From Bloomberg Businessweek:
Historical data from the National Association of Realtors (and adjusted for inflation by Businessweek.com) show that in 18 of the 25 largest metro areas in the U.S., the value of homes purchased in 1990 had increased by 2010, often by double digits. And this in a year when real estate prices around the country have softened since their peak in 2006. These houses would have been worth even more a few years ago.
A national housing survey by Fannie Mae shows that in the third quarter this year, 66 percent of consumers believed buying a home is a safe investment, compared with 16 percent who believe stocks are safe. That does not mean confidence in real estate has not been shaken in recent years: In 2003, 83 percent considered a home a safe investment.
Fannie Mae's survey also showed that 59 percent of respondents still believe owning a home is a good way to build wealth, and 84 percent believe buying makes more sense than renting.
Assuming home prices continue to increase 1 percent to 2 percent better than inflation, a buyer needs to own the property for at least five years to break even and cover selling costs, says Sorrento Capital's Hebner.
According to the latest forecast by Moody's Economy.com and Fiserv, nominal home prices in the U.S. will decline 4.8 percent from the fourth quarter of 2010 to the third quarter of 2011, when they are forecast to reach their trough.
NAR estimates that in 2010, 4.8 million homes will be sold in the U.S.—less than the 5.2 million sold in 2000, which is regarded as a "normal" year, says Yun, as the market had not yet overheated.
As the market normalizes, Yun expects sales volume to rise 6 percent year-on-year in 2011—assuming GDP grows 1.9 percent, 1.5 million jobs are created (bringing the unemployment rate to about 9.5 percent), and mortgage rates stay near 5 percent. Markets with high foreclosure rates, such as Nevada, Arizona, and Florida, will remain volatile.
For Buying or Selling, You Need a Teacher that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.
Tuesday, December 21, 2010
Thursday, November 18, 2010
Typical Escrow Closing costs for Buyers
First time buyers will often wonder how much their closing costs would amount to. Below is a typical breakdown of costs. In bank involved transactions, buyer also pays certain other costs that banks will not pay eg. First year Home Warranty coverage ($285-$355), third party disclosure source document ($123), etc. From a planning standpoint, we give a 0.7-1% rule of thumb depending on whether it is a short sale, foreclosure, or regular sale. The lender will also require an appraisal ($450) to ensure that the buyer is not overpaying and that the lien on the property is covered by the value of the property. Buyers also get a physical inspection done by a licensed inspector ($400) – just like getting a car checked out prior to purchase.
Offer Price: $525,000
Loan Amount: $417,000
Escrow Fee: $1037.50
Loan Tie-in: $250.00
(one) HOA fees: $150.00
Electronic Download: $200.00
Archival Fee: $24.50
Overnight Fee: $30.00
Title Insurance: $611.00
Endorsements: $200.00
Wire Fee: $25.00
Sub-escrow fee: $62.50
Notary Fee: $150.00
Recording Fee: $160.00
Total: $2900.50
Additional fees:
HOA plus tax proration
Lender’s closing costs calculated once escrow receives the loan docs
One month’s HOA dues for the buyer.
For Buying or Selling, You Need a Teacher that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.
Offer Price: $525,000
Loan Amount: $417,000
Escrow Fee: $1037.50
Loan Tie-in: $250.00
(one) HOA fees: $150.00
Electronic Download: $200.00
Archival Fee: $24.50
Overnight Fee: $30.00
Title Insurance: $611.00
Endorsements: $200.00
Wire Fee: $25.00
Sub-escrow fee: $62.50
Notary Fee: $150.00
Recording Fee: $160.00
Total: $2900.50
Additional fees:
HOA plus tax proration
Lender’s closing costs calculated once escrow receives the loan docs
One month’s HOA dues for the buyer.
For Buying or Selling, You Need a Teacher that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.
Wednesday, November 10, 2010
First Time Home Buyer Q&A
First Time Home Buyer Q&A
1. The description in one of the listing says - "LIGHT TLC NEEDED TO MAKE THIS HOME SHINE". Do you know what this means?
Answer: TLC = Tender Loving Care – it is a nice way of saying home needs cosmetic repairs
2. "Ownership - Fee Simple", "Ownership - PUD", "Possession - Close of escrow", "Corporate-owned. * * * AGENTS: READ CFR * * *" - What does these different terms indicate?
Answer: Ownership – Fee Simple: You own the lot and land – city/county typically owns the roads/driveways leading up to it.
Ownership – PUD – Planned Unit Development – you own the property but there is a shared interest in the common areas e.g. driveways, etc.
Agents: Read CFR - CFR = Confidential Remarks is an MLS communication field used for broker-to-broker communication that is not to be shared with the general public on the internet for security purpose e.g. showing information, gate codes, lock box codes, contact phone numbers, etc.
3. When the listing says - "Pets - Yes". Does this mean that the house has/had pets OR is it OK to have pets in the community for new owner?
Answer:
Pets – Yes – means rules and regulations of the community (aka CC&Rs) allows pets. Sometimes it will say Pets - Yes, with restrictions. This means that pets are allowed but may have size/weight restrictions to ensure that someone doesn't have a caged 150lb Siberian Tiger in their townhome and classify it as a pet.
4. One of the houses had this description- "...Its many upgrades include travertine, Berber carpet, custom paint, surround sound,..."? Do you know what travertine, or berber carpet is? What is vinyl flooring? And as far as pricing is concerned how is vinyl compared to hardwood, engineered wood, tile, or carpet flooring?
Answer:
Tiles: Travertine is a stone tile – in order of cost for tile flooring – Ceramic Tile < Travertine < Granite < Marble. Carpet: Different types of carpet: Berber, Plush, etc. Vinyl flooring – cheapest of all floor covering – this is a piece of plastic-type covering mostly used in bathrooms and kitchens. I will show you. Vinyl < Carpet < Tile (see tiles above) < Laminate < Engineered wood < Hardwood. There are so many different types of floor coverings that this order of cost is no set in stone. Cost of stone depends on where it is quarried from, how rare it is, etc. etc.
For Buying or Selling, You Need a Teacher that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.
1. The description in one of the listing says - "LIGHT TLC NEEDED TO MAKE THIS HOME SHINE". Do you know what this means?
Answer: TLC = Tender Loving Care – it is a nice way of saying home needs cosmetic repairs
2. "Ownership - Fee Simple", "Ownership - PUD", "Possession - Close of escrow", "Corporate-owned. * * * AGENTS: READ CFR * * *" - What does these different terms indicate?
Answer: Ownership – Fee Simple: You own the lot and land – city/county typically owns the roads/driveways leading up to it.
Ownership – PUD – Planned Unit Development – you own the property but there is a shared interest in the common areas e.g. driveways, etc.
Agents: Read CFR - CFR = Confidential Remarks is an MLS communication field used for broker-to-broker communication that is not to be shared with the general public on the internet for security purpose e.g. showing information, gate codes, lock box codes, contact phone numbers, etc.
3. When the listing says - "Pets - Yes". Does this mean that the house has/had pets OR is it OK to have pets in the community for new owner?
Answer:
Pets – Yes – means rules and regulations of the community (aka CC&Rs) allows pets. Sometimes it will say Pets - Yes, with restrictions. This means that pets are allowed but may have size/weight restrictions to ensure that someone doesn't have a caged 150lb Siberian Tiger in their townhome and classify it as a pet.
4. One of the houses had this description- "...Its many upgrades include travertine, Berber carpet, custom paint, surround sound,..."? Do you know what travertine, or berber carpet is? What is vinyl flooring? And as far as pricing is concerned how is vinyl compared to hardwood, engineered wood, tile, or carpet flooring?
Answer:
Tiles: Travertine is a stone tile – in order of cost for tile flooring – Ceramic Tile < Travertine < Granite < Marble. Carpet: Different types of carpet: Berber, Plush, etc. Vinyl flooring – cheapest of all floor covering – this is a piece of plastic-type covering mostly used in bathrooms and kitchens. I will show you. Vinyl < Carpet < Tile (see tiles above) < Laminate < Engineered wood < Hardwood. There are so many different types of floor coverings that this order of cost is no set in stone. Cost of stone depends on where it is quarried from, how rare it is, etc. etc.
For Buying or Selling, You Need a Teacher that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.
Tuesday, November 2, 2010
What gives the best ROI when upgrading your home?
I know that one can find the answers to almost anything on the internet. But excess information can be overwhelming at times, especially when you don’t have a clearly defined idea of what you are looking for. I have attempted to narrow the information based on my experience and present to you the part that is of most value – the Return on Investment in Remodeling your home.
A lot of people will ask me: what type of work should we do that would increase the value of the property?
Obviously, you don’t want to spend money over-upgrading the home if the surrounding properties don’t have these features. It doesn’t make sense to develop an intricate front yard with marble water features and exquisite palm fronds if 80% of the neighborhood has a grassy lawn and a simpler layout. Your house should have good clean curb appeal on par with the community. If you are looking for a place to start, start with the granite in the kitchen, upgrade the appliances to be more energy efficient, make sure that the roof underlayment is up-to-date, the home has good coat of paint, and decent floor covering. Details such as crown molding, above average baseboards, add definition and character to the home. Get rid of all the junk, ensure that storage space is well organized. If the cars can’t pull into the garage, either you need to get rid of your accumulated “treasures” or it might be time to consider making a move into a large home.
The home should feel that there is good space to move around and stretch. This is not a function of how large the home is but how much stuff you have managed to gather in it. Even a 1br condo can feel spacious and a 4000sf home can feel cramped. It is just a function of how the lifestyle is organized.
Check the return on investment for the projects shown here and then you decide which remodeling project will best fit your lifestyle needs along with your financial goals. Email/Call me if you have more specific questions.
A lot of people will ask me: what type of work should we do that would increase the value of the property?
Obviously, you don’t want to spend money over-upgrading the home if the surrounding properties don’t have these features. It doesn’t make sense to develop an intricate front yard with marble water features and exquisite palm fronds if 80% of the neighborhood has a grassy lawn and a simpler layout. Your house should have good clean curb appeal on par with the community. If you are looking for a place to start, start with the granite in the kitchen, upgrade the appliances to be more energy efficient, make sure that the roof underlayment is up-to-date, the home has good coat of paint, and decent floor covering. Details such as crown molding, above average baseboards, add definition and character to the home. Get rid of all the junk, ensure that storage space is well organized. If the cars can’t pull into the garage, either you need to get rid of your accumulated “treasures” or it might be time to consider making a move into a large home.
The home should feel that there is good space to move around and stretch. This is not a function of how large the home is but how much stuff you have managed to gather in it. Even a 1br condo can feel spacious and a 4000sf home can feel cramped. It is just a function of how the lifestyle is organized.
Check the return on investment for the projects shown here and then you decide which remodeling project will best fit your lifestyle needs along with your financial goals. Email/Call me if you have more specific questions.
| Paint | 70% to 300% | Built-in washer dryer | 75% |
| New Flooring | 50% to 300% | Fireplace | 65% |
| Kitchen Renovation | 75% | Energy Efficiency Features | 30% |
| Bathroom Addition | 75% to 100% | Swimming Pool | 25% to 50% |
| Addition to Existing Home | 40% to 60% | Garage | 75 to 100% |
| Basement Development | 55% | New heating system | 45% |
| Patio or Deck | 50% | Central Air Conditioning | 50% |
| New windows | 30% | Underground sprinklers | 50% |
| New Exterior Siding | 65% | Landscape Improvements | 50% |
Friday, October 29, 2010
Tips to speed up the short sale process
The short sale can take up to 90-120 days for approval which can be a pretty long wait for most. The seller and the buyer need to be educated with the process and made aware that this is not a regular ‘traditional’ sale and what they should expect.
Selling a home in a short sale needs a very different approach
Hardship documentation
The hardship letter should not be a sad saga of what the borrower has gone through but it should realistically portray the difficulties that the borrower has gone through so as to convince the lender about the inability of the borrower to repay the loan. The documentation should have supporting proofs like pay stubs, medical bills, financial statements etc. The numbers in all the supporting documents should add up to show the lender that the circumstances have changed and the borrow has done all he could to avoid the results.
Condition of the home
Most of the times the lender doesn’t want to invest additional money into repairing the house before a short sale. The condition of the house plays an important role in the decision of the prospective buyers. If the house is in a terrible condition the buyers are going to want to pay a very low price for the property. On the other hand the lender is going to try and make sure they lose least amount on the mortgage. This will lead to a mismatch in the price that is being offered by the market and the short sale price approved by the lender. This will lead to a delay in the process. Hence it makes sense for the seller to make sure the house is in a presentable situation so as to minimize the gap between the offered and the approved short sale price
Competitive Pricing
Competitive pricing is essential for any sale to take place. The seller and or his agent must do a thorough market analysis to come to the asking price for the property. The sellers agent must do a competitive analysis of the neighborhood so as to reach a fair asking price. The lender will also do their own research and number analysis and come up with the approved short sale price. At this point the seller and his agent should be ready to defend their analysis. A competitively priced property will not stay on the market for long.
For Buying or Selling, You Need a Teacher that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.
Selling a home in a short sale needs a very different approach
Hardship documentation
The hardship letter should not be a sad saga of what the borrower has gone through but it should realistically portray the difficulties that the borrower has gone through so as to convince the lender about the inability of the borrower to repay the loan. The documentation should have supporting proofs like pay stubs, medical bills, financial statements etc. The numbers in all the supporting documents should add up to show the lender that the circumstances have changed and the borrow has done all he could to avoid the results.
Condition of the home
Most of the times the lender doesn’t want to invest additional money into repairing the house before a short sale. The condition of the house plays an important role in the decision of the prospective buyers. If the house is in a terrible condition the buyers are going to want to pay a very low price for the property. On the other hand the lender is going to try and make sure they lose least amount on the mortgage. This will lead to a mismatch in the price that is being offered by the market and the short sale price approved by the lender. This will lead to a delay in the process. Hence it makes sense for the seller to make sure the house is in a presentable situation so as to minimize the gap between the offered and the approved short sale price
Competitive Pricing
Competitive pricing is essential for any sale to take place. The seller and or his agent must do a thorough market analysis to come to the asking price for the property. The sellers agent must do a competitive analysis of the neighborhood so as to reach a fair asking price. The lender will also do their own research and number analysis and come up with the approved short sale price. At this point the seller and his agent should be ready to defend their analysis. A competitively priced property will not stay on the market for long.
For Buying or Selling, You Need a Teacher that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.
Wednesday, October 13, 2010
The Short Sale Process Summary
This is a compilation of the steps involved in a Short Sale and what documents would be needed for a successful short sale completion. The short sale process can be divided into 7 major steps. The duration of each step varies for each case and hence difficult to estimate in advance. The important thing to keep in mind is that all the parties to a short sale need to be happy. Mr. Seller is getting away from his debt with little harm to his credit as compared to a foreclosure. Mr. Buyer is getting a property at a ‘good deal’ i.e. below the expected market value in the near future. Mr. Lender needs to be convinced that a short sale is a better alternative than a foreclosure.
The numbers calculated need to convince the lender that the borrower is headed towards foreclosure or bankruptcy or both. The lender needs to make sure that they will recover more of their investment by approving a short sale rather than foreclosing the property.
Below is the step by step process which explains the short sale process and what is involved:
1) Initial Property evaluation
The borrower must be upside down in the loan payments and the financial numbers should show that he is heading towards bankruptcy or foreclosure. The lender needs to be ensured that the borrow can no longer support the payments and the best recourse for the lender is to approve the short sale. The foreclosure process costs on an average $50000 to the lender and that can cut into the bottom line of the lender. Also the lender will need to make the property ready for sale by doing repairs and this will further cut into the bottom line for the lender. The home should be worth less than what the borrower owes with various mortgages.
As a prospective buyer for a short sale property you need to take a look at various things like, a seller who is willing to go through the short sale so as to avoid foreclosure, true hardship on the part of the seller, market evaluation or comparison that will help you determine the price, the property has no prohibitive claims or liens against the title, etc. there are many details that one needs to keep in mind when entering a short sale transaction. It is best to have an experienced attorney and real estate professional look into the detail and advice accordingly.
2) Lender contact after borrower permission
Once the borrower has made up his mind that he wants to do a short sale of his property he needs to hire a short sale experienced attorney and real estate professional. Please make sure the person you hire is an experienced one and knows what they are doing since they are the ones who represent you in the dealings with the lender. Once the borrower has decided on who will represent him in the transaction they will be required to give a written permission authorizing the person to discuss their situation with the lender.
Next the authorized person needs to contact the lender’s loss mitigation department (a list of the contact information of most of the lenders is given below). Another alternative is to contact the person named on the letters to the homeowner, which would be a most efficient and direct contact. It is advisable to make the first call in the presence of the borrower so that the lender can ask him questions directly.
Each lender has different decision making processes and different requirements hence, make sure the representative asks for an outline of what to expect and what the lender wants so as to get everybody on the same page.
3) Writing the hardship letter
The letter of hardship explains the occurrences which testify that the borrower has no ability to pay future payments towards the home. Hardships can be as a result of events beyond the borrower’s control which might result in sudden, significant and prolonged reduction in income or a catastrophic increase in financial obligation. The letter should describe the financial situation that is leading up bankruptcy or foreclosure or both. The letter doesn’t have to be sob story of what the borrower has been through but it needs to have a factual description of the financial situation faced by them. It should also contain the efforts taken by the borrower to resolve the situation
With the letter the lenders need to be convinced that approving a short sale is a preferable option and foreclosure is the only other option. The letter of hardship needs to be supported with valid documents such as paystubs, medical bills, income tax statements, etc.
4) Collection of documents for the process
Collecting documents for the short sale package only begins with the hardship letter. All the documents included should give numbers that will indicate that the borrower is on his way to bankruptcy or foreclosure or both. The goal is to prove that the borrower is a hopeless situation and cannot afford to pay all the mortgages accumulated on the house.
Below is the list of some of the documents the borrower should attach to prove financial hardships:
- Bank statements
- Pay stubs
- Tax returns
- Credit reports
- Hospital bills, etc.
Repair estimates should be the other document that the borrower attaches for the lenders reference. This tells the lender the amount it would need to spend incase if the property was to be foreclosed. This helps the borrower’s case in getting approval for short sale and avoiding foreclosure.
5) Short sale purchase agreement
Along with the financial statements, the package should also have a purchase agreement for the property. The borrower or his real estate agent needs to list the property on the market for sale and invite offers. The seller will need to accept one offer and then send that offer to the bank along with the other documents for approval.
The buyer should also have an experienced attorney who practices real estate law, so as to protect his interests. The attorney can draft the original offer as well as evaluate the counter offers that come back from the seller or lender.
6) Lender’s processing of the short sale
The lender looks at the short sale package with the aim of determining what would be less expensive for them – short sale or foreclosure. The package and the contents need to convince the lender that short sale is a better option. The lender will verify and analyze all the information and documents mentioned in the package. They will also gather their own data and analyze that in light of the documents. In doing so the lender will determines the value of the property and compares that with the value of the amount due on the mortgage and buyer’s offer.
If the numbers support it the lender will approve the short sale since the average cost of a foreclosure is $50000 for the lender in addition to the assets that the lender has to hold as reserve against the loan. So, if there are repairs that the lender will have to undertake to make the property ready for a sale in a foreclosure, then those need to be mentioned in detail in the short sale package submitted by the borrower. This will give the lender an additional reason to approve a short sale.
7) Closing the short sale
After the lender verifies all the documents, collects their own and does their own calculations they will approve the short sale at a particular price. If the short sale is approved at the price of attached purchase offer then the buyer and the lender will open Escrow. If the lender approved short sale price is higher than the offer price then a counter will be sent to buyer with the changed terms and the buyer is given a chance to accept the counter. If the revised terms are inacceptable to the buyer then the property is put back on the market and new offers are called for. Most of the lenders set a time limit on the approval and if an offer is not closed within that time, the process will start all over again.
For Buying or Selling, You Need a Teacher that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.
The numbers calculated need to convince the lender that the borrower is headed towards foreclosure or bankruptcy or both. The lender needs to make sure that they will recover more of their investment by approving a short sale rather than foreclosing the property.
Below is the step by step process which explains the short sale process and what is involved:
1) Initial Property evaluation
The borrower must be upside down in the loan payments and the financial numbers should show that he is heading towards bankruptcy or foreclosure. The lender needs to be ensured that the borrow can no longer support the payments and the best recourse for the lender is to approve the short sale. The foreclosure process costs on an average $50000 to the lender and that can cut into the bottom line of the lender. Also the lender will need to make the property ready for sale by doing repairs and this will further cut into the bottom line for the lender. The home should be worth less than what the borrower owes with various mortgages.
As a prospective buyer for a short sale property you need to take a look at various things like, a seller who is willing to go through the short sale so as to avoid foreclosure, true hardship on the part of the seller, market evaluation or comparison that will help you determine the price, the property has no prohibitive claims or liens against the title, etc. there are many details that one needs to keep in mind when entering a short sale transaction. It is best to have an experienced attorney and real estate professional look into the detail and advice accordingly.
2) Lender contact after borrower permission
Once the borrower has made up his mind that he wants to do a short sale of his property he needs to hire a short sale experienced attorney and real estate professional. Please make sure the person you hire is an experienced one and knows what they are doing since they are the ones who represent you in the dealings with the lender. Once the borrower has decided on who will represent him in the transaction they will be required to give a written permission authorizing the person to discuss their situation with the lender.
Next the authorized person needs to contact the lender’s loss mitigation department (a list of the contact information of most of the lenders is given below). Another alternative is to contact the person named on the letters to the homeowner, which would be a most efficient and direct contact. It is advisable to make the first call in the presence of the borrower so that the lender can ask him questions directly.
Each lender has different decision making processes and different requirements hence, make sure the representative asks for an outline of what to expect and what the lender wants so as to get everybody on the same page.
3) Writing the hardship letter
The letter of hardship explains the occurrences which testify that the borrower has no ability to pay future payments towards the home. Hardships can be as a result of events beyond the borrower’s control which might result in sudden, significant and prolonged reduction in income or a catastrophic increase in financial obligation. The letter should describe the financial situation that is leading up bankruptcy or foreclosure or both. The letter doesn’t have to be sob story of what the borrower has been through but it needs to have a factual description of the financial situation faced by them. It should also contain the efforts taken by the borrower to resolve the situation
With the letter the lenders need to be convinced that approving a short sale is a preferable option and foreclosure is the only other option. The letter of hardship needs to be supported with valid documents such as paystubs, medical bills, income tax statements, etc.
4) Collection of documents for the process
Collecting documents for the short sale package only begins with the hardship letter. All the documents included should give numbers that will indicate that the borrower is on his way to bankruptcy or foreclosure or both. The goal is to prove that the borrower is a hopeless situation and cannot afford to pay all the mortgages accumulated on the house.
Below is the list of some of the documents the borrower should attach to prove financial hardships:
- Bank statements
- Pay stubs
- Tax returns
- Credit reports
- Hospital bills, etc.
Repair estimates should be the other document that the borrower attaches for the lenders reference. This tells the lender the amount it would need to spend incase if the property was to be foreclosed. This helps the borrower’s case in getting approval for short sale and avoiding foreclosure.
5) Short sale purchase agreement
Along with the financial statements, the package should also have a purchase agreement for the property. The borrower or his real estate agent needs to list the property on the market for sale and invite offers. The seller will need to accept one offer and then send that offer to the bank along with the other documents for approval.
The buyer should also have an experienced attorney who practices real estate law, so as to protect his interests. The attorney can draft the original offer as well as evaluate the counter offers that come back from the seller or lender.
6) Lender’s processing of the short sale
The lender looks at the short sale package with the aim of determining what would be less expensive for them – short sale or foreclosure. The package and the contents need to convince the lender that short sale is a better option. The lender will verify and analyze all the information and documents mentioned in the package. They will also gather their own data and analyze that in light of the documents. In doing so the lender will determines the value of the property and compares that with the value of the amount due on the mortgage and buyer’s offer.
If the numbers support it the lender will approve the short sale since the average cost of a foreclosure is $50000 for the lender in addition to the assets that the lender has to hold as reserve against the loan. So, if there are repairs that the lender will have to undertake to make the property ready for a sale in a foreclosure, then those need to be mentioned in detail in the short sale package submitted by the borrower. This will give the lender an additional reason to approve a short sale.
7) Closing the short sale
After the lender verifies all the documents, collects their own and does their own calculations they will approve the short sale at a particular price. If the short sale is approved at the price of attached purchase offer then the buyer and the lender will open Escrow. If the lender approved short sale price is higher than the offer price then a counter will be sent to buyer with the changed terms and the buyer is given a chance to accept the counter. If the revised terms are inacceptable to the buyer then the property is put back on the market and new offers are called for. Most of the lenders set a time limit on the approval and if an offer is not closed within that time, the process will start all over again.
For Buying or Selling, You Need a Teacher that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.
Tuesday, September 28, 2010
August homes sales see modest movement.
The housing numbers showed modest gains in the north county inland mini-market with single digit gains/losses for the most part. e.g. Scripps Ranch gained 4%, Mira Mesa gained 1%, Penasquitos gained 9%, Rancho Bernardo W gained 24%, Rancho Bernardo E dropped 7%, and Poway dropped 9%. Data derived from the association of Realtor's monthly snapshots for the local markets.
It took California seven years to recover after the recession of the early 1990s; our state is projected to add 400,000 to 500,000 residents per year over the next decade. The long term outlook for rental and first time housing remains favorable and remains as the basis for purchase decisions in the short term.
For Buying or Selling, You Need a Teacher that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.
It took California seven years to recover after the recession of the early 1990s; our state is projected to add 400,000 to 500,000 residents per year over the next decade. The long term outlook for rental and first time housing remains favorable and remains as the basis for purchase decisions in the short term.
For Buying or Selling, You Need a Teacher that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.
Wednesday, September 8, 2010
Short Sales on the rise
We have been seeing an increasing number of successful short sales as banks are finally coming to the realization that it is more costly to go through a trustee sale or a foreclosure than to negotiate successful outcome on the short payoff. Perhaps there is a behind the scenes insurance picture that is slowly receding! Some of the loans that the banks were not negotiating earlier were insured so the bank losses were mitigated. In the trenches, we only get glimpses of the true picture when it comes to the mysterious workings of a bank system. As a result, we end up formulating empirical strategies to increase the odds of negotiating a successful outcome for our short sale home buyers. After all, we just need one good deal at a time!
Home loan mods are also becoming increasing frustrating for home owners because many of them are finding that the banks will shave of 20-30% of monthly payment and tack them on as deferred payments at the end of the loan! So after months of waiting, they home owners are finding this out. If you have a non-recourse primary home loan, the chances of negotating a successful short payoff with the lender is high. We work with a team of experienced short sale negotiators that have successfully accomplished the negotiation with the banks. Beware of fraud and definitely don't pay upfront money for a loan modification. There are many war stories out there. Please be careful.
At the invitation of NetIP (Network of Indian Professionals), I will be discussing short sales, investment opportunities and property management issues. Please RSVP if you are interested in attending. Space is going to be limited. Event will be held at 16363 Bernardo Center Dr on Saturday 18th Sept 1.00-2.15pm.
For Buying or Selling, You Need a Teacher that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.
Home loan mods are also becoming increasing frustrating for home owners because many of them are finding that the banks will shave of 20-30% of monthly payment and tack them on as deferred payments at the end of the loan! So after months of waiting, they home owners are finding this out. If you have a non-recourse primary home loan, the chances of negotating a successful short payoff with the lender is high. We work with a team of experienced short sale negotiators that have successfully accomplished the negotiation with the banks. Beware of fraud and definitely don't pay upfront money for a loan modification. There are many war stories out there. Please be careful.
At the invitation of NetIP (Network of Indian Professionals), I will be discussing short sales, investment opportunities and property management issues. Please RSVP if you are interested in attending. Space is going to be limited. Event will be held at 16363 Bernardo Center Dr on Saturday 18th Sept 1.00-2.15pm.
For Buying or Selling, You Need a Teacher that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.
Monday, August 23, 2010
Real Estate: What does the foremost economist have to say?
So last Friday, the San Diego Association of Realtors (SDAR) held a summit and the chief economist for the National Association of Realtors (NAR), Lawrence Yun, was a speaker. The predictions were generally conservative. "Housing starts figures have been low. Once the jobs figures come around, things will turn. 1.5 million jobs will be created annually over the next two years, with unemployment dropping to 8% by 2012 and 6% by 2015. Home prices are expected to remain steady but interest rates will climb out of the current low levels to around 6.2 by 2012." There was no concrete reason for these predictions that I could sink my teeth into. As always, foreword looking information can not be fully relied upon and everyone that predicts puts spin on data that validates their argument! I can assist unravel these for San Diego's micro-markets. Being in the trenches locally, I experience this first hand and am able to keep my finger on the pulse.
For Buying or Selling, You Need a Teacher that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.
For Buying or Selling, You Need a Teacher that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.
Thursday, August 5, 2010
15 year rates as low at 3.75%! Believe it! Can it last?
Last week mortgage interest rate 4.25% for 30 year and believe it, 3.75% for a 15 year fixed! This is the best time to buy and for all the right reasons, financials make it work, they make it believable and they make it the right thing to do. If you have been on the fence thinking of moving, this is a good time to do it and lock into a low interest rate on your target home. My sellers are doing this and taking advantage of this anomaly. Soon this should correct itself as rates go up again.
For Buying or Selling, You Need a Teacher (see Union Tribune article last weekend). For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.
For Buying or Selling, You Need a Teacher (see Union Tribune article last weekend). For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.
Tuesday, July 27, 2010
Bldg permits increase for San Diego County homes.
Finally the County has decided to issue house permits!! About time. San Diego county permits rose to their highest level in two years. This leads us to conclude that builders are going to create jobs and the economy is inching its way forward in a positive direction. Nevertheless, we are not out of the woods yet. This is still the second worst year for building permits (last year being the worst). San Diego median price hit a low in March 2009 ($326,830) and prices are now 21.7 percent higher than that low, still far off its peak of $622,380 in May 2006. (Data from C.A.R, California Association or Realtors). For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More on this within the next couple of weeks.
Wednesday, July 21, 2010
Summer is off to a great start
June has been a very successful month in terms of closings. Prices have responded to a change in marketplace. Average sales price were high and interest rates are still at a low...a 50 year low and that is encouraging the prices to hold. New opened business dipped in June. We are anticipating inventory levels to increase as short sale inventory builds up. Sellers will need to be educated to remain competitive. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More on this within the next couple of weeks.
Tuesday, May 18, 2010
Positive Outlook is Refreshing...
We have gotten used to the news about Real Estate Market not being favorable so the change in print headlines is refreshing. California is leading the real estate market out of the recession with San Diego being one of the biggest leading areas. Union Tribune reported 14.7% increase in resale prices and activity over the past months have been brisk and being in the trenches, I could sense this urgency. Loan interest rate is cooperating even as lending standards remain tight. Once the tax credits expire, we should anticipate a slowdown. Foreclosure and short sale inventory is still allowing many investors/first time buyers to acquire great homes at good prices. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More on this within the next couple of weeks.
Monday, May 10, 2010
Consumer Confidence is coming back
Current market conditions are seeing a definitive pickup in sales. The general first quarter numbers were off the charts given that we have just come out of the woods with the recession and all. This tells us that consumer confidence is coming back. The First Time Buyer credit helped drive the market but more importantly, we have started seeing more equity sales which are now coming back and this will help further the market to a better place. California tax credit is anticipated to help in keeping the sales going through end of June. Investment opportunities continue to remain available. Low interest rates + Good monthly rents. Consider exchanging a residential rental condo into a multiplex or combine forces with a friend and partner with each other to pick up a multifamily unit residential income property. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More on this within the next couple of weeks.
Tuesday, February 9, 2010
#1 in Customer Service
Frank Rashid named and awarded the 2010 FIVE STAR Real Estate Professional Award for highest and best in Customer Satisfaction by the San Diego Magazine!!
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