Everything Real Estate

Monday, July 5, 2010

Buyer Series – Buying Short Sales – Sweet Deal or Short Changed?

With all the recent financial troubles daunting many American families, we've seen a huge increase in listings called "Short Sales." While short sales can represent a "sweet deal" for the buyer looking to buy a bargain - in many cases, they can be more trouble than they are worth.

WHAT IS A SHORT SALE?

A short sale is when a homeowner is unable to sell their home for enough money to pay off their mortgage. (This is either because they have been loaned more on the home than the market will bear, or because values in the area have decreased substantially.) Therefore, the bank agrees to accept less than the mortgage payoff in order to avoid foreclosure proceedings (which can cost the lender up to $60,000).

BEWARE - THE ASKING PRICE IS THE AGENT'S "BEST GUESS"

When a home is listed as a short sale, it is extremely rare that the lender has already been consulted in order to approve the list price. The listing agent will attempt to estimate an amount far enough below market value to attract buyers, which is still high enough to receive approval from the lender. For that reason, the asking price that attracts the buyer in the first place may not be the amount the bank will accept. In addition, it's not only unusual to negotiate less than the agent's estimated short sale price, but also fairly common to end up being asked to pay more than that price.

THE HOME WILL BE SOLD AS-IS

Before a buyer begins negotiation on a short sale home, it is important to know that the lender (who is paying all the fees in the transaction) usually will not make any repairs (including pest inspections or treatment, and home warranties). This means that any questionable items that come up as a result of a home inspection are for the buyers' knowledge only. However, it is imperative to go through with the inspection process, and leave this contingency as a "loophole" in case serious issues come to light.

THE CLOSING DATE IS ANYONE'S GUESS

It can take 2-6 weeks just to receive an answer from the lender on the original purchase offer! If there are two lenders involved (a "first mortgage" and a "second mortgage"), those two entities have to agree on how to split the loss - so it can take even longer to reach an agreement. In addition, the short sale closing process takes an indefinite amount of time. It is extremely unusual to close in 60 days or less - and pretty common to take several months before finalizing the sale. So buyers in a time crunch may not be able to coordinate a closing fast enough to meet their needs.

HIRE AN AGENT WITH SHORT SALE EXPERIENCE

Once a buyer has decided to pursue a short sale "eyes wide open" - it's very important to have a Realtor on their side that is familiar with the short sale process. Although buying any given short sale home is never a "done deal" until closing - having the right agent can literally make or break the deal. A great deal of communication, understanding of the process, and follow up is necessary to give a short sale its best chance for success.

While buying a short sale home can represent a great "deal," there are many potential stumbling blocks along the way. It is important to know just what you're getting into going in, so you're prepared for the possible pitfalls you may experience during the sale. Most of all, hire a Realtor with experience in all kinds of sales (short, foreclosure, traditional, etc.) so that he or she can help you explore your options, and choose the best route for you.

If you would like more information about buying or selling a home in your area, please don't hesitate to contact me! I am always available to answer your questions - and ready to serve your real estate needs. Your complete satisfaction is my goal - because I want to be your Realtor for life!

Lori Day
Infinity Realty
(816) 200-4372 Cellular
(816) 554-6351 Fax
(816) 554-6368 Office
EMAIL: Lori@LoriDaySells.com
WEB: www.LoriDaySells.com
FACEBOOK: www.facebook.com/pages/Lori-Day-Realtor/198561393044?ref=ts

My Mission Statement:

At Infinity Realty, we make a difference in real estate by saving our clients thousands! Whether you're buying or selling, I WILL save you money; with expert negotiation skills and lowered commission rates. When you hire me, you won't sacrifice service! I promise I'll provide you with a full-service customized client experience, at the highest level of integrity. I do the little things that make a difference - from start to finish, and beyond. Your satisfaction is my mission, because I want to be your Realtor for life!

Buyer Series - Are Foreclosures Really All They're Cracked Up To Be?

"My friend Mary just got an awesome deal on a foreclosure! She got the house for $35,000 below market value."

In this market, who among us has not heard a story similar to that? Sure, when you know just what you're up against and have an experienced Realtor to guide you, foreclosed and distressed homes can be a fantastic opportunity for some walk-in or sweat equity. But there is a lot of the story missing; and buyers out to get a steal in the the real estate market often have to find out the hard way that it is not just making a low-ball offer and signing on the dotted line.

First, when you're negotiating to purchase a foreclosed home - you are at the mercy of the bank, investor, or servicing company who is handling the sale of the property. The whole process will happen on the terms of the seller; and while it may take them days to answer a buyers offer, they expect all counter-offers and documentation from the buyer to be submitted immediately.

They will outline the closing date, inspection and financing timelines. Many of these homes are without utility service and/or have been winterized, which can add $200-$300 in additional inspection expenses. In most cases, the home will be sold as-is (except for the case of termite infestation, which all sellers in this area are compelled to treat by law), therefore many of these homes will not pass FHA or VA Appraisal requirements.

Buyers can spend up to $1000 on inspection costs, only to find that the condition of the house is unacceptable to the lender, or buyer - or both. Having to start again the search and negotiation process can be frustrating, especially with a lot of time and money having already been spent.

So if the process to buy these foreclosures is so difficult, why do buyers even bother with the process? Simple! They remain in charge of one major aspect of the sale - the price. Buyers have quite the advantage in this current real estate market because there are so many distressed homes for sale. Many of these homes are being sold for thousands (and even tens of thousands) below a "typical market value."

Even the homes that need some work can represent a great profit opportunity to the savvy buyer. However, a lot of the available homes out there are in terrible condition, and will require thousands of dollars in repairs and updates. Therefore, what a buyer will spend in total on the property must be considered.

Many buyers who have already purchased homes are surprised to find that they have little room to "make demands" like they have in past transactions. First-time buyers - for whom the buying process is already full of surprises, can be easily (and understandably) overwhelmed by the additional difficulty added when buying a foreclosed home.

This is why it is essential to have an expert Realtor in your corner. Now more than ever, having a skilled agent guiding you through the process step-by-step will help ease what is likely to be challenging at the very least. With all the changes happening in lending and the housing market - consumers need someone on their side who stays informed, and is out there "fighting the battle" for their clients every day.

So before you decide to "hop aboard the foreclosure train", be sure to contact an experienced Realtor who will help you examine the pros and cons. Each buyer's situation and home for sale are unique, so be sure you have an expert to help you decide what's right for you.

Lori Day

Infinity Realty

(816) 200-4372 Cellular

(816) 554-6351 Fax

(816) 554-6368 Office

EMAIL: Lori@LoriDaySells.com

WEB: www.LoriDaySells.com

FACEBOOK: www.facebook.com/pages/Lori-Day-Realtor/198561393044?ref=ts

My Mission Statement:

At Infinity Realty, we make a difference in real estate by saving our clients thousands! Whether you're buying or selling, I WILL save you money; with expert negotiation skills and lowered commission rates. When you hire me, you won't sacrifice service! I promise I'll provide you with a full-service customized client experience, at the highest level of integrity. I do the little things that make a difference - from start to finish, and beyond. Your satisfaction is my mission, because I want to be your Realtor for life!

Buyer Series - Can't I Just Call The Listing Agent?

So you're driving down the street, and you see a beautiful home for sale. You pull a flyer out of the box in front, and it looks like THE perfect home for you. The next thing you do is call the number for the listing agent and set up a showing - right? WRONG! At least not if you want an agent that's working for YOU.

When you're ready to buy a home - one important thing you need to understand is "Agency". There are many ways a consumer can work with an agent in the KC Metro, and it's important to know who is working for whom.

In most cases, the agent who lists a home for sale is representing the seller - and the seller only. So if you call the listing agent to view & write an offer on a home, you're on your own. What's worse is not only will they not be able to provide you advice on purchase price and terms, but any personal information you tell them about yourself WILL be passed on to the seller. (Why you're moving, what you can spend, how interested you are in the home, etc..) This can definitely jeopardize your position at the "negotiating table."

What you need is an Exclusive Buyer Agency Agreement with a qualified Realtor, so that your interests are represented. A Buyer's Agent will be working for you to get you the best price and terms possible, and all of your information and motivations will be kept confidential. Best of all, buyer representation is at no cost to you in Kansas and Missouri.

So, rather than driving around looking for homes, and calling several separate Realtors to view the ones you like - get your own Realtor first. Having a qualified professional on your side will save you time and money. Although buyer representation is "free", having someone to guide you through the process from start to finish is "priceless."

For more information about buying a home in the Kansas City Metro Area, call or email me any time. I stand ready to answer your questions and help to guide you through the process.

Lori Day

Infinity Realty

(816) 200-4372 Cellular

(816) 554-6351 Fax

(816) 554-6368 Office

EMAIL: Lori@LoriDaySells.com

WEB: www.LoriDaySells.com

FACEBOOK: www.facebook.com/pages/Lori-Day-Realtor/198561393044?ref=ts

My Mission Statement:

Household Maintenance Made Easy - Volume II April

With the go-go lifestyles we lead, it can be easy for life's to-do list to be overwhelming. My monthly home & lifestyle maintenance checklist will help you stay organized, show you how to do a little at a time, and how to get everything DONE.

Indoor Cleaning Tips

Use your vacuum and dishwasher to clean more efficiently. Start at the ceiling line with the vacuum: Vacuum walls, baseboards, and furniture before vacuuming floors. Empty the bag as soon as it starts getting full.
Use the dishwasher for everything that fits. On some models, you can take out the top shelf for oversized items you might not have considered like the bathroom garbage cans, broiler pans, and bath caddies.
Clean and shampoo carpets. If you can, hire someone to do this; it will save a lot of time and free you up to do other things. Wash floors, then treat per manufacturer´s instructions. Wash woodwork including moldings, baseboards, and doors.
Take down curtains and drapes. Wash or dry clean. Wash mini-blinds, blinds, or shades. If damaged, repair or replace. Clean lamps and ceiling fans, removing light bulbs and covers to wipe/polish.
Take down pictures and artwork. Clean frames and glass. Move appliances and heavy furniture. Clean underneath.

Indoor Organizing Projects

Empty clothing closets, toy boxes, cupboards, and drawers. (If you´ve been decluttering and cleaning throughout the year, you know which ones you generally ignore.) Vacuum, dust, or wash shelves, drawers, and cabinets depending on when they were last cleaned. Repaint or wallpaper a closet if you have time.
Sort winter clothes for tossing, donating, tag sales, or storage. Wash or dryclean woolens and down-filled clothing then store with cedar chips. (Tip: Use "Space Bags" to store large/many items in a small space. These really help maximize storage areas such as closets and under the bed.)
Go through bookshelves. Get rid of any books that you no longer need or want. Donate or set them aside for a tag sale. Dust and replace on clean shelves. Sort through videos, DVDs, electronic games, and music CDs. Toss damaged tapes and CDs. Sell or donate old games, CDs, and movies.
Sort through computer clutter. Donate usable software, manuals, and equipment. Find a recycling center for dead equipment. Pitch disks and floppies that you can´t read on your current systems.
Set aside garage sale items, drop off donations, and haul garbage to the dump or dumpster.

Outdoor Checklist

You still have time to reseed patchy areas of the lawn. Now is a good time while everything is in growth mode. Be sure to scape off dead/dried out grass and remove before seeding.
Transplant and move plants that are still dormant or just starting to wake up. If you wait, they may be too leafed out and more susceptible to transplant shock.
Have your sprnkler system checked for leaks or clogs. Set timer for early-morning watering three times per week. (Tip: You will probably be able to over-ride many of these watering sessions since we typically get a lot of rain in April. This way though, when the heat kicks in - your system is up and ready to go.)
Bring out hoses and seasonal lawn equipment. Wash lawn furniture and hose off exterior of grill (at least the parts that were not covered during the winter season.) Scrub down patios, stairs & decks.
Wash exterior windows. (Tip - Windex Outdoor works great - and is a snap to use.)

You can stay on top of your home's maintenance by doing the little things all year long. Just a little bit of effort through the year goes a long way toward avoiding major headaches down the line. Check back next month for the next volume of my Household Maintenance Made Easy series. Happy Homeowning!

Tax Tip Time!

If you're anything like me, you spend countless hours preparing for tax time. Each year I promise myself that "this year, I am going to keep up with my deductions." Then I end up kicking myself for not doing it. The good news is, it's not too late.

It's the beginning of the 3rd Quarter, which is a great time to get ahead of the tax game. Make a list of all the deductions you take each year (such as mileage, charitable donations, work-related clothing purchases, etc.). Gather and go through all your paperwork now, and record your running totals for the first six months of the year. Then make a file for 2010 Taxes, where you'll store all your information, receipts, etc. for the next filing.

Taking a little bit of time now will help you wrap up tax season much faster the next time around. Keep logging those deductions every month, and this time filing will be a snap!

Lori Day
Infinity Realty
(816) 200-4372 Cellular
(816) 554-6351 Fax
(816) 554-6368 Office
EMAIL: Lori@LoriDaySells.com
WEB: www.LoriDaySells.com
FACEBOOK: www.facebook.com/pages/Lori-Day-Realtor/198561393044?ref=ts

My Mission Statement:

At Infinity Realty, we make a difference in real estate by saving our clients thousands! Whether you're buying or selling, I WILL save you money; with expert negotiation skills and lowered commission rates. When you hire me, you won't sacrifice service! I promise I'll provide you with a full-service customized client experience, at the highest level of integrity. I do the little things that make a difference - from start to finish, and beyond. Your satisfaction is my mission, because I want to be your Realtor for life!

Moving Over To Blogger

I have been blogging for quite some time on another site. Recently, they've changed the way they do things, and as a result I've decided to switch over to google. I'm copying some of my posts from the other site, which you can read above.

I'm always happy to answer questions about my blog posts or anything real estate. If I can be of assistance, please don't hesitate to contact me. Happy Reading!