownership of the homes (along with responsibility for repairing the code violations)  to their previous owners!

Historically, the courts and judges would side with the banks and vacate the foreclosure orders, but now, the trend is reversing and many judges, to the dismay of banks, are not returning ownership of the foreclosed homes to the previous owners..........leaving banks on the hook for repairs, violations, and fines!

I hope this current trend continues.  If it does, banks will be more reluctant to foreclose on properties in the first place, and will be more flexible in giving homeowners loan modifications, interest rate freezes or reductions, or will reduce prices enough to make homes more affordable.

So, if you are a distressed seller/homeowner, and in danger of loosing your home, try renegotiating the terms of your loan with your bank, and stress the fact that homes in your area are not selling and that if the bank takes the home back, they will likely end up with another empty home that won't sell, won't rent, won't produce any income and will rack up fines and code violations!

 

Simple Math for Desperate Sellers

It's Hair Pulling Season (#190 of 365), originally uploaded by Krelic.

OK, whether or not you are a regular reader of my blog, you know that the housing market, and the entire economy in fact, is in serious trouble.

Correctly pricing a home in todays marketplace has become almost an art!  Yet correct pricing is a must if one wishes to sell his or her home.

One problem that happens often with less informed sellers is that they believe that they determine the sale price of their homes, when it's actually the market that determines - or should determine - the list/sale price.

As an example, and using very simple math, let's suppose that Seller A purchased a home almost thirty years ago for $50,000.00.

Then a year ago, Seller A refinanced and took out $100,000.00 worth of equity, and another $50,000.00 in equity was taken out 6 months ago.

Last week, Seller A decided to sell.  Since the bulk of the original $50,000.00 has been paid off, Seller A now owes $165,000.00, and wants to net $100,000.00 from the sale of his home and insists on listing the home for no less than $298,000.00, hoping that someone will pay that amount!  Yet, similar properties in Seller A's immediate area are only selling for $190,000.00 to  $192,000.00.

Seller A is adamant that he will not list his or her home for less than the $298,000.00 minimum idea that he had in mind, so that he or she can net the minimum $100,000.00 from the sale of the home.

Seller A understands that selling the home for the Realtor suggested $190,000.00 - 192,000.00 will only net the seller approximately $10,000 after closing costs, commissions, etc, and insists that he or she has to make at least $100,000 from the sale of his or her home, as the $10,000 is not enough for all of the time, care, mortgage payments made, and equity put into the home.

Yet, Seller A doesn't see that the truth is he or she has already netted $150,000 from the refis over the last year and a half, and with the additional $10,000, would net or get back in equity, $160,000,00!

Although this scenario may seem like common sense, or intuitive, it's actually anything but to many sellers, especially as they transition from a sellers market to a buyer's market, and also especially now as real estate values tumble in most, metropolitan, areas across the country!

Even buyers who had equity several years ago, and who didn't use their homes as ATM machines, and dry up all the equity, are seeing their equity eroded as prices plunge and are yikes, upside-down ()owe more for their homes than their homes are actually worth!

In this case, and unless one must sell, and providing one can still cover the mortgage payments, the best action may be to stay put and wait out the market - which could take between three to eight years!

Tougher for Workers to Relocate

With the current buyers market and sluggish home sales, workers around the country are having a hard time relocating from one city to another for better pay and job promotions.

Some relocating home owners end up renting their homes out, lowering the asking price, or if the promotion is large enough, some took a loss on the sale of their homes. 

Others simply refuse the promotions or transfers and stay put.  In many cases, the employers would offer more incentives in order to induce the employees to relocate. 

Some have brought in speakers and experts form schools, banks, churches, etc, in the areas where the employees would be relocating to in order to try to smooth out the much tougher process.

Get the full story by clicking the link to USAToday.com below… 

http://www.usatoday.com/printedition/money/20070315/relocate.art.htm

For Sale by Owner Security Alert

Many Sellers try to sell their homes on their own without an agent.  This is not always as easy as it may seem and not always the safest thing to do, simply to save the commission.

Selling a home on your own and without an agent is especially difficult during a buyer’s market.  There are far fewer buyers than there are sellers, buyers are often reluctant to move forward with a real estate purchase in a down market, and often require reassurance from a non interested third party; family, friends, and or a Real Estate agent.

Also, when you sell your home, even when you do so on your own and without professional help, you are legally obligated to show it to potential buyers regardless of race, ethnicity, sex, etc.  So, even if the person looks suspect, you have to show the property, or possibly face a discrimination law suit!

However, when someone comes knocking on your door, because they've seen your For Sale by Owner sign in the yard, or even the real estate sign for that matter, you never know who they are!  Maybe they are legitimately interested in your home and there to get a look at it, maybe they are ‘looky Lous’, or maybe they have more sinister motives! 

Between 1982 and the present 12/17/06, there have been 206 Real Estate agents murdered while on the job, and usually while hosting an open house! I know, it’s a horrible and staggering statistic.

http://www.mortgagenewsdaily.com/7262006_Reator_Safety_Tips.asp

http://cbs11tv.com/topstories/local_story_190190009.html

Also, locally in Chicago, there have been two murder/rapes linked to Anthony Triplett, a cable installer for Comcast!  Two women, Janice Ordidge and Urzula Sakowska, had appointments with him to repair their cable and DNA evidence linked him to the crimes!

http://cbs2chicago.com/local/local_story_348152849.html

[I have to also add a caution against using race to decide whether or not to allow an unknown person into your home.  Yolanda Gutierrez, a 35 year old Puerto Rican woman met Paul Runge, a white male, who was a delivery driver for Pepsi, while putting an appliance for sale sign up at the grocery store.  Runge pretended to be interested in the refrigerator that she was selling, made an appointment to see it after he finished working, and then rapped and murdered both her and her 11 year old daughter, Jessica Muniz !

http://mesh.medill.northwestern.edu/mnschicago/archives/2006/01/runge_the_trial.html]

Ordidge’s family was surprised that their was no forced entry into her home, as they said that she was very cautious and security conscious, and they couldn’t believe that she would allow someone into her home that she didn’t know.  Now it all makes sense, She let the cable installer in!    

Even more chilling, Triplett was allowed to continue working for Comcast even after the company knew that he was being investigated for Ordidge’s rape and murder, which enabled him to kill at least one other Comcast customer since then; Sakowska! 

There is a way to be in compliance with the law and also protect yourself from would be rapist/murderers, whether you are a FSBO or the customer of a cable or other company.
This is how it works.  When a would be buyer calls wanting to see your home, take down his Name (as it appears on his driver’s license), Address, Home phone number, Cell phone number, and his driver’s license number.

He already has your name, address and phone number, and if he is reluctant to give you his, tell him that it is a security precaution and that he can’t see the home without providing this information.

When he arrives to see the home, have him drop his driver’s license into your mail slot, slide it under the door, or hold it against the window.  Verify that the information is the same as the information that he gave you when he called, and call a close relative or friend and let them know that he is there and what his personal information is.

Open the door while still on the phone, tell the relative or friend that you will call them back once he leaves, remain on the phone for the entire service call, or tell the relative or friend that you should be finished in 20 minutes if they want to stop by.

This same technique can also be used, with a slight modification, if you are expecting a cable or other repairman to come by.  Having a large protective (and obedient) dog present can also be an added deterrent.

Once the person leaves, call the relative back and let them know that the repairman has left.  You should also add a code to the end of the conversation so that they know that you are not under duress.  Give them two codes ahead of time.  One so that they know everything is ok, and another distress code so that they know to call 911 immediately.

The distress code should seem inconspicuous to the visitor and could be something like  ‘all clear’.  This way, even when he suspects that you’ve added a distress code, he won’t suspect that you’ve just sounded the alarm!

I know this may seem like a lot of trouble to go through but, unfortunately, we don’t live in a perfect world, and there are evil people, blending in, among us.

In the case of a For Sale by Owner; FSBO (pronounced fisbo), you can simply hire a real estate agent and let them screen would be buyers before they enter your home, and have them escort the buyers into and out of your home during and after the showings. 

Offer More Incentives, Builders are!

There is currently more inventory, houses on the market, than there are buyers actively seeking housing!  Nationally, the average market time, for a home to remain actively for sale, rose from 4.6 months last year, to 7.3 months currently!

In August of 05 there were 3 million homes on the market in the United States.  This past August 06 there were close to 4 Million homes on the market.  That's a difference of close to 1 million more homes on the market this year vs last!

If you are a home owner and and want to sell your home, your home not only competes with other similar homes for sale, but also with nearby new homes as well!  And builders are offering more and more amenities in order to try to get their homes sold.

Presently, 55% of builders are offering more amenities, 42% of builders pay the buyer's closing costs, and 26% of builders are absorbing points on mortgage loans!  In some parts of the country they are so desperate that they are offering to pay a year's worth of a buyer's mortgage payments!

When the price of a resale home is close to the price of a new home, then homeowners must get creative in order to be competitive in the marketplace, no two ways about it.

Often a drop in price will work wonders on arousing interest in your home.  But, price drops should be in the range of 10-12%, initially, in order to be affective in boosting interest in, and ultimately getting buyers to, your property.

Also, remodeling, modernizing and renovating your bathroom(s) and kitchen is also a big benefit to helping to sell your home, if they haven't been remodeled in more than 10 years!

www.usatoday.com/money/economy/housing/2006-10-25-home-price-u...

www.usatoday.com/money/economy/housing/2006-10-26-new-homesale...

Managing Stress During the sale of your home

Let's face it.  Selling your home is stressful, no two ways about it.  Are they going to come to see the house today?  Has our agent been getting calls?  Why did the agent say that the buyer and the buyer's agent were coming at 2:00 yet no one showed up, and after we spent 2 hours tidying up! 

You may stay awake at night, spend every spare second going on line, running in and out of open houses, break out in a cold sweat, get goose bumps, and on, and on, and on, and on, and on, and ooooooooon, and oooooooooooooooooooon, and..... you get the idea.

• Sometimes buyers see a picture of your home and add it to the list of homes that they want to see in your area, then drive up and decide that they don't want to see it inside because "it's a darker shade of beige than it looked on paper."
• Sometimes buyers make appointments, and then one of the spouses gets mandatory overtime at work and now they can't come.
• Sometimes buyers are overly optimistic and believe that they will be able to see six homes in one day, only have time to see four, and never get to your home - which may have been fifth or sixth on their list - yet, the buyer's agent doesn't notify the seller's agent that they aren't going to be able to make it!
• Sometimes buyers have their agents make appointments to see several homes, arrange to meet either in front of the first home, or at the agent's office, yet leave their buyer's agent 'in suspended animation' and never show nor call.
• Sometimes buyers get buyers remorse, before they buy, and decide to spend their down payment on a new car instead (or new furniture) and don't tell their buyer's agent.

Beat the stress.  Find things to do to distract you from the sale of your home.  Break up your routine so that you aren't on pins and needles from the time your home is listed until it is sold.  Otherwise, you may not be able to function at 90% much less sleep at night!

One seller couple that I know took the weekend off and checked into a hotel together!  How nice!  What a bright idea for breaking up the routine and managing the stress of selling their home!

You could also, go bowling, go to the movies, go out to dinner, attend a high school sporting event, go hiking through jogging trails, go bicycle riding with the family, or check into a hotel for a romantic weekend (as one client couple did) etc.  just break up the routine keep yourself busy, keep your mind occupied, and "don't worry, be happy!"

Selling Your Home in a buyer's market

Hello everyone.  Today is October 22, 2006.  As of today's date, in the chicagoland area, we are currently in a buyer's market; there are more houses on the market than there are buyer's looking for houses! 

(This is in contrast to 6 and 7 years ago when mortgage interest rates were in the low 5's and it was a seller's market; more buyer's looking for houses than there are houses on the market)

In a buyer's market, buyer's can be a bit pusshy and or demanding.  As a seller, you don't want to appear over eager to sell the home, or the buyer may ask for the shirt off of your back! 

However, being fair to a buyer and offering reasonable incentives can help you to seal the deal when you have a buyer who is interested enough in your home to make a written offer.

Some incentives that a you can use to sell your home in a seller's market are...

1. A credit to repair an item
2. A decorating allowance
3. Paying a percent of the buyer's closing costs
4. A home warranty
5. Offer to pay a percentage of the buyer's moving expenses
6. A credit at closing for the buyer to buy new appliances
7. Adding the lawn mower and freezer to sweeten the deal
8. Other.......?

These are just some of the options available to you when you are selling your home during a buyer's market.  Can you think of some others?