WHEN CAN I BUY A HOME

          So if you have had a foreclosure or short sale or bankruptcy – when can you buy a home? The chart attached from the Realtor Magazine, March 2013 provides some helpful information. All cases are different so this chart is not set in stone. We just closed a couple who short saled their home 2 years ago and they were ready to buy. The key is to re-establish good credit after the incident took place. If the house foreclosure/short sale is the only incident on your credit report, it’s explainable. The same holds true for bankruptcy.

          See attached, but give us a call if you are 2 years removed from your housing crisis. We may have a plan that can get you back into homeownership.

Thanks,

Brian

Click For Short Sale Chart

Where are we and Where are we going?

            By the time you read this I will have been on Fox 21 News and spoken about Short Sales & Foreclosures. While it’s a very tiring and old subject it is something that will be part of the Colorado Springs landscape for another 1 ½-3 years.

            Through the month of September there were 4106 foreclosure filings. Last year we were at 3400. Last year the total was 4602. This year we will be over 5000 foreclosure filings. All statistics are pointing that 2010 will have again as many as we will have in 2009. Because we will have another bad year of foreclosures we will also have a lot of short sales.

            What is the difference? A foreclosure is when a homeowner cannot or does not make house payments. Generally a foreclosure will start 6-8 months after the last payment was made. The bank turns it into the legal dept which take another 1-2 months to process and post a “Notice of Election & Demand”. This is the technical word for foreclosure. The homeowner then has 120 days to “Cure” the note and the defienciency. If the homeowner does not payoff the loan, make the payments in full or short sale successfully, the bank forecloses and takes the home back. At that time the homeowner is made to leave the home by sheriff’s order.

            A short sale is a “Cure” for a foreclosure. A short sale is when the homeowner and the bank settle on a loss to the bank through a sale. In English it means a sale for less than is owed on the mortgage. Generally it takes a real estate professional with a CDPE (Certified Distressed Property Expert) to negotiate with the bank in the sellers’ behalf. A seller must have a valid reason for selling and have hardship that is causing the reason to sell. Banks are getting better than they were a year ago in working these out.

            From a credit point of view a short sale is very preferable. From an economic point of view a short sale is also better. In keeping neighborhood values, a short sale is better.

            So where are we going? I think that foreclosures are here for awhile. I think the filings will continue to be in the 5000 a year. However I feel instead of 2 in 10 of these going short sale, 5 out of 10 will. This will keep values stable. The high end market $400K and above unfortunately will feel lots of foreclosure activity. There is lots of inventory and no one to buy them. That means foreclosures and as much as 25-30% drops in price.

            I am a CDPE certified realtor. I have a department dedicated to it. If you find yourself slipping financially, please call us at The Maecker Team for your confidential interview.

Thanks,

Brian

So now that we know the differences between foreclosure and short sale, who is allowed to do them? Typically people think that the only way a short sale happens is when the payments are behind. That is not necessarily always true.

A foreclosure will happen to any person who does not make payments and or has not been able to sell the home by a foreclosure date. A short sale can stop a foreclosure and generally is a better solution than bankruptcy or foreclosure.

The people who are eligible for short sale are folks who are in some sort of distress. Distress in the eyes of a bank can mean loss of job, divorce, death, medical hardship, dramatic income changes within the household, huge payment changes and a host of other issues. A person does not necessarily have to be behind in payments. However if you want to sell because you don’t like your home anymore, that is not valid.

Another key point to distress is your financials. If you have liquid cash, you will not qualify for short sale. However if your financials show more going out than in and you have no savings, you could qualify. One key point is retirement funds in IRA’s and SEP’s are off limits, so they stay safe.

Obviously it’s better on your credit to keep payments going, but if you find yourself sinking it’s better to consult a professional CDPE realtor before you drown. Call us at The Brian Maecker Team and we’ll show you all your alternatives.

Thanks,
Brian
www.brianstopsforeclosure.com

What is a CDPE and what will it do for you? A CDPE is a Certified Distressed Property Expert. A person who is a CDPE is a person who went through 3 full days of classes to learn how to successfully sell a short sale home. At my office today, I have observed a 2 hour class and many of these agents now think they are experts. Come on!! How many other realtors are thinking the same thing? Let me show you why a CDPE is the best class and certification that I have attended in years.

The short sale arena is very difficult at best. Alex Chorfin for the Distressed Property Institute has written the book on short sale mastery. The materials and procedures are priceless. A CDPE has gone over every page of a 175 page manual on how to work through the process with Wells Fargo, Countrywide, Aurora, Citibank and any other lender you can think of. We spent 3 days learning the causes and different avenues sellers have to cure distress in the household. Along with the manual we have received 60 pages of checklists and procedures that a seller and realtor need to follow to have a successful closing.

So tell me who is the expert? The realtor with a 2 hour class or the realtor with several years of experience and a 3-day class of certification?

The process of a short sale is complicated. In summary it requires aggressive pricing. In addition to pricing a seller needs to authorize a realtor to negotiate with a bank. The seller also needs to do a financial report to see if the distress is real. There is criteria to determine this. Assuming the criteria and financials meet distress standards a short sale can proceed.

In order for the sale to proceed it requires tons of follow up. One must understand that these banks have hundreds of files on several desks. A CDPE file will be complete. It will stand out. It will close.

So for Realtors and sellers alike, when a property is a likely short sale, get the knowledge and know how of a CDPE. Call The Brian Maecker Team @ 719-593-2963 for a confidential appointment.

Thanks,
Brian