How to Prepare to Short Sale Your Home

Paperwork and proper documentation are extremely important to the short sale process. Most lenders still require a "hardship package" that is completely filled out. To adequately prepare to short sale your home, your real estate agent will provide you with a list of documents you will need to gather.

In addition, all documentation that is required must be submitted as soon as you have an offer on your property. Sellers must be extremely cooperative with their agents and negotiators to be sure they have the best chance of getting approved. Throughout the entire short sale process, it is important that home sellers send bank statements and pay stubs to their real estate agent every month.

If you have questions about the short sale process or would like more information, please visit my website at www.TheRealEstateDr.com or give me a call at 1-800-921-1900 ext 2502.

One Big Reason to Short Sale Now

When it comes to selling real estate in today's market there is a lot of confusion when it comes to short sales. It is often difficult for homeowners to understand why they can short sale or even what a short sale is and how they work. That's where I, as the Real Estate Dr. in the Central Valley, come in.

One of the biggest reasons to list your home as a short sale is that the bank pays all of the sellers closing costs. This includes paying for commissions, property taxes and normal closing costs. Sometimes, if a seller is nearly in an equity situation, it is still more advantageous to do a short sale because otherwise the seller has to pay these costs and repairs and inspections as well. With SB458 to remove deficiency and the Tax Relief Act to often remove taxation.. short sales rocks!

If you're unsure of the specifics of the short sale process, or if you want a clear understanding of your home selling or saving options, give me a call or contact me on The Real Estate Doctor website. Clarity, hope and relief is just one phone call away. Call me. I can help you.

Considering Buying a Short Sale?

Are you considering buying a short sale? You probably landed on my blog because you are looking for short sale help. That's what I am here for!

One very important consideration before you make an offer on a short sale is the length of time it takes to close escrow. Short Sales take longer than the average escrow, 90-120 days and sometimes longer. Before making an offer make sure you will be in it for the long haul. If you have a strict time frame in which you need to close on your new home and move in, a short sale may not be the right choice for you.

As a buyer of a short sale you must be prepared for the bank to counter your offer. Usually the bank counters the value a bit higher.

It is also important to remember that a home listed as a short sale is being sold as-is. As a buyer of a short sale you cannot ask the seller to pay for inspections or repairs. You must be prepared to do your own repairs if needed at your cost.

Those are just a few aspects of a short sale that a buyer must be aware of before making an offer. Need more help? Post a comment below, give me a call or contact me through my website at Christine Papworth The Real Estate Doctor.

Considering Short Selling Your Home?

I was recently asked "What is the most important thing for a home seller to remember when they are considering short selling their home?" As a reader of my blog, I thought you just might like to know the answer to this question as well.

It is important for the homeowner to remember that they cannot receive anything from the sale. They also cannot have any cost associated with the sale to them. Most homeowners don't know that the bank pays all costs of sale and the short sale is totally "as is", with no deficiency...  in California at least!

Short selling will affect their credit if they are forced by the bank or their situation forces them to get behind on their payments. One of the most important ways to protect your credit when you go through the short sale process is to not miss any payments.

When a homeowner decides to put their home on the market as a short sale listing, it just might be one of the best decisions they make for their future. They can buy again in 3 years after a short sale and sometimes sooner if they meet the requirements of qualification for an FHA or VA loan(2 years).

Are you looking for short sale help? Would you like to know what your options really are? The Real Estate Doctor is in... call me now. Let's talk! 1-800-921-1900 ext. 2502

Video: Seller's Market? How to Get MORE for Your House than it's Worth

This is a hot market for sellers right now and I want to share with you how to get the MOST for your home. Watch my video below where I share what's going on in the housing market right now for sellers... and buyers... and agents! This is one of the best markets for everyone - low inventory which is great for sellers, low interest rates which is great for buyers, and homeowners and home buyers who need our help as agents.

Leave a comment below and let me know what you think about the current housing market. I'd love to hear from you!

Check out all of the resources on my website now...
Christine Papworth The Real Estate Doctor!

Stop Foreclosure Clinic on March 9, 2013 in Modesto, CA

You're invited to my Stop Foreclosure Clinic in Modesto, CA on Saturday, March 9, 2013 at 1pm. Watch the introduction/instructional video below and then go to my website, Christine Papworth, The Real Estate Doctor's Stop Foreclosure Clinic in Modesto, to register.

Stop Forelcosure Clinic in Modesto, CA

Short Sale vs Equity Sale - Which is Right for You When You're on the Edge?

What do you do when you owe just a little more on your house than it's actually worth and you need to sell it? This situation has been coming up a lot lately so I recorded this explanatory video for your viewing pleasure. Watch this video below as I dissect this situation!

Short Sale vs Equity Sale
by Christine Papworth The Real Estate Doctor

Stop Foreclosure Clinic on March 23, 2013 in Tracy, CA

You're invited to my Stop Foreclosure Clinic in Tracy, CA on March 23, 2013 at 1pm. Watch the introduction/instructional video above and then go to my website, Christine Papworth, The Real Estate Doctor's Stop Foreclosure Clinic in Tracy, to register.

Stop Foreclosure Clinic on March 2nd - You're Invited!

I hope you are enjoying this beautiful day! I wanted to take a minute to personally invite you to my Stop Foreclosure Clinic on March 2, 2013. Here's a little video I made with the details. After you watch it, you can go to my website at http://www.TheRealEstateDr.com to register. It's free! I can't wait to meet you there!

Debt Forgiveness Act - What Does it Mean to You?

Does it Matter?????

Everywhere I look today on Facebook, emails and texts, there are myriad agents and government entities shouting with glee over the one year extension of the Debt Forgiveness Act.  I agree this is a good thing, however, more for mindset and lessening the fear factor than for actual help.

Keep in mind that the law, passed in 2008 as Bush was leaving office, protects a homeowner who either allows a home to go to foreclosure or closes on a short sale with debt- forgiveness  from being taxed on the loss (to the lender), which is considered a gain like ordinary income to the homeowner. In either case the homeowner will likely receive a 1099c stating they have a gain in income…just as if the homeowner were self-employed and received a 1099 declaring how much income they had made that year.  Even if they do not receive a 1099c they are obliged to declare the income anyway to the IRS.

The bill states that there can be NO taxation IF (and this is a huge IF): 1) The home is their personal primary residence under IRS code (owner-occupied 2 of the last 5 years), and 2) The loan on which the debt was forgiven is PURCHASE MONEY (meaning the original loan taken out when the property was first purchased by said owner) period. 

Do You Know How Few People this Law Actually Protects?...

In California, less than 20%. If you refinanced your original loan to send your kid to college, to buy another home, to throw to the winds of the sea…this law does not protect you…never did. And , no, if you just refied to get a lower interest rate and took no cash out it is still questionable as to whether this act actually kicks in even for you.

Do you know the other ways to protect yourself against taxation after a foreclosure or short sale or loan mod with a principle reduction? There are several and one of them is available to almost anyone who finds themselves in this situation of losing or short selling a home.

Listen to my radio show this Saturday, 10 am, 1360 AM KFIV to get the answers.  IHeart radio, too. HOUSE CALLS with Christine Papworth, the Real Estate Dr.  Anyone out there disagree with me? Let’s talk.

Short Sales on the Rise!

Short sales are rising as banks start to shun foreclosures

By Les Christie | CNNMoney.com – Thu, Mar 1, 2012 5:50 AM EST

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Homes in some stage of foreclosure accounted for nearly one in four homes sales during the fourth quarter, according to RealtyTrac.

During the three months that ended December 31, homes that were either bank-owned or going through the foreclosure process accounted for 24% of all home sales, up from 20% in the previous quarter and down only slightly from a year earlier when foreclosures accounted for 26% of sales, RealtyTrac said.

In total, 204,080 distressed properties were purchased during the fourth quarter, down 2% from the year-ago quarter. For all of 2011, foreclosure-related sales were down 2% year-over year to 907,138, accounting for 23% of all home sales.

"Sales of foreclosures in the fourth quarter continued to be slowed by questions surrounding proper foreclosure paperwork and procedures," said Brandon Moore, chief executive officer of RealtyTrac, referring to the delays cause by the robo-signing scandal that broke in late 2010. "Even so, foreclosures accounted for nearly one in every four sales during the quarter and for the entire year."

"We expect to see foreclosure-related sales increase in 2012, particularly pre-foreclosure sales, as lenders start to more aggressively dispose of distressed assets held up by the mortgage servicing gridlock over the past 18 months," said Brandon Moore, CEO of RealtyTrac.

Short sales on the rise

Short sales are starting to become the preferred method for banks to dispose of properties in default. In short sales, borrowers who owe more on their mortgages than their homes are worth agree with their bank to sell their homes at the lower market value. In return, the bank agrees to absorb the loss.

During the last quarter of 2011, there were more than 88,000 short sales, up 15% compared with a year earlier, according to RealtyTrac. Short sales comprised 10% of all homes sold during the quarter.

Meanwhile, sales of bank-owned homes fell 12% year-over-year to 116,000, comprising 13% of all sales during the quarter.

"That trend will likely show up in more local markets in 2012 as lenders recognize short sales as a better option for many of their non-performing loans," said Moore.

Steal this house: 7 foreclosure deals

Short sales have become a more attractive option since all parties agree on the terms, leading to fewer legal issues, said Daren Blomquist, RealtyTrac's director of marketing.

They also offer better returns. During the quarter, the average short sale sold for $184,221, while the average foreclosure sold for $149,686. And banks typically don't have to spend a mint maintaining a short sale home like they do a foreclosure, where they have to pay more in legal fees, property taxes, maintenance and insurance, said Blomquist.

Short sale deals also get completed more quickly. During the fourth quarter, it took an average of 308 days, to complete a short sale. Foreclosures, meanwhile, can take years to complete.

Quicker approvals mean fewer buyers get discouraged and withdraw their offers. Blomquist said some banks even pre-approve prices so deals close very fast.

Short sales already outnumber REO sales in several "bellwether markets," including Los Angeles and Phoenix, where, in both cities, they exceeded 20% of all sales.

Some lenders have even incentivized short sales in Florida and other hard-hit foreclosure states. They offer large cash rewards -- as much as $35,000 -- to delinquent borrowers in return for co-operating on these transactions.

Million-dollar foreclosures rise as rick walk away

Distressed properties continue to make up a large portion of the sales inventory in many housing markets. In Nevada, they accounted for 56% of all sales during the quarter, the highest percentage of any state.

California foreclosure-related sales claimed a 43% share, Georgia 39%, Arizona 38% and Michigan 33%.

Taken From: http://finance.yahoo.com/news/short-sales-rising-banks-start-105000703.html;_ylc=X3oDMTNuZzg0NXQ1BF9TAzExODMzMDg3MjgEYWN0A21haWxfY2IEY3QDYQRpbnRsA3VzBGxhbmcDZW4tVVMEcGtnA2ViODBiNGM0LTI3ZmQtM2UxNy04NzdiLTE3ZTQwMjUwODhkZgRzZWMDbWl0X3NoYXJlBHNsawNtYWlsBHRlc3QD;_ylv=3

Now Is Not The Time To Rent Your Underwater Home

In the central Valley of California including San Joaquin and Stanislaus and Merced counties I have found an interesting trend amoung the expired and withdrawn listings I am calling. What is it, you ask? Probably one third of those I spoke with have decided to rent their underwater properties.
That concerns me for a couple of reason:
1. They owe more than the property is worth....for how long? 10-15 years?! A little scarry..a lot scarry!!
2. The rent may or may not make all of the payment now. What about vacancy?
3.And here's the most important:
   a. the HOMEOWNER RECOVERY ACT which protects sellers freom a tax problem under certain circumstances on the personal residence runs out Oct of 2012. While sellers may still be considered owner occupants by the IRS after a year of being out of the home...what happens if the seller is forced to short sale AFTER Oct 2012...no protection.
   b. Also, SB581 in California cureently says no deficiency on any loan doing a short sale right now. What if that law and the protection under it changes during the next few years?
I am not trying to be a doomssayer, but I do want to be sure people understand what ramifications could be if they wait too long to take care of their situations.

Please do not assume anything right now. Find out what your real options are and what your real issues could be. I will be happy to give a free consult to anyone so we can look at it all together. The financial health of your family and your future could be at stake. Do the right thing. Do your homework.
Be well.

Home owners receiving loan mods are being viewed as short sellers by Fannie Mae!

Hey everybody,
I haven't verified this for sure as of yet, but this is some important information regarding loan modifications and their potential impact on your ability to purchase a home down the road.  Check it out and let me know your thoughts!

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Just when it seems sanity is returning to the lending industry….this gets dropped on us.

Homeowners receiving loan modifications for their primary residence (and noted on their credit report); are now being treated as short sellers by Fannie Mae…even if the homeowner was never late on their mortgage.

In other words: A responsible homeowner, who made their payments on time and received a loan mod for their primary residence will now have to wait three (at least) years before they can purchase their NEXT home (or refi their current residence).

The only exception to the rule: If a homeowner received a loan modification on an “investment property/second home” may receive financing on another property (primary residence only) on a case by case basis (underwriter’s discretion) within 2 years.

Here are the Fannie rules:

o Refinance transactions: On previously modified loans…refinancing is not permitted.

o New purchase transactions: When a borrower’s current residence (previous loan) was modified AND the property is being retained as a 2nd home/investment property…financing for another home…will NOT be permitted.

o New purchase transactions: ..When a borrower’s previous loan was modified AND the property is being sold…the borrowers loan application …should be treated with caution and reviewed for delinquencies and short payoffs.

o New purchases of 2nd home or investment properties: When a borrower’s current residence (owner occupied) has been granted a loan modification… financing for the next home will not be NOT permitted.

o Refinances where another property (not the subject property) has a loan modification should be reviewed with "caution" to ensure that there was no short refinance (treated as a short sale).

For more rules regarding the rules for short sale /foreclosure waiting periods please click here.

Daniel Dobbs
Sr. Mortgage Loan Officer
American Commerce Mortgage
Cell: 949 250-3981 Fax (714) 970-9777
Dandobbs6@gmail.com DRE # 00986886 …..NMLS# 307631