The company I work for, Prudential Palms Realty, has taken the lead in the Sarasota area when it comes to helpping our clients understand and navigate the short sale process. Last week we announced a new comany "Palms Short Sales Services". It was established to specifically designed to guide and manage buyers and sellers in these difficult transactions. With this in mind I would like to let you in on a little known fact.
This past November, the Treasury Department released guidelines for its new Home Affordable Foreclosure Alternatives Program (HAFA), designed to help homeowners who are unable to retain their home under the Home Affordable Modification Program (HAMP). Under HAFA, homeowners may be able to avoid foreclosure by completing a short sale or a deed-in-lieu of foreclosure (DIL). If you or someone you know is having trouble making mortgage payments, understanding this new government program is essential.
As a Member of the Top 5 in Real Estate Network(R), I have consulted with many clients faced with a distressed property situation. The good news is HAFA is designed to simplify and streamline the use of short sales and deeds-in-lieu of foreclosure by improving the process. Here’s how:
• Help homeowners who are HAMP eligible but nevertheless unable to keep their home
• Use financial and hardship information already collected in connection with consideration of a loan modification
• Allow borrowers to receive pre-approved short sales terms before listing the property
• Require borrowers to be fully released from future liability for the first mortgage debt and if the subordinate lien holder receives an incentive under HAFA, that debt as well
• Use standard processes, documents, and timeframes/deadlines
• Provide financial incentives: $1,500 for borrower relocation assistance; $1,000 for servicers to cover administrative and processing costs; and up to a $1,000 match for investors for allowing a total of up to $3,000 in short sale proceeds to be distributed to subordinate lien holders
To be eligible for HAFA, homeowners must meet the basic eligibility criteria for HAMP:
• The home must be your principal residence
• The first lien must have originated before 2009
• Mortgage delinquent or default is reasonably foreseeable
• The unpaid principal balance cannot exceed $729,750 (higher limits for 2- to 4-unit dwellings).
• The borrower’s total monthly payment exceeds 31% of gross income
Under HAFA, the forgiven debt due to a short sale will not be taxed if the amount of forgiven debt does not exceed the debt that was used to acquire, construct, or rehabilitate a principal residence. Check with your tax advisor. Please also know that while the debt will be forgiven, the short sale will be reported to credit agencies and have some degree of negative impact on your credit. Short sale agreements must be executed and returned no later than December 31, 2012.
If you think that you or someone you know can benefit from the HAFA program, please e-mail me. You can also visit www.realtor.org/shortsales for links to the guidance, many additional FAQs, and more information about short sales. Please remember to pass this important information along to others. In today’s economy, we all know someone who might need help.
Thursday, January 28, 2010
Friday, January 22, 2010
How to Help Your Home Stand Out and Sell Faster
What's my home worth? Is now a good time to sell? How long will it take to sell my house? These are just a few of the many questions I am getting these days from many of my clients.
In today’s buyers market, home-selling clients are always asking me what they can do to help their homes stand apart from the competition. As a Member of the Top 5 in Real Estate Network(R), I have seen how effective home staging can make all the difference in not only a quicker sale but a more profitable sale, as well.
First, it’s important to realize that home staging does not refer to the usual steps taken when your home is placed on the market, like painting the front door, taking away personal photos, and baking something in the oven. Staging, rather, is the professional merchandising of your home, which helps create an instant connection with potential buyers as they walk through the door. Just as new homebuilders create a model home for buyers to envision themselves living in, home staging does the same for your existing home.
Here are some important facts to be aware of before embarking on the home-staging process:
1. Make sure your home stager is knowledgeable about real estate and, in particular, your local market. Knowing what other homes in your area sold quickly provides the stager with important clues as to what buyers are attracted to.
2. Real estate agents, especially Top 5 Members like me, are excellent sources for referrals on home stagers in your area. Be sure to ask your neighbors as well.
3. Staging seeks to minimize the furniture in any given room in order to create the right spacing, while displaying as much floor space as possible. Be prepared with a convenient storage solution before you begin the staging process.
4. According to the International Association of Home Staging Professionals (IAHSPR), there is a growing trend toward eco-friendly home staging, where stagers provide specific “green” materials to sellers. This creates unique appeal to today’s environmentally conscious consumers.
5. Home staging is also on the rise among short sale and foreclosure properties where homes might be in need of special care. If you are in a financially challenged situation and need to sell your home, talk to your real estate professional about staging. Certain lenders are working with stagers in order to expedite these types of sales.
In the current real estate climate, homes must be merchandised and marketed wisely. Please e-mail me to find out how staging can make a significant impact on the outcome of your home sale…and please forward this email to anyone else who might be in need of home staging.
In today’s buyers market, home-selling clients are always asking me what they can do to help their homes stand apart from the competition. As a Member of the Top 5 in Real Estate Network(R), I have seen how effective home staging can make all the difference in not only a quicker sale but a more profitable sale, as well.
First, it’s important to realize that home staging does not refer to the usual steps taken when your home is placed on the market, like painting the front door, taking away personal photos, and baking something in the oven. Staging, rather, is the professional merchandising of your home, which helps create an instant connection with potential buyers as they walk through the door. Just as new homebuilders create a model home for buyers to envision themselves living in, home staging does the same for your existing home.
Here are some important facts to be aware of before embarking on the home-staging process:
1. Make sure your home stager is knowledgeable about real estate and, in particular, your local market. Knowing what other homes in your area sold quickly provides the stager with important clues as to what buyers are attracted to.
2. Real estate agents, especially Top 5 Members like me, are excellent sources for referrals on home stagers in your area. Be sure to ask your neighbors as well.
3. Staging seeks to minimize the furniture in any given room in order to create the right spacing, while displaying as much floor space as possible. Be prepared with a convenient storage solution before you begin the staging process.
4. According to the International Association of Home Staging Professionals (IAHSPR), there is a growing trend toward eco-friendly home staging, where stagers provide specific “green” materials to sellers. This creates unique appeal to today’s environmentally conscious consumers.
5. Home staging is also on the rise among short sale and foreclosure properties where homes might be in need of special care. If you are in a financially challenged situation and need to sell your home, talk to your real estate professional about staging. Certain lenders are working with stagers in order to expedite these types of sales.
In the current real estate climate, homes must be merchandised and marketed wisely. Please e-mail me to find out how staging can make a significant impact on the outcome of your home sale…and please forward this email to anyone else who might be in need of home staging.
Thursday, January 14, 2010
5 Ways to Finance a Home Improvement Project
You’ve probably noticed that remodeling projects in our neighborhood have waned as the economy has struggled. But remodeling your home is still one of the best long-term investments you can make. As home prices start to stabilize and slowly start to climb again, completing a remodeling project now can leave your home sitting pretty in terms of value when the market fully recovers.
In today’s tough lending climate, however, financing a home improvement project can be tricky. I am often asked, “What’s the best way to fund a remodel?” The National Association of Home Builders (NAHB) says there are several good options. Here are five recommendations I often share, from the simple to the more creative:
Cash
If you have cash in savings to pay for your remodeling project, this may be the best way to finance your home improvements. But be sure to consider the fact that, by paying in cash, you tie up money that could be earning interest in other investments. In other words, you need to look at the interest rate that you would be charged by financing the project and compare this to the interest you could earn by investing these funds.
Also remember that interest payments on a home improvement loan may be tax-deductible, while you can't write off the expenses of a remodeling project paid for in cash. Crunch the numbers and meet with a financial advisor to determine whether paying in cash will really pay off in the long run.
Home Improvement Loan
Two special loans administered through the Federal Housing Administration (FHA) are the Title I and Section 203(k) programs. A Title I loan allows you to borrow up to $25,000 for improvements to a single-family home. These are fixed-rate loans that FHA insures against the risk of default. Loans must be made by an approved Title I lender.
The 203(k) program is not as well known, but if you are looking to purchase a fixer-upper, it is a terrific opportunity. It allows homeowners to receive a single, long-term, fixed or adjustable rate loan that covers both the acquisition and rehabilitation of the property. To obtain a loan under the 203(k) program, you must use an FHA-approved lending institution. Most mortgage lenders are approved to make loans through this program.
Home Equity Line of Credit
A home equity line of credit is a form of revolving credit in which your home serves as collateral. This allows you to tap into these funds whenever you need it. The credit line is usually set at 75 to 80% of the appraised value of your home minus the balance of the first mortgage. Your credit history and ability to pay may also be considered in determining the amount of credit available.
Home equity lines of credit usually carry a variable interest rate that is figured by adding a margin to the current Prime Rate or some other index. Other costs associated with setting up a line of credit may also apply and will vary from lender to lender.
Second Mortgage
If you are not comfortable with the open-ended nature of a line of credit (which requires discipline to ensure that you don't go way over budget), a home equity loan, or second mortgage, may be right for you. This is a fixed-rate, fixed-term loan based on the equity in your house that is paid back in equal monthly installments over a specific period of time.
Cash-Out Refinancing
If interest rates today are significantly less than when you first purchased your house, refinancing your mortgage may be a wise move. This refinancing alternative allows you to use the accumulated equity in your home to take out a new loan to pay off your existing mortgage and then use the remaining funds for your remodeling project.
Make sure you factor in the length of time you plan to live in the house and the number of years left on your current mortgage before you decide to refinance.
Carefully consider the above options to determine what might be best for you or e-mail me to discuss further. I look forward to visiting with you.
In today’s tough lending climate, however, financing a home improvement project can be tricky. I am often asked, “What’s the best way to fund a remodel?” The National Association of Home Builders (NAHB) says there are several good options. Here are five recommendations I often share, from the simple to the more creative:
Cash
If you have cash in savings to pay for your remodeling project, this may be the best way to finance your home improvements. But be sure to consider the fact that, by paying in cash, you tie up money that could be earning interest in other investments. In other words, you need to look at the interest rate that you would be charged by financing the project and compare this to the interest you could earn by investing these funds.
Also remember that interest payments on a home improvement loan may be tax-deductible, while you can't write off the expenses of a remodeling project paid for in cash. Crunch the numbers and meet with a financial advisor to determine whether paying in cash will really pay off in the long run.
Home Improvement Loan
Two special loans administered through the Federal Housing Administration (FHA) are the Title I and Section 203(k) programs. A Title I loan allows you to borrow up to $25,000 for improvements to a single-family home. These are fixed-rate loans that FHA insures against the risk of default. Loans must be made by an approved Title I lender.
The 203(k) program is not as well known, but if you are looking to purchase a fixer-upper, it is a terrific opportunity. It allows homeowners to receive a single, long-term, fixed or adjustable rate loan that covers both the acquisition and rehabilitation of the property. To obtain a loan under the 203(k) program, you must use an FHA-approved lending institution. Most mortgage lenders are approved to make loans through this program.
Home Equity Line of Credit
A home equity line of credit is a form of revolving credit in which your home serves as collateral. This allows you to tap into these funds whenever you need it. The credit line is usually set at 75 to 80% of the appraised value of your home minus the balance of the first mortgage. Your credit history and ability to pay may also be considered in determining the amount of credit available.
Home equity lines of credit usually carry a variable interest rate that is figured by adding a margin to the current Prime Rate or some other index. Other costs associated with setting up a line of credit may also apply and will vary from lender to lender.
Second Mortgage
If you are not comfortable with the open-ended nature of a line of credit (which requires discipline to ensure that you don't go way over budget), a home equity loan, or second mortgage, may be right for you. This is a fixed-rate, fixed-term loan based on the equity in your house that is paid back in equal monthly installments over a specific period of time.
Cash-Out Refinancing
If interest rates today are significantly less than when you first purchased your house, refinancing your mortgage may be a wise move. This refinancing alternative allows you to use the accumulated equity in your home to take out a new loan to pay off your existing mortgage and then use the remaining funds for your remodeling project.
Make sure you factor in the length of time you plan to live in the house and the number of years left on your current mortgage before you decide to refinance.
Carefully consider the above options to determine what might be best for you or e-mail me to discuss further. I look forward to visiting with you.
Thursday, January 7, 2010
10 Tips for Staying Organized in 2010
If you’re like my wife and I, one thing that always makes our New Year’s resolution list is, “Get more organized.” In today’s hectic and often challenging lifestyle pace, staying organized provides an important sense of control and ensures we stay on track toward important goals.
I know that organization is the key to success, both at home and on the job. So as the new year begins, here are 10 tips for kicking off a well-organized year:
•Box it up right – Begin by stowing away the holiday décor in well-marked and sorted boxes. Try using empty wine cartons (you can probably get them free from your local liquor store) for fragile ornaments, and buy a few plastic storage cases that can be stacked and stored out of the way.
•Make some lists – Add any new names to your card and gift list, so that you are ready for next year.
•Get a new calendar – first, transfer in all birthdays and other important dates you want to be sure to remember.
•Schedule it – then begin scheduling annual medical, dental and veterinarian appointments for the family and pets, and note any other dates you want to remember, such as car maintenance, registration times, etc.
•Get it on sale – Get a head start on next year by taking advantage of after-holiday sales on wrapping paper, cards and gifts.
•Budget for next year – Take a look at your receipts to see how much you spent this year; then divide by twelve and begin a savings plan to help you get there stress-free.
•Hidden agenda – Designate a private spot for storing gifts you buy when they are on sale during the year. Keep a note in your wallet listing what you buy and for whom.
•Be tax ready – Create a folder or storage box for all receipts, check stubs, and other materials you will need when tax season rolls around. Make this the year you throw everything into the designated file or box.
•Be car ready – Keep a box in your trunk to hold blankets, umbrellas, diapers, flashlight and anything else you may want to have handy in an emergency.
•Check on your resolutions – Keep a written list of what you want to accomplish this year: losing weight, eating better, exercising, or even being more organized. Check the list each month to see how well you are doing.
While it seems impossible at times, staying organized is simpler than you think—and the rewards are tremendous—so forward these great tips to your family and friends. Wishing you a happy and healthy 2010 and be sure to e-mail me for any real estate-related assistance you may need in the New Year.
I know that organization is the key to success, both at home and on the job. So as the new year begins, here are 10 tips for kicking off a well-organized year:
•Box it up right – Begin by stowing away the holiday décor in well-marked and sorted boxes. Try using empty wine cartons (you can probably get them free from your local liquor store) for fragile ornaments, and buy a few plastic storage cases that can be stacked and stored out of the way.
•Make some lists – Add any new names to your card and gift list, so that you are ready for next year.
•Get a new calendar – first, transfer in all birthdays and other important dates you want to be sure to remember.
•Schedule it – then begin scheduling annual medical, dental and veterinarian appointments for the family and pets, and note any other dates you want to remember, such as car maintenance, registration times, etc.
•Get it on sale – Get a head start on next year by taking advantage of after-holiday sales on wrapping paper, cards and gifts.
•Budget for next year – Take a look at your receipts to see how much you spent this year; then divide by twelve and begin a savings plan to help you get there stress-free.
•Hidden agenda – Designate a private spot for storing gifts you buy when they are on sale during the year. Keep a note in your wallet listing what you buy and for whom.
•Be tax ready – Create a folder or storage box for all receipts, check stubs, and other materials you will need when tax season rolls around. Make this the year you throw everything into the designated file or box.
•Be car ready – Keep a box in your trunk to hold blankets, umbrellas, diapers, flashlight and anything else you may want to have handy in an emergency.
•Check on your resolutions – Keep a written list of what you want to accomplish this year: losing weight, eating better, exercising, or even being more organized. Check the list each month to see how well you are doing.
While it seems impossible at times, staying organized is simpler than you think—and the rewards are tremendous—so forward these great tips to your family and friends. Wishing you a happy and healthy 2010 and be sure to e-mail me for any real estate-related assistance you may need in the New Year.
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