May 09, 2011 by MichaelS.Dunn.

This is just a quick note for anyone that is considering a short sale:

Recently in my business, I have noticed a dramatic shift in the attitudes and effectiveness of banks/mortgage lenders when presented with an offer for a short sale on a home. 18 month ago, when i really started doing these, it was nearly impossible to get anyone at the banks to even talk to me. Then, when I was able to speak to someone, they frequently did not know and did not care what it was that i was proposing. I would talk to their supervisors and be begrudgingly talked at, which primarily amounted to a list of demands that were to be met, with absolutely no regard for ethics, etiquette or even common business sense.

I’m happy to report that times have changed.

Now, not only do the major home lenders have entire departments set up just for handling short sales, but they actually seem happy to talk us and show a sense of understanding when faced with the choice between accepting a short sale and risking the extra time money and exposure on taking the home through the foreclosure process and putting it back on the market  for sale.

Here’s a few examples:

1. A short sale with two loans, one with Chase and the other with GMAC was approved in a friendly, ethical manner in two weeks from the time that the offer was received.The loss that was taken by the Chase was around $75,000 and GMAC ate about $50,000.

Sellers: Lost everything that they had put into the house(about $52,000) but were able to walk away without any further obligation, responsibility or financial liability AND were given $3,000 as an incentive for completing the short sale and not just walking away from the home.

Buyers: Total transaction time was about 7 weeks. Got into the home of their dreams with the lowest priced home in the neighborhood!

2. Another Chase short sale, this one with an investor owner and two loans. (which are usually the toughest short sales to get approved.) After one buyer who bailed out after waiting for 1 month for approval we got a another offer. This one was approved after two weeks and there were also incentives offered to the Seller for completing the short sale. Chase apparently is randomly selecting particular short sale borrowers to receive seller incentives for leaving the home in good condition and maintaining the utilities, etc until closing. This approval was absolutely hassle free and actually required quite a bit less paperwork and documentation than most. Way to go Chase!

Seller: Got out without any further liability. Received $20,000.

Buyer: Once again got the home of their dreams and paid less than anyone else in the neighborhood.

3. A number of large lenders have gotten on board with equator which, love it or hate it, is a very organized and efficient software for processing the short sales and all of the documents that go with it. This is just another sign that lenders are wanting to streamline their systems to make the short sale process work.

Seller: More likely to have a successful sale, less time spent dumping $ into a bottomless pit.

Buyer: Less time spent wondering if the purchase will actually happen, less stress, better deals.

The point of all of these examples is just to let you know that many of the horror stories that you may have heard in the past (yes, some of them were probably from me) are likely to be just that: stories from the past. Lenders are starting to make some sense in their attitudes about short sales and will at least consider a short sale as an alternative.

What this means for you if you are considering buying a short sale is less uncertainty, time and hassel as you are trying to purchase what is likely to be a very good deal.

What this means for you if you need to sell and owe more than the home is worth is that there are options and talking to a realtor and/or your lender is a great way to explore whether a short sale is the best option for you. You are not alone and the process is much less dysfunctional than it was 18 months ago. Lenders do not want to take your home, they just want to minimize their loss. A short sale may be the best way to do that and free you from having a burden you cannot bear for years into the future.

Posted in Short Sale, Selling, Buying, Uncategorized | No Comments »

Feb 17, 2011 by MichaelS.Dunn.

Data provided by: NAR 

Metropolitan Area Existing-Home Prices and State Existing-Home Sales 

The Quarterly Reports

NAR releases statistics on state-by-state existing-home sales and metropolitan area median home prices each quarter. The state existing-home sales report includes single-family houses, condos and co-ops. The price report reflects sales prices of existing single-family homes by metropolitan statistical area (MSA). Beginning on February 15, 2005, this quarterly report includes a breakdown of condo and co-op prices by metro market. MSAs are as defined by the U.S. Office of Management and Budget and include the specified city or cities and surrounding suburban areas.

Metropolitan Area Prices

• Current Report: Single-Family 4th Quarter 2010 (PDF: 27K)
• Also available in spreadsheet (MS Excel: 53K)

• Current Report: Condo 4th Quarter 2010 (PDF: 13K)
• Also available in spreadsheet (MS Excel: 53K)

• See the latest news release >
• Read about 2005 Revisions using latest MSA Definitions from the U.S. Census Bureau.

State Existing-Home Sales

• Current Release: 4th Quarter 2010 (PDF: 10K)
• Also available in spreadsheet  (MS Excel: 20K)

Posted in Market Data, Selling, Buying | No Comments »

Aug 26, 2010 by MichaelS.Dunn.

The following is my response to an e-mail I recieved from a nice couple in Illinois. Their current home had lost about 50% of it’s value and they needed to move because of an expanding family and proximity to their work. Because they owe about $80,000 more than their house is currently worth, they needed advice on what their options were. Here was my reply that I thought might be helpful to others in a similar situation.

So, my first question would be…what’s the rental market like near you? If you think you can rent out your current house to cover the payments and other expenses (taxes, insurance, hoa dues, etc.) that could save you some financial pain, although it would mean becoming a landlord which can be a hassle of you don’t have the right tenants. If you were able to get a signed lease, the bank may include that as additional income to get you qualified for a loan to buy the new house. (Check with your lender to verify this…they all have their own way of doing things.) This method would prevent any credit score damage and foreclosure issues and still get you into your new place. In addition, You may be able to hold on to the house until the market improves and sell it then. Do some number crunching and look in the paper for rental rates in your area for a similar house. If there is any way that you can afford to do this, I think it is the best option.

If you decide you do not want to go the landlord route, or if you can’t get a new loan without selling the old house, then a short sale is definitely better than a foreclosure, although it will still hurt your credit a bit. A foreclosure is nasty, and makes it nearly impossible to get a mortgage for 5-7 years, as well as doing a number on your credit score. Then if the lender can’t sell the house for as much as the amount that was owed, they could come after you for the difference! I would definitely avoid this choice if at all possible.

A short sale on the other hand, although it does affect your credit score, does not have all of the negative repercussions that a foreclosure would. (Many experts are not sure how much short sales will affect scores, because they are just now becoming popular due to the economic situation we are all facing now. I’ve seen estimates from as little as 50 points to up to 200 points. Either way, your score can be brought up again relatively quickly if you stay on top of all of your other payments.) Most lenders will report the short sale as “settled for less than the amount owed” in your credit report. The big question is how will lenders look at this in the future. My guess is that because there are so many short sales now, if mortgage companies want to do much business in the future, they are going to have to be pretty lenient when it comes to folks that have a short sale in their report.

The FHA or Federal Housing Authority, who is a governmental agency that insures many of the loans made to people buying their primary residence (No investment properties or vacation homes), requires a waiting period of two years after a short sale to get approved for one of their loans. Most of the major lenders have guidelines that are close to this. (Wells Fargo says 3 years for example.) That being said, if you need to move now, it might be a good idea to get the new loan and complete the purchase of the new house before the short sale shows up on your credit report. The problem here is that you can get stuck with two mortgage payments for the time it takes to get the old house sold unless you do things in the right order.  

So this is where a good realtor and mortgage person come in. Things have to happen in a very particular order for this to work out. This is what I would recommend:

1.      Talk to a Realtor who has the SFR designation and one that you trust to handle this. (I can help you find someone qualified in your area if you would like.) Get your old house listed for sale at a price that the realtor thinks will get it sold in 30 to 60 days. Also have the realtor start the short sale process by sending in any financial info, the listing agreement and short sale application to your lender.

2.      Apply for a new loan and let the lender know that you will be selling your current house.

3.      Start looking for a new house

4.      Get an offer on your house AND get the bank to approve the short sale. Make SURE that you have something in writing from the lender that states that they will not pursue a deficiency judgment. Meaning that they will not come after you for the difference between the sale price and the amount owed. This is the most important part of the short sale. Sometimes they will ask you to sign a promissory note to pay off the difference. Remember that these are negotiations and that the lender is simply trying to minimize their loss.

5.      Put in an offer that works for you but make sure that the offer is CONTIGENT ON THE SUCCESSFUL CLOSING OF YOUR CURRENT RESIDENCE. Some sellers will not like this but many are taking whatever they can get in this market. Schedule the closing on the new house to be within a week of the closing on your old house. This way the short sale will not be on your credit report until after the new loan is already closed. Even better if you can have both closing on the same day.

6.      Confused yet? 

As far as getting approved for a short sale, banks are typically looking at these things:

1.      Is the house your primary residence? They have programs and incentives such as HAFA that makes it easier to get approved when it IS your primary residence.

2.      Do you have a legitimate financial hardship? In your case, if your income has not gone down, your argument is that you HAVE to move for your job and that you cannot afford two mortgage payments and can’t get the old house rented for enough to cover the payments. If they think that you can afford your current house and that relocation isn’t absolutely necessary, they will probably not approve the  short sale.

3.      Will the house go to foreclosure if they do not approve the short sale? For this they look at your financial information and your work situation to try to determine whether or not they think you could afford to keep making the payments.

4.      Will the short sale cost the lender less than a foreclosure would? This one is really out of your hands, but typically the answer is yes because of the long, expensive process of doing a foreclosure. 

Another good option if you can’t get a loan to purchase a home is to consider renting for a short time. You could get into a house that suits your needs, in a location that you want, and still have the option of leasing or doing a short sale on your current home.

Hope this is helpful and doesn’t confuse you more! Feel free to call me with other questions or if you want me to recomend a qualified realtor in your area.

-Mike

Posted in Tax and Financial info, Short Sale, Selling, Buying | No Comments »

Aug 16, 2010 by MichaelS.Dunn.

Home owners are more active in their communities, benefit from improved education opportunities, and report higher levels of self-esteem and happiness when compared to renters, according to leading research. A new report from the NATIONAL ASSOCIATION OF REALTORS®, Social Benefits of Homeownership and Stable Housing, explores the impact of stable housing and the positive social outcomes resulting from homeownership.

“Homeownership is in investment in your future – home is where we make memories, build our lives and feel comfortable and secure,” said Vicki Cox Golder. “Owning a home has long-standing government support in this country because homeownership benefits individuals and families, strengthens our communities, and is integral to our nation’s economy.”

NAR’s study identifies research from government, industry, and academia that identified the relationship between homeownership and stable communities. Home owners move far less frequently than renters, and therefore are embedded into the same neighborhood and community for a longer amount of time. This allows for social cohesion, ultimately resulting in social benefits and stronger communities.

“REALTORS® care as much about keeping families in their homes as they do about helping them find the home of their dreams,” said Golder. “Social benefits do not arise solely from ownership, but also from greater housing stability and social ties associated with less frequent moves among home owners.”

Several research studies cited in the NAR report have found that homeownership has a significant impact on educational achievement. For instance, the decision by teenage students to stay in school is higher for those raised by parents who are homeowners compared to those whose parents are renters. Access to economic and educational opportunities are also more prevalent in neighborhoods with high rates of homeownership. Furthermore, studies have shown that changing schools frequently due to moving impacts negatively a child’s educational outcome.

Civic participation is another social benefit resulting from homeownership and stable housing. Home owners are proven to be more politically active and are more likely to vote in local elections compared to renters. In addition, homeowners have a higher membership in voluntary organizations.

Studies have shown that home owners are more likely to believe that they can do things as well as anyone else, and they self-report higher ratings on their physical health. “The research shows that home owners report higher self-esteem and happiness than renters, resulting in better overall health, both physically and psychologically,” said Golder.

When it comes to property, home owners have more invested both financially and emotionally. Property crimes affect home owners directly, but nonviolent property crimes can impact the property values of the entire neighborhood. Therefore, home owners are more motivated to deter crime by forming and implementing voluntary crime-prevention programs. In addition, it is easier for home owners to recognize perpetrators in stable neighborhoods because of extensive social ties. Unstable neighborhoods often display social disorganization which can lead to higher levels of crime.

Along with protecting their home and neighborhood from crime, home owners spend more time and money maintaining their home than renters. Neighbors also influence other home owners to improve their property, resulting in a better overall quality of the community.

“Homeownership certainly contributes to positive social outcomes, but those outcomes are truly a result of stable housing communities,” said Golder. “With strong social ties and a cohesive community, home owners can enjoy not only the long-term financial benefit of owning a home, but also a more satisfying life – which is what’s really at the heart of the American Dream.”

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Jul 21, 2010 by MichaelS.Dunn.

Knowing how to read your good-faith estimate can help you save money on your home loan.

When you’re shopping for a mortgage loan, it’s sometimes hard to understand the jargon lenders use in the good-faith estimate explaining the costs and fees you’ll pay when taking out a mortgage.When you apply for a mortgage, the lender has three days to give you a good-faith estimate of the fees and interest rate you’ll pay, as well as other loan terms. Here are five tips for using the new three-page form to your advantage.

When you apply for a mortgage, the lender has three days to give you a good-faith estimate of the fees and interest rate you’ll pay, as well as other loan terms. Here are five tips for using the new three-page form to your advantage.

1. Know which fees can increase and by how much

In the past, lenders provided an estimate of the costs involved in getting your home loan, and if those costs rose by the time you closed on your home, tough luck. The good-faith estimate shows some fees the lender can’t change, like the loan origination fee that you pay to get a certain interest rate (commonly called points) and transfer costs.The form also lists the charges that can increase by up to 10%, like some title company fees and local government recording fees. The lender must cover any increase over that amount.Finally, the good-faith estimate lists the fees that can change without any limit, such as daily interest charges.

2. Look for answers to basic loan questions

In the summary section, lenders explain your loan’s terms in simple language. Can your interest rate rise? If so, a lender must spell out how much the rate can jump and what your new payment would be if it does. Can the amount you owe the lender increase, even if you make your payments on time? If it can, a lender must show you the potential increase.

3. Evaluate the “tradeoffs” on a loan

In the new “tradeoff table,” you can ask lenders to provide details on the tradeoffs you can make in choosing among home loans. If you’d like the same loan with lower settlement charges, how will the interest rate change? If you’d like a lower interest rate, how much will your settlement charges increase?

4. Compare apples to apples with the shopping chart

Included on the good-faith estimate is space for you to list all the terms and fees for four different loans, so you can make side-by-side comparisons.

5. Know what’s missing from the good-faith estimate

The new form lacks some key information, such as how much you’ll reimburse the sellers for property taxes they’ve already paid on the home. It also doesn’t tell you the amount of money you’ll have to bring to the closing table. Some lenders have created supplemental forms providing that information. If yours hasn’t, ask for it.

More on the new good-faith estimate form:

http://www.houselogic.com/articles/homebuyer-tax-credit-what-you-need-know/

 Other web resources

The new U.S. Housing and Urban Development good-faith estimate http://www.hud.gov/content/releases/goodfaithestimate.pdf 

More on shopping for a loan http://www.hud.gov/offices/hsg/ramh/res/Settlement-Booklet-January-6-REVISED.pdf

Posted in Buying, Mortgage | No Comments »

May 17, 2010 by MichaelS.Dunn.

RISMEDIA, May 5, 2010—Pending home sales increased again in March 2010, affirming that a surge of home sales is unfolding for the spring home buying season, according to the National Association of Realtors®. The Pending Home Sales Index (PHSI) forward-looking indicator based on contracts signed in March, rose 5.3% to 102.9 from 97.7 in February, and is 21.1% above March 2009 when it was 85.0; this follows an 8.3% increase in February. The data reflects contracts and not closings, which usually occur with a lag time of one or two months.

Lawrence Yun, NAR chief economist, said favorable affordability conditions have been working with the tax credit. “Clearly the home buyer tax credit has helped stabilize the market. In the months immediately following the expiration of the tax credit, we expect measurably lower sales,” he said. “Later in the second half of the year, and into 2011, home sales will likely become self-sustaining if the economy can add jobs at a respectable pace, and from a return of buyer demand as they see home values stabilizing.”

The PHSI in the Northeast declined 3.3% to 75.1 in March but remains 27.2% higher than March 2009. In the Midwest the index increased 1.2% to 98.9 and is 18.5% above a year ago. Pending home sales in the South jumped 12.7% to an index of 121.2, which is 28.3% higher than March 2009. In the West the index rose 1.9% to 99.9 and is 8.8% above a year ago.

“Another encouraging sign is the improvement in the availability for jumbo and second-home mortgages,” Yun said. “As bank balance sheets strengthen, it is just a matter of time before lending of non-government-backed mortgages steadily opens up.”

The National Association of Realtors, “The Voice for Real Estate,” is one of America’s largest trade associations, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20% of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

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May 08, 2010 by MichaelS.Dunn.

It’s a bit of a misnomer, since Federal Housing Administration (FHA) loans are not loans at all. What they do is insure loans so that lenders can offer mortgage assistance to people who:

• Have fair or poor credit
• Have a low down payment (must have at least 3.5%)
• Have undergone bankruptcy
• Have been foreclosed on

Essentially, the federal government insures loans for FHA-approved lenders so that lenders reduce their risk of loss if they lend to borrowers who could default on their mortgage payments. The FHA program has been in place since the 1930s to help stimulate the housing market by making loans accessible and affordable. Traditionally, FHA loans have helped military families who return from war, the elderly, handicapped, or lower-income families, but really, anyone can get an FHA loan - they are not just for first-time home buyers.

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Apr 12, 2010 by MichaelS.Dunn.

Going solo - Buying a house is a complex transaction. It should be a team effort. You’ll need a real estate agent, lender, inspector, insurer, perhaps a lawyer and other team members to help you through each step of the way. Team build before you start the search.

Love at first sight - If you believe in fairy tales you probably shouldn’t be buying a home. You won’t live happily ever after if you emote your way through the home buying process. Your home should fit your real needs, not your yen for drama. Buy a home that fits your budget and your lifestyle. Be sure the home is in a community and neighborhood you desire. Visit neighborhoods several times before you buy to check out schools, noise and traffic patterns.

‘Loanless’ shopping - Being pre-qualified gives you a general idea of how much you can afford to borrow. It’s better to be pre-approved for a given loan. Sellers will take you more seriously. You’ll stay on budget.

Overbuying - Home buyers buying more than they could truly afford, in part, led to the collapse of the housing market. Buy more than you can afford and your dream home will become the same nightmare. Analyze all your monthly costs including debts, food, transportation, entertainment, and savings. Your total monthly debts, including your mortgage, should not exceed 36 percent of your income before taxes. Don’t forget to budget closing costs (often two to five percent of the home’s purchase price), plus moving, redecorating and maintenance. Look ahead and allow for increases in ongoing expenses such as utilities and taxes.

Misplaced trust - You are engaged in what’s likely your most valuable acquisition ever. It’s a business transaction. Ask family, friends, co-workers, professionals and others you trust for referrals, but don’t take their word for it. Vet your team members.

Accepting oral agreements - Get it in writing. The rate lock, the home inspection, disclosures, the contract. Always. Should a dispute arise, you’ve got the details documented.

Skipping the fine print - Understand what’s really in any document before picking up a pen. Get documents in advance, take time to read them and ask questions. Get copies of your mortgage and closing papers a few days ahead of closing.

Forgetting or betting on resale - Avoid buying a home that costs 50 percent more than neighboring homes. Reconsider buying the most expensive home on the block. Neighbors’ lower home values will weaken yours. Buy intending to flip your investment only to have the market fail means when it’s time to sell your price may not cover your costs.

Making an unconditional offer - Protect yourself with these contingencies:

• Mortgage financing: You may be preapproved but is the house? A formal appraisal confirms — or not — that there is sufficient value in the home to warrant the loan. If the house appraises lower than the sales price, the loan may be declined.

• Inspection: Never buy an existing or new home without a thorough home inspection. Walk through the home with the inspector to learn more about the house and any concerns he or she may have.

• Insurance: Confirm you can get adequate insurance coverage. In some areas, or following certain disasters, it can be difficult to get types of hazard insurance.

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Apr 01, 2010 by MichaelS.Dunn.

It seems a strange rule of thumb to say that our little valley will follow the national real estate trend, just at a 6 month delay. I mean, that just sounds like tooo much of a generalization to me. but it has happened that way for every major movement in the real estate market for the past 10 years.

What this means for us, is that we are probably at the bottom of the market. Yes, you heard me. I am going out on a limb and making the call. We’re at the bottom.

What’s the bottom mean you ask? The bottom is the best time to buy! Time to take action. If you have been a bit nervous about taking on debt and dumping all your hard earned money into real estate over the last couple of years, I can’t say a blame you. But I believe that the danger has passed and that it is now time to go for it.

Real Estate has historically been one of the best places to put your money over the long term, and for those that buy in the current market, it is likely that will be true for the future as well. Let’s take a look at all the reasons to buy NOW:

1. Tax credit still applies until the end of this month. That means $8000 for first timers and $6500 for those buyers that have lived in their current residence for 5 years or more and are now making a move.

2. Mortgage rates are rediculously low. This is one of the primary factors that determine whether a loan will be affordable for you.

3. HUGE, and I mean HUGE, selection of homes to choose from. A few years ago, the average buyer that I worked with would have one or two homes to choose from that were in their price range. This didn’t give them alot of options when it came to all the features that they would have liked to have in their home. Now, I typically narrow down a list of 30-40 homes by asking my clients to be more and more picky! Then we go and look at 10 - 20 homes and I again ask them to be MORE picky. This is the market to find your TRUE dream home.

4. If you don’t buy now, you’ll be paying rent right? That is money out the window.

5. Many sellers are anxious to sell and are open to negotiation.

6. Tax benifits, financial stability, pride of ownership, freedom to do what you like with your own property, and all the traditional reasons why it has always been a good idea to buy your own home. All of these things are still true, despite what you may have heard in the media!

In closing I’ll say it one more time, just in case you missed it. We’re at the bottom…BUY, BUY, BUY! (And of course buy what you can afford. Don’t over extend yourself because there is no need to in this buyers market.)

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Mar 24, 2010 by MichaelS.Dunn.

FOR IMMEDIATE RELEASE: 

Company Name: Harmony Ventures, Inc.

Telephone Number:970-309-9249

Email Address: Mike@RoaringForkProperty.com

Web site address: www. RoaringForkProperty.com

Michael S. Dunn Earns NAR Short Sales and Foreclosure Certification Buyers and Sellers Benefit from REALTOR^® Expertise in Distressed Sales 

City, State, Date — Michael S. Dunn with Harmony Ventures Inc. has earned the nationally recognized Short Sales and Foreclosure Resource certification. The National Association of REALTORS^® offers the SFR certification to REALTORS^® who want to help both buyers and sellers navigate these complicated transactions, as demand for professional expertise with distressed sales grows.

According to a recent NAR survey, nearly one-third of all existing homes sold recently were either short sales or foreclosures.  For many real estate professionals, short sales and foreclosures are the new “traditional” transaction.  REALTORS^® who have earned the SFR certification know how to help sellers maneuver the complexities of short sales as well as help buyers pursue short sale and foreclosure opportunities.

“As leading advocates for homeownership, REALTORS^® believe that any family that loses its home to foreclosure is one family too many, but unfortunately, there are situations in which people just cannot afford to keep their homes, and a foreclosure or a short sale results,” said 2009 NAR President Charles McMillan. “Foreclosures and short sales can offer opportunities for home buyers and benefit the larger community, as well, but it’s extremely important to have the help of a real estate professional like a REALTOR^® who has earned the SFR certification for these kinds of purchases.”  The certification program includes training on how to qualify sellers for short sales, negotiate with lenders, protect buyers, and limit risk, and provides resources to help REALTORS^® stay current on national and state-specific information as the market for these distressed properties evolves.

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