As if the home buying process isn't nerve wracking enough, an unstable market presents unique challenges to future home buyers. With the steady stream of bad news, increased foreclosures and tightened restrictions on mortgages, it can be more difficult to buy a new home now than it has been in the past. Lenders are getting picky and it can spell bad news for those individuals on the house market.

If you already qualify for a mortgage, however, and have a good income with strong credit, you can be in a prime spot to purchase a home. With declining home prices and an established mortgage, the housing market is not as treacherous for established homeowners as it can be for first time buyers. There are some tips and tricks, however, to help you stay within a safe area for your future home purchase despite an unstable market scenario.  

ASK YOURSELF?

Can you afford to have this as a monthly expense while still saving for your retirement, college, increased portfolio, or a new car? What are the bills that will accompany a house that is that large? Can you afford those along with your mortgage? What are your annual taxes? Know this information before you get too caught up in a big number that will mean little to you until you break it down in monthly installments.

If you are armed with extensive knowledge, you can make better deals and know what you are getting into with your future home.

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 I am a Multi-Million Dollar Producer that has resided in Georgia for my entire life! I am a very successful and dedicated Full Time Real Estate Professional.  I have a strong sales background which includes Marketing, Finance, and most importantly a High Level of Strong Customer Service Skills.  I believe the most important aspects in Real Estate are Communication, Follow-up, Loyalty, and Honesty.  These parts are vital in any business transaction, but are crucial to a High Level of Success in the Real Estate transaction. The real estate market is constantly changing and you need an agent who is extremely knowledgable and understands what it takes to buy or sell a home. I am busier than ever and can help you with ALL of your Real Estate needs! I cover all areas of this business which include New Construction, Relocations, First Time Home Buyers, Investors, Foreclosures, and Short Sales. Looking to buy Fannie Mae/Freddie Mac, or HUD homes...No problem. I have successfully negotiated and closed hundreds of these types of properties and can give you valuable insight and knowledge on what you need to do to successfully win and close on these homes! No real estate transaction is too small or too large for me to handle. If you are Buying or Selling please give me the opportunity to EARN your business. You won't be disappointed! I have a ton of referrals and would be glad to supply them upon request. Email or call me today. I promise to give you the BEST SERVICE in the industry!

I am often asked by other clients new to the short sale process... "What do I include in my short sale package?"

I personally think that this is a great question and is a key starting point for clients new to short sales --- where do I start? What do I need to include in my short sale package?

Knowing exactly what to include and having a system in place to ensure that you create a successful package to submit every time will greatly improve your chances of a successful short sale.

Basic Contents of a Short Sale Package

The following is a basic outline of what you want to include in a successful short sale package:

* Cover Letter
* Authorization to Release Information
* Sellers Hardship Letter
* Seller’s Financial information - most banks have a form for this however I use a standard form initially with all sellers.
* Supporting Financial Information:
o 2 years w2's
o 2 months pay stubs
o 2 months bank statements
* Supporting Hardship info - for example HOA liens, medical statements, disability statements
* Repair Estimate for the property - if you can develop a relationship with a contractor for this it adds credibility
* Comps for the property
* Contract
* Net Sheet
* Additional information that may be asked for:
o The first mortgage holder may ask for a payoff amount from the 2nd
o The second mortgage holder may ask for a payoff amount from the 1st
o Initial Title Report - I have had one bank ask for this.

Cover Letter

The cover letter should be clear and concise giving the needed information to the bank. The information that I include is an overview of the homeowner’s situation, what they owe on the property, what it is really worth and mention the amount of the needed repairs. I also state what my offer to the bank is. I conclude my cover letter with all of my contact information and state that I hope we can work together to resolve this issue for the homeowner.

Authorization to Release Information

I have a standard Authorization form that I use and in most cases this works fine. There are a few banks that require their own form for this. GMAC will require that you use their form and it must be signed and notarized and the original must be sent back in.

Seller's Hardship Letter

I typically ask my sellers to make this at least a page long. The goal if this letter is to simply have the homeowner explain their situation to the bank. This will include key items such as job loss, medical issues, divorce, health issues, etc. If the seller is considering bankruptcy you can have them include that, however it typically doesn't scare the bank into acting faster.

Seller's Financial Information

The bank really wants to know what is the inflow and outflow that the seller has each month and what other expenses and assets do they have. I have two standard forms that I have my seller’s fill out, personal information and financial information.

In most cases these forms will work, however there are times that the bank will request that the homeowner complete the standard forms that they issue.

Supporting Financial Information

These items are typically the same required by a borrower when applying for a loan:

o 2 years w2's
o 2 months pay stubs
o 2 months bank statements

I always tell my sellers that in order for the bank to evaluate considering taking less than what is owed on their property they need provide the same type of information they did when they applied for a loan, however they are now showing they can't do this financially at this time.

Supporting Hardship Info

In order to paint the full picture to the bank of the homeowner’s situation it can help to provide additional documents showing the hardship. This can include medical bills, accident reports, layoff notice, etc.

Repair Estimate For The Property

Providing the bank with a detailed repair estimate from a reputable contractor will assist greatly in getting your short sale accepted. The bank doesn't want to own property and especially not property that needs a complete overhaul. Showing this by presenting what needs to be done and the cost is very helpful.

Comps For The Property

You definitely want to do your homework and provide the bank with at least 3 to 5 comps of properties in the area that have sold in the last 12 months, preferably the last 6 months. In doing this you want to try to get as close to the subject property that you can and ensure that you provide the lowest comps that you can. I have found that it is also helpful to be able to show the number of days on market and any and all down payment assistance or seller concessions given in the sale.

Contract

As an investor most of the time when working a short sale your goal is to purchase that property in some form. This could be a purchase for your personal portfolio, a fix-n-flip or even a double closing. In order to do this you will need a contract.

I have found that a generic contract 1-3 pages works great. I always include my company name/ and/or assigns as the buyer and I also always include the following clauses:

• Buyer Shall be entitled access to the property to show partners, lenders, inspectors, contractors and other interested parties prior to closing
• Buyer is purchasing "AS IS"
• Contingent on the mortgage holder(s) accepting a short sale
• Contingent on a clean title search being performed for liens and/or other judgments against property.

Providing a contract shows the bank that you are serious and want to purchase the property.

Net Sheet

Banks want to see how much money they are going to net with your offer. Providing a Net Sheet with your offer will provide the bank with the numbers they need to see -- what will we get. I have found a great tool that I use for generating a preliminary net sheet to submit with my offers -- this tool is EasyHUD it is a membership site that allows you to generate all of the net sheets or hud1's that you need.

Additional Information

Typically if a bank requires additional information they will let you know what it is. The most common that I have seen so far is the request for the payoff amounts from the other lien or mortgage holders on the property.

If you are working with a homeowner with an FHA or a VA loan then you will have to include additional forms with your short sale package.

10 Keys To Making A Successful Offer To Buy A Foreclosure - What You Need To Know…

Given the current market, I get a lot of calls asking about foreclosures.  If you listen to the news, you’d think that every other house on the market is in foreclosure or close to it.  In fact, according to the Mortgage Banker’s Association, at the end of last year, just over 9 percent of all home loans in the United States were in arrears or already in foreclosure.  That means that more than 9 out of 10 homes are NOT in foreclosure.  However, if the current trends continue, the percentage of homes in foreclosure could rise to 16 percent by 2012 according to a report by Credit Suisse.  Regardless of what the future holds, there are several key differences between a foreclosure sale and a market sale.  They are:

1. Homes that have been foreclosed on are now in the hands of the bank that made the primary loan.  The owner is out of the picture (and hopefully out of the house).
2. There may be an asset management company that is now managing the property and sales process.  This adds additional layers of bureaucracy and communication to the process.
3. The home is most likely listed with an REO or foreclosure broker.  This adds another layer to the process but can a good REO broker will help the buyer and their agent make a good offer.
4. There are typically no disclosures  and the home is sold “as-is” with no repairs.
5. The bank will often collect offers or bids and hold them until a time at which they want to respond.  It is not uncommon to wait weeks before hearing of your offer is accepted, only to find out it wasn’t but someone else’s was.
6. Most banks will choose the “best offer” as they see it and may or may not even give the buyer a chance to revise their offer.  The “best” offer can be one with a quick close or less contingencies or stipulations.  Of course, the higher the price offered is always a good way to get considered.
7. Banks usually require several addenda be signed by the buyer and that the buyer closes at an attorney of the bank’s choosing.  The addenda may not be available to review until after your offer is accepted.  While there’s usually a period to review these documents before a “formal” acceptance is made, these documents can be lengthy and include key information that may change the affect the buyer.  An experienced agent will know what information is critical and relevant to the buyer.
8. Foreclosure is an expensive process and banks want to re-coup as much as they can.  They are not in a rush to sell and will often refuse to negotiate in the beginning.  These are not fire-sales.

So what does all of this mean?  It means that when making an offer on a foreclosure, you are not dealing with a motivated owner who is looking to retire or downsize. You are dealing with a bank - a business entity - who is going to scrutinize every aspect of the transaction.  If they have gone through the process of foreclosing, you can bet that they are going to want every last dime they can get.

Many buyers mistake a foreclosure as a sign of desperation. It’s not. A seller in pre-foreclosure may be desperate. A foreclosed on home is now an asset and not a home. It’s on the bank’s books. They probably have priced it below the market price of a typical home already but usually at or near the amount they are owed.  Buyers often think they can get a foreclosure for 50%-60% of the list price. It’s not gonna happen, at least not usually.

Here are my tips for making a strong offer and increasing your chance to have your offer accepted.

1. Be fully pre-approved by a lender and have a letter from them with your offer.
2. Review the comps for houses that have sold and compare the subject to these adjusting for condition. Base your offer price on these factors, not what “you” think it is worth.
3. Get a quote on all work that needs to be done on the house before you make the offer or be comfortable with the possible work to be done.
4. Follow the submission guidelines carefully.  Many offers are rejected due to incomplete paperwork or missing signatures.
5. Be prepared to compete with other offers.  Banks like to collect multiple offers and then have the buyers outbid each other.
6. Understand that the bank doesn’t care why you want the house.  They are looking at it from a financial perspective.
7. CASH offers are usually more attractive.  Most foreclosure deals fall apart because the buyer can’t get financing - even if they are fully approved before hand!
8. Use a professional and experienced Realtor.  All homes listed in the FMLS will include a commission to your agent. They’re paying for you to be represented - be represented!
9. Make sure you want the house. Otherwise, this is a lot of effort for nothing.
10. Don’t be afraid to make another offer if the house comes back on the market.  It’s not personal.  Just because they didn’t select your offer before doesn’t mean they won’t this time.

I have successfully closed several foreclosure deals.  I worked on many more.  Typically, if the buyer is realistic and follows these tips, there is a very good chance in getting the offer accepted.  If they decide to “throw an offer out” and see what happens, it usually results in a rejection and a lot of wasted effort.

Please feel free to contact me with any questions you may have about this or any other real estate topic.