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6 must-haves for your short sale package.

In order to have a successful short sale, the following items must be assembled asap upon deciding to list your home as a short sale.

1. Recent mortgage statements for all loans.
2. Copies of your most recent tax returns (last two years ) with W-2’s and 1099’s.
3. Copies of your last two pay check stubs (husband & wife).
4. Copies of your most recent bank account statements.
5. A letter, written in your own words, outlining the facts associated with the hardship that caused your financial distress (hardship letter).  
6. Completed financial disclosure, a form usually provided by the lender. Include copies of credit card statements, financial obligations, divorce decrees, physician letters, or anything else that shows you are having difficulty making payments.

Once an offer is received, your Realtor® will submit these items to your lender(s), along with the other documentation necessary for a succesful short sale!

For more information, feel free to contact me.

What is Mello-Roos?

Is there Mello-Roos?  is the familiar cry heard in many communities around California from buyers shopping for homes. So what is Mello Roos?

The Mello-Roos Community Facilities Act was created in 1982 to provide a means of funding community infrastructure such as sewer systems, streets, landscaping, fire and police protection, libraries, parks, schools, etc. Mello Roos bonds remain in place and are paid along with property taxes for as long as it takes to pay the bond off, oftentimes for upwards of 20 years. When a property changes hands, the obligation to continue paying this bond is passed to the new buyer. It is the responsibility of the seller to disclose any knowledge of this bond to the buyer.

To find out if a property has Mello Roos assessments, check out this post.

To search for homes in the area, click here.

The Three M’s of Short Sale Hardship

Will you qualify for a short sale? What is your hardship?

When considering the possibility of a short sale, it is important to know what your hardship is, and be able to communicate it clearly, along with supporting documentation, to the bank.

Here are the Three M’s of Hardship:

1. Medical. Something has happened with regard to your health, or to the health of one of your family members, which has caused you to lose income, or to deplete savings.
2. Marital. You are having marital problems, either separation or divorce, which has caused a decrease in income to the household, and the desire to sell the home.
3. Money. You have either lost your job or have had a decrease in salary which has impacted your ability to pay your mortgage.

Any one of these situations, when documented, will help to support your case with the lender.

For more information, contact me and I’d be happy to help.

What is a short sale? – Avoid Foreclosure

Are you considering a short sale? Here are some basics to get you started.

What is a short sale?

• When a homeowner owes more on their mortgage than their home can sell for in the current market (a.k.a, upside-down), the homeowner can try to avoid foreclosure by negotiating with the lender to accept a “short” payoff.

Are you a candidate for a short sale? Ask yourself this question:

• Do you have a true hardship that is keeping you from making your payments?
• Think job loss, job transfer, illness, or other challenge. Discuss your particular situation with your lender. Loss in value due to market condition does not qualify as hardship.

What do you need to do to prepare for a short sale?

• First, find a Realtor® who is experienced with the short sale process, who knows how to negotiate with banks, and will be your partner to get the transaction closed.
• With the help of your Realtor®, compile your hardship letter and other necessary documentation which comprises the Short Sale Packet.

What goes in your hardship letter?

• In your own words (and in your own handwriting is best), describe the circumstances that have caused you to be unable to make your monthly mortgage payments.
• Be personal and sincere about your situation, and include as much detail as possible. We want them to want to help you.

What goes into the necessary Short Sale documentation packet?

• Proof of income & assets, including:
  • Bank Statements
  • Pay Stubs
  • Assets (investment accounts, stocks, CDs, other properties)
• Proof of hardship, which might include:
  • Bills
  • Unemployment Records
  • Death certificates
  • Divorce papers
• Preliminary net sheet, prepared by your Realtor®, reflecting the price you hope to get, less the cost of the sale. Include a comparative market analysis, prepared by your Realtor®.

Prepare your home for sale

• With the help of your Realtor®, price your house to generate an offer.
• Prepare your home for sale.
• If you do not get showings and/or an offer in the first 2-3 weeks, lower the price.
• Keep lowering the price until you receive an offer.

Submit offer to the bank along with the short sale package

• Your experienced Short Sale Realtor® will take it from here
  • They will submit the package to the bank
  • They will follow up to make sure it has been received
  • They will be assigned an asset manager with whom they will communicate throughout the short sale negotiation
  • If all goes well, the lender will approve the short payoff, and your Realtor will follow the transaction through to a successful close

For more information, contact short sale specialist Noel Crider.

9 Alternatives to Foreclosure – Things to think about before you “Just Walk Away.”

Before you decide to “Just Walk Away,” here are some alternatives that you might not have considered that could reduce the negative impact to your credit score, and allow you to get back in the housing market sooner.

1. Loan modification – The lender and the homeowner agree to change one or more of the original terms of the note in order to make payments more affordable. (Be careful when hiring a loan modification company!) Common loan modifications include:

• Adding missed payments on top of the existing loan balance
• Turning an adjustable-rate mortgage into a fixed-rate mortgage
• Extending the number of years the homeowner has to repay the loan

2. Forbearance – This allows the homeowner to pay less than the full amount of their mortgage payment temporarily for a prescribed period of time. Forbearance might be considered if the homeowner can show there is some source of future income that will bring the mortgage payments current.

3. Reinstatement – The homeowner brings current the amount they are behind, usually by an agreed upon date. A reinstatement is often in conjunction with forbearance.

4. Repayment plan- The lender gives the homeowner an agreed upon period of time to repay the amount they are behind by combining the homeowner’s delinquent portion along with their regular monthly payment. At the end of the repayment period, the homeowner should then be current.

5. Refinance – Refinancing requires income, credit and equity to support a new mortgage or deed of trust. If your current income cannot pay your present mortgage, it may be difficult to convince another lender to offer you a loan with a reasonable interest rate. Based upon the tightening of qualifying criteria for loan applications, refinancing in today’s market is becoming less and less of a viable option. It goes without saying that the only reason to refinance is to lower your monthly payment.

6. Short-Refi – This is the latest trend for lenders in working with delinquent borrowers to avoid foreclosure. The lender agrees to refinance the home with a reduction in the principal balance. Sometimes the lender will also reduce the interest rate as well on the new loan. The borrower needs to provide proof of a “hardship” and fully document the ability to pay the new mortgage.

7. Short Sale- If the sale proceeds are less than the total amount owed to the lender, the lender(s) may agree to a short payoff or “short sale” and write off the portion of homeowner’s mortgage that exceeds the net proceeds from the sale.

8. Deed-in-lieu of Foreclosure – If the homeowner agrees to voluntarily transfer title of the property to the lender in exchange for cancellation of their mortgage debt, the lender may agree to a deed-in-lieu of foreclosure. In most cases though, the homeowner must attempt to sell the home for its fair market value first (at least 90 days before a lender will consider this option).  This option might not be available if there are other liens on the home, such as judgments, second mortgages or tax liens.

9. Bankruptcy – A bankruptcy may allow the homeowner to discharge some debt and reorganize others to keep the property. However, if a homeowner doesn’t or can’t make the house payment after the bankruptcy, the home is foreclosed on anyway. It is not recommend for real estate agents to list the property and try to negotiate a short sale while the homeowner is going through this process. Homeowners need to seek legal counsel if they want to pursue this option.

Contact me if you have any questions, or need a referral to a trusted professional such as a loan modification specialist or bankruptcy attorney.

10 Best-Kept Secrets for Selling Your Home

I read a great article on the BHG site on home selling secrets. I liked this article for many reasons. One of the most important tips, of course, is pricing it right. If it’s not priced right, then none of the other tips matter! I also really enjoyed this tip:

Selling Secret #1: The first impression is the only impression
No matter how good the interior of your home looks, buyers have already judged your home before they walk through the door. You never have a second chance to make a first impression…

To see the rest of these great tips, click here, and happy selling!

Pricing your home to sell

Price it right out of the gate!

Pricing your home correctly is the single most important key to getting it sold. Of course location and condition come in a close second. Even if you do find an eager buyer who is willing to overpay for your home, the deal will screech to a halt when the lender’s appraisal comes in under the value of the contracted price.

There is a magic ”window of opportunity” when a property first hits the market. This is when it attracts the most attention from buyers and real estate agents who represent motivated buyers. If your home is priced too high, both buyer and agent will discard it from the prospect list, and probably won’t revisit it. They will assume they are dealing with an unrealistic seller.

Factors that affect the price of a home

Location: You can’t get away from this one. If your house is located in a desirable area that is in demand, you will be able to get a higher price than you can for the same house in a less desirable area. Freeway or road noise, busy corners, train proximity will detract from a home’s desirability, while good schools and convenience to shopping & commuting will add to desirability.

Condition: A house that has been better maintained and shows better will always sell for more than one that has had deferred (neglected) maintenance and needs work. A home that has been properly prepared for sale  home will always show better! A house that has been updated with modern amenities will also command a higher price.

How to set the price

CMA (Comparable Market Analysis): A comparison of similar properties in the same general area that compares actual sold prices. A Real Estate Agent can generate a CMA for you at no charge. A current popular consumer CMA tool is Zillow.com. Do not put too much confidence in the accuracy of this tool as it does not take into effect condition or other amenities of a property.

Current Active & Pending Properties: In our current “Buyer’s Market,” it’s important to analyze the competition. Price your home below the competition (Active properties) to generate an offer. Note at what price point Pending properties received an offer. Don’t try and test the market by starting out with a higher price in hopes that you will get an offer.. You will end up lowering your price, and can often end up chasing the market downward, and getting a lower price than if you had priced it right in the first place.

10 Steps to preparing your home for sale

1. Say goodbye to your home now.  Get over it…it’s time to move on. Prepare it for the next person who is going to live in it. Picture the day you hand over the keys and move into your new home.
2. Take the “you” out of it.  Get the family photos off the wall, neutralize paint colors, pack up personal collections ahead of time. Buyers want to picture themselves living in your home. Taking the you out of it allows them to see the house and not be distracted by the stuff.
3. Lean and mean!  It’s time to sort through stuff, throw away, sell or donate excess items, and prepack those you want to take with you. Clear the kitchen counters, minimize books in bookcases, get things off the floor of the closets. Put your bathroom essentials out of site.
4. People open doors!  Make sure your closets and cabinets are neat & tidy. Less stuff makes them look more spacious!
5. Rent a storage unit  Store excess furniture and prepacked boxes to give the feeling of spaciousness.
6. Take down fixtures or window coverings that you plan to take with you in advance.Keep these items off the bargaining table if they are important to you!
7. Make repairs now.  Fix anything you know is broken or not working in advance. This will keep them off the Home Inspector’s report and will show the buyer that your home is in good repair. Consider painting over any bold walls in more neutral shades.
8. Clean, clean clean!  Make sure your home shines! Clean windows, baseboards, fans & fixtures, remove cobwebs, power wash decks & walks.
9. Give it the once-over.  With the help of your Realtor® or a friend, stand back and take another look. Does your home have curb appeal? Are the shrubs and lawn in good condition? Does it beckon people in? If not, consider adding some pots of bright flowers, a new welcome mat, a new coat of paint on the front door. Make it shine!
10. Call in a professional.  Have a professional stager add the touches that will cause buyers to want to stay a while. These folks know what they are doing, and know how to evoke the emotion in buyers that generate offers! It is worth the investment.

Buy, sell or hold? Auburn CA homes for sale and real estate trends.

Do you wonder if it’s a good time to buy an Auburn CA home? Real estate mogul Donald Trump said a few months ago in an interview on Good Morning America: “If you want to buy a house there’s probably never been a better time.” Trump also commented that the golden real estate rule of location, location, location still applies. He said to hold off selling if you can, but if you do need to sell, make sure your home is in the best condition possible. He may not have a hair style to emulate, but he seems to have the knack for real estate investing!

We are bombarded daily with negative headlines about the real estate market. I had a conversation with my mother-in-law on Thanksgiving Day about this very subject. She said, “yes, it’s a great time to buy, but there’s no money to lend.” That is a commonly held belief that is absolutely not true! Yes, qualifying is more stringent, but there is money to lend. FOR BUYERS, there has not been a better time to buy in a very, very long time. Some of you may say, “We haven’t hit bottom yet.” The only sure way to know we’ve hit bottom is to be looking back at it.

Isn’t it ironic that when prices were rising a few years ago, buyers were doing everything they could to buy…even when the advantage was to the seller! They were afraid of missing out. Now that the advantage is to the buyer, they’re afraid once again, but this time it’s the fear of possibly paying too much. We have had a 20%-plus decrease in median home price in the greater Auburn area in the past 2 years. This is the point when smart buyers decide it’s time to buy a home. They know they can’t predict the end of a slump, but they know there has been a considerable fall in prices, and it’s time enough to make a sensible purchase.