Tuesday, January 22, 2013
Wednesday, January 2, 2013
Short Sale Myths and Why Now is the Right Time
I've been giving this blog alot of consideration lately. With so much information to be absorbed on the subject it's easy to understand why so many people are misguided. Much has happened in the world of Short Sales over the past several years. On a weekly basis it seems I'm being asked "what exactly IS a short sale" or someone will say to me "I'd like to buy a short sale but I don't want to wait 7 months for it to close" - a comment I will address later in the Short Sale Myth section of the blog.
First lets look at what a "housing bubble" is. Besides a fancy term heard routinely in the media, the United States housing bubble is an economic bubble affecting many parts of the United States housing market in over half of American states. Housing prices peaked in early 2006, started to decline in 2006 and 2007, and reached new lows in 2012. On December 30, 2008 the Case-Shiller home price index reported its largest price drop in its history. As a result of this and overall economic crisis across the nation, distressed property sales spiked.
It would stand to reason that the average homeowner needing to sell their home, probably couldn't afford to sell because they owe more than the home is worth. Many sellers became behind in mortgage payments due to a variety of reasons. Many were in dual or multiple mortgage situations and many had a loss of income. As homeowners faced foreclosure they failed to seek the advice of a professional. Many didn't even know a Short Sale was a viable alternative to Foreclosure.
So the big question - WHAT EXACTLY IS A SHORT SALE? Wikipedia's definition is - a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property, and the property owner cannot afford to repay the liens' full amounts, and whereby the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt.[1] Any unpaid balance owed to the creditors is known as a deficiency.[2][3] Short sale agreements do not necessarily release borrowers from their obligations to repay any deficiencies of the loans, unless specifically agreed to between the parties. However, in some states, legislation was passed to preclude deficiencies after a short sale is approved. The same is true of lenders on first loans and lenders on second loans - once the short sale is approved, no deficiencies are permitted after the short sale.
First lets look at what a "housing bubble" is. Besides a fancy term heard routinely in the media, the United States housing bubble is an economic bubble affecting many parts of the United States housing market in over half of American states. Housing prices peaked in early 2006, started to decline in 2006 and 2007, and reached new lows in 2012. On December 30, 2008 the Case-Shiller home price index reported its largest price drop in its history. As a result of this and overall economic crisis across the nation, distressed property sales spiked.
It would stand to reason that the average homeowner needing to sell their home, probably couldn't afford to sell because they owe more than the home is worth. Many sellers became behind in mortgage payments due to a variety of reasons. Many were in dual or multiple mortgage situations and many had a loss of income. As homeowners faced foreclosure they failed to seek the advice of a professional. Many didn't even know a Short Sale was a viable alternative to Foreclosure.
So the big question - WHAT EXACTLY IS A SHORT SALE? Wikipedia's definition is - a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property, and the property owner cannot afford to repay the liens' full amounts, and whereby the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt.[1] Any unpaid balance owed to the creditors is known as a deficiency.[2][3] Short sale agreements do not necessarily release borrowers from their obligations to repay any deficiencies of the loans, unless specifically agreed to between the parties. However, in some states, legislation was passed to preclude deficiencies after a short sale is approved. The same is true of lenders on first loans and lenders on second loans - once the short sale is approved, no deficiencies are permitted after the short sale.
A short sale is often used as an alternative to foreclosure because it mitigates additional fees and costs to both the creditor and borrower....
Basically a short sale allows you to sell your home for less than you owe. The process will be addressed in a follow up blog but for now I want to list a few common myths associated with short sales.
1) My credit score will never recover - while a drop by as much as 300 points can be seen with a foreclosure, the drop as a result of a short sale is only half.
2) Short Sales take too long - Yes, the average short sale takes longer than a 30-45 conventional closing BUT, banks have come along way getting their paperwork act together and many have streamlined the process online. Using an experienced agent who knows how to negotiate a short sale will not only help you to close the deal sooner but these agents are closing a higher percentage of the short sales they represent.
3) I'm going to owe the money anyway - Many short sales when approved negate a deficiency judgement which means you can move on without the short fall hanging over your head.
4) You have to be behind on your mortgage to be considered for a short sale - While this used to be the case it is no longer true.
5) There isn't enough time - There is always time. I've negotiated short sales when the house had already gone into foreclosure.
6) The bank would rather foreclose than approve a short sale - This simply is not true. Foreclosures are very costly and as long as the seller qualifies the short sale will be considered.
If you or someone you know is in a distressed housing situation, tell them about my blog. Now is the time. Don't wait until it's too late and be sure to contact me at 843-368-4324 or mmiller@hargray.com if you're in the Bluffton, Hilton Head Island real estate market. I also have a long list of referral agents in areas across the country. Have a Happy Healthy 2013 and hopefully it's a prosperous one.
Thursday, November 8, 2012
The grass is always greener...
Coming from the Northeast where excellent soil conditions were somewhat easily achieved, I had no idea what I was in for when I move to the Lowcountry. An avid gardner, I fancied myself a pretty advanced green thumb. A title that would soon be stripped when I moved to the Lowcountry. There was a whole new set of rules to gardening here. I soon built my first home and eagerly purchased about $500 of plants to showcase my new back yard. I amended the soil somewhat and quickly planted my favorite plants. Everything looked great....for about a week. The leaves scorched by the sun even though the tags of my new plants said 6 or more hours of sun per day and yet when I pulled them out of the ground I was amazed to find them sitting in water. Yet immediatly to the left or right, the soil seemed as if my daughter brought half the beach home. I was at a loss. I then made the mistake of having "screened" top soil trucked in which presented a whole other set of issues. The weeds that had graciously found themselves in my new nutrient laden flower beds had taken on a life of their own. I had become a slave to my weeds and no longer had the time to worry that I had no plants to care for.
Now, the natural chemistry that goes on in your soil changes subtly with the seasons as grass clipings decompose, nutrients break down and soil ages. Different kinds of plants need different kinds of soil chemistry to thrive. Soils are classified as acid, neutral or alkaline, depending on their chemical reaction. That reaction determines how much of each nutrient will available to the plant.
Recently we purchased a lot and put a home on it. We are now "in the country" as my husband lovingly refers to it. Left with nothing but dirt after the septic and the well went it, we tried unsuccesfully for over a year to grow grass and nothing I mean NOTHING thrived. We have beautiful Oaks that provide the perfect landscape only these beautiful creatures strip the lime from the soil and without it nothing will grow. After this ephifany we enthusiastically tromped off to Lowes and purchased an inexpensive soil kit so we could test for various nutrients and bought a huge bag of lime determined that we would now have grass. To our suprise lime was NOT missing from our soil. If fact our biggest problem was that we had ZERO as in nada, zip, zilch, none... Nitrogen.
Grass is notorious for needing a lot of nitrogen fertilizer. Nitrogen is a macronutrient that all plants need. An excess of nitrogen, caused by fertilizer over application, can result in rapid, lush growth and a diminished root system. In extreme cases too much quick release nitrogen can cause burning of the leaf tissue, and plant death. A lawn with a nitrogen deficiency will lose it's green color and begin to turn yellow. Too much fertilizer, especially with high levels of soluble nitrogen fertilizer, tends to increase thatch problems and leaves lawns more prone to insect and disease. Or, worse yet, you will literally burn your lawn.
Recommendation: The goal of a good fertility program is to produce a reasonable amount of top growth, but not at the expense of root growth or carbohydrate storage. A good root system is the key factor to a healthy lawn. Moral of the story? Save yourself alot of headache and purchase yourself a good soil test kit before embarking on any fertilization program.
Now, the natural chemistry that goes on in your soil changes subtly with the seasons as grass clipings decompose, nutrients break down and soil ages. Different kinds of plants need different kinds of soil chemistry to thrive. Soils are classified as acid, neutral or alkaline, depending on their chemical reaction. That reaction determines how much of each nutrient will available to the plant.
Recently we purchased a lot and put a home on it. We are now "in the country" as my husband lovingly refers to it. Left with nothing but dirt after the septic and the well went it, we tried unsuccesfully for over a year to grow grass and nothing I mean NOTHING thrived. We have beautiful Oaks that provide the perfect landscape only these beautiful creatures strip the lime from the soil and without it nothing will grow. After this ephifany we enthusiastically tromped off to Lowes and purchased an inexpensive soil kit so we could test for various nutrients and bought a huge bag of lime determined that we would now have grass. To our suprise lime was NOT missing from our soil. If fact our biggest problem was that we had ZERO as in nada, zip, zilch, none... Nitrogen.
Grass is notorious for needing a lot of nitrogen fertilizer. Nitrogen is a macronutrient that all plants need. An excess of nitrogen, caused by fertilizer over application, can result in rapid, lush growth and a diminished root system. In extreme cases too much quick release nitrogen can cause burning of the leaf tissue, and plant death. A lawn with a nitrogen deficiency will lose it's green color and begin to turn yellow. Too much fertilizer, especially with high levels of soluble nitrogen fertilizer, tends to increase thatch problems and leaves lawns more prone to insect and disease. Or, worse yet, you will literally burn your lawn.
Recommendation: The goal of a good fertility program is to produce a reasonable amount of top growth, but not at the expense of root growth or carbohydrate storage. A good root system is the key factor to a healthy lawn. Moral of the story? Save yourself alot of headache and purchase yourself a good soil test kit before embarking on any fertilization program.
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