Real Estate Blog

“You gotta know when to hold ‘em, know when to fold ‘em, know when to walk away, and know when to run” -Kenny Rogers

I was first introduced to this song by my parents at the age of seven and 27 years later, this refrain popped back into my head. I was thinking about successful real estate stories … the ones you don’t often hear about because the foreclosure and short sale stories are all the rage. Before the downturn of real estate, there were investors who flipped houses and made a killing. During the downturn, there were home buyers who traded spaces for something bigger and better for less than in years past.

Want proof? I don’t even have to get out my excavating gear and dig up fossils from the past. I am going to serve up two real-life examples and prove that real estate survivors are not extinct. I’ll do it effortlessly.

I won’t even have to dance around the issue and break a sweat. Watch me now.

If you’ve been a longtime reader of my blog, you will know that I sold my house on a short sale due to a divorce. My ex-husband and I had been through a bankruptcy due to a layoff he went through a few years after we purchased our house. Though we tried to recover, we were still feeling the after-effects of a loss in finances for a period of more than seven months.

The impending divorce left neither one of us in a position where we could carry our mortgage payments on one income and we were behind, so we sold on a short sale.

The short sale transaction closed in spring 2005 and by winter 2006, my ex-husband was able to contract on a new construction house. He had gained new employment, thereby increasing his income, and had paid down some debt in order to raise his credit score.

Even with his bankruptcy and short sale on file, he was approved for a mortgage. The builder, anxious to get the rest of his houses sold after a recent downturn in the marketplace, gave my ex-husband a deal on the sales price and some upgrades as incentive.

My ex-husband closed on his new house in spring 2007.

The next real estate survivor story that is at the top of my mind was relayed to me by Connect2Agent member Janell Hunter, who sells real estate in St. Charles County Missouri. A year ago, she was showing a house to a younger couple who became entranced with a house that was $350,000.

Having crunched some numbers, Hunter felt the home price was too high of a financial commitment for this young couple, and told them so. In the end, they really wanted the house and still ended up writing an offer to purchase on it.

The home inspection report came in and there were a few repairs that needed to be made. The seller refused to do anything and the deal fell apart. The real estate buyers, through Hunter’s help, ended up finding a great house and purchasing for $200,000. The house ended up being a perfect fit for this couple and they were enthralled with their end result. It was right next door to an elementary school where Mrs. Home Buyer was going to be working.

Hunter spoke with this young home buying couple recently and asked them if they were happy with their decision. Considering the shift in the market, the couple was extremely happy they ended up on the positive side of their housing equation.

Easy said and easy done. Real estate survivors are not extinct.

Posted by Rebecca D. Levinson

Excerpted from:
Real estate survivors are not extinct

The choices can be overwhelming in a real estate market saturated with inventory. REO properties and short sales - added to new construction and regular resale properties - make an interesting potluck for real estate buyers. If you are diligent, there are many great real estate buys across the United States today.

Most importantly, if you are realistic, you can hit a bullseye in real estate.

I spoke with Connect2Agent member and real estate agent in Scottsdale Arizona, Jan Green, about the multiple housing options buyers have to choose from. Similar to a multiple choice test, there is usually one right answer. Unlike that popular testing method, the right answer changes for each real estate buyer.

While a buyer’s final answer results in a big financial commitment, the reasons for the commitment are personal.

In the Phoenix area, variety is the spice of the real estate market. Buyers are able to choose from a mix of resale, REO (real estate owned) and short sale properties. The majority of the houses on the market right now are ones that are nearing or already in foreclosure.

Four hundred foreclosure properties typically come on the market in a day in Phoenix. Green says it is her job to pick the best ones for her clients - not an easy task. She shared with me that some foreclosures have pools that have not been maintained. These become cesspools for mosquitoes and their larvae.

Other foreclosure properties have been left in varying stages of disrepair, from unsightly yards and dirty interiors to more pressing problems, like water damage due to a burst pipe that’s been leaking and left neglected. Vandalism can also be a common occurrence for REO properties. Green has seen houses where built-in speakers have been ripped out of the walls and the interiors have been gutted of valuables and spray painted.

Green tours many REOs in order to find the ones left unscathed by neglect and abuse. The ones that remain are true diamonds in the rough.

Next are the short sales. These houses are still with the original owner, but are nearing foreclosure. Because the sellers of these houses have fallen behind in their payments and owe more than what they can list the house for, the banks have to agree to the final sales price negotiated between the owner and a real estate buyer.

The short sale process is not for the faint of heart. It can be long and problematic. Green does not recommend short sales to many real estate buyers for this reason. They take longer to close and the deal can go from desk to desk in the loss mitigation department. It is difficult to keep the communication efficient and consistent. The time from contract to closing can be months and in between that time, the deal can fall apart.

Finally, you have the resale and new construction houses. They may not be the cheapest houses for sale in the Phoenix real estate market, but some are aggressively priced to keep up with the abundance of REO properties and short sales. Sellers and builders alike might offer incentives, like free upgrades and closing cost assistance, to tempt home buyers.

The resale and new construction properties are the best-maintained properties in the market today.

Each type of housing has its own flavor. At the end of the day, how do you know where to find the bullseye? I asked Green - who has recently assisted four first-time home buyers in a row - this question. One of the first-time home buyers purchased new construction and the other three purchased REO properties. She broke it down to three questions home buyers need to ask themselves:

• What am I looking for?
• What location do I want to be in?
• What am I willing to sacrifice?

Answer these questions and share your hopes and dreams with your real estate agent. This is where the impartial party can step in and give you the guidance you need. Then step back, adjust your stance, aim and throw … you can hit the bullseye in real estate.

Posted by Rebecca D. Levinson

Here is the original:
How to hit the bullseye in real estate

Is a short sale a good option for a home seller looking to escape foreclosure? The answer is an undeniable yes. Is it a good move for a real estate buyer? The answer to this question depends on who you are talking to and what real estate market you are in.

Some real estate agents work the short sale market as their niche. They learn the ins and out of working with the banks and getting approval from them. The process is similar with every transaction, but each bank has different people behind desks making decisions. Even more complicated is that each bank has different departments–legal and loss mitigation–working on the short sale process and seemingly not working in conjunction with each other.

As a homeowner, you need a real estate agent who specializes in short sales to make sure you are as timely and effective as possible with the banks. As a real estate buyer, you need an agent who specializes in short sales to guide you to the better deals and to be your support staff through the excruciatingly long process of acceptance.

Tanya Endicott, a Connect2Agent member and real estate agent in North Dallas, is a true-blue short sales guru. She’s been selling real estate in North Dallas for the past eight years and has specialized in REOs and short sales. Short sales are a good situation for homeowners who are upside down on their house, says Endicott.

In this situation, the banks are more inclined to work with a homeowner. Homeowners need to work with their real estate agent and get all the proper documentation to the bank. The process is the same for all banks, Endicott informed me.

It’s a matter of being steadfast in getting the right paperwork to the bank and having a real estate agent make sure the communication happens to both the loss mitigation and the legal departments at the bank. Although these two departments are in the same bank, they often don’t talk to each other.

Even the most extreme situations can work out successfully. Endicott shared a story about a client who had three strikes against her and still was able to come out OK: Her client’s daughter had expensive back surgery. Then the client herself had costly back surgery. The final strike was the tenants in her rental properties stopped paying rent. Endicott was able to renegotiate the mortgage terms on one of the houses. It’s currently listed.

Another of the houses closed in escrow on July 28.

For buyers, short sale transactions can be a roller coaster ride. They need to have patience because the process is so long. Even when the homeowner and the buyer settle on a sales price, the bank still has to approve it.

Endicott takes pride in being able to close 8 out of 10 short sale transactions. She informed me this is a high closing ratio for the marketplace. Many real estate agents, she estimates, may have 1 in 10 short sale transactions go through.

Can you be a homeowner again after you have closed your house on a short sale? The dream of homeownership is not lost for these homeowners. Endicott informed me it is “Free for people to do a short sale and in most instances, it doesn’t impact your credit.” If you go past 30 days paying on your mortgage, it will still go on your credit, but you can work on credit repair after your short sale transaction.

How do you find a real estate agent who specializes in short sales properties? This seems to be the million-dollar question. Endicott recommended a seller’s best avenue might be to Google “short sales” and take some time to read up on what kind of advice a real estate agent might give you.

When it’s time for you to choose a real estate agent to work with, make sure you ask questions like:

• How long have you been working on short sales?
• How many short sales have you closed in the last six months?
• What are the pros and cons of buying/selling a house on a short sale?

The success of a short sale transaction can begin and end with your real estate agent’s expertise.

Posted by Rebecca D. Levinson

More:

Is a short sale a good option for a home seller looking to escape foreclosure? The answer is an undeniable yes. Is it a good move for a real estate buyer? The answer to this question depends on who you are talking to and what real estate market you are in.

Some real estate agents work the short sale market as their niche. They learn the ins and out of working with the banks and getting approval from them. The process is similar with every transaction, but each bank has different people behind desks making decisions. Even more complicated is that each bank has different departments–legal and loss mitigation–working on the short sale process and seemingly not working in conjuction with each other.

As a homeowner,