Putting your Escondido home up for sale can be stressful. When you sell your home (especially if it is your primary residence), this means that you have to pack and have a plan for your future move.

Here are three hot tips for Escondido home sellers:

1. Start packing before you put your home on the market. Believe it or not, you probably have many items in your home that you have not touched for over a year. Your wedding dress, Grandma’s silver cutlery, your junior high school yearbooks. Why not pack and store as many boxes of those items that you can? In fact, after the move, if you do not find the need to open those boxes for another year, why not consider donating or selling the contents?
2. Remove all personal items. One person’s personal items are another person’s clutter. Pack up all personal photos and the bulk of your bric-a-brac before listing your Escondido home for sale. When homes are free of clutter, they appear to be larger and more spacious. The visual appeal will really help to sell your home more quickly.
3. Contact a qualified Realtor®. Despite what you may believe, selling a home is really a job best left to professionals. Professional Realtors® already have a laundry list of prospective buyers at their disposal; they are also marketing experts and know how to help you sell your home for top dollar and also gain maximum exposure. Not to mention, Realtors® know how to prepare the California real estate paperwork in order to assure that your transaction is completed in accordance with the laws of the state of California.

If you are thinking about selling your home in Escondido, why not call one of the agents at Broadpoint Properties for a free consultation? They can help you to identify how you can sell your home for top dollar even in this unique and challenging real estate market.

(photo credit)

Everyone makes New Year’s Resolutions—lose 5 pounds, go to the gym three times a week, work harder, spend more time with family, etc. This year, it seems that many homeowners may want to add another New Year’s Resolution to the list: getting out of my underwater property. (That is, homeowners who owe more on their mortgages than their properties are worth may want to sell their homes in a short sale in 2012).

You see, at the end of 2012 of the Mortgage Forgiveness Debt Relief Act of 2007 will expire. This means that there is a possibility that those homeowners who sell their homes after 2012 will have forgiven debt that is taxable. Right now, there are many homeowners who can take advantage of the Mortgage Forgiveness Debt Relief Act of 2007 and sell their homes as a short sale with no tax consequence at all.

Some homeowners in Escondido, San Marcos, Vista and beyond need to ask themselves: Do I continue to pay my mortgage when I’m so far upside down, or can I even afford to continue paying my mortgage?

If you find yourself considering these questions, then a short sale may be an option for you. Of course, a short sale is not the best solution for everyone. However, with this tax relief and all of the wonderful short sale incentive programs (where sellers can actually get cash at closing from such banks as Bank of America, Chase, and Citi), many sellers may actually want to add short sale to the list of New Year’s Resolutions for 2012.

 (photo credit)

Here’s a question that people are always curious about:

How much does it cost to do a short sale?

Well, the answer is two-fold. If you are wondering how much commission you will be required to pay in a short sale transaction, the answer is ‘zero.’

Here’s why: In a short sale transaction, the seller is netting no proceeds from the sale. That is, the seller owes more on his/her home than the property is worth and the mortgage lender(s) have agreed to accept less than the full payoff. The mortgage lender also agrees to allow some of their proceeds to the Realtor® as commission on the sale. So, while the agent does earn a commission, it is paid from the bank’s proceeds and not by the seller.

The second part of the question involves whether the seller has any cost when s/he participates in a short sale. The answer to that part is ‘maybe.’

In some short sale transactions, there may be an unpaid HOA balance or some other costs that are associated with the closing that are not being paid by the short sale lender. The short sale lender often pays most of the costs associated with the closing (including title insurance, settlement fees, and recording fees). Often times, the mortgage lender may even allow money for property taxes, pest control, or an unpaid HOA balance.

When the lender approves the short sale, they breakdown the allocation of funds. Some sellers may find that the lender has not approved enough to cover the HOA balance or the entire settlement fees. And, in those cases, it is possible that the seller may need to assist in covering those costs—which are generally quite minimal.

It is not uncommon for short sale sellers to never pay a dime. But, don’t put all your eggs in that basket, because if you are a short sale seller, you may be asked for a small contribution in order to get the deal closed.

A few weeks back, we reported on this wonderful newly updated Government program, commonly known as HARP 2.0. In this program, responsible borrowers (perhaps even you) who are upside down (who owe more to the bank than their homes are worth) can refinance at prevailing rates.

Guidelines for this program were slated to come out on November 15, 2011, and the program applications could begin on December 1, 2011. However, according to Annamaria Androitis at SmartMoney, even if you apply right now, you probably will not see the refi completed until late spring of next year.

Lenders who underwrite mortgages manually can start processing refinancing applications this month, say spokespeople from Fannie Mae and Freddie Mac. But those who depend on an automated software system to underwrite mortgages must wait until updates are made, says Brad German, a Freddie Mac Spokesman. (Many lenders rely on the automated system.) Those lenders won’t be able to start processing applications and delivering loans until at least early February for Freddie Mac-backed mortgages and until March for Fannie Mae-backed mortgages.

In order to qualify for this program, your mortgage loan must meet conforming loan limits, and must be owned by Fannie Mae or Freddie Mac. Additionally, borrowers must be current for the last six months and eleven of the last twelve months.

If you are interested in learning more about this program and about whether you will qualify, please do not hesitate to contact the agents at Broadpoint Properties.

(photo credit)

Just the other day, a former short sale seller from another part of California contacted our office because she had questions about Senate Bill 458 and the anti-deficiency regulations for those short sale sellers that participated in a short sale prior to July 15, 2011.

Senate Bill 458 protects short sale sellers (borrowers) because it waives the rights of any short sale lenders who agree to a short sale from pursuing a deficiency judgment (essentially collecting the unpaid balance) from the seller (borrower). (Disclaimer: Discuss with an attorney whether this bill applies to your particular situation.)

This particular short sale seller sold her home in a short sale in February of 2011. She has two liens on the property, and the second lien was not satisfied in the short sale. Apparently, the second lien had been sent to a collection company that has been aggressively attempting to collect on the debt.

Prior to July 15, 2011, short sale sellers in the state of California were protected from deficiency for first liens only. The beauty of Senate Bill 458 is that it extended that protection to all junior liens.

For this particular short sale seller, she had some questions about recourse and non-recourse debt and whether she would be liable for non-recourse debt. Since real estate agents (unless they are attorneys, too) should only advise on what they know best (real estate, not California law), we advised her to seek the advice of an attorney—who might actually be able to help her get that collection agent to stop calling 24/7.

If you are considering participating in a short sale versus letting your home go to foreclosure, in California there are now some unique benefits to the short sale. Check out this handy chart and learn about the short sale incentive programs. Believe it or not, your lender may actually pay you to participate in a short sale.

I recently met up with a prospective Escondido short sale seller who bought his lovely home five years ago and put down a hefty down payment. His heart is broken. His $200,000 down payment is gone—unless he waits for the market to turn so that he can regain the lost equity in his home.

Unfortunately, because he needs to move for a new job, he cannot wait for the market to turn and needs to sell his Escondido home as a short sale in Escondido right now.

This Escondido short sale seller stopped making his mortgage payments a few months back and is about 7 weeks from an anticipated foreclosure on the property. However, because he is so crushed by the downward spiral of our real estate market and the loss of his $200,000, it is difficult for him to reconcile himself to sign a listing agreement for the amount that his property is worth right now on today’s market

If you are considering selling your home as a short sale, your home will need to be priced at current market value in order to obtain an offer and have your short sale reviewed by your lender. Generally, most of the mortgage lenders are not reviewing short sales without a complete short sale package and an offer to purchase the property. In order to obtain an offer quickly, the property must be listed and priced accordingly.

Banks will not postpone foreclosure auctions just because your property is listed as a short sale with a real estate agent. The qualified short sale Realtor® must have prepared and sent a short sale package to the bank and the bank must be evaluating the short sale package—otherwise the mortgage lender may foreclose on the property.

The goal of many short sale sellers is to avoid foreclosure. And, if your home is scheduled for auction, it is important that the short sale seller be aggressive in pricing, and that the property be available for showings and ready to sell. Banks send out their own appraisers to conduct appraisals (called BPOs –Broker Price Opinions) and those values are based on the current market value. So, if you need to sell your property in a short sale, make sure that you price it right. “The Price Is Right” was and still is a successful game show so perhaps there is something to the idea of selecting the appropriate price.

Photo: flickr creative commons by stweedy

Dear Broadpoint:

I am so confused and I do not know what to do. I am selling my San Marcos home as a short sale and I have missed about 8 payments. The other day my agent told me that my house is going to be foreclosed on by the bank in 7 days. I’m doing a short sale, so they cannot foreclose, right? –Confused short sale seller in San Marcos

Dear Confused Short Sale Seller in San Marcos:

I’m sorry to say that you have been given some misinformation. Just because you are participating in a short sale does not mean that the bank will not foreclose on your home.

A short sale is an alternative to foreclosure and the remedy (the closing, the short sale approval, and the short sale negotiations) must all be completed before the foreclosure sale date.

Unfortunately, the banks do not stop the foreclosure proceedings just because they have a short sale file. The good news, however, is that often times the banks will postpone the foreclosure auction in order to entertain the short sale offer that is currently on the table.

Have your agent contact the bank and request that the sale date be postponed in order to process the short sale. If you have any questions, feel free to call one of the agents at Broadpoint Properties. –Broadpoint