Susan's Blog

You still have time to take advantage of the 1^st Time Homebuyers Tax Credit, but you’ve got to act quickly and strategically. You must close escrow by November 30, 2009, which means you really should enter into contract by October 15. (The government could extend this deadline, but you can’t count on it.) There’s a lot of bidding competition right now, and issues can come up during escrow, so you’ll want to give yourself as much time as possible.  Even if the Tax Credit isn’t your main motivation, you can still cut down on lengthy searches and write fewer offers by following these strategic steps. Many of these you’ll do upfront, even before you start your actual search. It’s a lot like a great paint job—the best results come from the most diligent prep work.

1. YOUR LOAN—BE  PREPARED. Clearly identify your loan amount, loan program, and source of any gift funds upfront. Switching programs midstream can cost you time and might result in the loss of an offer. You’ll need a preapproval from a direct lender, and one who is available to write new preapprovals as required (on weekends, too). Once you’ve found the lender you want to work with, stick with them. Loyalty is mutually beneficial. Be prepared to write an earnest money check for 1% of the purchase price –or more. You may also be required to put this money into escrow upon seller acceptance—even before the short sale is approved by the bank.  Even if you’re paying cash, plan on showing proof of funds.

2. YOUR LOAN—STAY PREPARED. Keep all your paperwork close at hand and updated, including your FICO scores and proof of funds to close (down payment and closing costs).  Scan it and have it ready, so if the seller requires you to prequalify with their lender too, you will have everything ready. They may also ask you for DU approval (desktop underwriting).Don't buy anything that will affect your credit score, especially big ticket items like furniture or a car. Your credit score may be rechecked up until the day of closing and a new purchase may affect your ability to get a loan. 

3. YOUR SEARCH—BE $$$ REALISTIC. Have your REALTOR® pull the solds for the past 3 months in your desired neighborhood and pay particular attention to the past 30 days. If prices are on the rise, make sure this is still a realistic area for you. Keep in mind that most people are looking for the same thing—the nicest house in the best neighborhood for the lowest price. You’ve got competition!

4. YOUR SEARCH—TARGET  IT.  Zero in on just a few favorite neighborhoods. This is not the market to be looking all over the entire county. If prices are rising in your first choice community, switch quickly. Have a backup area in mind from the beginning.

5. YOUR SEARCH—REALLY KNOW WHAT YOU WANT.  Sit down with all decision makers involved and have a heart-to-heart about which amenities and features you really need and want, and which you can live without. Don’t let your emotions get in the way. Be logical when you make your wish list; because as soon as you start looking at homes, your emotions will kick into high gear.

6. YOUR REALTOR®-- PUT THEM TO WORK. Full time professional REALTORS® love what they do, and will be your greatest asset in this turbulent market. Their connections, perseverance, hard work and loyalty will get you the results you want. Be prepared to sign a Buyer Broker Agreement, which spells out the specific duties of both parties. if you’re not willing to make a commitment, the best agents won’t take time away from their loyal clients to help you.

7. THINK OUTSIDE THE BOX. Do you really have to have 2 full baths? There’s less competition for homes with 1 bath, and you could add another one later, or get a rehab loan upfront.  Or how about a 2-on-1 instead of a single family home? Extra space or rental income can be a great asset.            

8. LOOK AT THE CONTINGENT/PENDING LISTINGS. Another reason for having a good REALTOR® at your side.  A very high percentage of escrows do not close with the original buyer, so it pays to track these homes and put in a competitive backup offer . In San Diego we now have a “contingent” status, where a short sale seller has accepted the offer but the bank has not yet approved it. Many of these first-position buyers are putting in offers on several homes at once, so look for homes which have been in contingent/pending for at least 1 month or more. Chances are that many short sale listings will need a new buyer, and when they do, they will need one quickly.

9. LOOK FOR HOMES NOT ON THE MARKET YET. Your REALTOR® can help you here, too, by checking the recent NOD (notice of default) filings in your targeted neighborhoods. Another possibility—homes which are going to auction within the next few weeks. Many of these would have made great short sales but the seller stayed in denial too long, or perhaps didn’t’ get the loan mod they were seeking. If your agent can get a short sale listing from the seller, and you write a strong offer and present it to the bank, you have a shot at getting the house, and helping the seller salvage their credit.

10. PUT IN OFFERS ON BOTH SHORT SALES AND REOs (and regular sales). You never know which will pop first and it’s best to cover all your bases. The advantage with regular and REO sales is simple—you’re dealing with the owner (private seller or  bank). The decision can be made relatively quickly, so you can get into escrow quickly. However, everyone else knows this too so the competition is fierce, with dozens of offers  on almost every decent home.  Short sales can take a long time and there’s a good chance the approval won’t come before your deadline. The good news is you still can get some tax benefits from selected home purchase related fees. If it’s the house you really want, in the long run you’ll be doing well.

If the First Time Homebuyers Tax Credit is your main goal, make sure you know all the basics, plus the IRS rules. http://www.irs.gov/newsroom/article/0,,id=204671,00.html. For more specifics on the difference between REOs and short sales, see my blog at http://activerain.com/blogs/barbfischer

Happy house-hunting to you!

 

10 Strategic Quick Escrow Tips ©2009 Barb Fischer San Diego

 

 

My credit score's what!!! How many times have you heard that. In general people don't think much about their credit score until they need it. I thought it might be helpful to explain just what goes into your credit score.

Let's start with FICO. This is an acronym for Fair Isaac & co. whom developed the credit scoring system most widely used by lenders.The FICO model has a range from 340, very poor, to 850 very good. The system weighs several factors to determine credit worthiness.

• record of timely payments - 35%
• amount and type of outstanding debt - 30%
• length of credit history - 15%
• number and types of recently opened accounts - 10%
• revolving credit - 10%

There are three major credit bureaus and typically the same individual will receive a different score for each one. When this happens the lender will use the middle score. In the case where the lender only pulls 2 scores they will use the lower score. The credit scores are rated in the following way.

• 750 - 850  A+
• 740 - 749  A
• 680 - 739  B
• 620 - 679  B-
• 340 - 619  F

I recommend that you take a look at your credit report at least once a year and examine it for discrepancies. There are several companies that will offer you 1 free credit report a year.  If you find discrepancies on your report challenge them immediately. This can be done by writing a letter directly to the reporting credit agency and supplying them with proof of the pay off, duplication, name error, closed account etc. Send this information by certified mail. If the creditor fails to either correct the error or respond within 30 days they must remove the item from the credit report. If you have an unresolved dispute on an item you have the right to enter your side of the dispute onto your credit report in 100 words or less.

I hope you found this informative. I find that as a realtor in todays market I need to be as equally well versed in the fiancing and tax implications of real estate as the real estate itself. Please feel free to contact me if there's anything That I can help you with.

Orange, Ca Short Sale vs. Foreclosure: 5 Reasons to Choose a Short Sale over a Foreclosure.

                                                          

Falling behind on mortgage payments is an unpleasant feeling but doing nothing about it and ending up losing your home to Foreclosure is not the best solution. Here are the top reasons why a short sale can help you and your family.

                                                                                                            

1. Your future home purchasing power: Just because things are bad now doesn't mean they will be this way forever. If a short sale is successfully negotiated, a homeowner can qualify for a Fannie Mae home loan in as little as 2 years.

 On the other hand, a homeowner with a foreclosure on their record will be ineligible for a Fannie Mae home loan for 5 years on a primary residence and 7 years for the purchase of a second home or investment property. For non Fannie Mae loans, a home buyer with a previous foreclosure on their record must disclose this fact in a Mortgage applications for 7 years which will affect their ability to qualify and also affect interest rates.

 

2. Credit Score: After a short sale a credit score will be damaged by as little as 50 points. In most cases only mortgage lates will be reported and the mortgage account will be labeled as a settled, paid, or negotiated. Credit will start to improve in as little as 12-18 months.

                                                                                                        

In a foreclosure, a persons score is usually lowered 200-300 points. This will typically affect the score for at least 3 years.

 

Credit History: A short sale does not appear on a person's credit. Instead the mortgage account willbe reported as paid in full, settled, or paid as negotiated. A foreclosure will remain on a credit report for 10 years or more.

                                                                                                               

3.Employment: An employer has the right to check your credit for those employees who hold sensitive positions. Future employers also check credit when deciding on candidates. Since a short sale is not reported it does not create a challenge for employment. It also does not affect security clearances.

                                                                 

 

A foreclosure can effect employment in particular sensitive positions and security clearances. On top of this, when applying for a new job, a foreclosure is one of the most detrimental credit items an applicant can have.

 

4. Time in Your Home: During short sale negotiations a homeowner will typically remain in their home. Since banks are overwhelmed with files and do not have enough personal to handle all of the short sales that come in, a typical short sale negotiation will take between 60-180 days. While the short sale is being looked at, the lender will typically postpone foreclosure proceedings or suspend them all together. This can buy your family valuable time in your home.

                                                                                               

In California, a typical foreclosure takes about 6 months from time of first missed payment until Foreclosure Trustee sale. Knowing that your home will soon belong to the bank can be stressful and can feel like things are out of your control.

                                                                                 

5. why choose a Short Sale Vs. A Foreclosure? Here is a great reason... A short sale is FREE! Typically all commissions and sales costs are paid by your lender. Sadly, 70% of homeowners in Orange, Ca and across the United States go through a foreclosure without this knowledge and subsequently lose their home without seeking help.

                                                                    

***BONUS **** A foreclosure can cause embarrassment for you and your family. After a home goes to Foreclosure, the bank will likely post notices on your home. You will also get a knock on your door from a bank representative asking you to leave once the foreclosure goes through. This can be especially hard on children and teenagers. Once you are out of the home, the lender's Realtor will likely market the home as a bank owned property which let's the neighbors know of your troubles. Believe it or not, with all the emotional turmoil that happens with a foreclosure, this is the one that frightens many homeowners the most.

               

In a Short Sale, the home will be marketed like any other sale. As far as neighbors, family, children, or friends are concerned, it is nothing out of the ordinary. You also have more control as you are the seller and not the bank. It is also thought to be a more ethical thing to do as you are looking for a solution instead of ignoring a problem. Everyone wins: The bank saves money as there are no expensive foreclosure fees, you save your credit and dignity, and the neighborhood does not suffer value loss due to another foreclosure on the street.

                                                                                                     

Don't spend more time than you need to carrying the burden of your current financial stress the winner between short sale vs. foreclosure is obvious. If putting your life back on track is your goal, then please give me a call. You have many options. Find out if a Short Sale is right for you.

Theresa Struckmeyer

Realtor/CDPE Short Sale Specialist

714-244-8761

theresa@orangecountyshortsalehelp.com

www.orangecountyshortsalehelp.com

The above brokerage  is not engaged in the practice of law nor gives legal advice.
Realtor License # 01765700 HABLO ESPANOL

I had a great open house scheduled for yesterday; an AWESOME home, priced to sell and I had lots of interest in this one....I set up, put my purse in a cabinet, out of site but within my site...just like I always do. I am always cautious about this and am ready for my open house!

Apparently, the only intrest was NOT in the house.  Please learn from what happened to me and be on the look out for this group!

Early in the day, two ladies come in. I start speaking to them and one speaks no English. The other is looking for a home and is here from Santa Barbara.  She says she likes the house and is going to call her husband.  I immediately get a strange feeling and stay on my guard.  Your gut is usually right.

She hangs up and there are a few others in and out and then a man shows up that gave me that same weird feeling. I send a text to my husband to see if he is near so he can stop by. I make sure I am close to the door but with my eye on my belongings (luckily it is a bank owned home so nothing else really to worry about).

He doesn't answer so I keep my eagle eyes on these three, but stay near a door and keep my eyes on my stuff, noting my purse in the cupboard.

The ladies call me out to ask me a question and I am trying to figure out where that guy is.  I go just far enough to answer her questions but I make sure to stay where I can see what is going on inside.....or so I thought. 

They all leave separately but ALL offer to sign my registry. No one offers this!!! So many red flags, I am so mad at myself for not immediately going to that cabinet and holding onto my purse! But by this time, I have a full open house and am busy so I don't even think about it.

Of course you know what I am getting at here. I get home, have a message from CHASE regarding unusual activity on my credit card. Sure enough, WALLET IS GONE! 

If you are a North Orange County Agent, be on the look out for the following:

1. Hispanic woman

• late 20's 
• about eight months pregnant
• long black hair
• about 5'6"
• bad teeth
• a big scrolling tattoo of a name on her neck. It was like Angelica or something along those lines.

2. Her "sidekick" also Hispanic

• late 20's and does not speak English
• shorter and pretty
• long wavy hair

3. Hispanic Man (will come in seemingly unrelated)

• early to mid 30's
• nicely dressed
• about 5'9"

Go with your gut!  They know how to get you distracted. I was even on to them and I STILL GOT IT! If you feel like something is wrong, it probably is. I am now locking everything in my car trunk that I do not absolutely need. I am not sure how much better that is.  With all the "smash and grabs" going on the car isn't safe either!

It's obviously not just the money, the cards, the inconvenience, the violated feeling but the huge amount of time it is going to take me to get this sorted out!  If this helps even one agent then I feel a little better. This economy is bringing out desperate people!

Please, spread the word and be on the look out!

 7/20/09 UPDATE - Two other Realtors I spoke to have seen this group (pregnant woman with huge neck tatoo is easy to remember).  BE ON THE LOOK OUT!

ALSO, I just found out about another agent that had this happen the same weekend in the same area.  The local board has been notified and they are sending out the alert!