What is a Short Sale?

Overview:

A Short Sale, also known as a pre-foreclosure sale, is when you sell your home for less than the balance remaining on your mortgage. If your mortgage company agrees to a Short Sale, you can sell your home and pay off all (or a portion of) your mortgage balance with the proceeds

Short Sale is an alternative to foreclosure and may be an option if:

• You are ineligible to refinance or modify your mortgage
• You are facing a long-term hardship
• You are behind on your mortgage payments
• You owe more on your home than it’s worth
• You have not been able to sell your home at a price that covers what you still owe on your mortgage
• You can no longer afford your home and are ready or need to leave

What are the benefits of a Short Sale?

• Eliminate or reduce your mortgage debt
• Avoid the negative impact of foreclosure
• Start repairing your credit sooner than if you went through a foreclosure
• May be able to get a Fannie Mae mortgage to purchase a home sooner (in as little as 2 years) than if you went through foreclosure (up to 7 years)

What is the process for a Short Sale?

If you qualify for this option, the process is similar to a normal real estate sales transaction. You will work with a real estate agent to market and sell your home. However, your mortgage company will also be working with you and your real estate agent every step of the way to:

• set the sale price (based on current market value),
• collect financial information and negotiate with other lien holders (i.e., your second mortgage company) if applicable,
• review acceptable offers,
• agree to the terms of the sale once a buyer is in place, and
• work with the buyer’s real estate agent and mortgage lender to finalize the sale.

In some cases, you may be eligible to receive relocation assistance to use toward your moving expenses and to make the transition to new housing easier.

What Are My Loan Options?

First Choice: Fixed or Adjustable-Rate Home Loans

The different types of mortgages available today can be placed in one of two categories. They either have a fixed rate of interest, or an interest rate that adjusts over time. Technically, there's a third category of "hybrid" loans. But I'll get to that later. As a home buyer, this is one of the first decisions you'll have to make about the loan you want to use.

So how do you choose between these mortgage types? First, you need to understand how they work. Next, you need to consider the pros and cons of each type. And lastly, you should choose the loan that best supports your long-term housing plans.

Let's start with the basics...

•    Fixed-rate mortgage: This type of home loan carries the same interest rate for the entire term (length) of the loan. The interest rate makes up part of your monthly payment. It's also the only component that has the potential to change over time. So if you get a mortgage with a guaranteed fixed rate, your monthly payment is guaranteed to stay the same -- for the entire life of the loan.

•    Adjustable-rate mortgage: These are also referred to as ARM loans for short. Unlike the previous option, this type of mortgage has an interest rate that changes over time. This also means that the size of your monthly payment will change over time. It might adjust up or down, depending on market conditions at the time of adjustment. But they usually adjust upward, resulting in a larger monthly payment.

•    Hybrid ARM loan: Most of the adjustable-rate mortgages offered today are considered "hybrid" loans. They get this name because they start off with a fixed rate for a certain period of time. After that period, the rate will begin to adjust. The most popular example is the 5/1 ARM loan, which carries a fixed rate of interest for the first five years. The rate will change every year after that. Some lenders offer 1-year, 3-year and 7-year ARMs, as well.

•       With an ARM, you can probably save money during the first few years by securing a lower rate (when compared to a 15- or 30-year FRM). But after the initial fixed-rate period, your loan's interest rate will begin to adjust to keep pace with market conditions. They usually adjust upward, which means you'll have a larger monthly payment.

•       With the fixed-rate option, you'll have the same interest rate for the entire life of the loan. This is true even if you keep the loan for 30 years. You'll pay a higher rate than the initial rate on an ARM loan, but you won't have any of the uncertainty that comes in the later years of an adjustable loan  you're basically paying a premium for long-term predictability.

Second Choice: Conventional or Government Loan

A conventional mortgage is one that is not insured by the government in any way. This home loan is made in the private sector with no form of government backing.

A government-backed loan is insured by some type of federal agency, such as the Department of Veteran Affairs (VA) of the Department of Housing and Urban Development (HUD). The loan may still be made in the private sector, but the lender receives insurance from the federal government.

There are several types of government mortgages:

•    FHA loan -- This mortgage is made by lenders in the private sector (known as FHA-approved lenders) and is insured through the Federal Housing Administration. If the borrower defaults on the loan, the lender gets paid by the FHA.

•    VA loan -- This program is reserved for military service members and their families. It can be used to finance 100 percent of a home purchase, which eliminates the need for a down payment. This program is managed by the Department of Veteran Affairs. If you're a military member, you should have a VA specialist somewhere within your command. They can provide you with details about the program.

•    USDA loans -- These used to be called RHA loans, for the Rural Housing Administration. The program is overseen by the United States Department of Agriculture, or USDA. This type of mortgage loan is reserved for people who live in certain parts of the country. There are income restrictions as well. They are sometimes referred to as "farmer loans," due to the geographical and demographic nature of the program. But you certainly don't have to be a farmer to qualify. The program is designed for low-income residents of rural areas.

Choosing the Right Type of Mortgage for You

We've covered a lot of different mortgage types up to this point. But how do you choose the best one for your situation? Here are some questions that will help you decide.

1. How much do you have for a down payment?

If you can afford a 20-percent down payment on a house, you're probably better off using a conventional loan. You'll avoid mortgage insurance if you go that route (it's only required on loans that make up more than 80 percent of the purchase price).

If you can't afford to put that much money down, you might want to consider the FHA program. You'll pay extra insurance on the loan, but your down payment could be as low as 3.5 percent if you meet the requirements.

2. What's your credit score?

To qualify for a conventional mortgage, you will probably need a FICO credit score of 640 or higher. But the government programs are a bit more flexible. Many home buyers with credit scores below 640 have to rely on the FHA loan. Find out where you stand. It will help you decide which type of mortgage to use. It will also help you negotiate with the lender (by better understanding your qualifications).

3. How long will you be in the house?

You'll have an easier time choosing between the fixed-rate and adjustable loan by thinking about your long-term plans. The longer you plan to stay in the home, the more you should lean toward the fixed-rate mortgage. But there are certain scenarios where it makes sense to use an ARM.

Here's an example from my own experience. When I was in the military, my wife and I bought a home in Maryland. We knew were would only be there for three to four years, at the most. We purchased the house because home prices were appreciating in the area, so it was a good investment (and better than living in an apartment).

We used an ARM loan to get a lower interest rate. We sold the home at the end of the tour, before the mortgage started to adjust. So we saved money during our stay, and we got out of the loan before the rate went up. This is an example of using the right type of mortgage for your situation.

Some people use an adjustable loan even when they plan to stay in the home for a long time. The logic is that they can enjoy having a lower rate for the first few years, and then refinance the loan before the first adjustment period. This makes sense on paper. But what if you can't refinance? A lot of things can prevent you from refinancing -- not enough equity, bad credit score, etc. So there's no guarantee you'll be able to refinance down the road.

Now is the Time to Buy, Sell and Refinance

It is very rare that it is a great time to buy, sell and refinance all at the same time. For the past few years it has been a great time to buy and for those rare folks with equity a great time to refinance but a pretty terrible time to sell. That has changed in the past few months and we are now entering a trifecta moment.

Let’s Refinance:

In the past month home prices have edged up while rates have lowered. This means that if before you could not refinance you may be able to now. Rates are in the mid 3’s on a 30 year fixed for conforming loans that is insanely low.

 

Now is the time to sell:

In terms of selling there is a lack of inventory which means that there are more buyers then homes for sale. From the sellers perspective that is ideal because it creates multiple offers and higher prices. There are also far less foreclosures on the market so you no longer have those comps hurting prices.

 

Last Call for buyers:

Rates at historic lows and the beginning of prices edging up now is the time to get in and buy before you miss today’s great prices. It is last call for buyers right now who want the killer deals. There are still some foreclosures ebbing through but on the whole they have slowed down dramatically and no one is quite sure what comes next. There are also aggressive loan programs like FHA that can get you into a home with a rate as low as 3.25% on a 30 year fixed with only 3.5% down or Homepath which can get you a home with 3% down and NO mortgage insurance.

 

What Should I Do To Prepare My Home For Sale?

 

Every seller wants her home to sell fast and bring top dollar. Does that sound good to you?  Careful planning and knowing how to professionally spruce up your home will send home buyers scurrying for their checkbooks. Here is how to prep a house and turn it into an irresistible and marketable home.

 

Disassociate Yourself With Your Home

• Say to yourself, "This is not my home; it is a house -- a product to be sold much like a box of cereal on the grocery store shelf.
• Make the mental decision to "let go" of your emotions and focus on the fact that soon this house will no longer be yours.
• Picture yourself handing over the keys and envelopes containing appliance warranties to the new owners!
• Say goodbye to every room.
• Don't look backwards -- look toward the future.

De-Personalize

Pack up those personal photographs and family heirlooms. Buyers can't see past personal artifacts, and you don't want them to be distracted. You want buyers to imagine their own photos on the walls, and they can't do that if yours are there! You don't want to make any buyer ask, "I wonder what kind of people live in this home?" You want buyers to say, "I can see myself living here.”

De-Clutter!

People collect an amazing quantity of junk. Consider this: if you haven't used it in over a year, you probably don't need it.

• If you don't need it, why not donate it or throw it away?
• Remove all books from bookcases.
• Pack up those knickknacks.
• Clean off everything on kitchen counters.
• Put essential items used daily in a small box that can be stored in a closet when not in use.
• Think of this process as a head-start on the packing you will eventually need to do anyway

Rearrange Bedroom Closets and Kitchen Cabinets

Buyers love to snoop and will open closet and cabinet doors. Think of the message it sends if items fall out! Now imagine what a buyer believes about you if she sees everything organized. It says you probably take good care of the rest of the house as well. This means:

• Alphabetize spice jars.
• Neatly stack dishes.
• Turn coffee cup handles facing the same way.
• Hang shirts together, buttoned and facing the same direction.
• Line up shoes.

Rent a Storage Unit

Almost every home shows better with less furniture. Remove pieces of furniture that block or hamper paths and walkways and put them in storage. Since your bookcases are now empty, store them. Remove extra leaves from your dining room table to make the room appear larger. Leave just enough furniture in each room to showcase the room's purpose and plenty of room to move around. You don't want buyers scratching their heads and saying, "What is this room used for?"

Remove/Replace Favorite Items

If you want to take window coverings, built-in appliances or fixtures with you, remove them now. If the chandelier in the dining room once belonged to your great grandmother, take it down. If a buyer never sees it, she won't want it. Once you tell a buyer she can't have an item, she will covet it, and it could blow your deal. Pack those items and replace them, if necessary.

Make Minor Repairs

• Replace cracked floor or counter tiles.
• Patch holes in walls.
• Fix leaky faucets.
• Fix doors that don't close properly and kitchen drawers that jam.
• Consider painting your walls neutral colors, especially if you have grown accustomed to purple or pink walls.
  (Don't give buyers any reason to remember your home as "the house with the orange bathroom.")
• Replace burned-out light bulbs.
• If you've considered replacing a worn bedspread, do so now!

Make the House Sparkle!

• Wash windows inside and out.
• Rent a pressure washer and spray down sidewalks and exterior.
• Clean out cobwebs.
• Re-caulk tubs, showers and sinks.
• Polish chrome faucets and mirrors.
• Clean out the refrigerator.
• Vacuum daily.
• Wax floors.
• Dust furniture, ceiling fan blades and light fixtures.
• Bleach dingy grout.
• Replace worn rugs.
• Hang up fresh towels.
• Bathroom towels look great fastened with ribbon and bows.
• Clean and air out any musty smelling areas. Odors are a no-no.

Scrutinize

• Go outside and open your front door. Stand there. Do you want to go inside? Does the house welcome you?
• Linger in the doorway of every single room and imagine how your house will look to a buyer.
• Examine carefully how furniture is arranged and move pieces around until it makes sense.
• Make sure window coverings hang level.
• Tune in to the room's statement and its emotional pull. Does it have impact and pizzazz?
• Does it look like nobody lives in this house? You're almost finished.

 

Check Curb Appeal

If a buyer won't get out of her agent's car because she doesn't like the exterior of your home, you'll never get her inside.

• Keep the sidewalks cleared.
• Mow the lawn.
• Paint faded window trim.
• Plant yellow flowers or group flower pots together. Yellow evokes a buying emotion. Marigolds are inexpensive.
• Trim your bushes.
• Make sure visitors can clearly read your house number.
  

Five Reasons To Buy Now

Based on prices, mortgage rates and soaring rents, there may have never been a better time in real estate history to purchase a home than right now. Here are five major reasons purchasers should consider buying:

Supply Is Shrinking

With inventory declining in many regions, finding a home of your dreams may become more difficult going forward. There are buyers in more and more markets surprised that there is no longer a large assortment of houses to choose from. The best homes in the best locations sell first. Don’t miss the opportunity to get that ‘once-in-a-lifetime’ buy.

Price Increases Are On The Horizon

Prices will bounce along the bottom this winter. However, projections call for appreciation after that. Several studies and surveys call for price increases over the next few years starting in 2013. One such survey shows that prices will increase over 10% by 2016.

Rents Are Skyrocketing

Rents historically increase by 3.2% on an annual basis. A study issued earlier this year projects rent increases of 4% for the next two years. Trulia recently reported that rents this year have actually shot up by 5.4%.

Interests Rates At Historic Lows

Federal Reserve Chairman Ben Bernanke has kept interest rates low in an effort to stimulate a lethargic economy. He understands that low rates will help housing and housing is a key to bringing back the economy. As the economy approves, the need to keep rates low will no longer exist. The 30-year-mortgage rate before the financial crisis was 6.57% (August 2007).

Buy Low and Sale High

We would all agree that, when investing, we want to buy at the lowest price possible and hope to sell at the highest price. Housing can create family wealth as long as we follow this simple principle. Today, real estate is selling ‘low’. It’s time to buy.

14966 Marvel Pl. Caldwell, Idaho

 

$257,000 

Bedrooms: 4

 

Total Baths: 2.5

 

Year Built: 2006

 

Sq. Feet: 2714

 

Garage: 3



This 2006 built home has many upgrades and custom features and upgrades. Located minutes from, Middleton and Purple Sage Golf Course. This wonderful home features a tile entry and beautiful bamboo flooring throughout the kitchen and dining area leading into the great room with a wonderful fireplace and built in book shelving! The down stairs office gives you privacy to work away from the entertaining area of the home. 2 large bedrooms, bonus room with closet and huge master finish the upper floor!

MLS:  98513536

Listing courtesy of: Keller Williams Realty Boise

Mark My Words, 2012 Sellers Market!

I am officially applying to sell your house in 2012! I am not sure if you have been noticing, but houses are flying off the shelf. Inventory is low and with historically low interest rates not expected to rise, the market has officially shifted to a sellers market. Buyers and investors are out and looking, rental markets are very strong and good seasoned agents are at a low. 

Buyers in all price ranges are out there, new construction starts are rising and loan programs are starting to roll out for 100% financing and  taking credit challenges into consideration. The low ball offers in the beginning are still not uncommon, but f negotiated correctly, one will get what they are looking for, I have been getting 94-99% of asking price on my sales. 

I think that 2012 is going to be a break through year for me and I want you to prosper. I am actively looking for buyers everyday and I want to start by advertising your house. If your considering listing your house, you should evaluate the listing agent you are interviewing. Here are some of the questions that you can start your interview with:

1.  How long have you been selling Real Estate?

2.  How many homes do you sell a year?

3.  How many homes have you sold in your Career?

4.  What is your average market time compared to Multiple Listing Sales?

5.  What is your average List to Sale ratio, and how does that compare to MLS?

6.  Where do you rank in your office, are you a Top Lister, Top Seller and for how many years?

7.  Where do you rank in your Company, Franchise, Region and Nationally? 

8.  Do you advertise on Television?

9.  Do you have a Personal Staff?

10. What percentage of you listings close?

I can send you the rest of them if you would like, you can visit me at www.rridaho.com and contact me asking for the rest of the questions. If you would like me to answer these for you, I would love to sit and discuss the sale of your house with you! If you would like to see market statistics, I can do that also, just let me know what you want and I can send them to you!