New Mexico homeowners at risk of losing their homes to foreclosure may be eligible for an interest-free loan that will pay a portion of their mortgage for up to two years. A total of 352 homeowners will receive as much as $50,000 each through the Emergency Homeowners’ Loan Program.

The Emergency Homeowners’ Loan Program, or EHLP, is targeting homeowners who are behind on their mortgage payments because of job loss or unexpected medical bills. For many, it could be the last chance to save their homes.

Qualified applicants will be selected to receive EHLP funds through a lottery.  Applications must be submitted no later than July 22, 2011.

Click here for full details including how to apply.

If you or someone you know is in distress regarding what do to about your home or investment property, contact me today.  I will be happy to provide a free consultation to help you evaluate your options.

What is a Short Sale?
In the world of Real Estate, a short sale refers to the sale of real property for an amount less than the amount owed on the property. In the short sale scenario, the bank agrees to accept less than the full balance due on the debt, and usually ‘forgives’ all or a large portion of the difference.

How will the Short Sale affect my credit?
Short Sales are still a relatively new concept. Banks have the option of submitting the short sale to the credit bureau as “Paid in Full” or “Settled for less than full balance”. As far as your credit score is concerned, there is no evidence whatsoever to support that a short sale will lower your credit score. Some have the idea that this is like a bankruptcy or a foreclosure. That’s far from the truth! In a short sale, the lender is simply allowing you to pay less than you owe!

If you are currently behind on your mortgage or facing foreclosure, the short sale will actually help your credit! How? Because once you are approved for the short sale, all collection activity will STOP and you will avoid foreclosure! 

Who benefits from the Short Sale?
Short sales can be a win-win situation. Lenders, Mortgagees and Realtors all benefit from the successful short sale. Mortgagors get the majority of their money back, Mortgagees get the relief they need and are able to sell their property and avoid foreclosure, and Realtors can facilitate the transaction and receive compensation (commission) from the sale of the property.

Why would banks forgive the difference?
To mitigate their losses, banks often accept a settlement of less than what is owed on the property. When faced with the option of getting the property ‘back’ through foreclosure, a short sale often makes a much wiser business decision for the bank.

This sounds too good to be true!?
Not really. Things that are ‘too good to be true’ usually don’t make good economic sense. The short sale makes good common and financial sense for the banks who grant them. The fact of the matter is, Mortgage companies and banks are NOT in the real estate business. They are in the LENDING business. The last thing they want is that property back.

Why does my property have negative equity?
Here are a few common reasons:

  1. Person bought at the height of the market and the market has now declined or paid more than the property was worth.
  2. The area has become less desirable for any number of reasons, so property values have declined.
  3. Person purchased the home with little or no money down and wants to sell within a few years of purchase… and the property value has not increased during that time. Therefore, costs associated with selling the property may create a balance due at closing,
  4. Person refinanced the home (with a high appraisal value) and now has little or no equity.
  5. Person bought in a brand new subdivision or recently developed area that has not been fully developed or has not appreciated (or has depreciated) in value
  6. The market is soft because there is too much builder (new home) inventory or too many existing homes on the market (buyer’s market)

 

What is Negative Equity?
Also known as being “upside down” negative equity is the difference between the value of an asset and the outstanding portion of the loan taken out to pay for the asset, when the latter exceeds the former. For example, if your car is worth $10,000 and you owe $15,000 on it, you would have a negative equity of $5,000.  Negative equity can result from a decline in the value of an asset after it is purchased.

Some areas decline in value. In other areas, prices may remain flat so that the properties in that area do not appreciate. If a seller wants to sell within 2-3 years of purchasing their property, they may be in a situation where they have negative equity.

What if I owe what my home is worth?
Even if you owe exactly what your home is worth, you may still need to do a short sale in order to pay for the costs of the sale (Realtor fees, Title Policy and other seller closing costs).

Why not just let my lender foreclose?
NO! What is the first thing banks do when they foreclose on a property? Hand it over to a real estate agent to get rid of it quick! The foreclosure process is a legal process. It involves attorneys and it costs MONEY. Once they get the property back via foreclosure they must often sell it for MUCH LESS than market value and pay Realtor commissions and all customary closing costs. Doesn’t it make more sense for them to take at or a little below fair market value before foreclosing?

And, even when they do sell it through foreclosure… this does NOT remove your obligation to repay the remaining balance! It is not wiped away!!!

What if I’m not behind on my payments?
Short sales work – even if you’ve never missed a payment! Yes, I know… short sales have gotten a stigma of being only available for folks who are in foreclosure. And it can happen that a lender will refuse to negotiate because the borrower is not behind.  But it is possible to negotiate short sales for folks who have never missed a mortgage payment! They just happen to be in a negative equity position and need the short sale in order to sell their home.

How long does it take?
Short sale approval can take 60 days or longer. 

What if my home is already in foreclosure?
Your foreclosure sale can usually be suspended during the short sale process. That’s why it’s imperative that you contact us right away!!!

Will my lender send me a 1099 on the debt forgiven?
In 2007 the U.S. Congress passed the Mortgage Debt Forgiveness Relief Act and it is in effect until 2012. As a result of that act, borrowers no longer pay taxes on the debt forgiven on their primary residence. So if the property is your primary residence, then no, you should not receive a 1099 for the debt forgiven or have to pay any taxes on the forgive debt.

For investment property, the lender does have the right to report to the IRS the amount they have ‘forgiven’ in a Short Sale transaction, the amount of the resulting tax will be far less than the debt forgiven. Take the example of one client who did get a 1099 for $30,000 forgiven. This resulted in additional taxes of $1,300 for that year. The resulting tax is far superior to paying the difference of the debt. Also, if the property is in foreclosure, the foreclosure would have a much more devastating affect on you than the amount of the 1099.

For more information go here: http://www.irs.gov/individuals/article/0,,id=179414,00.html

How much will the short sale cost me?
The real estate commission will be paid by your lender.  My goal as your broker is to negotiate with the lender so that you will bring no money to closing.  However, there are some fees that a lender simply will not pay, such as HOA dues. 


What kind of marketing will you do on my property?

On our regular listings, we do employ an extensive marketing plan, however we have found that traditional marketing mediums (flyers, virtual tours, open houses, showing feedback surveys, etc) are not effective at generating offers on short sale listings.

What generates success on our short sale listings is over 90% dependent on the property’s PRICE. We typically review the pricing and make adjustments every week or so until an offer is generated.

In addition to pricing, we employ a strong internet marketing presence. We have teamed up with REALTOR.com and ListHub.com to market your property on over 150 web sites.

If there are very few calls or lookers, then we will need to adjust the price until we get an offer. We typically generate an offer within 30 days, unless the property is very unique.

Do you think I should just do a loan modification instead of a Short Sale?

If you desire to keep your home and can afford to make the monthly payments, then YES you should keep it! In order to qualify for a loan modification, you will need to demonstrate to the bank that you are generating more income than your current monthly expenses.

Is this the case? If so, you will need to call your lender and let them know you want to do a loan modification, and see if they will qualify you for their loan mod program. If you aren’t approved, we can then move forward with a short sale. We can’t work the short sale at the same time you are working with your bank on a loan mod.

 Can I lease out my house while we’re waiting on the short sale?

We don’t recommend that you lease your home while waiting on the short sale to be finalized. Lenders will not be sympathetic to sellers who are collecting rent payments and not making their mortgage payment. Also, homes with tenants are subject to legal rules (tenant rights) and much more difficult to show and to sell.

 How will you decide on the list price of my home?

Initially we will set the price based on his extensive market analysis. Once we have an offer we will submit that to the bank. Once we convince the bank to agree to do a short sale on your home, they will hire their own independent appraiser who will come out and view your home, and set a valuation, based on its condition.

In order to get the process going quickly, we will need to send you our short sale package and get all of the necessary information we need back from you first, before one of our team members goes out to put up the sign and lockbox.

 Who will let me know what I need to do to the home to get it ready for sale?

We won’t be recommending that you do anything to the home that will cost you money. The truth is, since you won’t be netting anything from the sale, the last thing you probably want to do is spend more money on a home you no longer can afford. For that reason, we will be selling your home as-is. Our only suggestion is to clear out as much clutter as you can. Other than that you’re OK. The lender will price your home according to its condition.

Wells Fargo says it’s accepting FHA mortgages for borrowers with credit scores as low as 500. The move comes after NAR (National Association of Realtors) and FHA (Federal Housing Administration) Commissioner David Stevens among others late last year criticized the country’s major banks for requiring credit scores as high as 650 in some cases before making loans. At NAR’s annual conference last year in New Orleans, Stevens said banks’ credit policies were out of sync with FHA and artificially restraining home sales by as much as 20 percent of the potential market. Under its new policy, Wells Fargo will accept borrowers with credit scores of 500-579 if they put down 10 percent (no gifted funds or down payment assistance allowed). For borrowers with credit scores of 580-599, borrowers must put down 5 percent, with the same restriction on gifts and assistance funds. Borrowers with credit scores of 600 or higher can make a 3.5 percent down payment. The new policy took effect January 15, 2011.

US lawmakers passed a set of economic assistance measures on Nov 6, 2009 which includes an extension of the unprecedented $8,000 tax credit for first time home buyers, defined as someone who has not owned a home within the last 3 years.  It also opens the door for current homeowners who have owned and occupied their current home for 5 of the last 8 years to obtain a $6,500 rebate.  Qualified buyers now have until April 30, 2010 to fully negotiate a contract, and until June 30, 2010 to close and fund the purchase to obtain the credit.

This is GREAT news if you are someone who needs to sell your Albuquerque  real estate this winter.  Contrary to some negative reports that the tax credit is going to people who have bought a home anyway, I can attest to my first hand experience with many buyers who feel a strong incentive to find and close on a house in time to get that big chunk of cash.

It’s even better news if you are someone who needs to sell your Albuquerque home now, or in the next few months.  Typically, Nov, Dec, Jan and Feb are the slowest months for Albuquerque real estate sales in the year.  But this year promises to be different with the added historic opportunity for homebuyers to take home cash in their pocket AND buy in a buyers market. 

If you need to sell your home in the next six months, I encourage you to consider listing your Albuquerque home for sale NOW, to take advantage of these unduplicatable market conditions.  It may still take time to sell your home, but the more buyers who see your home, the more likely you are to get the best price possible!

Who knows, maybe you want to upsize or downsize?  There couldn’t be a more perfect time, with more buyers coming into the mainstream AND extra dollars in your pocket when you buy another home!

Contact me today if you have questions about the value of your Albuquerque home, or about how this tax credit works.

When I put my first baby into a car seat for the first time, I had the benefit of a very detail oriented husband who made sure every strap, buckle and clip was properly placed and perfectly tightened.  However, had I not, I think that first ride with Annika in the back seat would have felt very different. 

Statistics show 4 out of 5 car seats are improperly installed.  It’s no fun to worry about your child’s safety!   SAFER New Mexico will be offering a free child safety seat clinic for parents and caregivers to have their child safety seats inspected and installed. 

If you are an expecting or new parent, take the opportunity for peace of mind by stopping by

That’s My Baby!
4500 Osuna Rd NE
Albuquerque, NM 87109

505.345.6262

Saturday, December 13, anytime between 2pm – 4pm, and have your child’s car seat inspected.

 

It sure is comforting when you can put your baby in the car seat knowing that, without question, the equipment is installed in such a way as to offer the best possible protection.

 

And, yes, That’s My Baby! does happen to be having a 20% off sale so you can browse around before or after if you have time.  If you are going to buy something fun for a baby, consider shopping local over a big box store!  I recently read a statistic that indicates that for every dollar spent in a big national chain or box store, only 14 cents stays in the community, vs. 89 cents spent in a local “mom and pop” store.  Imagine what a difference that could make in our local economy this holiday season!

 

 

Keller Williams Realty is selling properties (vacant land and homes) like mad on the West Side and Rio Rancho.  A new and innovative approach of collecting properties for sale into a 2 day mass auction every quarter has increased the sales market unit volume about 62% and has accounted for about 38% of the combined market volume based on MLS closings. This is so very exciting in our current real estate market.

 

This unique approach attracts investors and homeowners, local and non, and results in a concentrated pool of motivated prequalified and cash buyers who can close the deal, and fast.  No waiting for a buyer, no “days on market”, no back and forth hassle of negotiating, no protracted closing.  Just cash in your pocket.  What’s not to like?

 

The biggest concern most sellers have with this approach is will they have to sell their property for a price less than that which they are comfortable with?  And the answer is no.  Reserve prices can be set if you wish.

 

Add your properties to the next auction scheduled for February 21, 2009 and get in on the excitement of selling at auction!!

 

For more information on this opportunity, please contact me.

 

On Feb 17, 2009, when America switches to digital airwave transmission, millions upon millions of TVs in households which currently rely upon analog airwaves (instead of cable) will become obsolete, unless a digital converter box is installed.  In case you have been on ice for the last few years and this news to you, go to http://dtvfacts.com/ for detailed information on the switch and what your options are. However, what I want to know is, what happens to the millions of analog TV sets that will be replaced in the coming months by upscale digital models?

Before you trash your old TV set for any reason, consider that many municipalities have banned TVs from landfills.  And for good reason, since your old set contains up to eight pounds of lead, a poison that can cause nervous system damage. Lead is there to protect you from radiation while it’s still in your TV, but when the TV is crushed in the garbage truck and then in the landfill, bad news: that lead is going to leach out. And that’s not all – electronic circuit boards, batteries, and color cathode ray tubes (CRTs) can contain additional hazardous materials such as, mercury and hexavalent chromium. If improperly handled or disposed, these toxins can be released into the environment through landfill leachate or incinerator ash.

Unfortunately, you can’t just drop off the TV at the local thrift store or recycling center and call it a day. Many charities don’t accept used TVs anymore since the cost of disposing of broken sets is too high to offset the money they could make by selling working ones.

 

The Bad News 

Albuquerque’s Electronic Waste Recycling Pilot Program does not accept TVs!!!

 

The Good News

We do have other options!

·    Reuse!  If your set is so new and/or loved it just breaks your heart to recycle it, check with a few local charities before you just drop it off. The Earth 911 and Electronic Industries Alliance searches include some nonprofits that accept used working TVs, but if you can’t find any in your area, try calling local thrift stores to ask if they’ll take your set or know who will.

·    Recycle!  Ready to let your set go on to its next life?

o        For local folks, you can 311 – Albuquerque’s Solid Waste Management Department says that you can call to schedule a “Large Item Pickup” and they will take your old TV set away and, they claim, recycle it.  At this writing, I was unable gain confirmation as  what they actually do with the equipment, but I hope to have an update on that soon.  But that is certainly a quick and easy option!

o        Anyone can search through Earth 911’s database of recycling, disposal, and donation alternatives. Just enter your ZIP code and get a list of options instantly. There are several for ABQ!  Need more? Look through the Electronic Industries Alliance list of state-by-state e-cycling resources.

o        Some retailers and manufacturers, like Best Buy and Sony, offer recycling programs. Visit the Environmental Protection Agency‘s list of participating e-cycling companies to find out what’s available in your area.

If you do choose to recycle, just make sure you’re dealing with a reputable company.  Some unethical recycling firms charge substantial fees to recycle old sets and then just ship the old TVs overseas, where they become HUGE polluters.  Even non-functioning sets will be sold to impoverished families who disassemble the sets, and burn the wiring or other components in order to obtain the lead or copper, which they then resell.  But the fumes are incredibly toxic, and often, families are using the same cast iron pot to “home-smelt” as they are to cook their dinner.    The NIMBY (not in my backyard) philosophy just doesn’t work anymore.

How to navigate all this?  For starters, find out if they’ve signed the Electronics Recycler’s Pledge of True Stewardship. The Electronics Industries Alliance has also compiled a list of questions you can ask to ensure your old television is handled responsibly.

Dec 3, 2008

Free Tram Tickets!

What are you doing Saturday, Dec 20th

If you would like to be riding the Sandia Peak Tramway up to Sandia Peak to enjoy the views, OR, maybe you will have family in town and would like them to enjoy the uniquely exciting experience of the world’s longest tramway in lieu of spending portions of the evening standing forlornly in front of your open refrigerator door and asking you where the snacks are.  The tram tickets are free, no obligation, no cost to you.  This is just my way of saying “Thank You” to you, my clients, colleagues, friends, family, in general, any and all folks who receive my newsletters.  If you (this means you) would like to receive two free Tram tickets for that evening, or maybe give them as a gift for a friend or family member, then please contact me to make arrangements to receive them! 

 

There are several high profile segments of homes selling today.  Of course we have the usual suspects:    

  • Homes listed by real estate agents in the MLS (the majority)
  • Homes For Sale By Owner
  • Ebay
    • Don’t laugh, over 4,364 real estate properties are sold in an average month, mostly unique homes, vacation homes or properties suited for investors.  Lest you think that you can avoid a Realtor® and just list your home on Ebay, keep in mind that within the greater picture of 5.18 million units sold nationwide in September 2008, this works out to be less than 1/100th of one percent.
  • Mass Auctions
    • My company here at Keller Williams has begun sponsoring auctions of land and homes alike.  This is an up and coming segment of the current market, a great opportunity for buyers and sellers alike.  Watch for more information in future blog entries. 

But the fastest growing segment that has been shaking up the party is

  • Foreclosures. 

How many of you out there think foreclosure properties present incredible opportunities for wealth building?  (Raise your hands, don’t be shy).  I thought so. 

Thus I thought it would be useful to take a closer look at them.  Are they really the scorchin’ deal everyone thinks they are?  Keep in mind, the following discussion is locally based, and other areas of the country may be experiencing completely different market activity.

Listen closely, it is the sound of bubbles bursting (and opportunity knocking!).  First of all, in my experience foreclosures are not being listed for sale at the rock bottom prices you might expect.  I believe this is because most of the foreclosed homes were purchased at the top of the market, within the last 3 years, many at 100% (or more!) mortgages.  Lenders are stuck with very high positions in homes that simply can’t command the price that will even pay off the note and additional costs incurred by the foreclosure process and holding of the property.

I’ve written offers on many foreclosed homes, and in some cases it takes weeks or months to get a response, if you get one at all.  Many lenders hold tens, if not hundreds, of these homes.  I recently wrote an offer on a foreclosure that had been sitting for over a year at 84% of the list price.  The seller did get back to me in 24 hours. Their response?  Nope. Forget it. G’bye. They didn’t even send over a counter. 

You might wonder why, I mean, this doesn’t make any sense does it?  Wouldn’t you think lenders want to divest of these properties?  Well, there are a variety of reasons why lenders might be sitting tight.

First, seven letters.  Bailout.  Many lenders who are eligible for bailout money are likely waiting to see what kind of package they are going to ultimately get from Capitol Hill. Yes, it is true that most of our local New Mexico lenders were so conservative in their policies that they aren’t even eligible for bailout money, which is one of the reasons New Mexico has so few foreclosures relative to other areas of the country.  The largest portion of New Mexico foreclosures are held by The Big Ones, the national companies such as Citibank, Bank of America, and Countrywide.  They are eligible for bailout. Until it is clear what that means, many are sitting on their properties, waiting for a buyer, but not just any buyer, one at their price.

Second, market protection.  If lenders start letting their homes go for that proverbial song buyers dream of, then it could create a downward spiral of home prices, worsening the housing market in the short term.  In short, they hope to keep the housing prices from dropping even more, further reducing their chances of getting out from under their inventory without losing their shirts. 

Third, sheer volume. In some cases, there are so many homes in the inventory, lenders don’t have enough staff to evaluate the offers they are receiving, and offers sit unanswered.  In other cases, there is plenty of entry level staff to prep the offers in-house, but they do not have sufficient access to the “decision makers”, the people who can actually authorize the sale.

So, if you buy my diatribe thus far, where ARE the scorchin’ deals?  Drum roll please..  Top ten survey says….  1) Grandma’s house and 2) Realtor® represented properties.

Grandma’s house, or more generally put, any home which has been owned by the owner for 5 years or more.  The longer, the better the potential deal.  These are homes in which the owner has equity to negotiate.  They can afford to give you the scorchin’ deal because they are still going to walk away from the table with dollars, and plenty of them.   Chances can be even better for deal-age if the home is vacant and the owner is out of state or is being relocated to another state by a company who isn’t going to give them a relocation package which would “buy” their house for them so they can buy another one in their new town.  These people are motivated.  They have equity, and strong desire (if not financial necessity) not to have two mortgage payments, and they can give their equity to you, in exchange for being the only house in the neighborhood to sell this quarter.

Why a Realtor® represented property?  Because the majority of people who list their home For Sale By Owner have an emotional idea of how much their house is worth, which is typically higher than the market value.  For Sale By Owner properties are typically overpriced, that’s partially why 88% of homes originally attempted for sale by owner ultimately end up listed with a Realtor®.  When a Realtor® is involved, he/she can help the seller evaluate the offer properly – by providing the seller with an estimated net of cash after closing costs are paid, and helping the seller to understand what is happening, truly, in the marketplace, so they have not just an emotional idea of the value of their home, but a viewpoint based on the cold hard facts, only available as sales statistics from the Multiple Listing Service (Greater Albuquerque Metropolitan Board of Realtors).  Buyer’s have an advocate in a Realtor® represented property.  The seller’s agent is, of course, looking out for the seller’s interests solely, but the seller’s interest is ultimately to sell the house for most desirable terms for the seller.  “Desirable terms” is most often interpreted by buyers to mean price, but for the seller, the more desirable terms could be a quick closing with cash or pre-approved funds.  A good seller’s agent will do his/her best to ensure that negotiations continue until either a meeting of the minds is reached, or it is absolutely clear that such a meeting is impossible.  The intent of the seller’s agent is full and complete advocacy for the seller, but it is indirectly also advocacy for a buyer who comes in with a lowball offer, trolling for the deal of the century.

The deals are always there, no matter the weather, but it takes a little research and elbow grease to find them.  Having a good Realtor® helps too.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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