What is a short sale and why do homeowners prefer it? A short sale happens when the mortgage is more than the value of the property itself. This could be because the value of the properties in the area where the property is located has decline. It could also be because of the condition of the property. Many property owners apply for a short sale because they want to avoid foreclosure. Through this, they can pay off the mortgage and star anew.
Before a short sale can take place, the lender has to approve the package presented by the homeowner first. The package presented has to be complete. It should have a hardship letter. This letter will explain to the lender why the homeowner could no longer make his payments. This could be because of unemployment, divorce or death in the family. In addition to that, you will be asked to present an offer from a buyer as well. Ask your lender about the other requirements you need to present.
The lender has the right to approve or reject the proposal because he will definitely lose if he agrees to this. However, this maybe a better option for him rather than foreclosing the property. It is not easy to get your lender’s approval. This shy you should be ready. All your requirements have to be complete. Moreover, you should be familiar with your documents so that you can defend your package and explain it thoroughly to your mitigating officer.
One of the major reasons why your lender would reject your short sale package is when the value offered is way lower than the value of the property. If this happens, the lender will send a broker to check the property. The broker will determine the value of the property and will recommend it to the lender. If the value is higher than the offer made by the buyer, your short sale package will be rejected. However, you can prevent this. Just make sure that the offer to your property is reasonable. Be there when the broker arrives and walk him through your property. You can also present to him images and documents of the repairs made in your property.
If the lender rejects your package, do not be disheartened and try to qualify again. Get a better offer for your home. You can ask your current buyer or you can look for another buyer who will be willing to make a better offer for your property.
If you are the buyer, make sure that you make a good offer. See to it that you consider several factors before you make an offer. Check the property as well as the location. Of course, you will offer a discounted value since it is a short sale but be careful not to make a very low offer.
Many turn to short sale to prevent foreclosure. However, getting an approval from the lender is not easy. You have to make sure that your requirements are complete and that the offer made is reasonable.
article alley
Thursday, February 25, 2010
Tuesday, February 16, 2010
UPPER DUBLIN FIRST TIME HOMEBUYER DRESHER WOODS TOWNHOUSE.
Sunday, February 14, 2010
It’s a Buyers’ Market for Real Estate Investors, too
By Joanne Genesio
Prudential Fox & Roach
Turn on any financial news program and at some point you’ll hear the experts extolling the virtues of diversification. Real estate, even through the market downturn, has long been considered a conservative, long-term strategy to growing wealth.
In fact, that very downturn has created a historic buying opportunity for potential homebuyers and investors alike. The combination of lower home prices across American and historically low mortgage rates, two essential factors that usually don’t trend in the same direction, have triggered a buyer’s market in many areas of the country. For real estate investors who want to rent their properties, this can make the difference in achieving positive cash flow sooner or right off the bat.
While some seasoned real estate investors make it look easy, to be successful, beginners should follow some basic principles.
Learn all you can. Before committing your cash, you should have a fundamental understanding of real estate. For example, be aware that, in general, investment properties are not liquid investments. Barring exceptional circumstances, real estate does not sell at a moment’s notice. It could take days or months to sell a property, depending on the strength of the market in a particular region.
Consider cash flow. You’ll need to have enough capital on hand to cover any short-term losses due to vacancies between tenants.
Start small. Look into buying a condominium, single-family home or a duplex. Leave large apartment buildings and commercial properties to the pros.
Inquire at the local Chamber of Commerce about companies relocating into or out of the area. Company movement is one indicator of demand for rental and/or office space.
Find a property that will be in demand. Look for a moderately priced home with three or four bedrooms, two bathrooms, and a garage that sits on a quiet street.
Research the property. The most common way first-time investors lose is by failing to investigate a property thoroughly. Look beyond the front door. Investigate the reputation of the school district, the crime rate, and plans for expanding a nearby highway or developing vacant land. Ask a local real estate professional about the area, its history, and how fast (or slow) properties are moving.
Inspect the home you’re considering for signs of water damage, such as stains on the ceiling and crinkling or gathering wallpaper; open and close every door and window; and check all electrical sockets by plugging in an appliance. Get an independent home inspection, roof inspection and termite inspection. Unexpected repair costs can eat away your cash flow. Because even the best inspection can’t always predict problems, try to set aside some of the rental income for unexpected repairs.
Spend time driving the streets of the neighborhood noting the condition of other properties. Are lawns maintained? Are roofs in good shape? Are homes kept up?
Be ready to make fixes quickly and respond to the renter’s needs. If you’re not prepared to be a hands-on landlord, consider hiring a property management firm.
See your tax advisor for related planning and laws that can affect your investment decisions.
Remember, investing in a property is much different than living in one, and while emotion and attachment can be prime motivators when it comes to homes, it is return on investment that counts when investing in real estate.
Joanne Genesio can be reached at (215) 641-2413. Prudential Fox & Roach is an independently owned and operated member of The Prudential Real Estate and Relocation Services, a Prudential company. Equal Housing Opportunity.
Prudential Fox & Roach
Turn on any financial news program and at some point you’ll hear the experts extolling the virtues of diversification. Real estate, even through the market downturn, has long been considered a conservative, long-term strategy to growing wealth.
In fact, that very downturn has created a historic buying opportunity for potential homebuyers and investors alike. The combination of lower home prices across American and historically low mortgage rates, two essential factors that usually don’t trend in the same direction, have triggered a buyer’s market in many areas of the country. For real estate investors who want to rent their properties, this can make the difference in achieving positive cash flow sooner or right off the bat.
While some seasoned real estate investors make it look easy, to be successful, beginners should follow some basic principles.
Learn all you can. Before committing your cash, you should have a fundamental understanding of real estate. For example, be aware that, in general, investment properties are not liquid investments. Barring exceptional circumstances, real estate does not sell at a moment’s notice. It could take days or months to sell a property, depending on the strength of the market in a particular region.
Consider cash flow. You’ll need to have enough capital on hand to cover any short-term losses due to vacancies between tenants.
Start small. Look into buying a condominium, single-family home or a duplex. Leave large apartment buildings and commercial properties to the pros.
Inquire at the local Chamber of Commerce about companies relocating into or out of the area. Company movement is one indicator of demand for rental and/or office space.
Find a property that will be in demand. Look for a moderately priced home with three or four bedrooms, two bathrooms, and a garage that sits on a quiet street.
Research the property. The most common way first-time investors lose is by failing to investigate a property thoroughly. Look beyond the front door. Investigate the reputation of the school district, the crime rate, and plans for expanding a nearby highway or developing vacant land. Ask a local real estate professional about the area, its history, and how fast (or slow) properties are moving.
Inspect the home you’re considering for signs of water damage, such as stains on the ceiling and crinkling or gathering wallpaper; open and close every door and window; and check all electrical sockets by plugging in an appliance. Get an independent home inspection, roof inspection and termite inspection. Unexpected repair costs can eat away your cash flow. Because even the best inspection can’t always predict problems, try to set aside some of the rental income for unexpected repairs.
Spend time driving the streets of the neighborhood noting the condition of other properties. Are lawns maintained? Are roofs in good shape? Are homes kept up?
Be ready to make fixes quickly and respond to the renter’s needs. If you’re not prepared to be a hands-on landlord, consider hiring a property management firm.
See your tax advisor for related planning and laws that can affect your investment decisions.
Remember, investing in a property is much different than living in one, and while emotion and attachment can be prime motivators when it comes to homes, it is return on investment that counts when investing in real estate.
Joanne Genesio can be reached at (215) 641-2413. Prudential Fox & Roach is an independently owned and operated member of The Prudential Real Estate and Relocation Services, a Prudential company. Equal Housing Opportunity.
Sunday, February 7, 2010
Monday, February 1, 2010
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