If you are under the 3 year mark and would like to repurchase when time allows, you may want to consider visiting with a credit counselor to gauge where your credit is at this time and what you might need to work on.  I recommend Consumer Credit Affiliates .  They can assess your situation and help you formulate a plan to get back on the path to home ownership.   

If you are planning to purchase you will need to save a minimum of 3.5% for an FHA down payment and money for closing costs.  In some cases you can get assistance from the seller with your closing costs which typically are about 3% of the purchase price.  If you need a recommendation to a good local lender contact me.

Being a REALTOR has taken on a whole new meaning for me.    I have gone from a salesperson who specialized the marketing of property for sale and helping buyers find their new home, to so much more than that.   Helping homeowners avoid foreclosure by successfully finding alternatives such as short sale has made me so much more than a salesperson.  I am a problem solver, listener, helper, and facilitator.    I am genuinely helping people and making a real difference in their lives.  For buyers I am assisting them in navigating the more complicated web of purchasing short sales and REOs.  Helping them avoid the obstacles that arise in these types of purchases.  It has become harder than ever to be a buyer with tighter lending standards, distressed properties and long wait times. 

We look around in this industry and are often hard pressed to find positives and things to be thankful for.   But, there is plenty that I am thankful for.  The challenges of this market have made me a better REALTOR.  I have been given the opportunity to not only help my neighbors buy and sell homes, but help them improve thier lives.  By necessity I have been motivated to learn more, so I can help more. 

This REALTOR is thankful… 

Happy Thanksgiving to Everyone!

FHA Preforeclosure Sales  if listed correctly will be “pre-approved”.  FHA requires homeowners to get approval into their system prior to listing thier property.  FHA sets the price and the net proceeds.  Once an offer is received the seller’s lien holder is supposed to respond to the offer within 5 business days.  If the offer meets the FHA requirements as set forth in the “Approval to Participate” that the seller is given when approved into the system then this is truly a “pre-approved” short sale.

HAFA Short Sales – This is a newer short sale program that is set up in a similar fashion to FHA short sales.  Sellers can be approved for a HAFA short sale prior to listing the property, given a sales price and net amount.  In this case the short sale is truly “pre-approved”.    The seller is provided with a Short Sale Agreement (SSA) which outlines the terms required for the short sale. 

Previously approved short sales are just that – previously approved under another buyer’s name.  Most lien holders provide short sale approval letters with the specifics of the buyer who made the offer.  If the property is being advertised as “pre-approved” but the approval letter has another buyer’s name on it, it won’t do you much good.  At that point if you make an offer, your offer and all the pertinent documents will need to be re-submitted to the lien holder in order to issue a new approval letter in your name.  This process may be shorter than the timeline the previous buyer waited, but there are no guarantees. 

Key is to work with a buyer’s agent that knows the short sale process and can inquire about the specifics of the property you are interested in.

Many buyers are still anxiously hoping to close in time for the credit. There are currently about 1890 pending sales in the Reno-Sparks area for stick built, single family homes.  Of this number about 61% are short sales which typically take 60-90 days to close. Buyers will need to consult with their REALTOR if they are concerned about closing in time.

According to Moody’s chief economist mark Zandi, by the time the credit expires it will have been responsible for sales of 400,000 new and existing homes, out of a total of 1.4 million sales.  That is about 28.5%.  Personally 75% of the buyer transactions I have closed so far this year were with buyers who qualified for the tax credit. 

As of today there are only 28 more “escrow closing” days. There are 4 holidays between now and the end of November, and with escrows only recorded Monday through Friday time is definitely of the essence. 

Currently there are over a dozen bills presented to Congress to extend the credit. If you are a buyer waiting to close and concerned that you might not close in time, I would highly recommend that you contact your Representatives in Congress and urge them to extend the credit. The National Association of REALTORS estimates that for every home sold $63,000 is pumped into the economy which is the equivalent of one new job.  This credit is a win-win for both home buyers and the economic recovery. 

A recent Zillow survey found that 70% of prospective first-time buyers said that the tax credit was the primary influence, a significant influence or some influence to their purchase decision.  Zillow stated that if the credit were extended it could account for another 334,000 home sales.  With increasing foreclosure rates, this could be a major factor in whether or not we see a good year next year or one that has continued negative pressure on prices. 

The bottom line is that regardless of whether you have enough time to close before the tax credit expires, conditions are still ideal to purchase a home – low prices and competitive rates.  If you get the tax credit – it’s a great bonus!

In Sparks/Spanish Springs since January 1, 2009 here is how buyers purchased their homes:

• Cash 17.04%
• Conventional Loans 34.92%
• FHA 41.99%
• VA 5.19%
• Miscellaneous .41%
• Owner Financing .41

As you can see the majority of buyers are using FHA financing as this type of loan only requires 3.5% down payment.  Many buyers are also still using conventional financing if they have larger amounts of down payment funds and want to avoid private mortgage insurance. 

The number of cash buyers in the market is on the rise, up from 10.3% to 17.04% over the same time last year.  This could indicate that there are investors getting back into the market because of the lower market prices.

VA financing is really the only 100% financing that is still available to eligible buyers at this time. 

And as you can see it is very rare that owners are financing the sale of a property.

If you have questions about whether or not you qualify for a mortgage you can contact me and I can refer you to several local lenders who would be happy to help.

Here’s how it works…Eligible homebuyers who purchase between January 1, 2009 and December 1, 2009 can treat the purchase as if it had occured on December 31, 2008.  That being said you can claim the credit in your 2008 tax return. 

You have several filing options:

1. If you close escrow between January 1, 2009 and April 15, 2009 you can claim the $8000 credit on your 2008 return that is due April 15th. 
2. You can extend your 2008 income tax filing until as late as October 15, 2009. (The IRS grants automatic extensions, but you must file for the extension.) See IRS.gov for instructions.
3. If you have already filed your 2009 return, you can file an amended 2008 tax return on form 1040X which is available at IRS.gov or through your tax providor.
4. Or you can just wait until you file your 2009 return, but why would you if you can get the money now and use it to fix up your new house.

The best part is that you don’t have to pay the money back unless you sell the property before you have lived there for 3 years.  (Some exclusion apply to this as well.)

What are you waiting for???? Phenomenal prices, great selection, FHA mortgages with only 3.5% down, historically low interest rates and $8000 in tax credit.  It doesn’t get much better than this.

If you need to move in 30 days a short sale is not the right property for you.  Short sales typically take anywhere from 30-90 days to get approval from the seller’s lender.  Once the approval comes it can be another 15-30 days before you can close.  So if you are in a hurry you might want to skip these types of properties. 

If you are not in a particular rush and have the ability to be patient while the seller’s agent works the the seller’s lender to negotiate your offer you have a greater chance at success in this type of transaction.

Some of the other factors to consider when considering the purchase of a short sale are:

1. Does the seller have more than one mortgage on the property?
2. If there is more than one mortgage are the with the same lender?
3. Who is the listing agent and has that person sucessfully closed a short sale?
4. Are there any liens on the property?

The key here, and I can’t stress this enough, is that these transactions take time.  You can get a fantastic deal, but you have to be willing to wait for it.