List your house EARLY in the year to decrease competition!

It is common knowledge that a large number of homes sell during the spring-buying season. For that reason, many homeowners hold off on putting their homes on the market until then. The question is whether or not that will be a good strategy this year. The other listings that do come out in the spring will represent increased competition to any seller. Do a greater number of homes actually come to the market in the spring, as compared to the rest of the year? The National Association of Realtors (NAR) recently revealed the months in which most people listed their homes for sale in 2016. Here is a graphic showing the results: The three months in the second quarter of the year (represented in red) are consistently the most popular months for sellers to list their homes on the market. Last year, the number of homes available for sale in January was 1,820,000.

That number spiked to 2,140,000 by May!

http://www.keepingcurrentmatters.com/wp-content/uploads/2017/01/Calendar-2016-Listing-Dates-KCM.jpg

What does this mean to you?

With the national job situation improving, and mortgage interest rates projected to rise later in the year, buyers are not waiting until the spring; they are out looking for a home right now. If you are looking to sell this year, waiting until the spring to list your home means you will have the greatest competition for a buyer.

Bottom Line

It may make sense to beat the rush of housing inventory that will enter the market in the spring and list your home as soon as possible.  We would love to come and take a walk through with you to help with items to spiff it up for sale.  Call us any time!

 

 

Posted on January 26, 2017 at 4:10 pm
Cary Perkins | Category: Best Time to Sell Your House, Current Portland Real Estate Market Information, Moving, Portland Oregon Real Estate, Portland Oregon Realtors, Selling Your home | Tagged , , ,

Timing is Everything

3 Graphs That Scream List Your House Today! | Simplifying The Market

Why you should LIST your House in the Fall!

 

 

Thinking about waiting till Spring to sell?  Capitalizing on the shortage of homes for sale in the market now, will translate into a better pricing situation than waiting until Spring.

 

In school we all learned the Theory of Supply and Demand. When the demand for an item is greater than the supply of that item, the price will rise.

 

SUPPLY

The National Association of Realtors (NAR) recently reported that the inventory of homes for sale stands at a 4.8-month supply. (it's more like 3 months in the Portland region)  This is significantly lower than the 6 months inventory necessary for a normal market.  We are currently experienceing a seller's market.

Inventory | Simplifying The Market

DEMAND

Every month NAR reports on the amount of buyers that are actually out in the market looking for homes, or foot traffic. As seen in the graph below, buyer demand this year has significantly surpassed the levels reached in 2014.

Foot Traffic | Simplifying The Market

Many buyers are being confronted with a very competitive market in which they must compete with other buyers for their dream home (if they even are able to find a home they wish to purchase).

Listing your house for sale now will allow you to capitalize on the shortage of homes for sale in the market, which will translate into a better pricing situation.

HOME EQUITY

Many homeowners underestimate the amount of equity they currently have in their home. According to a recent Fannie Mae study, 37% of homeowners believe that they have more than 20% equity in their home. In reality 69% of homeowners actually do!

Equity | Simplifying The Market

Many homeowners who are undervaluing their home equity may feel trapped in their current home, which may be contributing to the lack of inventory in the market.

Bottom Line

If you are debating selling your home this year, let's get together to evaluate the equity you have in your home and the opportunities available in our market.  Buyers are lining up for homes in Portland.  

Cary Perkins,
Windermere Top Producer
Fun With Real Estate
Current Portland Oregon Real Estate Information,
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by Cary Perkins

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Windermere Top Producer Cary Perkin

 

 

Posted on September 23, 2015 at 12:25 am
Cary Perkins | Category: Portland Oregon, Portland Oregon Real Estate, Selling Your home | Tagged , , ,

How is my home sale taxed? What about capital gains?

 

 

When it's time to sell your home, I start by preparing a seller's "net sheet," which outlines the sale price less your outstanding mortgage, pro-rated property taxes, etc.  Often people are worried about how much tax they're going to have to pay on that big (hopefully) number on the bottom line that says "Net to Seller."

 Most times the answer is ZERO taxes!  When you sell your principal residence and make a profit, you get to exclude $250,000 of that profit from your taxable income. And that's just the exclusion for single owners. Married couples can exclude up to $500,000 (if both spouses each meet the ownership and use tests below). So, depending on how much of a profit you make on the sale, you and your partner could potentially have no capital gains tax bill at all.

Here's the fine print:  in order to claim the maximum exclusion, you have to pass the IRS ownership and use tests. The test questions are:

  • Have you owned the house for two years?
  • Have you lived in the house as your principal residence for two out of the last five years, ending on the date of the sale?

There are a few exceptions to these rules–for example, if you had to move before owning the home for two years because of a job change or due to "unforeseen circumstance," such as a divorce or natural disaster. In these situations the IRS may allow you to prorate the exclusion.

And here's more fine print that is ususally helpful:   the two years residency doesn't have to be consecutive–you just have to have lived in your home for a total of 24 months out of the five years prior to the sale.

How to Calculate your cost basis

To determine capital gains on the sale of your home, you subtract your 'cost basis' from the selling price. Your cost basis is not just the purchase price. It also includes some settlement fees, closing costs and commissions paid with the purchase and the sale.  Add to this the cost of significant capital improvements (not repairs) you've made  for renovations, additions, roofing, landscaping, and other upgrades. All of these improvements increase your cost basis, and will lower your potential tax liability. (Another good reason to keep records of all your home improvements)

You can also reduce your tax basis (and owe more taxes) for a few reasons –  if you have a home office and have claimed depreciation over time, you now have to subtract those deductions from your cost basis. Or any tax credits for energy-related improvements have to be subtracted as well.  

Estimate sale price and capital gains

Now estimate your sale price and subtract your cost basis. If you bought your house for $350,000, did  $50,000 worth of improvements and had other closing fees and costs of $15,000, your cost basis is $415,000. Now let's say you expect to sell the house for $850,000. Your potential capital gain would be $435,000.

Factor in exclusion

In the above example, if you and your married partner met the ownership and use tests, you could exclude the entire gain from your taxable income. You wouldn't even have to report the sale on your tax return. However,if your capital gain turned out to be $525,000, you'd have to report the sale and pay long-term capital gains on $25,000.

As always, I recommend you speak with your accountant for the rules that apply to your personal tax situation.  But if you want to talk about selling your home, please call.

 

 

Click here for the full article.

 

 

Cary Perkins,
Windermere Top Producer
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by Cary Perkins

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Windermere Top Producer Cary Perkin

Posted on July 8, 2015 at 9:29 pm
Cary Perkins | Category: Moving, Portland Oregon Real Estate, Portland Real Estate Data, Selling Your home | Tagged , , , , ,

Seniors, is it time for a major de-cluttering?

 

Here's one of those grown-up topics that aren't lots of fun to think about, (like long term care) but is something we should start to prepare for as we age… what are our kids going to do if all of our stuff if we don't thin it out for them?

 

I've been there before – having to clean out my parents' home after they've died, and hating to let go of even one thing that still smelled like them.  I still have both of their bathrobes, and my mother's 25th anniversary dress, and so on.  It's so hard to let it all go, but you must in order to somehow get through it. 

 

This article by a Portland Organizer, Heather Hawkins, is a wonderful reminder of how we really owe our kids the favor of starting this process now so they don't have to throw our stuff away while greiving ….  and there are so many good recycling opportunities now that there's no excuse not to thin things out so your kids won't have to do it later.

 

If you'd like information on where to donate your items, please let me know.  I have lists of wonderful recycling opportunities so that others can enjoy your overflow.  And won't your family love you for it?

 

– Cary

 

Please enjoy the article in full below.

 

Sorry, there is no gentle headline for this kind of post. I tried: Do your children a favor and get rid of most of your stuff before you die and don’t burden them with the painful, guilt-inducing job of sorting through their childhood and feeling obligated to keep everything that reminds them of you, which is basically everything you own, but I feared it would blow up the Internet so I pared it down.

 

This sweet, touching essay by Jeremy Clarkson, a British broadcaster, completely sums it up. After his beloved mother died of cancer, he was overwhelmed to discover that she’d gotten rid of almost all of her stuff before she died to spare him from having to do it himself.

There is no single thing in the house of anyone’s mother that isn’t infused with a gut-wrenching air of sentimentality. It’s not just her jewelry or her clothes. It’s the little things as well. Her kitchen scissors, her bathroom scales, her flannel. Every single thing in each and every drawer is as impossible to discard as a first teddy bear…I’d need at least two months to go through it all. And I’d need about 4,000 boxes of Kleenex.

It was the greatest gift she could have left him.

I don’t know how long she had worked on her downsizing and the clear-out and the organisation of her things, but it’s something we should all try to do when we know the Grim Reaper is heading our way. Because not only does it spare our loved ones from the hassle of going through every single thing we’ve ever owned but it also spares them from the grief of deciding that the horse brasses and the Llardro figurines really do have to go to the tip.

(Tip = dump, by the way. I’m a big advocate of reuse, and there are plenty of donation centers and consignment shops happy to take household goods off your hands.)

I’ve helped people clear out their parent’s homes after they’ve passed, and it’s a big job. Most professional organizers offer this service, but we also help seniors get rid of clutter and extraneous possessions beforehand. We figure out, with input from their children, what will be passed down and what should go now. Photos get sorted and labeled. Furnishings and artwork that will be used by the heirs are listed out and saved with the will. Valuable items can be sold ahead of time. Other items can be donated. We work to clean out the basements and garages and drawers filled with opened seed packets and old receipts and clothing that hasn’t been worn in 30 years but is often the hardest for children to get rid of.

It’s not an easy subject to discuss or ponder, but it’s one that’s worth considering now rather than later. For another touching, funny insight on aging parents and the burden of clearing out a deceased parent’s home, I highly recommend New Yorker cartoonist Roz Chast’s memoir Can’t We Talk about Something More Pleasant?

Heather Hawkins of Homeflow Professional Organizing helps Portland-area residents declutter, organize, downsize and stage their homes for sale. Contact her at 503-313-7164 or heather@homeflow.org. Visit www.homeflow.org for more information.

 

 

 

 

Cary Perkins,
Windermere Top Producer
Fun With Real Estate
Current Portland Oregon Real Estate Information,
Highlights of Portland Oregon, House Ideas
Portland Oregon Homes

by Cary Perkins

Portland Real Estate, Portland Oregon Top Producer, Windermere Top Producer, Portland Realtor, Portland Homes for Sale

 

Windermere Top Producer Cary Perkins

 

Posted on March 18, 2015 at 8:33 pm
Cary Perkins | Category: Daily House Idea, House Ideas, Selling Your home | Tagged , , , ,

10 Home Maintenance Tips for Spring

 

The camillias are in already bloom & the daffodils and primroses are popping up in my front yard  – my first sign that spring is already on its way.  After a long, dark winter, spring's bright sun and warm winds are a breath of fresh air. The only downside? All that sunshine spotlights your leaf-filled gutters, cracked sidewalks and the dead plants in last year's flower beds.

Dwight Barnett, a certified master inspector with the American Society of Home Inspectors, shared this checklist to help you target the areas that need maintenance so you can get your chores done quickly, leaving you time to go outside and play in the sunshine.

  • Check for loose or leaky gutters. Improper drainage can lead to water in the basement or crawl space. Make sure downspouts drain away from the foundation and are clear and free of debris.
  • Low areas in the yard or next to the foundation should be filled with compacted soil. Spring rains can cause yard flooding, which can lead to foundation flooding and damage. Also, when water pools in these low areas in summer, it creates a breeding ground for insects.
  • Use a screwdriver to probe the wood trim around windows, doors, railings and decks. Make repairs now before the spring rains do more damage to the exposed wood.
  • From the ground, examine roof shingles to see if any were lost or damaged during winter. If your home has an older roof covering, you may want to start a budget for replacement. The summer sun can really damage roof shingles. Shingles that are cracked, buckled or loose or are missing granules need to be replaced. Flashing around plumbing vents, skylights and chimneys need to be checked and repaired by a qualified roofer.  
  • Examine the exterior of the chimney for signs of damage. Have the flue cleaned and inspected by a certified chimney sweep.
  • Inspect concrete slabs for signs of cracks or movement. All exterior slabs except pool decks should drain away from the home's foundation. Fill cracks with a concrete crack filler or silicone caulk. When weather permits, power-wash and then seal the concrete. 
  • Remove firewood stored near the home. Firewood should be stored at least 18 inches off the ground at least 2 feet from the structure.
  • Check outside hose faucets for freeze damage. Turn the water on and place your thumb or finger over the opening. If you can stop the flow of water, it is likely the pipe inside the home is damaged and will need to be replaced. While you're at it, check the garden hose for dry rot.
  • Have a qualified heating and cooling contractor clean and service the outside unit of the air conditioning system. Clean coils operate more efficiently, and an annual service call will keep the system working at peak performance levels. Change interior filters on a regular basis. 
  • Check your gas- and battery-powered lawn equipment to make sure it is ready for summer use. Clean equipment and sharp cutting blades will make yardwork easier. 
 
 
Cary Perkins,
Windermere Top Producer
Fun With Real Estate
Current Portland Oregon Real Estate Information,
Highlights of Portland Oregon, House Ideas
Portland Oregon Homes

by Cary Perkins

Portland Real Estate, Portland Oregon Top Producer, Windermere Top Producer, Portland Realtor, Portland Homes for Sale

 

Windermere Top Producer Cary Perkins

 

Posted on January 27, 2015 at 11:22 pm
Cary Perkins | Category: Daily House Idea, Gardens and Landscape, house idea of the day, Portland Oregon Real Estate, Selling Your home | Tagged , , , ,

How to Avoid a $20,000 Housing Error

Don't assume that all houses (including yours) are good investments — because, frankly, many houses are not. Tell me if one of these thoughts has ever crossed your mind:

  • "I'll live in this house for a few years, then rent it out, and then maybe sell it when it rises in value."
  • "I'm going to remodel big-time before I sell; I bet I'll get top-dollar."
  • "Renting is just throwing money away."

Not so fast. Before you start throwing a massive chunk of your income toward an untested assumption, read on. The following could save you tens of thousands in unnecessary costs.

Myth No. 1: There's No Difference Between Your Personal Home and a Great Investment Home.

Myth No. 2: All Remodels Are Profitable.

Myth No. 3: Buying is Always Better Than Renting.

For the truth on these three myths, please read:  How to Avoid a $20,000 Housing Error

Paula Pant owns five houses — yes, five. No, she's not rich, but she's a real estate investor who built a portfolio of rental properties that cover her entire cost-of-living. She's 30 years old, and she invites you to check out all the details about her real estate purchases — including the numbers — on her blog, Afford Anything.

 

For current Portland Real Estate advice, sales and purchases, please call or write.

 
 
 
Cary Perkins,
Windermere Top Producer
Fun With Real Estate
Current Portland Oregon Real Estate Information,
Highlights of Portland Oregon, House Ideas
Portland Oregon Homes

by Cary Perkins

Portland Real Estate, Portland Oregon Top Producer, Windermere Top Producer, Portland Realtor, Portland Homes for Sale

 

 

 

Posted on September 29, 2014 at 8:30 pm
Cary Perkins | Category: Selling Your home | Tagged , , , ,

Godzillow!

 

 

I heard an interesting story yesterday about Chinese real estate purchases in the USA.  Sure, I had talked about it recently at a friend's house over dinner with a business partner who mentioned his Chinese clients were dropping a million on a house every time they came to the US. But I hadn't really focused on the extent of this movement until I heard an article on NPR yesterday. 

The news?  Zillow has begun publishing its entire U.S. real estate property database in Mandarin on the biggest real estate Web site in China. This means Chinese buyers can use Zillow to find properties near family and friends in their price range. “The fact that Zillow is going there is huge,” says Hall Willkie, president of New York real estate firm Brown Harris Stevens Residential Sales. “The Chinese may just overwhelm the United States with purchases.”

The Chinese are on the move. In 2014, a record number of Chinese, 100 million, are expected to travel abroad, an army roughly as big as Mexico’s population. They have money in their wallets, an appetite for the good life and ants in their pants.

You can’t blame them for feeling unsettled at home. Beijing’s aggressive anti-corruption sweep has netted thousands of big fish, and more confiscations are on the way. Pollution has created an asthma epidemic, food safety scares are commonplace, and China’s economic pace ebbs. There is still no true dissent or freedom of expression allowed. So the country’s wealthiest are on the move and want a better life for themselves or their children.

Some 9.3 million Chinese have immigrated in recent years, and 64 percent of the country’s remaining rich households — a category that includes a few million people — want to leave or are in the process of doing so.

The United States is their preferred destination, and American real estate is becoming their new T-bills, a safe-haven asset. Like bullion, it’s an asset class denominated in U.S. dollars, safe from confiscation and, when necessary, bought anonymously to hide wealth from governments or creditors or ex-partners. But unlike bullion, U.S. real estate can earn income, provide a roof and help obtain a visa. 

This month, U.S. real estate Web site Zillow begins publishing its entire U.S. real estate property database in Mandarin on the biggest real estate Web site in China. This means Chinese buyers can surf the Net to find properties near family and friends in their price range. “The fact that Zillow is going there is huge,” says Hall Willkie, president of New York real estate firm Brown Harris Stevens Residential Sales. “The Chinese may just overwhelm the United States with purchases.” 

A buyout is already underway. In 2013, Chinese buyers snapped up $11 billion worth of properties in the United States, capturing second place (at 12 percent of all foreign buying) behind Canadians for the first time, according to the National Association of Realtors’ Profile of International Home Buying Activity.

Willkie notes a spike in terms of interest in the past 18 months: “In New York, we’ve noticed Chinese buying very large, very expensive apartments, homes. But there are also many buying smaller apartments, $1.5 to $3 million, for their children going to school here. The parents are buying them.”  

In 2013, for instance, a Hong Kong woman paid $6.5 million for a two-bedroom in the tallest residence in New York, One57, for her daughter so she’ll have somewhere to live when she gets into Columbia, Harvard or NYU, she told her agent. The daughter, currently, is 2 years old. Another Chinese woman bought four $20 million units there for family members.

The desire to get money out of China for whatever reason, added to Zillow’s foray into China’s living rooms, will only enhance enthusiasm. China’s biggest exports to the United States may end up being capital and people. Look out for its biggest winners in a neighborhood near you.

Of course, your property listings with me are already advertised on Zillow, so no worries about having Portland representation on China's computer screens.   When talking with a client, Brian, last night, we decided it's the new GODZILLOW!

 

Cary Perkins,
Windermere Top Producer
Fun With Real Estate
Current Portland Oregon Real Estate Information,
Highlights of Portland Oregon, House Ideas
Portland Oregon Homes

by Cary Perkins

Portland Real Estate, Portland Oregon Top Producer, Windermere Top Producer, Portland Realtor, Portland Homes for Sale

 

 

Diane Francis

, July 15, and published in the Washington Post. 

 

 

 

Diane Francis, former editor of Canada's Financial Post, is editor-at-large of the National Post and a professor at Ryerson University’s Ted Rogers School of Management.

 

Posted on July 22, 2014 at 4:05 pm
Cary Perkins | Category: Buying property without ever seeing it, Current Portland Real Estate Market Information, Moving to Portland, Portland Oregon Real Estate, Selling Your home | Tagged , , , ,

Q & A: What if I have a stupid question about Real Estate?

 

 

My clients will sometimes say, "I've got a stupid question for you…. what does <insert odd real estate term> mean?

 

Of course I always respond that there is no stupid question in this process.  This is a big deal, buying and selling a house, and one should never feel that they don't full understand every little bit of what is going on.  That's why you work with a Realtor who you trust. 

Still, it's nice to have a reference for all those terms that come up during your transaction. 
Below is a link to the Federal Trade Commission's Real Estate marketplace glossary. 

 

 
The Federal Trade Commission, the agency that promotes competition
 
and protects consumers, has prepared this glossary to help you
 
better understand the terms commonly used in the real estate
 
and mortgage marketplace.    You'll find it here. 
 
 
 
 
Portland Oregon Real Estate Information,
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Caryperkins.com
 

 

by Cary Perkins

Posted on April 4, 2013 at 7:44 pm
Cary Perkins | Category: Moving, Moving to Portland, Selling Your home | Tagged , , , , ,

Q & A: How much is my kitchen remodel worth when I sell? 2013 Cost -vs- Value

 

Q:  We've just put in a ton of work on a new kitchen, and now it's time to sell.  How much can we actually recoup from our expense?

 

A:  Here is a link to the Remodeling Magazine Cost -VS- Value Comparison Tool.  It lists costs for all areas of the US, and you can look at moderate or fancy remodels.  It's lots of fun to figure out which improvements will give you the best return on your dollar.  It also helps you to understand that when pricing your home, you can't expect to wring every penny out of your remodel.  It will, however, make your home more attractive, and it should sell more quickly! 

 

This site compares the average cost for 35 popular remodeling projects with the value those projects retain at resale. To find data for any of 81 cities:
1. Click a region on the map or choose from the drop-down list.
2. Click on a city in the map (requires flash) or from the drop-down list.
3. Click the Download button for a PDF with city data.

For more information about individual projects:
1. Click on a project name to see a description and a 3-D model.
2. Sort any column by clicking on the column header.
3. For more information on the Remodeling 2013 Cost vs. Value Report, click on any of the links listed at right.

 

Thanks to Remodling Magazine for their research on this great article.

 

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Posted on March 2, 2013 at 8:13 pm
Cary Perkins | Category: Current Portland Real Estate Market Information, Daily House Idea, house idea of the day, House Ideas, kitchen ideas, Portland Oregon Real Estate, Portland Real Estate Statistics, Selling Your home | Tagged , , ,

Q & A: What is a Short Sale?

 

Q&A:  What exactly is a short sale?

 

A short sale occurs when a bank agrees to accept less than the total amount owed on a mortgage to avoid having to foreclose on the property.  This is not a new practice; banks have been doing short sales for years.  Only during the past four to five years has this process become a part of the public consciousness.

IF YOU ARE THE HOMEOWNER:  YOUR FIRST ORDER OF BUSINESS IS TO SPEAK WITH AN ATTORNEY. 

Here's a bit more info that might help:

 

To be eligible for a short sale you first have to qualify!

To qualify for a short sale:

  • Your house must be worth less than you owe on it.
  • You must be able to prove that you are the victim of a true financial hardship, such as a decrease in wages, job loss, or medical condition that has altered your ability to make the same income as when the loan was originated.  Divorce, estate situations, etc… also qualify.  There are some exceptions to hardship now, but for the most part the bank or investor will need to verify some type of hardship.

Now that you have a basic understanding of what a short sale is,  LET’S BUST SOME MYTHS!!

 

Myth #1  If you let your home go to foreclosure you are done with the situation and you can walk away with a clean slate.

The reality is that this couldn’t be any farther from the truth in most situations.  You could end up with an IRS tax liability and still owing the bank money.  Please keep in mind that if your property does go into foreclosure you may be liable for the difference of what is owed on the property versus what is sells for at auction, in the form of a deficiency balance!  Please note this is state specific and in most states you will be liable for the shortfall, but in some states the bank may not always be able to pursue the debt.   Check your state law as it varies widely from state to state.

Here is an example of how a deficiency balance works:

If you owe $200,000 on the property and it sells at auction for $150,000, you could be liable for the $50,000 difference if your state law allows it.

Not only could you be liable for the difference to the bank, but in some situations you could also be liable to the IRS!   Although there are exemptions (mostly for principal residences) under the Mortgage Debt Forgiveness Act, there are times when you could be taxed on both a short sale and a foreclosure, even in a principal residence situation.  I advise talking to a CPA if you are in this situation and as you are weighing your options.

 A short sale can alleviate your liability to the bank, in most situations.  There are also exceptions to this, but in most cases banks are releasing homeowners from the deficiency balance on a short sale.

Myth #2  There are no options to avoid foreclosure.

Now more than ever, there are options to avoid foreclosure.  Besides a short sale, loan modifications along with "deed in lieu" are also examples of the many options.  In most cases (but not all) a short sale is the best option.  Either way, there are more options today than there have ever been to avoid foreclosure.

Myth #3  Banks do not want to participate in a short sale, or, it is too hard to qualify for a short sale.

Banks would rather perform a short sale than a foreclosure any day.  A foreclosure takes a long time and creates a huge expense for the banks; a short sale saves them both time and money.  In speaking with some of the biggest lenders and servicers in the country, they have said they average a net of 17-25% more on a short sale than on a foreclosure.  A testament to this are the financial incentives now being offered by banks, and how much the entire process has recently changed to try and streamline it for all parties.   Qualifying for a short sale is easier than you think – you just need to have a true financial hardship, or a change in your finances and your house has to be worth less than what you owe on it. Also, banks now have government incentives to participate in short sales.

Myth #4   Short sales are not that common.

At this time, short sales range from 10-50 % of sales in various markets and it is predicted that in 2013 we will have more short sales than any other year, to date.  One of the biggest reasons is that MHA (Making Home Affordable) expires December 2013. Many of the Government incentives like HAFA, will expire the end of this year.   Short sales are in every market, and are not just limited to any particular income class. This has affected people from all facets of life. A short sale should be looked at as a helpful tool, not a negative stigma.That is why the government is offering programs that actually pay consumers to participate in short sales. It is not just affecting one community; it is affecting communities and consumers across the nation.

Myth #5  The short sale process is too difficult and they often get denied.

Though the short sale process is time consuming,  it is not as difficult as the media would have you believe.  The problem is that most short sales are denied because of a misunderstanding of the process.  It is true that if the short sale process is not followed correctly there is a good chance of getting denied.  An experienced agent knows how to avoid this.  Short sales require a lot of experience, and a special skill set.  If you are looking to go the option of a short sale make sure your agent is skilled and experienced in this area.

Myth #6   Short sales will cost me money out of pocket.

A short sale should not cost you any out-of-pocket money.  In fact, you could get between $3000-up to $30,000 to participate in a short sale.  In many ways, a short sale may put you in a better financial position than prior to your short sale.  Almost every short sale program now has some type of financial incentive for the home owner, as long as it is a principal residence, and we are even seeing relocation money being paid on some investment/second homes.  As a seller of a property you should never have to pay for a short sale cost up front to any professional service . Realtors charge a commission that will be paid for by the bank.  In most communities there are also non-profits and HUD counselors who can help you with foreclosure prevention options for free.  The only potential cost you could incur is if the bank would not release you from a deficiency balance in the short sale, which is happening less and less.

Myth #7  If I am behind on my payments, I can perform a short sale any time.

The farther you get behind on your payments, the harder it is to get a short sale approved.  The closer a property gets to a foreclosure the harder it is to convince the bank to perform a short sale.  As they get closer to a foreclosure sale, more money is spent, thus deterring them from doing a short sale.  If you think you need to perform a short sale, time is of the essence –  the sooner you start the process, the better.  Waiting too long can trigger the ramifications of a foreclosure, losing the ability to do a short sale as a viable option.

Myth #8   I have already been sent a foreclosure notice so I can’t perform a short sale.  

For the most part, just because you received a foreclosure notice or notice of default it does not mean that you do not have time to perform a short sale.  The timeline and specifics do vary from state to state, but I've heard of banks postponing a foreclosure to work a short sale option as close as 30 days prior to the scheduled foreclosure auction.  Still, the longer you wait the less chance you have.  If you have received a legal foreclosure notice, please reach out to a professional right away.  The longer you wait, and the closer you get to foreclosure, the fewer options you have.  If you have received a notice to foreclose, this means the bank is filing paperwork and starting the process to take legal action to repossess the house.  You may still have time, at this point to prevent foreclosure, but do not hesitate!  The closer you get to the foreclosure date, the harder it becomes to negotiate with the bank for whichever option you choose.

Myth #9   I was denied for a loan modification, so I know I will get denied for a short sale.

Short sales and loan modifications are handled by two separate departments at the bank.  These processes are totally different in approval and denial.  If you got denied for a modification you can still apply for a short sale.  In some cases, you can get a short sale approved faster than a loan modification, as some loan modifications are denied because they cannot reduce the loan low enough based on the consumers income.

Myth #10   If I go through a short sale I cannot buy another house for a long time.

The time to buy another house depends on your entire credit picture and can vary from 2-3 years. Fannie and Freddie Mac just said on November first that a homeowner may be eligible two years after a short sale to repurchase.  There are even a few FHA programs that allow for a purchase sooner than that, but the guidelines are fairly strict.  Some regional and local banks will finance 16-18 months after a short sale, but the interest rate will more than likely be higher than one of the national chains, and this is based on their specific underwriting guidelines.

These are just a few of the common myths surrounding short sales and foreclosure. With the options available today, no homeowner should ever have to go through foreclosure, and hopefully this information can help a few more homeowners think twice before walking away from their home not realizing the possible long term ramifications a foreclosure can have.

 

Next time I'll address "Deed in Lieu of Foreclosure"

 

info via KCM Blog

 

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Posted on February 6, 2013 at 6:50 pm
Cary Perkins | Category: Current Portland Real Estate Market Information, Selling Your home, Short Sale of your Property | Tagged , ,