It happens all the time: I have sellers and agents call me at the office to ask whether a short sale seller (their prospective client) can list in a short sale because the seller has not missed any mortgage payments.

Or, I may get a call from an agent who tells me that the bank told the seller that he or she could only get evaluated for a short sale if mortgage payments have been missed. Apparently, there’s this masked employee who seems to work at all the banks and spread this misinformation like wildfire. (It’s almost like the beginning of one of those urban myths—you know the friend of a friend who brings home a Chihuahua from Mexico but it turns out to be a rat).

Can a borrower participate in a short sale if s/he is still current on his or her mortgage?

Quite simply, the answer is yes. However, there are certain criteria that may impact an agent’s ability to successfully negotiate a short sale for a borrower who is current. So, here’s what you need to consider when taking a short sale listing like this:

Does the borrower have a hardship or a legitimate reason for participating in a short sale? If the seller is simply sick and tired of being upside down on the mortgage, some banks may be a little bit less flexible in their short sale approvals. Banks are looking for solid reasons that sellers need to sell—job loss, divorce, death, illness, etc. 

How many liens exist on the property? Depending upon the number of mortgage loans and also depending upon the state where you live, there are many different programs available for short sale sellers. However, sellers who are current and who have second liens held by collection agents may find it necessary to throw in a little bit of cash in order to make the second lien holder agree to the short sale. (Don’t forget that you need to get the first lien holder’s approval in order to make a cash contribution to the second lien holder and that contribution must appear on the settlement statement.)

Who are the mortgage lenders? With respect to folks who are still current, some mortgage lenders are a little more flexible than others. Many mortgage lenders will check the borrower’s credit and look into all aspects of the sellers’ financials, while others will be a bit more flexible and forthcoming with short sale approval letters.

So, the next time you hear that the bank has told your seller to miss a few payments, you had better double check to make sure that the Chihuahua doesn’t smell like a rat.

Photo: flickr creative commons by crispee

 

Melissa Zavala 
BROKER/REALTOR® ● DRE #01324959

BROADPOINT PROPERTIES, INC. 
760.839.3838

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What's the Difference Between an Offer and a Contract?

The language we use when talking about real estate transactions is important.  In fact, in some situations the difference in one single word used over another can be critical to understanding what is happening, or what is expected in a real estate transaction. 

You'll often see the word CONTRACT used when the word OFFER should be used.  There is a very big difference between the two words.  They are not interchangeable.  Real estate professionals know the difference, but so should you as a Buyer or Seller.

An OFFER is what a Buyer makes to a Seller, or vice versa.  It is all the terms under which the Buyer would like to purchase the property.  It has been accepted in writing by only one party, that one making the offer.

The Seller can counter-offer those terms, making changes and sending them back to the Buyer for review.  Again, if this were the case, the terms have been changed and the changes have only been accepted by one party.

You don't get to the point of CONTRACT until all parties all agreed to all the terms IN WRITING.

As a Buyer you make OFFERS on properties.  You do not write CONTRACTS.  You are putting forth the terms under which you would like a contract to exist.  When accepted by the Seller your OFFER will become a CONTRACT, but not until it is accepted in writing.  Knowing the difference can be critical when explaining a multiple offer situation.  If you said you were dealing with a Seller than had multiple CONTRACTS, you are dealing with a Seller who has agreed in writing to sell one property to multiple Buyers.  That is a nightmare.  If you are dealing with a Seller who has multiple OFFERS, you want to be the one the Seller signs and turns into a CONTRACT.  It can be a competitive situation, but is not screaming for one or more lawsuits. 

When a CONTRACT exists both parties to it have obligations to perform.  An OFFER has no such obligation until the terms of the OFFER are accepted by all parties.
 

 

Chris Ann Cleland, Associate Broker- Licensed in Virginia, GRI, SFR, Northern Virginia Short Sale Specialist. Affiliated with Long & Foster, 7526 Limestone Drive, Gainesville, VA 20155.  To contact Chris Ann, call 703-402-0037 or email chrisann@LNF.com.  Or you can visit her website:  www.nvarealestate.net.

Header is a combination of photos, taken by Chris Ann Cleland, of various listings and neighborhoods in the Bristow-Gainesville-Haymarket area. 

Pass this along to every Realtor you know. Re-blog this post, whatever you can do to get the word out!  

As of September 1, 2011 appraisals will change drastically. We now must complete appraisals in what is defined as UAD or Uniform Appraisal Dataset format. This is a GSE Fannie, Freddie requirement. 

What does this mean for you? The new reports will look foreign to you and your clients with all the codes we have to use in the reports, so you will have to be versed on what the codes mean. Instead of the old days where we described a property as being Good in condition or Good in Quality of Construction, we will now be using codes such as Q=3 and C-2, etc. It will be far less user friendly to read and more automated system friendly. Fannie and Freddie want consistency across the board for all appraisals nationwide and the codes are   the way they are trying to get this accomplished. They have clearly defined what Fair, Poor, Average, Good, Very Good and Excellent Quality and Condition should entail. No more leeway in how appraisers determine this on their own. Lenders are also gearing up for uniform delivery of their loan packages and the UAD is part of this whole process.

If you GOOGLE UAD or Uniform Appraisal Dataset you should find a wealth of information on this topic. Be prepared and prepare your clients! 

What do we as appraisers need from you? One of the big changes is we must know in what YEAR any renovations to the BATHS and KITCHENS were completed. In addition to the comments you already place in FMLS/MLS about renovations, we need the renovation year for the kitchens and baths. If the exact year is unknown then we need a specific range, ie: less than 1year ago, in the past 5 years, in the past 10 years or in the past 15 years. 

If we cannot get this information in FMLS/MLS for the SUBJECT we must contact the owner if available or the Realtor and get this information and this takes time and mayt also delay closings! For all the comparable sales and listings that we use in our reports, we of course cannot contact the owner, so we will be contacting you the Realtor unless you have this information in your comments and photos.  While we do NOT have to indicate year of renovations for the comparables, we really need this information in order to properly compare them to the SUBJECT. So any listing you have, please include as much detail about renovations as possible!

What else do we need from you? We need photos! Lots of them, more the better. Photos of the renovations and if you can add descriptions under your photos, please include the YEAR the renovations to kitchen and baths were completed or use the range noted above. Also needed is extent of renovation! Was it a REMODEL  or just an UPDATE. For appraisal purposes a Remodel means a significant change, Gutting of the bath or kitchen, all new fixtures, flooring, cabinetry, appliances, etc. VS. Updating which brings it to current market appeal and standards without a total REDO! New Paint, Some new fixtures, refacing of cabinets, etc.

We must have this information included in every appraisal report. So if all Realtors add this information in the comments or under your photos, life will be easier for all as the appraisal will be completed SOONER and the deals will closed faster. Win/Win for everyone! Not to mention, the homeowner needs to get full credit for renovations and when they were performed!

** FOR THOSE OF YOU WHO PROVIDE GREAT DETAIL AND PHOTOS IN YOUR REPORTS, APPRAISER'S AND OF COURSE THE SELLERS THANK YOU!

I hope this POST is featured as we have to get all Realtors on board with this ASAP! So please pass this along to your Brokers too and let me know if you have any questions.

In Future Posts I will define in more detail the codes (which will look foreign to everyone for awhile) and what they mean and how they are defined in our reports

 

Thanks guys! 

 

Mary Thompson

Certified Appraiser

http://www.lakelanierappraiser.com

 

 

I Don't Care Who You Are, This Will make You Cry...We Let A Stranger In Our House...And A Friend Into Our Hearts

In early July, I admit, we did something most people would consider a very foolish thing. We let a total stranger in our house.

It was a Sunday morning and my Chris and I were about to pull out of the driveway on our way to find breakfast at a yet to be determined restaurant, when I noticed a car was pulling over to the side of the road opposite our driveway. I asked Chris to roll down her window as I expected the solitary gentleman in that car might have a question or perhaps need directions.

"Do you live here?" the fortyfive-ish stranger asked,
"Yes we do," Chris replied.
"This is the house where I grew up," he said. "Could I visit for a minute. I won't take much of your time. I can see you are on your way out."
With that, I stepped out of the car and said, "Why don't you pull into the driveway and get your car off the road."

In the next minute, we were shaking hands in the driveway and he introduced himself as Pete Martin. He asked if the Kelleys still lived next door and pointed to the second floor bedroom that was his and described how the chimney ran right up through the middle of the room. I asked if he would like to tour our home. He happily agreed.

As we passed through each room, Pete shared some little memory about the room and about the house and asked if the lilacs were still behind the house where he had buried his much loved dog. I showed him that the lilacs, and most likely his dog, had been relocated to another part of the yard to make room for the pool that we now enjoy. Through this stroll down memory lane, Pete shared a bit about his life.

Pete told us he had retired from a military career in the Air Force and now lived in Tennessee. After over twenty years of service, he was still not ready to give up flying and serving our country, so he became a Government contractor flying special operations forces in combat missions over Afghanistan, and tomorrow, he would be on a plane going back there and not returning until September.

Out of pure coincidence, he was visiting a friend in Londonderry, NH and asked if he could borrow his car to drive over to North Hampton in the hope we might be home when he knocked on our door. He had made this drive some years earlier, and we were not home. :-(

When we finished the tour of the house, Pete asked us if we could take a few pictures of him with his mobile phone and we took a few with our camera. We exchanged email addresses to stay in touch. As he was getting ready to leave, Pete made it clear, that by inviting him, a total stranger, into our home, we had given him something he something he would never forget. We had given him, the WORLD....and yesterday, well, he turned around and gave it back to us, in a way I know I will never forget.

While I was at my first showing yesterday, Chris called me on my cell and told me we had received a package from Afghanistan from Pete. I could not get home fast enough from the showing.

Seated at the kitchen table, Chris handed me the package and asked me to open it. Inside, was an American Flag, a copy of the Stars and Stripes daily newspaper published for members of the military, a copy of the July 2011 edition of Freedom Watch Afghanistan magazine and the following letter and special presentation:

Now, most of you know I am a Pease Greeter at Pease AFB in Portsmouth, NH, welcoming our troops home from duty or sending them overseas to Iraq or Afghanistan. If you enjoy freedom, thank someone in the military. Maybe you could stop by Pete Martin's Facebook page and thank him. I know that's where I'm headed as soon as I publish this blog.

If you would like to know why I chose Seacoast New Hampshire to make my home, click here to email me, and I can make a real convincing argument for you to choose it too! Or, if you would like to do your own home search, sign up NOW on my website for our exclusive Home Scout Program.

John McCarthy           Your Seacoast NH Realtor          408 Lafayette Rd, Hampton, NH 03842          603-601-1110 Office          603-418-1521 Cell            Visit My Website             Email Me

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It just happened.  I spent about 1.5 months getting this guy's ducks in a row.  Sounds almost too good to be true.  But it is true.  You can't do it on a conventional loan.  You can, however, do with an FHA mortgage with:

TWO CRITICAL CAVEATS!!!!!

1. The bank can't be reporting a deficiency and;

2. The borrower can't have any 30 day lates reporting either.

I feel almost guilty on this, but I've come to learn that we've done a myriad of them at our company this year. 

My buyer was denied by two other mortgage companies over the last two months.  The other mortgage banks didn't look at the 4155 (or the FHA guidelines).  Realtors, this is critical.  A buyer still needs to qualify, but if they sell their home in a short sale and meet both of the aforementioned criteria, then....you have another happy buyer! 

Loan officers need to have the support.  They need to know the guidelines.  Buyers do have options.

 

 

 

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