 |
| For more infomation on Short Sales visit my website: http://www.dandenuccio.com/ |
Tuesday, August 24, 2010
BANKS ACCEPTED SHORT SALE HARDSHIPS
Wednesday, August 18, 2010
TIMING THE REAL ESTATE MARKET...THE SIGNS TO WATCH.
A friend of mine asked me "When do you think the right time to buy a home in Las Vegas would be?"I have been a real estate broker in Las Vegas for 26 years now and if I had a dollar for everytime I have been asked that question, I would be happily retired, sitting on a beach on my own island somewhere in the Pacific counting coconuts and watching the tide roll in and out while sipping on one of those goofy drinks with the mini umbrellas. "No really", he says, "you must know when the perfect time will be?" "Are prices going to drop more, are the interest rates going to drop more?" Should I wait until the government gives me the down payment and offers to make my monthly payments for the next five years, oh and maybe if I time it perfectly, I can get a home the day the market bottoms out and lock in my interest rate an hour before the rates start to climb again...Riiight.
Save yourself some major stress and anxiety and buy a home when you WANT to buy a home. That is, if you are financially ready, and have a legitimate reason to either move or own an investment home.
Too many would-be buyers get caught up in the "Time the market" syndrome. About ten years ago I came to the conclusion that I was not a clairvoyant and didn't know one either so I came up with a list of the signs that will usually tell you when the time is right to buy-NOT to be confused with timing the market, just paying attention to the proper indicators:
1. Home prices have dropped significantly over the past 12-36 months. Do the research YOURSELF.Just reading a few articles on the Internet does not qualify as research. If you are interested in a specific area, say the Summerlin or Green Valley area, ask a very qualified Realtor to provide you with the most recent data that would indicate the price adjustments over the last 12-24 months. Talk to qualified active appraisers about their opinion of those areas. Make sure the agent and appraiser you talk to has been very active in the market for at least the past few years, preferably more.
2. The inventory of homes available indicate that it is a buyers market. That would be at least a minimum of a 4-5 month supply. Again, your real estate professional should be able to tell you how many months supply of homes there is in the area you are looking as well as the overall market. If not, there are a few good sites that I will forward to you that are accurate and informative.
3. The interest rates to finance a home are below 7%. Yes, I said 7%! Currently they are in the 4.5% range, the lowest I have ever seen in my 26 years and the lowest overall in the last 40 years!
We have become so spoiled by the low interest rates over the past ten years (almost all below 7%) that we have come to expect the rates to stay there. And if they don't, it sends a shock wave to the market and buyers start waiting again. If the rates are below 7% and the average home price is under $170,000, that is the tipping point of where it is cheaper to buy vs. rent.
4. The tax incentives are still in place. Yes, Uncle Sam has for decades and still to this day, and hopefully for future decades, offers the incentive of the interest deduction when you purchase a home with the banks money, not to mention the writes-offs for improvements, and other expenses. Investors are entitled to excellent incentives as well. Consult your tax advisor for all the details and you should find that it is far more benificial to own than to rent when it comes to paying taxes.
Of course, there are more signs to watch such as the improvements and growth in the area, demand for the area and overall economic indicaters, but those are the most recognizable signs to watch.
And if I am properly informed, I believe all four of the above signs are now quite noticable in Las Vegas.
For my friend that asked me that question, I hope this helps.
Save yourself some major stress and anxiety and buy a home when you WANT to buy a home. That is, if you are financially ready, and have a legitimate reason to either move or own an investment home.
Too many would-be buyers get caught up in the "Time the market" syndrome. About ten years ago I came to the conclusion that I was not a clairvoyant and didn't know one either so I came up with a list of the signs that will usually tell you when the time is right to buy-NOT to be confused with timing the market, just paying attention to the proper indicators:
1. Home prices have dropped significantly over the past 12-36 months. Do the research YOURSELF.Just reading a few articles on the Internet does not qualify as research. If you are interested in a specific area, say the Summerlin or Green Valley area, ask a very qualified Realtor to provide you with the most recent data that would indicate the price adjustments over the last 12-24 months. Talk to qualified active appraisers about their opinion of those areas. Make sure the agent and appraiser you talk to has been very active in the market for at least the past few years, preferably more.
2. The inventory of homes available indicate that it is a buyers market. That would be at least a minimum of a 4-5 month supply. Again, your real estate professional should be able to tell you how many months supply of homes there is in the area you are looking as well as the overall market. If not, there are a few good sites that I will forward to you that are accurate and informative.
3. The interest rates to finance a home are below 7%. Yes, I said 7%! Currently they are in the 4.5% range, the lowest I have ever seen in my 26 years and the lowest overall in the last 40 years!
We have become so spoiled by the low interest rates over the past ten years (almost all below 7%) that we have come to expect the rates to stay there. And if they don't, it sends a shock wave to the market and buyers start waiting again. If the rates are below 7% and the average home price is under $170,000, that is the tipping point of where it is cheaper to buy vs. rent.
4. The tax incentives are still in place. Yes, Uncle Sam has for decades and still to this day, and hopefully for future decades, offers the incentive of the interest deduction when you purchase a home with the banks money, not to mention the writes-offs for improvements, and other expenses. Investors are entitled to excellent incentives as well. Consult your tax advisor for all the details and you should find that it is far more benificial to own than to rent when it comes to paying taxes.
Of course, there are more signs to watch such as the improvements and growth in the area, demand for the area and overall economic indicaters, but those are the most recognizable signs to watch.
And if I am properly informed, I believe all four of the above signs are now quite noticable in Las Vegas.
For my friend that asked me that question, I hope this helps.
Tuesday, August 10, 2010
SHORT SALE vs. FORECLOSURE
 |
| Click on the above chart to enlarge VERY IMPORTANT: Before you decide to Short Sale, Cash for Keys, or give your home up to Foreclosure, check with your CPA or tax advisor. Attorneys can also be helpful but some tend to lean towards Bankruptcy too often. |
Tuesday, August 3, 2010
Short Sales...Is it the way to go?
Most states in the U.S. have been utilizing the short sale process. A brief explanation would be as follows: Mr. and Mrs. Upsidedown Homeowner (they owe more on the home than it is worth) are put in a position that they must sell their home. The MUST part of that is important because if the bank that holds the mortgage on their home is to agree to the short sale, the homeowners must have some sort of a hardship. The typical hardships that would qualify would be:
1. Divorce
2. Loss of employment
3. Reduction of income or increase in expenses
4. A health issue that creates loss of income or increased expenses
5. Job transfer forcing a move
Wanting to sell your primary or investment property just because you are upside down and it's having an adverse affect on your portfolio, is not a good enough reason. You must be able to prove that you have at least one applicable hardship. The most common one today is loss of or a decline in income. Most of us have suffered a decrease in pay, reduced work hours or reduction in benefits resulting in increased expenses.
The average short sale is completed in approximately 90 days now. Most banks have replenished their staff and assembled a platform for managing the short sale process so they are closing much faster now.
As a homeowner, you should consider the short sale the same type of sale as a normal sale with the exception of the bank having to approve the sale and your credit being downgraded. The home should be maintained the same as you have been, or better since your are selling it, and all of the normal selling rules such as staging the home, keeping the utilities on, and making repairs as necessary DO apply. If any agent or want-to-be agent tells you different, they are wrong. Part of the purpose of the banks accepting the short sales is that they expect the homeowner to stay in the home and maintain it while it is on the market and in escrow. Therefore, the home will sell for more because of the condition, the bank gets more money and they mitigate their loss.
The end result for Mr. and Mrs. Upsidedown Homeowner could be any or all of the following:
1. Best case scenario: No cash contribution, no promissory note to the bank, and the bank agrees not to pursue Mr. and Mrs. Homeowner for a deficiency judgement.
2. Homeowners sign a promissory note to the bank for a fraction of the unpaid debt.
3. Homeowners have to make a cash contribution at close of escrow to the bank.
4. Both 2 and 3.
5. No cash contribution, no promissory note but the bank (or banks) reserve the right to pursue the homeowner for a deficiency judgement for the deficiency.
There are other options of course but this is only a blog. There are obvious credit ramifications. In most cases, Mr. and Mrs. Upsidedown Homeowner will succeed in the short sale and have the underwater home behind them and start rebuilding their credit as soon as it closes. They should be able to finance a home within two years after the short sale closes, as long as the rest of the credit is maintained.
For more detailed information contact:
Dan DeNuccio
Prudential Americana Group Realtors
702-592-4663
http://www.dandenuccio.com/
1. Divorce
2. Loss of employment
3. Reduction of income or increase in expenses
4. A health issue that creates loss of income or increased expenses
5. Job transfer forcing a move
Wanting to sell your primary or investment property just because you are upside down and it's having an adverse affect on your portfolio, is not a good enough reason. You must be able to prove that you have at least one applicable hardship. The most common one today is loss of or a decline in income. Most of us have suffered a decrease in pay, reduced work hours or reduction in benefits resulting in increased expenses.
The average short sale is completed in approximately 90 days now. Most banks have replenished their staff and assembled a platform for managing the short sale process so they are closing much faster now.
As a homeowner, you should consider the short sale the same type of sale as a normal sale with the exception of the bank having to approve the sale and your credit being downgraded. The home should be maintained the same as you have been, or better since your are selling it, and all of the normal selling rules such as staging the home, keeping the utilities on, and making repairs as necessary DO apply. If any agent or want-to-be agent tells you different, they are wrong. Part of the purpose of the banks accepting the short sales is that they expect the homeowner to stay in the home and maintain it while it is on the market and in escrow. Therefore, the home will sell for more because of the condition, the bank gets more money and they mitigate their loss.
The end result for Mr. and Mrs. Upsidedown Homeowner could be any or all of the following:
1. Best case scenario: No cash contribution, no promissory note to the bank, and the bank agrees not to pursue Mr. and Mrs. Homeowner for a deficiency judgement.
2. Homeowners sign a promissory note to the bank for a fraction of the unpaid debt.
3. Homeowners have to make a cash contribution at close of escrow to the bank.
4. Both 2 and 3.
5. No cash contribution, no promissory note but the bank (or banks) reserve the right to pursue the homeowner for a deficiency judgement for the deficiency.
There are other options of course but this is only a blog. There are obvious credit ramifications. In most cases, Mr. and Mrs. Upsidedown Homeowner will succeed in the short sale and have the underwater home behind them and start rebuilding their credit as soon as it closes. They should be able to finance a home within two years after the short sale closes, as long as the rest of the credit is maintained.
For more detailed information contact:
Dan DeNuccio
Prudential Americana Group Realtors
702-592-4663
http://www.dandenuccio.com/
Subscribe to:
Posts (Atom)
