EXPECT AN OFFER WITH CONTINGENCIES

The buyer has made an offer to purchase your home ... but with contingencies. View how best to negotiate the offer in your best interest.

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The current housing market continues to offer a good news/bad news scenario. First the good news: prices continue to drop. Now for the bad news: sellers are dropping their prices. Well, the bad news for the seller is good news for the buyer who may discover that the home that they are interested in has already seen at least one price reduction, strengthening their position as a buyer.

Falling Prices After The Initial Listing

According to Trulia.com, which tracks the US real estate market, nearly one in four homes currently on the market has already gone through one round of price reductions. This is taking place even as sellers are pricing their homes at rates much lower than a year ago. Finding that their homes are not selling at the original asking price, 23.6% of homeowners have lowered their home prices at least once. Trulia's data excludes foreclosed homes.

“Summer time is the peak season for buying and selling, and with some of the lowest prices in the last decade, we expect to it be a busy season,” said Pete Flint, Trulia co-founder and CEO. “Everyone wants to think they are getting the best deal available and price reductions are helping to spark a renewed interest in the U.S. real estate market.”

A number of major markets are seeing home prices reduced by their owners at a much greater rate than the national average. For example, Jacksonville, FL homeowners are leading the way with some 36% of the homes having gone through one or more price drop. Tucson, Boston, Los Angeles, Columbus, Dallas and Honolulu are among the markets where homeowners are more apt to drop their prices than average.

Taking Tens Of Thousands Off Of The Initial Price

More telling is just how much homeowners are willing to drop off of their selling price. Trulia says that this average is 10.6% which means that a home originally listed for $229,000 may have already been reduced to about $205,000.

Detroit homeowners are dropping the price on their homes by the largest amount, averaging 23%. This means that a Detroit home listed originally for $159,000 may have been reduced to around $127,000. Trulia noted that those markets with a greater number of foreclosures are forcing home prices down at the greatest rate.

Few experts are willing to concede that the national market has bottomed out yet. However, prices in some local markets appear to be stabilizing, even rising where demand exceeds available supply.

Source: Trulia, Inc.

2009/06/08 Home Selling

For the homeowner who is behind on house payments, the threat of foreclosure looms large especially as months pass without a payment. In some markets owners may fall behind by two or three months before foreclosure action is taken, while in other markets -- particularly those with a high percentage of foreclosures -- it could take many more months to occur.

Regardless, if you have fallen behind on payments, then your home loan lender has every right to take back your home.

Notice of Default & a Grace Period

Once legal action has been initiated by the lender, both parties enter a pre-foreclosure period. This means that the days from when the Notice of Default has been received up to the court date, a state-mandated grace period kicks in. Also known as a "default cure" period, this timeframe is designed to give homeowners a remedy before foreclosure sets in.

In most cases, few homeowners will have the means to sufficiently satisfy the legal complaint against them, specifically come up with all of the funds owed to the lender which would prevent foreclosure.

Four Resolutions To A Pre-Foreclosure

Once pre-foreclosure has been started it must be ended in one of four ways:

• The homeowner reestablishes the loan by paying off the default amount during the grace period set by state law. This grace period is also known as pre-foreclosure or "default cure."

• The homeowner sells the property to a third party during the pre-foreclosure period. The sale allows the borrower/owner to pay off the loan, thereby avoiding having a foreclosure included in his credit report.

• A third party comes to terms to purchase the property at a public auction at the end of the pre-foreclosure period.

• The lender takes ownership of the property, usually with the intention of selling it on the open market. The lender can take ownership either through an agreement with the borrower/owner during pre-foreclosure, via a short sale foreclosure or by buying back the property at the public auction. Properties repossessed by the lender are also known as bank-owned or REO properties (Real Estate Owned by the lender).

Most homeowners go through a drawn out warning period before they lose their home. Usually, several notices have already been sent by the lender reminding borrowers that funds are due, including phone calls, email messages, perhaps a visit to the home seeking collection.

During the default cure period which averages thirty days in most states, homeowners can still attempt to raise the funds needed to satisfy the lender's complaint or entertain offers from interested buyers.

Investors make a habit of learning which homes are in pre-foreclosure and will contact owners if interested. Homeowners are urged to retain legal counsel before agreeing to any sale which may also require the approval of the lender especially if their debt isn't satisfied with the sale.

2009/03/13 Home Selling

Don't Give Your Home Up Without A Fight

Hundreds of thousands of homeowners are facing imminent foreclosure, one of the largest groups of consumers to be in this position at the same time. If you are more than three months late on a mortgage payment, then you may have already heard from your bank that foreclosure proceedings will soon be started. Continue down this path and you will lose your home, your credit will be trashed and it'll take many years before a lender will offer a home loan to you. Even then you may be subject to onerous financing terms, taking the appeal away from homeownership.

Instead of allowing a foreclosure to take place without offering a challenge on your part, you may want to investigate several options available to you to help you avoid foreclosure. Certain options could help you buy some time and let you stay in your home for the long haul. Besides, a foreclosure could be a nasty blemish on your credit record which can make it difficult to secure a personal loan, rent an apartment, even land a job.

Four Options To Help You Avoid Home Foreclosure

Talk with your mortgage broker – An honest discussion with your lender may help you gain some time, perhaps even land you a loan deferment. You will probably have to prove that your financial situation is in the process of changing for the better, a tangible improvement over those months when you fell behind on payments. Ask your lender to modify the loan, by adding missed payments to the end of your mortgage. Your mortgage term will be extended, but it'll allow you to keep your home and work toward improving your financial position. Importantly, you may be able to land a lower interest rate.

Plunder your retirement account – Your company retirement account, if it wasn't decimated last fall by the stock market collapse, could help fund your home. Consider borrowing just enough money to cover your late payments, perhaps meet several future payments. Please note that you may have to pay this money back, but compared to losing your home to foreclosure, that is a comparatively small burden to bear!

Ask friends and family – Close friends and family members may be able to come to your assistance if you alert them to your plight. To keep things in order, put everything in writing just as you would for any kind of personal loan. If possible, spell out repayment terms or at least offer to repay once your financial crisis has passed. Keep in mind that any type of loan between you and those you love can strain your relationship -- make sure that it is a solid one before pressing forward.

Get out now – Unless your local housing market has collapsed, you may find it worthwhile to contact a real estate agent and put your home on the market immediately. Work with someone who won't tell the world that your property is distressed. She may be able to find someone who is willing to take over payments, perhaps arrange a short sell (or short sale) where a buyer will pay less for your house than what is owed. However, the lender will need to agree to this arrangement first. And, your credit rating may take a huge hit.

If you don't have the financial means to make payments, then nothing will stop the foreclosure train from traveling down the track. However, if you have a plan of action in place where you can demonstrate to your lender that your financial position is on the mend, then you may be able to avert home foreclosure.

2009/03/09 Home Selling

Our neighborhood is all abuzz as cold winter will become a distant memory when temperatures approach summer degrees this early month. Definitely, the month of March has some of the most changeable weather of the year, but we're confident that Spring has arrived here in the Carolinas.

March is also the month when the housing market traditionally heats up as first time home buyers look to jump into the market, while others trade up to new homes or move away in pursuit of a job or change in scenery. But, 2010 is not an ordinary year as the country continues to grapple with a deep recession.

Truly, it is difficult to gauge how the market will shape up over the coming months, but there are some trends to keep in mind if you plan to buy or sell a home this season:

Home Inventory Is Stable -- In most years, February housing inventory usually grows as homeowners put their houses on the market. Not this year. Instead, February remained flat which is actually a good thing for sellers: the housing glut isn't worsening, which could mean that prices will begin to stabilize.

Mortgage Rates Are Low -- 30 year fixed mortgage rates have been flirting with the 5% mark since the beginning of the year, with some mortgage brokers breaking through that barrier by offering their lowest interest rate to people with excellent credit. Having a good, secure job (not an easy task these days) and plenty of money to put down are two attributes lenders are looking at this year.

2009/03/06 Home Selling

I have some good new and bad news for you, but first the bad news...all of it!

Your company is laying you off, ending what had been a long term climb up the ladder.  In order for you to find a comparable position you'll most likely have to move so you are entertaining several offers hundreds of miles from your home. Clearly, you'll have to put your home on the market and hope that it'll sell in the deepest real estate correction in many years.

Worse, you'll be on your own as far as getting rid of home. Your new company will pay a flat relocation fee, but they won't help you sell your number one asset.  Money is tight all over and your new employer cannot possibly afford to carry your home for many months, perhaps longer.

The good news? Well, if your home is in top shape and you live in a desirable neighborhood, you may be able to sell it sooner than what you think. Regardless of what you may have beenn hearing on the news, homes are buying and selling, just at a pace slower than this time last year.

Big On Curb Appeal

Of course, if you are planning to sell you'll want to make certain that your home is in the best position to move quickly, which means one thing: how high is your home's curb appeal?

Curb appeal is defined as the attractiveness of a home as viewed from the street including how its look compares with other homes in the neighborhood. True, curb appeal is subjective as one person's yard art is another person's front yard trash! But, there are some things about the look of the house which can truly make it look nice especially for the person who might actually stop in if they are driving by.

Quick Fix Its On A Budget

Real estate agents will tell you that curb appeal is the most important aspect to presenting your home for sale. This doesn't mean that you won't need to fix some things on the inside before it goes on the market, but it is those exterior polishings which can sell your home.

Let's take a look at several projects you can to that'll cost you less than five thousand dollars total:

Paint or Replace the Front Door -- Very few things on the front of the house say "welcome" more than an attractive looking front door. In some cities around the globe, including Dublin, homeowners take pride in the unique styles and colors of their front doors. In the US, we're understanding how important that is too as people replace old, rotted doors with weather resistant fiberglass doors.  Prices range from $400 to $2000 on up. Consider upgrading the lighting too.

Replace Windows -- Some homeowners think that they have to replace all of their windows at the same time, but that can be expensive. Instead, spend the $400-500 or so to replace the 4-6 windows on the front of your home choosing those which are highly energy efficient and easy to maintain.

Beautify the Grounds -- Winter weather still has a lock hold on much of the nation, making it difficult to bring out the best in a lawn.  What you can do now is make sure that leaves and branches have been picked up, that bushes have been trimmed back and if you live in a snowy area that walkways and driveways are cleared and dry. If you live in a warmer climate such in the Carolinas, then you know that pansys thrive in cool weather, giving your yard just right amount of color to help it get noticed.

Miscellaneous -- Obviously, you cannot paint a home in cold weather while new siding can be expensive. Before you tackle any project, speak with a real estate professional who can give to you an objective opinion on what should be done to your home before it is placed on the market. When time is of the essence, you want to be able to complete such projects within a week or two so that you can get on with your life.

Of course, you'll also want a real estate agent who understands the market, with a good grasp on current home pricing, how long homes are on the market, etc. You may have to aggressively price your home in order for it to sell a decision you'll need to weight against pursuing employment in a different area of the country.

2009/02/24 Home Selling