Archive for January, 2010

Foreclosure Solutions

Wednesday, January 27th, 2010




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Foreclosure Solutions

The current U.S. housing market and national financial crisis has caused untold stress and heartache for many American families. Foreclosure is one of the most devastating financial challenges that a family can face and one that many times can be avoided. The options available to Stamford-area residents for foreclosure are many. Following is a brief explanation of these solutions, including their benefits and drawbacks:

Reinstatement
A reinstatement is the simplest solution for a foreclosure, however it is often the most difficult. The homeowner simply requests the total amount owed to the mortgage company to date and pays it. This solution does not require the lender’s approval and will ‘reinstate’ a mortgage up to the day before the final foreclosure sale.

Benefit: Does not require the mortgage company or lender’s approval.

Drawback: Requires that a homeowner be able to pay all back payments, fines and fees.

Forbearance or Repayment Plan

A forbearance or repayment plan involves the homeowner negotiating with the mortgage company to allow them to repay back payments over a period of time. The homeowner typically makes their current mortgage payment in addition to a portion of the back payments they owe.

Benefit: Allows the homeowner to make back payments over time.

Drawback: Requires that a homeowner be in a financial position to pay not only their current mortgage, but also a portion of the back payments owed. Some mortgage companies will require a homeowner to ‘qualify’ for forbearance.

Mortgage Modification
A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan, the term of the loan, or any combination of these. These typically result in a lower payment to the homeowner and a more affordable mortgage.

Benefit: Reduces the payment a homeowner is required to make on a monthly basis and may reduce the principal balance of the loan

Drawback: Requires that a homeowner ‘qualify’ for the new payment and will often require full documentation. Lender has to be actively pursuing modifications.

Rent the Property
A homeowner who has a mortgage payment low enough that market rent will allow it to be paid, is able to convert their property to a rental and use the rental income to pay the mortgage.

Benefit: Allows homeowner to keep property indefinitely.

Drawback: The issues that can arise with a rental property are many, and rent often does not cover the full cost of property ownership and maintenance.

Deed in Lieu of Foreclosure
Also known as a ‘friendly foreclosure’, a deed in lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process. Lender approval is required for this option, and the homeowner must also vacate the property.

Benefit: Many times in a successful deed in lieu, the lender will forego their right to a deficiency judgment.

Drawback: Requires that a homeowner vacate the property, and a deed in lieu may be reported to credit bureaus as a foreclosure.
Bankruptcy

Many have considered and marketed bankruptcy as a ‘foreclosure solution,’ but this is only true in some states and situations. If the homeowner has non-mortgage debts that cause a shortfall of paying their mortgage payments and a personal bankruptcy will eliminate these debts, this may be a viable solution.

Benefit: Does not require lender approval.

Drawback: If a homeowner cannot afford their mortgage payment, a bankruptcy will only stall—not stop—the foreclosure process. Bankruptcy can be costly, is damaging to credit scores, and can only be declared once every seven years.
Refinance
If a homeowner has sufficient equity in their property and their credit is still in good standing, they may be able to refinance their mortgage.

Benefit: In some cases, this will lower payments.

Drawback: In today’s market, a refinance will almost always raise mortgage payments, and is an expensive process.
Servicemembers Civil Relief Act (military personnel only)
If a member of the military is experiencing financial distress due to deployment, and that person can show that their debt was entered into prior to deployment, they may qualify for relief under the Servicemembers Civil Relief Act. The American Bar Association has a network of attorneys that will work with servicemembers in relation to qualifying for this relief.

Benefit: If qualified, this will lower payments on all consumer debt in addition to mortgage payments.

Drawback: Must be ac



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Kick the Tires, Check under the Hood, You’re Ready to Buy.

Tuesday, January 26th, 2010




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-By your local Stamford Connecticut Real Estate Broker, Nicole Borsey at The Property Network

Congratulations, You are ready to buy a home in Stamford! Buying a home is one of the most exciting things you can accomplish. There is the thrill of the hunt, applying for the mortgage, attorney review, all the elements that make the process exhilarating.

Just like buying a car, you want to check out the make, model, kick the tires, check under the hood of your potential new home.  Most of the time you have to find the right dealer and for home buying that is finding the right realtor. Your realtor should understand your wants and needs in a home and take all of your requirements into consideration.

There are many different makes and models of homes, just like cars. Being open minded is key for finding the right home. Ranches, cape cods, condos, town houses, Victorians, etc, are all out there and maybe even in the area you are looking.  If the place is in your price range and in the area you want to live, take the time to visit the home, because you never know what you might find.

First things first, when buying a house….where do you want to live? In a town (obviously Stamford or close by)? The middle of nowhere? On a hill? By the water? Near a school? Within 5 minutes of a Starbucks? Narrowing down these decisions will make the start of the process easier.   School districts, easy commute to work, and property tax are all things to think about when buying.

What features does your dream home have? Fireplace, walk out basement, a yard, a public place for the kids to play, a driveway, a great view, what does your dream home have that no others have. For some people the difference between buying and not buying a home is hardwood floors over a rug. Knowing the hard to change things (like a putting in a fireplace or driveway) will help build your check list of must haves.

Don’t forget to check for dings and dents. Does the house need a roof? Does the house need a new septic system? What is a septic system and how much does it cost to replace? Are their cracks in foundation, sidewalks sinking? All things to look for and think about before you buy. Some of these things are quick fixes and some can be quite costly.
Is it roomy enough for you? Literally, is there enough room? Will one bathroom cut it? How many bedrooms do you need? Is one bedroom enough space for you or are you planning on having kids in the future and need something with more room? Do you need a lot of storage space? For the shop-aholics are the closets big enough to store your clothes? Additions can be expensive so if you know these things ahead of time factor them in while comparing houses.

Paint colors, central air, trim moldings are all things that can be added after you move in. Where the home is, the amenities you can’t live with out, storage; style, etc are the starting points when you are ready to buy.  Your home is a BIG purchase and deserves a lot of careful thought and consideration, but is with out of a doubt one of the most exciting investments you can make.

Stamford Connecticut is the home of Property Network. We want make Stamford your home too!



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Exit Stage Left: Help sell your house through the art of staging.

Tuesday, January 26th, 2010




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-By your local Stamford Connecticut Real Estate Broker, Nicole Borsey at the Property Network

To Stage or not to Stage that is the question, and I’m telling you right now, Staging is the answer. Staging transforms your home into a house and then takes it from a house to a home for the potential buyer. Confused???  Read on…

When you first make the decision to sell your home, more times than not, you start with a good cleaning. You work your way from top to bottom. Anywhere from the basement to the garage, it all has to be spotless. Don’t get me wrong, a good cleaning is necessary, but you have to do more than just clean out the cob webs and dust balls under the couch. You have to clean the walls, patch nail holes, and start to set the stage.

Begin cleaning off the walls by taking down all of your family photos and touching up the holes with some spackle and paint. This leaves the potential buyer with a blank canvas effect. One or two neutral pictures on the wall will never hurt, but having all of the pictures from last year’s family reunion leaves your stamp. You don’t want that, you want the buyer to walk in and see themselves in the space. You want them to feel like they are at home. Their home, not yours!

Location, location, location! You must relocate any clutter. If your house has clutter in any rooms, clean it out! You want to maximize your room space. Clutter gives off the feeling that a room is smaller than it really is. It also leads the buyer to believe that the house lacks storage space. If you can’t bear to part with the items that are causing the clutter, then organize it. Buy bins and find a nice neat place to store your personal belongings for now, like a corner in the basement or the garage.

There are plenty of high traffic areas in your house and you want these clear too. Extra furniture and furnishings fill up a room quickly. You have to find your center and think Feng Shui. You want your rooms to flow and extra furniture and knick knacks can block that flow. You want to give the feel of open space in these high traffic areas. Otherwise, it can cut off your room and make it feel like the room is small and closed off.

We all have “good sides” and so does each room in your house. You want to show off all the “good sides” and highlight any special features. If there is a corner in your living room that is a cozy spot for reading, set it up for just that. Stage the space with a comfortable chair, a side table with a lamp and a place book on it as well. Make the buyer believe that is where you read every night. If you have a play room in the basement, set it up as an organized play area, with games and a few toys out. It’s all about showing off the potential of your home to buyers.

If you follow these few steps, you’ll transform your home (with your pictures, memories and clutter) to a house (full of potential for a new buyer). This in turn will open up your house to become the future home of someone else. Sounds simple, right???

Stamford Connecticut is the home of The Property Network. We want make Stamford your home too!



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Buying Foreclosures

Tuesday, January 26th, 2010




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Buying bank owned properties
There is a lot of interest in buying bank owned properties these days. A lot of information, some good and some bad, is floating around about the subject.   Often the information offered is for sale, with the promise that you can make a lot of money with little effort once you know “the secret formula”.  The fact is that there are no secrets, and to make money does require effort.
What’s an REO?
REO stands for “Real Estate Owned”.  These are properties that have gone through foreclosure and are now owned by the bank or mortgage company.  This is not the same as a property up for foreclosure auction.  When buying a property during a foreclosure sale, you must pay at least the loan balance plus any interest and other fees accumulated during the foreclosure process.  You must also be prepared to pay with cash in hand.  And on top of all that, you’ll receive the property 100% “as is”.  That could include existing liens and even current occupants that need to be evicted.  A REO, by contrast, is a much “cleaner” and attractive transaction.  The REO property did not find a buyer during foreclosure auction.  The bank now owns it.  The bank will see to the removal of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing.  Do be aware that REO’s may be exempt from normal disclosure requirements.  In California, for example, banks are exempt from giving a Transfer Disclosure Statement, a document that normally requires sellers to tell you about any defects they are aware of.
Is it a bargain?
It’s commonly assumed that any REO must be a bargain and an opportunity for easy money.  This simply isn’t true.  You have to be very careful about buying a REO if your intent is to make money off of it.  While it’s true that the bank is typically anxious to sell it quickly, they are also strongly motivated to get as much as they can for it.  When considering the value of a REO, you need to look closely at comparable sales in the neighborhood and be sure to take into account the time and cost of any repairs or remodeling needed to prepare the house for resale.  The bargains with money making potential exist, and many people do very well buying foreclosures.  But there are also many REO’s that are not good buys and not likely to turn a profit.
Ready to make an offer?
Most banks have a REO department that you’ll work with in buying a REO property from them.  Typically the REO department will use a listing agent to get their REO properties listed on the local MLS.  Before making your offer, you’ll want to contact either the listing agent or REO department at the bank and find out as much as you can about what they know about the condition of the property and what their process is for receiving offers.  Since banks almost always sell REO properties “as is”, you’ll want to be sure and include an inspection contingency in your offer that gives you time to check for hidden damage and terminate the offer if you find it.  As with making any offer on real estate, you’ll make your offer more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.  After you’ve made your offer, you can expect the bank to make a counter offer.  Then it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer.  Realize, you’ll be dealing with a process that probably involves multiple people at the bank, and they don’t work evenings or weekends.  It’s not unusual for the process of offers and counter offers to take days or even weeks.
Looking to Buy? Give me a call 203.667.0897 icon smile Buying Foreclosures | CT Real Estate or email nicole@thepropnet.com


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Short Sale Myths

Tuesday, January 26th, 2010




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Short Sale Myths

A short sale can be an excellent solution for homeowners who must sell and owe more on their homes than they are worth. Unfortunately, a number of myths about short sales have developed, and it is important to understand the reality of this process should you find it meets your current needs.

Myth #1 – The Bank Would Rather Foreclose Than Bother With A Short Sale

This is one of the most common misconceptions. The reality is that banks do not want to foreclose on your property because the foreclosure process is incredibly costly. Banks, investors, and even the federal government have all publicly stated that if a person is qualified for a short sale, the deal needs to be considered. Overwhelmingly, banks receive more on their investment through a short sale than a foreclosure.

The qualifications for a short sale include:

Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
Monthly Income Shortfall – “You have more month than money.” A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.
Myth #2 – You Must Be Behind On Your Mortgage To Negotiate A Short Sale

While this may have previously been the case, today lenders are looking for verifiable hardship, monthly cash flow shortfall, or pending shortfall and insolvency.

If you meet these three requirements and believe that you soon may be unable to afford your mortgage, act immediately. Any delay could limit your options. Do not wait until the countdown clock to foreclosure has started and you have even less time left.

Myth #3 – There Is Not Enough Time To Negotiate A Short Sale Before My Foreclosure

This is a myth that probably hurts homeowners the most. Many do not realize that foreclosure is a process, and that there is time to make decisions that may result in better outcomes.

The foreclosing party—in most cases a lender—can stall a foreclosure up to the final day of the process. Today, many lenders will stall a foreclosure with as little as a phone call from you explaining that you are trying to sell, and almost all lenders will stall a foreclosure with a legitimate contract. For real estate professionals who understand foreclosures and short sales, there is time available until the foreclosure process is complete.

Myth #4 – Listing My Home As A Short Sale Is An Embarrassment

It is understandable to have reservations about letting the world know that you owe more on your home than it is worth. However, according to recent estimates, more than one out of eight homeowners in the U.S. is in the same situation. You are to be congratulated for admitting you need help, taking action, and finding a professional who can work with you toward a solution.

With recent estimates showing 40-60% of U.S. sales will be short sales or foreclosures, you are not alone.

Myth #5 – Short Sales Are Impossible And Never Get Approved

This is a complete falsehood. Are short sales more difficult to execute? Yes. Do you, as a homeowner, need to learn about a new process? Yes. Are they impossible? Absolutely not.

For example, agents with the Certified Distressed Property Expert® (CDPE) Designation receive thousands of short sale approvals on a monthly basis. These professionals have undergone extensive training in methods to help homeowners in distress and process short sales. While there are no guarantees in any transaction, more and more short sales are being approved regularly. This is far from an impossible process.

Myth #6 – Banks Are Waiting On A Bailout And Not Accepting Short Sales

You may have heard this, but the reality is that banks (and the U.S. government) are trying to do anything they can, within reason, to avoid foreclosing on properties. It is preposterous to believe they would deny a short sale in hopes that some future legislation would pass and pay them for losses.

Today, more banks are aggressively pursuing short sales and working with agents who understand how to process them. Freddie Mac recently hosted a national training Webinar for real estate agents where they expressly stated the organizational goal of “eliminating distressed assets through modification or short sale.”

Myth #7 – Buyers Are Not Interested In Short Sale Properties

This is a myth that potential sellers hear all the time. Thankfully, this is just not true. In fact, many agents are getting calls from buyers who say they only want to look at foreclosure and short sales.

For buyers, short sales and foreclosures have become synonymous with “good deals.” More specifically, international buyers are targeting these properties. Listing with an experienced agent who is educated in the short sale process will provide you with a great chance of quickly seeing a contract on your property.

In conclusion, Agents with the CDPE Designation have been trained in all aspects of the short sale process, and know how to deal with the parties involved in foreclosures. Finding a CDPE can explain what options you have, and get you on the path to recovery.



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