Central New Jersey Short Sale Option: Action Steps

May 3, 2013 By Leave a Comment
 

A short sale is the option usually preferred by anyone who faces foreclosure. It’s the path that, with the approval of the mortgage lender, promises to ultimately minimize damage to the homeowner’s credit score.

According to Realty Trac, distressed sales of all kinds continued to decrease in the last reported quarter, yet the non-foreclosure short sale volume increased by 4%. That amounts to a significant 22% of all sales. Realty Trac’s are the most reliable national statistics, and our Central New Jersey short sale profile has likewise reflected the continuing working out of the distressed property phenomenon.

Completing a short sale in Bridgewater (or anywhere else, for that matter!) can be challenging. If you’ve decided that it is your best course, you can do a lot to help your agent accomplish it:

  • From the beginning of the short sale process, keep your agent informed of any changes in the financial picture. That means keeping up-to-date on the changing balance remaining on the mortgage, as well as the number of missed payments. When the information is at hand, your agent can impart the sense of urgency that gets your home sold as fast as possible.
  • The speed of sale is important, yet while a Central New Jersey short sale specialist is an expert in that arena, other important details regarding taxation and the law may influence the best overall strategy. By encouraging your real estate agent to work alongside an experienced attorney or tax specialist, you will form a team that can execute your short sale package more efficiently than if they worked independently.
  • Executing a short sale means meeting multiple demands—each with its own timing requirements. That can mean a lot of pressure: but if your agent asks you to do something or provide additional information, stand ready to do it! That speeds negotiations with buyers and lenders, increasing the chance that you will successfully close your short sale.

Short selling a home is a somewhat complicated process. I offer a no-obligation, in-home consultation to help assess your circumstances and the next steps to consider.

The DoorPath Team is the most comprehensive online source for Central New Jersey real estate information and services. Whether you are looking for the latest sales, trends or homes for sale in Somerset, Middlesex, Union or Hunterdon Counties in New Jersey, The DoorPath Team at Coldwell Banker Residential Brokerage has it all at your fingertips. Browse information regarding short sales, foreclosures, new construction, investment property, land sales or commercial locations throughout Central New Jersey plus much more at  www.DoorPath.com or  call Michael “Mike” Downer  at 732-302-1771.

 

 

 

 
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A Short Sale Can Aid the Seller, Too

March 29, 2013 By Leave a Comment
 

cbdogA Central New Jersey short sale represents real value for the homebuyer, of course. But to some extent, it is also a boon to the seller. Being able to unload a property that’s underwater helps avoid the most dire credit consequences of a foreclosure.

But lingering credit damage can still result from any short sale — if the short seller allows it to happen. Should you find yourself in the short sale situation, be proactive in protecting your credit score. You will put yourself in a position to re-enter the market sooner than you think if you take action to improve a damaged credit score following a short sale. Here’s how:

  • Sit down and write out a strategic monthly payment plan for all open credit accounts and loans. It becomes real when you put pencil to paper. If the total is unrealistically large, contact as many lenders as needed and ask to reduce the payment amount. Making on-time payments is how you will build and repair your credit.
  • Apply for a secured credit card. It is tempting to use only debit or prepaid cards, but this does nothing to rebuild credit. Secure a credit card with a deposit, and then use it to make calculated purchases you know you can repay on time.
  • Be on time with all rent, medical bills – and every other account. Immediately after a short sale in Bridgewater for instance is the right time to downsize and be frugal — but you need to keep certain accounts — bills, rent, etc. — open. It cannot be overstated: the key is to make all payments consistently on time.

Not everyone escaped unscathed from the recent downturn, but it’s also true that lenders are now a lot more familiar with good prospective borrowers who could not avoid its consequences. Whether you have been through a short sale in Central New Jersey or not, if you are looking to buy a home in Central New Jersey, do give us a call.  We’ll put you in touch with our mortgage broker, and we will see how close you are to owning your next home!

The DoorPath Team is the most comprehensive online source for Central New Jersey real estate information and services. Whether you are looking for the latest sales, trends or homes for sale in Somerset, Middlesex, Union or Hunterdon Counties in New Jersey, The DoorPath Team at Coldwell Banker Residential Brokerage has it all at your fingertips. Browse information regarding short sales, foreclosures, new construction, investment property, land sales or commercial locations throughout Central New Jersey plus much more at  www.DoorPath.com or call Elizabeth “Liz” Brain at 848-448-3132 or Michael “Mike” Downer  at 732-302-1771.

 

 

 

 
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How Foreclosure Affects Your Credit Score

August 1, 2012 By Leave a Comment
 

If you’re behind on your mortgage, your credit score will suffer. The question is, how much will it hurt your score?

A couple of years ago, Fair Isaac, which developed FICO scores, revealed some estimates of point-score declines following mortgage delinquency problems.

Here are the average hits your credit will experience:

30 days late: 40 – 110 points

90 days late: 70 – 135 points

Foreclosure, short sale or deed-in-lieu: 85 – 160

Bankruptcy: 130 – 240

Some borrowers will see their score fall much more than others for the same payment problem.

Even if borrowers made payments faithfully for years before short selling or doing a deed-in-lieu, their credit score will still take a hit. The total decline will run about 85 points for the 680 score borrower to as much as 160 for the 780 score.

Mortgage debt, combined with other financial problems, can send borrowers into bankruptcy, the worst thing that can happen to your credit score.

If you are experiencing troubled times financially or are in danger of losing your home to foreclosure please reach out to us at 732-302-1771 or send us an email at mike@mikedowner.com and we can share information on resources that can help you.

 
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Stressed Out by Debt?

July 24, 2012 By Leave a Comment
 

Debt continues to hound many Americans, stressing them out even as they firm up their own financial foundations.

There are some new jobs but old worries persisting for people despite belt-tightening and boosted savings, according to an Associated Press-GfK poll.

About 46% of those surveyed say they’re suffering from debt-related stress, and half of that group described their stress as “great deal” or “quite a bit.” On the other hand, about 53% say they feel little or no stress at all.

That’s in line with findings from last year, even though times seem better today: The economy is growing and generating jobs, although not as many as was hoped by this point in the recession, and households have made progress in repairing their financial footing, trimming debt, watching spending and saving more.

It’s a big turnaround from two years ago — a shrinking economy, jobs jettisoned as businesses struggled to survive the deepest recession since the 1930s.

So why aren’t the stressed — and the not-so-stressed — feeling better?

For starters, it just doesn’t feel much like a recovery to many people.

Unemployment is stubbornly high — 8.2% for May. The jobless face fierce competition for work. Those with a job are watching their paychecks shrink.

A growing number of people are at risk of falling into foreclosure, and only those with the most stellar credit probably can get a new loan. AP-GfK polls show that only 20% say the economy is good, compared with 15% last year.

People are cutting their debt.

The average amount owed on credit cards is $3,900, the poll said. That’s down from $5,600 in the fall and $4,900 last spring.

Families with incomes over $50,000 have sliced their credit card debt by more than half, yet their stress from debt hasn’t changed much — it’s moderately low. Families with incomes under $50,000, however, have added only slightly to their debt, while their stress level rose sharply.

At the same time, people are building up their savings — 4.2% of their disposable income last year.

What about you? Do you feel stressed by debt? We’d love to hear from you. Just click the comment link below and tell us how you feel about the economy and your personal debt/stress level. You email address will never be published, and your comments can remain anonymous if you’d like.

 
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Bridgewater Value Homes

June 9, 2012 By Leave a Comment
 

If you are considering buying a home in Bridgewater, consider buying one of the 26 short sale properties which require bank approval prior to purchase.  As of this morning asking prices range from $189,900 to $565,000 and include places with a few as 2 bedrooms or as many as 6 Bedrooms.

There is something for everyone.  Ranches, Colonials, Townhomes, Condos, Contemporaries, and Bi-Levels are all available today to the smart buyer.  A short sale is often a better buy than a foreclosure since the owner usually is trying to keep the place in good condition until closing as a way of helping their credit score as well as having a home to live in until closing.

Many short sale sellers got into trouble by over improving the property.  I have been in many homes which have granite countertops, remodeled bathrooms, great new decks, etc.  The seller’s loss is your gain.

If you would like a list of short sale properties in Bridgewater send us an email at mike@mikedowner.com with the words SHORT SALE in the subject line and we will get a list out to you as soon as possible.

 
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Short Sale or Foreclosure? Why Use One Over The Other?

June 8, 2012 By Leave a Comment
 

It is pretty obvious that if you are not able to pay your bills your credit score is going to take a hit.  When people fall behind on their mortgage they do have some options on how to at least get a better result for their situation.  As a REALTOR in Central New Jersey I see many situations where people give up hope and figure they should just let the bank take the home.  Nothing could be further from the truth.

FAIR ISAAC (FICO) is the organization that created the system for credit scores.  They estimate that the numbers below are indicative of how much your credit score will take a hit if you start to fall behind with your mortgage.

  • 30 days late: 40 – 110 points
  • 90 days late: 70 – 135 points
  • Foreclosure, short sale or deed-in-lieu: 85 – 160
  • Bankruptcy: 130 – 240

Keep in mind that each situation is slightly different but these are good guidelines.

Credit scores are always “in the moment” scores meaning that even a good history will suffer if you fall behind by 30 days.

If you are falling behind in your payments give us a call.  We are Short Sales/Foreclosure Specialists (the National Association of REALTORS’ SFR designation) and can assist you with all the options in keeping your credit score as high as possible.  Please email us at mike@mikedowner.com or call at 732-302-1771 for a no cost and no obligation consultation.

 
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When will we know we have we hit bottom in the Bridgewater Housing Market?

May 12, 2012 By Leave a Comment
 

You will not know by looking at your calendar.  For the Bridgewater housing market to begin a climb in prices a few things have to happen first.

According to Stan Humpries, chief economist at real estate website Zillow, “The market bottom is a multi-step affair. First, home sales have to bottom out, which they did in early 2009. Then, long-horizon buyers such as investors, 2nd home buyers, and retirees move into the market.”

The Bridgewater housing market has seen a lot of decent activity during the spring market so far but most economists still predict home prices to decline a bit more on average.  The economists see the shadow inventory (homeowners underwater on their mortgage but hanging on due to depressed prices) being a major force in the market very soon.

These distressed properties will be sold at bargain rates which will further depress prices short term until the inventory is used up.

Humphries points out that “A big part of it goes back to figuring out the ‘bottom of the housing market’ and the annoying little fact that no one can really predict when it will occur. For obvious reasons, consumers tend to not want to fork over thousands of dollars for something they know will decline in value, even if it’s only in the near term.”

Humphries goes on to say, “…for those who continue to wait out ‘the bottom of the housing market,’ lower prices aren’t their biggest enemy, the specter of rising interest rates are.”

Interest rates almost have to go higher if only to keep pace with inflation.  Currently rates are artificially low due to government programs.  A rule of thumb for those considering waiting for prices to fall a little more is if interest rates go up 2% the price of a home has to fall 20% just to have the buyer break even.  Or in other words, a $500,000 home must fall to $400,000 if rates move from the current 4% to 6%.

Don’t Try to Time the bottom of the Bridgewater Housing Market

With each Bridgewater housing price decline there are always buyers trying to wait for the bottom.  While they are standing on the sidelines trying to figure out where the bottom is, a combination of rising home prices and higher interest rates cost them a lot more financially than if they had
taken advantage of the great combination of rates and prices we currently are experiencing.

More than anything as a REALTOR in the Central New Jersey market, I see people lose great homes that they really love over a few dollars a month.

 
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Good News for Real Estate Short Sales

May 10, 2012 By Leave a Comment
 

Fannie Mae and Freddie Mac will require loan servicers who need more than 30 days to make a decision on a short-sale offer to provide weekly status updates and give a thumbs-up or thumbs-down no later than 60 days after receiving an offer.  Currently banks are taking up to a year or more to let sellers and buyers know of the decision.

Starting in June the guidelines will be in effect according to Fannie and Freddie’s regulator, the Federal Housing Finance Agency.  The goal of the program is to assist home owners in avoiding foreclosure.

FHFA said it expects additional changes to be in place by the end of the year that address borrower eligibility and evaluation, documentation simplification, property valuation, fraud mitigation, payments to subordinate lien holders, and mortgage insurance.

Freddie Mac issued more specifics on its new short-sale timeline, which applies not only to offers on properties in Freddie Mac’s traditional short-sale program, but to requests from borrowers to be considered for a short sale or deed-in-lieu of foreclosure under the Home Affordable Foreclosures Alternatives (HAFA) program.

Although Freddie Mac expects loan servicers to make a decision within 30 days, it recognizes that servicers may need more time to obtain a broker price opinion or approval from a private mortgage insurer before accepting a short-sale offer or approving a HAFA borrower response package (BRP).

If a loan servicer makes a counteroffer, the borrower is expected to respond within five business days. The servicer must then respond within 10 business days of receiving the borrower’s response.

Freddie Mac, which completed 45,623 short sales last year, said the new requirements are the latest step to comply with direction from the FHFA to set consistent servicing and delinquency management requirements.

“Short sales are more complex than routine home sales since they may involve multiple parties and long-distance negotiating,” said Tracy Mooney, Freddie Mac senior vice president, single-family servicing and REO, in a statement. “Freddie Mac’s new timelines are intended to help make the decision process more transparent and timely for short sales under the Obama administration’s HAFA program or Freddie Mac’s traditional short-sale option.”

Last week, Bank of America announced it cut decision times on short-sale offers to no more than 20 days, down from 45 days or longer. If offers fall through, agents have five days instead of 14 days to submit a backup offer.

All of these changes are long overdue and are of great benefit to the Somerset County Housing Market.  If you would like more information about the new guidelines or a list of potential short sales in Central New Jersey just drop us a line at mike@mikedowner.com with the word GUIDELINES in the subject line.

 

 
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Buying and Selling a Home in Central New Jersey

April 28, 2012 By 3 Comments
 

Buying and selling a home in the Somerset and Middlesex County areas of New Jersey is not for the faint of heart!

With the economy the way it is there are a lot of things to consider before you even start to look for a new home.

Foreclosures, short sales, distressed properties, and the like may be terms you are not familiar with and could have a big impact on your home search.  If you’re thinking about buying a foreclosure, you have to ask not only the price but the type of financing offered.  On short sales and foreclosures you should do an in depth check on the condition of the property condition.   Many times the previous owner has left the home in disrepair and has no incentive to disclose any defects. Despite this, you can make an intelligent decision about the home by having a licensed home inspector look at the property.  Then you can tell if the home is worth repairing and bringing up to snuff as they say.  Foreclosed homes can be a bargain or a bust; consider lots of options and make certain to get an independent appraisal before you make a contract offer.

Supply and demand always plays a part in the price of a home whether buying or selling. Right now in Central New Jersey, the supply is much higher than the demand. Many buyers are waiting to see if home prices and interest rates have hit bottom. If you want a successful home sale on your own place, you have to make decisions about what you have to offer as compared to other homes in the area. A little creativity can go a long way towards getting your home sold.  Some home sellers offer to hold a part of the mortgage, pay a part of the closing costs, or pay for some upgrades such as new appliances.

Buying and selling a home in Central New Jersey can be tough right now. Take the time to learn as much about the market as you can.  It will pay dividends with a completed home sale/purchase. Knowing the pros and cons of the potential home will help you make the right decision. If you would like advice on how to determine your specific needs and how they impact the sale or purchase of a home just drop us an email at mike@mikedowner.com or give us a call at 732-302-1771.

 
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Five Ways to a Faster Central New Jersey Home Sale

April 26, 2012 By 2 Comments
 

In a hurry to sell your home? The following is how to make certain you give yourself the opportunity to get the best price in quickest amount of time.

1. You have to significantly undercut the competition – Selling a home in a down market probably signifies settling for an unsatisfactory selling price. However in order to sell your home quickly, you’re going to have to drop 10% to 15% beneath what similar properties in your neighborhood recently sold for. You still may not be able to compete with home foreclosures and short sales, however at least you have a chance of getting buyers to notice your listing.

2. Exterior treatments have the greatest effect – Since your home won’t be cheaper than the distressed property down the street, it has to appear much better. But you may not have the time or funds to remodel the kitchen, so focus on curb appeal enhancements that will deliver the most buyers to your front door.

Investing $1000.00 can go a long way towards improving your property’s outside. Get the outside of your house power-washed, paint the door, change the knocker and kick plate, and hire a gardener to give your property some tender loving care and add some color with fresh blossoming flowers.

3. First-timers are your best friend – The most efficient way to market your home is to target the most likely purchasers. First-timers purchased more than half the properties purchased so far this year.  They can buy without the weight of selling a different home (super-low mortgage rates do not hurt either).

The average age of the first time home buyer is thirty, and to boost your chances of getting to today’s buyers, you need to think outside of the box. Get yourself a snazzy online profile and propagate the word about your upcoming open house through social networks like Facebook and Twitter.

4. Online methods will make your home appeal to a wide audience – Buyers are faced with thousands of sale listings. Help them find yours by peppering your information with amenity key phrases such as “deck,” “pool,” and “granite counter tops,” then make certain they like what they discover by using a wide-angle lens to make your spaces appear larger in photos. Set your home at the lowest end of its price rangefor search engines.

5. A seller’s secret weapon is a rapid deal – It can take a few months for financial institutions to say yes to a deal for a short sale or a foreclosure property. Make sure your agent lets potential buyers understand you can close the deal within a few weeks.

Another advantage you hold over distressed owners: the ability to be creative in negotiations on terms. If a potential buyer is wavering, offer to pay part or perhaps all of the closing costs or perhaps include a year’s worth of association charges. At the very least, think about tossing in some new kitchen appliances or a paint job. After all, in this marketplace no one is going to want a home that doesn’t seem like a bargain.

 

 
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