5 Expert Tips for Selling Your Home

A short sale is a negotiation between you and your lender to sell your home for less than what is owed. Since you may not be an expert at negotiating with a lender. Here are a few expert tips for short selling your home:
  1. Know your mortgage balance(s)

The first thing you need to do is find out how much you owe and how much your lender is willing to forfeit. Since the lender is taking a loss, it will set the selling price of the home. If you took two mortgages from different lenders, each lender has to approve the mortgage and set the price it’s willing to accept.

  1. Put together a short sale team

When you sell your home in a short sale, you need to assemble a team of professionals to help you walk through the process. First, hire a real estate agent who specializes in short sales, then a real estate attorney and tax advisor.

  1. Prepare your documents

A short sale needs your lender’s approval. Your lender needs to see why this is the way to go. Our short sale team are skilled in short sale negotiation. Having the right team along with the right documents will set up a smooth short sale process. Generally, the bank asks for the following documents:

– Seller’s hardship letter

– Authorization letter

– Last two bank statements

– Last two tax returns

– Last two pay stubs

– Purchase contract among others.

  1. Be Patient

Standing on your agent’s neck, seeking a fast reply doesn’t help the process. Short sales take months to complete. The bank takes their time before giving a reply. Which is conceivable, since they are accepting to lose some money, it takes time to find a buyer and close the deal. So, just be patient and work with your real estate agent

  1. Expect Demands and Requests

Get ready for the worst, but expect the best. There’s a whole lot of backwards and forwards between you, your team of experts and the lending company. While dealing with a team of experts really helps to make sure your short sale package is well-organized, the lender will make additional needs and demands. Reply to and submit the information at the earliest opportunity so as not to delay the process.

So, if you’re trying to ditch a home you can’t afford or fighting a foreclosure, a short sale offers a way out. However, it won’t be a smooth ride, hence you have to prepare for everything and have a good team working for you.

Selling My House in Virginia: 3 Things Homebuyers Will Not Overlook

Marketers of any kind of product know how important it is to understand the needs of their clients. The needs could be generic or specific depending on the type of product. Looking at a home as a product, you’ll understand that buyers of different age groups seek different things in a home.

For example, millenials do not really consider size of rooms when buying a home, but multi-functionality, while boomers prefer size. However, there are some common things that all buyers, no matter the age bracket want. Hence, to sell my house in Virginia, I’ll not overlook the following:

  1. Storage. When looking to avoid under-marketing, keep this at heart: showcasing your home in its best light is not simply about what you like about it. You may currently have outgrown the area, and began to see its imperfections more than its finer items: that is why you’re moving. However the goal of good marketing is to focus on things that allows your home to glow in the eye of your buyers and against your competition and one of this is a large storage space.
  2. Energy. Many buyers are drawn to the budget-friendliness of energy-efficient features of the less extreme variety. So, if your property is a fairly no-frills property but has a tankless hot water heater, dual-paned house windows and new insulation, talk about it! If you have got your energy charges down way below what’s normal locally, this is a feature you do not want to forget about; your agent can help you understand how to pass this information to buyers.
  3. Proximity. You may think the right buyers for your home will find it online just because of where it is located, so it is ridiculous to advertise the proximity of the property to amenities and attractions. Not the case. All buyers want a house that’s close to amenities and also easily accessible, but not everyone will have the time or know-how to do a zip-code search.

Your house may be a gem in this respect, but your buyer wouldn’t know this if you didn’t mention it. Also, your prospective buyer could look at all the houses in the city in their price range, but the fact that yours is off by an employer or a major university could push yours on top of the list.

Is Your Adjustable Rate Mortgage Giving You a Rough Ride?

Mortgage uncertainties are currently the order of the day for homeowners as speculations have arisen that mortgage rates are likely going up while others believe they’re coming even lower. For many defaulting homeowners, 2009 offered the saving grace with base rates which many homeowners found favorable. But this is changing with recent base rate increases. How does this concern adjustable rate mortgages?

Some years back, adjustable rate mortgages were even more common than fixed rate mortgages and this was easy to understand as they came with lower interest rates. Hence many people got the big houses, spurred on by the low interest rates offered by adjustable rate mortgages. It was a sweet deal, you could even take more cash out of your home.

But then there was the recession which stopped many homeowners dead in their tracks, as home values plummeted and many who couldn’t afford their mortgages tried to refinance but couldn’t. There was no way for them to refinance with the decreasing value of their real estate. During this time, many people lost their homes to foreclosure.


Originally, the ARM was designed to help people with short term needs. It was a loan designed for anyone who wanted a mortgage just for the short term. The low interest rates spurred on a refinance boom in the 90s that saw many homeowners applying for adjustable rate mortgages.

ARMs will not profit an average American in the long run. In fact the main reason for most mortgage companies pushing these loans is that they are a sure way to get the business of its customers once the fixed rate expires in a few years.

After the introductory period, the interest is set in line with the market index. When the index falls, your interest does too. And a lesser rate means less payment, which is very good news for you. However, as the market index rises, so does your interest rate. And this could increment your monthly payment, making the adjustable-rate loan higher risk than other alternatives.

Interest Rates & Inflation

Interest rates are determined by many factors. But one of the most important is inflation. Inflation determines how high or low your mortgage payments become. The value of the dollar determines how much you pay on your mortgage.

It is proximately infeasible to estimate inflation in advance since it responds to many market factors. However, in the long run, inflation tends to go up over time. Variable rate loans will see higher interest levels when inflation is higher. Unfortunately, interest levels almost never drops when inflation goes down.

A wise thing you can do to safeguard yourself when chosing an ARM is to set how high your interest rate can go. You are able to set the limit on your interest rate increases. You can set the limit at a certain amount over your initial rate or use the prime lending rate, which adjusts itself with inflation to set the limit on your interest rate.

People who apply for ARMs often do so in hopes that the following will occur:

  • They’ll sell the house before the reset of the loan.
  • Their income will increase before the reset of the loan.
  • They will be able to refinance before the reset of the loan.
  • Interest rates will remain stable or decline, giving them a similar rate to the rate of introduction when resetting the loan.

But the market is simply not predictable and things can turn out not as expected. For many homeowners who took these types of loans during the market crash, the ten year locks are expiring and there is no way out, except refinancing or doing a short sale.

If you’re stuck with an ARM loan with increasing obligations, your lender recognizes it’s a matter of the time before you default. This costs them money and income and keeping you at home can help them and also you at the same time.

When you have been a good paying customer it’s likely that they will modify your loan to a fixed rate mortgage loan and renegotiate your interest with you to be able to help you stay put in your home. If you are still struggling to refinance your loan and you’re struggling to pay up, then you might need to do a short sale.

Why You Should Take Action Now If You Want To Sell Your Home

Action makes results possible. It’s the one thing the differentiates those who get what they want and people that hope to get what they want. Every action starts with a small step, which results in bigger actions and then momentum is created. Amusing how some day slips into the next before you hardly notice it. So, you might be considering taking a short sale and even learning so much about it but as long as you’re not taking action, you’ll not get results. The short sale process is a long process and acting fast is essential. What should you expect in the short sale process?

A short sale requires negotiations between several people, so it’s best to have an expert on your side throughout the process. One negotiation take place between you and your listing agent and the buyer and their agent, just like in any other house sale. In addition, your lender must either accept or reject the buyer’s offer too.

When you have private home loan insurance (PMI) or another loan, like a home collateral loan, on your premises, the PMI company or second lender could also have to approve the short sale. Most lenders have investors who likewise have a say where loans get approved. The probability of a short sale offer being accepted depends partly on how much of a gap there is between your buyer’s offer and your mortgage balance.

To be able to have a short sale contract accepted by your lender, you’ll need to give a hardship letter describing why you cannot make your mortgage repayments. The letter must be supplemented with a financial worksheet with complete information regarding your present circumstances, taxation statements and pay stubs.

Your REALTOR will also have to provide documents, including a listing agreement for your home. Once you’ve an offer, your REALTOR should submit the offer along with an estimated HUD-1 Settlement Sheet that will show the possible proceeds from the sale.

Given the complexity of paperwork and negotiations with a number of different parties, it’s necessary to make use of a REALTOR with experience as a short sale listing agent. Some REALTORs focus on short sales and work with lawyers who can be consulted to represent your interests. Whilst not all practiced short sale agents earn the designation, several become a Certified Distressed Property Expert (CPDE), which means they have fulfilled educational coursework regarding short sales and foreclosures and they have had working experience as well. If you’re in the Virginia or DC region, you can call to work with an experienced short sales agent …

Now, let’s review some of the reasons it seems sensible to sell your home now.

  1. Mortgage rates are likely heading higher

The Federal Reserve has made it clear that interest fees will be moving higher. Fed Chief Janet Yellen as of late said that rates will move higher this year following seven years of national bank easing that helped the battered real estate market skip back after the subprime loaning crisis.

Subsequent to bottoming out at 3.77 percent in April 2015, rates for 30-year mortgages have crawled up to 4.26 percent, as indicated by rate monitor Bankrate (RATE).

This means that housing affordability is actually becoming an issue and many buyers would be looking to get more value for their borrowed buck. This poses opportunity for short sale sellers as buyers are beginning to think short sales could offer them this value.

  1. You should get out while the getting is great

Last year was great for sellers. Existing homes sold at the speediest pace since mid 2007. The National Association of Realtors is reporting that home sales climbed 3.2 percent in June 2015, pushing the regularly balanced yearly rate to 5.49 million homes changing keys. And this year could be better, NVAR already reports that a total of 1,108 homes sold in February 2016, an increase of 3.07 percent more than February 2015 home sales of 1,075.

  1. Locking in some currently low rates

One common gripe through the real estate boom is the fact that if someone sells a home, they still need to find a new home to live. This may be a perfect time to consider trading down, moving to a far more affordable housing market, or even renting. However, if selling now demands buying now, if you search around, you’ll still be able to find some currently low mortgage rates out there.

Sitting tight for rates to change may bring about better prices as a purchaser, yet is that a risk you want to take? You wouldn’t want to be priced out of your next home.

  1. Mortgage Debt Relief Act spread through 2016

The Mortgage Forgiveness and Debt Relief Act of 2007 provides a tax exemption for home owners for “income” resulting from debt forgiveness related to foreclosures, short sales and basic forgiveness of loans. Under the Mortgage Forgiveness Debt Relief Act of 2007, taxpayers can usually exclude income resulting from the discharge of debt on their major residence.

This latest extension will continue this tax coverage for homeowners through the 2016 tax year. This implies that if you do a short sale, you could be able to benefit from the latest extension of the act. However, as with most IRS rules, there are exceptions and constraints which can be a “gotcha” for an unsuspecting home owner. But if you do in fact qualify, this is great news for underwater homeowners!


What is Short Sale Fraud & Why Should You Care?

Short sale transactions are hugely susceptible to cons. A standard short sale is difficult, hard, and will drag on for lots of months. Yet, short sale sellers are often too monetarily strained to hire experts to advise them on the complicated monetary, legal, tax, credit, and other issues brought up by their situation. Sellers can also be likely anxious to finalize their short sale rapidly to prevent the opportunity of losing their homes in foreclosure. Along with the worry and stigma of a looming foreclosure, short sale sellers might be addressing other financial and psychological hardships, such as career loss, loss of a loved one, divorce, or ailment. Given these conditions, the sellers can certainly succumb to some scam artist’s lure of a certain quick fix.
Short sale fraud schemes come in different forms, but some are more common than others. Short sale buyers and sellers need to be on the lookout for these three scams as outlined by nolo.com.

Short Sale Scam # 1: Undisclosed Payments

Victims: sellers, buyers and lenders.

Perpetrators: Sellers, junior lien holders, real estate agents, short sale negotiators.

Red Flags: Payments made “out of escrow” or “Off settlement”

How it works: Lenders accept short selling to avoid foreclosure and minimize their losses. Before their approval, lenders often do one or more of the following:

  • Reduce commissions to realtors.
  • Require that sellers receive no financial benefit from the sale.
  • Reduce or even disapprove payments to other parties involved in the short sale (eg., Short sale negotiators, lawyers, etc.).

Primary lenders may cap payments to junior lenders. If there’s multiple loan on the property, the short sale won’t go through without the discharge of the junior liens. With a purpose to get this done, the primary lender will permit some payment to the junior lenders however will set a cap on these payments.

Obviously, those obtaining reduced or capped payments are often unhappy with this situation. Taking advantage of motivated buyers or sellers, they request payments “out of escrow” or “off of the settlement statement.” As a seller or buyer involved with a short sale, you might be enticed to make an undisclosed repayment to just get the offer done. In so doing, however, you’ll most likely be considered a party to loan scam.

All payments made within a short sale deal should be disclosed to lenders and other functions approving the short sale. According to Freddie Mac, short sale scam occurs when someone intentionally misrepresents an undeniable fact or omits a fact to be able to stimulate a lender, buyer, or insurance company to consent to a short sale that it could not have approved otherwise. To be on the safe side, always disclose.

Short Sale scam #2: “Flopping”

Victims: Sellers, lenders.

Perpetrators: real estate agents, buyers.

Red Flags: Double escrows; customer is an LLC or a fictitious entity or buying under the power of a legal professional; purchase contract offers the buyer the choice to resell property.

How it Works: “Flopping” occurs when a short sale is approved based on a misrepresentation of the value of the property. In a usual flopping fraud, the fraudster is the buyer purchasing the property from the short sale vendor. In some cases of flopping, the seller’s real estate agent is the buyer. The fraudster offers a low offer to buy the property to the lender along with an artificially low valuation of the property, with a view to convince the lender that the property is worth less than it really is. Meanwhile, any bigger offers from bona fide purchasers are withheld from the lender, since the lender would definitely reject the low offer if it knew that greater offers had been on the table. Once the lender approves the short sale at the artificially low fee, the fraudster contacts the veritable buyer or markets the property at its actual market price. Without the short sale lender’s knowledge, a second escrow between the fraudster (now the vendor) and a bona fide buyer is then opened to close concurrently with the primary purchase, or soon afterwards. The perpetrator of the fraud buys low, sells high, and keeps the change between the two sale prices.

Sellers could get hurt by flopping, simply because lenders may possibly hold sellers answerable for the deficiency, or the value of the difference between what the seller owed and the selling price. If a lender forgives a vendor the deficiency, the seller may well owe taxes on the amount of financial debt that is forgiven.

Short Sale Scam #3: Predatory Short Sale Negotiators

Victims: Sellers, potential buyers.

Perpetrators: Small sale negotiators, real estate agents.

Red Flags: Upfront fees; fees needed to be compensated out of escrow; negotiator will not be licensed.

How It Works: Sellers thinking about short sales are particularly vulnerable to con artists hoping to benefit from their demanding situations. These con artists, calling themselves short sale negotiators (or short sale processors, short sale coordinators, debt resolution professionals, loss mitigation experts, or foreclosure rescue negotiators) would guarantee results for a flat flee or possibly a share from the sale price. Often, the short sale negotiator normally takes the money and does very little in return.

Some states – including California, Washington and Oregon – require short sale negotiators authorized by the appropriate government agency (probably the body responsible for licensing and regulating real estate agents). If you are considering hiring a short sale negotiator, you should contact the agency within your state to find out if the short sale negotiator needs to be licensed and, if so, whether the short sale negotiator you are planning on hiring has a license. In California, it is illegal to collect short sale negotiator fees before providing services, unless they comply with certain strict conditions. You should also check whether this is the case in your state.

Prior to hiring a short sale negotiator, do your research. Study paperwork very carefully before signing. Ask questions. Request and get in touch with references. Seek the recommendation of an attorney or other neutral third party. Always remember, if it seems too good to be true, it probably is.



Are You Getting Lots of Showings But No Offers? Read This

So, you staged your house, took care of it but no offer is coming through. Probably, you’ve done some showings but still not seeing results. There is really no need to fret. Having showings is a good sign.  Firstly, it’s important to examine the actual issues that may be causing this, rather than taking a directionless approach to why your home might not have sold. Below are a few reasons why you aren’t getting offers:

  1. ) House is overpriced

Overpricing is the most common reason homes don’t sell. Any time you ask an unrealistic price, it sets in motion a process that works against you. Here’s why:

Many real estate agents, and most qualified buyers, will see your new listing within 30 days. When it is overpriced by as low as 5%, it will be properly noted and interest in your property will wane, especially when you show no intention of coming off your selling price. You likely already priced out potential buyers who might have qualified for financing at a more reasonable price. Even if you manage to find a buyer at your overpriced asking price, the property may not appraise at that value and so, the financing falls apart.

  1. ) House doesn’t ‘show’ well

Your property is competing against shiny new houses in those beautiful subdivisions out in the suburbs with the attractive prices, incentives and community amenities.

Face it: Even the best used house needs a little makeover if it hopes to appeal to a qualified buyer.

The good news is almost all of the work will be cosmetic and relatively inexpensive: a new coat of color, a few attractive window boxes, a thorough cleaning of floors and carpets and rugs. Voila and the place may look good enough to reconsider.

  1. House is in bad location

Nothing has a higher effect on your home’s value than its location. Your simple abode might be worth a king’s ransom were it situated in Palm Beach, Aspen or San Francisco. It could even jump thousands in value just two streets away in the next (and significantly superior) school district. The point is, the location rules in real estate.

4.Inadequate listing agent

Their terrible information can set you back lots in time, money and also the sheer headache of keeping the house show-ready 24/7.

The agent will help you to overprice your property (“Here’s what I will get for you when you list with me!”), not market it properly, fall short to screen for qualified buyers, be unresponsive to interest from other brokers (whenever they market their own listing, they don’t have to split the fee) and keep you plainly in the dark through the process.

What’s more, if your agent is abrasive, arrogant or usually hard to work with, other brokers may well not want the trouble of showing his/her listings to possible consumers.

Just what exactly can you do to boost your odds:

  1. Get yourself a new listing agent

Sometimes what you have to do is fire your listing agent. Could you try this? Certainly, you are able to. You don’t need your own home to sit on the market for a year, do you?

If you were to hire the neighbor’s kids to mow your lawn every week, you realize you always have option of terminating the arrangement if you are unsatisfied. If they don’t show up, run over your flowers or slice up your sprinkler heads, you can just simply tell them to not come back. There might be hard feelings, but no financial consequences.

With a property agent, you deal with a more challenging situation. When you retain the services of an agent, you sign an agreement that binds you to the Real estate agent. You and the real-estate agent agree to particular terms, conditions which frequently involve a promise that you’re going to use the Real estate agent solely to promote your property.

If you are very fortunate you could have signed a deal that enables you to extricate on your own from the deal if you aren’t happy. Most contracts having said that, do not work this way and to be able to fire your agent, they would have to let you out of the contract .

When you choose that you do not like your agent any longer, you cannot run him or her off like the youngsters. You need to try to part ways amicably, potentially honor your deal and do your very best to prevent abnormal money charges. Immediately after which you could get a person who is a lot more skilled and would have a strategic marketing plan.

2 . Make it presentable

Location is still one of the major reasons why a property may well not be selling. The overall economy has played a role in this aspect of real estate as well. Perhaps in the past your area was quite desirable and a real hotspot but today the economy fall has hit it hard and it may well not be as appealing. If this is the case it becomes your responsibility to make your home look as great as possible so a buyer can disregard the location and focus in on the home of their dreams. This may mean fresh landscaping, new paint, new house windows, a clean backyard, a home stager to help you present the inside as best as possible and so on. All of these tiny things can help enhance the possibility of a sale, if the location is not at the top of your buyer’s list.

  1. Pricing

One of the greatest real estate selling mistakes is to think your house is still justified regardless of the price, if not more, that you paid for it. The economy has definitely changed and this includes the housing market. Before considering setting a price on your home, you ought to consult a real estate agent in your area and learn about the market you are planning to sell in.

8 Tips to Minimize Damage to Your Credit Score During a Short Sale

The hard truth is that a short sale can damage your credit.

Both a foreclosure and a short sale can lower your credit score and will stay on your credit track record for seven years. With time, though, you can transform your credit score through credit rebuilding techniques such as paying all of your bills on time, reducing your debt, and, if necessary acquiring a secured credit card and making regular payments.

The impact of a short sale on your credit will depend on several factors, like the way your lender accounts the brief sales to the credit reporting agencies. Most lenders use the word “settled” for a short sale, which indicates that significantly less than the entire debt was repaid. If you can discuss with your lender to make use of the term “paid”, your credit will not be much damaged, but lenders rarely agree to that.

Your FICO rating could drop by anywhere in the range of 85 to 200 points depending upon whether you have been paying your home loan on time and your past financial assessment. In the event that, for instance, you had great credit of 700 or above, your score may drop significantly more than somebody who as of now had a low FICO rating of 620 or so because a short sale indicates potential future defaults on other credit, particularly if the borrower with low score had been making their mortgage payments on time. If you had months of non-payment, incomplete payments or late installments on your home loan, your FICO assessment will likewise be lower on account of the mix of the short sale and a bad mortgage payment history.

Despite the impact on your credit, a short sale may be the best option if you cannot stay at your home because you can move from your current situation and begin rebuilding your credit for the future.

Therefore, here are some tips to help the short sale seller minimize damage to their credit score:

  1. Work to Raise Credit Score Before the Short Sale

First, sellers can work to raise credit scores before the short sale process takes place to help reduce the implicative insinuations of this transaction. Spend time learning how to increase your credit score and work to utilize this information sapiently. Sellers can project the potential damage to their credit score and plan to raise their score by that amount before the sale. For example, if the transaction may reduce your credit score by 200 points, work to raise the score by 200 points before starting the short sale.

  1. Work to Continue Making Payments

Another tip that may help sellers lessen the credit ramifications of a short sale is working to keep making installments on the home loan even while working towards a short sale. Mortgage holders don’t need to quit making installments to get a loan specialist to consent to a short sale. Evading missed installments will help sellers maintain a strategic distance from the additional hit on their FICO rating, which can have a major effect in the wake of managing the drop in credit rating that happens after the short sale occurs. 

  1. Speak to Lenders Concerning How the Short sale Will Be Reported

Homeowners may also want to talk to lenders regarding how the short sale will be reported on their credit history. Negotiate to be sure lenders report the sale in the least damaging words possible. While the short selling will still go on the credit file, less damaging words can make a huge distinction in how future lenders view consumers when they apply for new credit.

  1. Attack old debt through Debt Validation

    Before paying off old credit card debt that was sold to a collection agency, first try debt validation. When a debt is sold, the documents proving that you own the debt do not always change hands. So make the collection agency prove that you owe the debt. If they cannot do that, you are not legally responsible for it and it should be removed from your credit reports.

  2. Arrange Debt Settlements

You might be amazed at exactly how little debt collectors will accept to settle an obligation, particularly on the off chance that they don’t sense that you’re in any race to do it fast. All things considered, it can be a scary process, and one you could pay another person to do. Luckily, there is nothing a debt settlement company can do that you can’t do for yourself.

  1. Build up Emergency Fund

In case you’re in the propensity for utilizing credit to pay for sudden costs, from auto repairs to medical expenses, then you have to fabricate a greater rainy day account. While six months of everyday costs might be ideal, in the event that you don’t have anything in your rainy day account by any stretch of the imagination, shoot for $500 to $1,000 to begin. If you put aside only $25 to $50, you’ll be there before you know it.

  1. Make Mortgage Payments until Short Sale is Final

Banks are not required to endorse a short sale on your home loan. A good motivation for them to do as such, nonetheless, is to see that you are staying current on your home loan installments. Also, you’ll stay away from the negative effect of late mortgage installments on your credit reports.

  1. Keep Using Credit Card Accounts

Letting an open credit card account sit nonproductive is missing out on the chance to significantly improve your credit score. Use the account at least once a month, but only on things you would have to pay for anyway, like gas or a utility bill. Then simply pay off the balance each month. That is how you show accountable credit use and, in turn, build your credit score.