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APPRAISALS & MARKET VALUE - Q & A
Q: How is a home's value determined?
A: You have several ways to determine the value of a home.An appraisal is a professional estimate of a property's market value, based on recent sales of comparable properties, location, square footage and construction quality. This service varies in cost depending on the price of the home. On average, an appraisal costs about $300 for a $250,000 house.A comparative market analysis is an informal estimate of market value performed by a real estate agent based on similar sales and property attributes. Most agents offer free analyses in the hopes of winning your business.You can also get a comparable sales report for a fee from private companies that specialize in real estate data. You also can find comparable sales information available on various real estate Internet sites.
Q: What is the difference between market value and appraised value?
A: Appraised value is a certified appraiser's opinion of the worth of a home at a given point in time.
Lenders require appraisals as part of the loan application process; fees range from $200 to $300.Market value is what price the house will bring at a given point in time. A comparative market analysis is an informal estimate of market value, based on sales of comparable properties, performed by a real estate agent or broker.
Q: What's a house worth?
A: A home is worth what someone will pay for it. Everything else is an estimate of value. To determine a property's value, most people turn to either an appraisal or a comparative market analysis.An appraisal is a certified appraiser's estimate amenities, energy efficiency, the quality of the value of a home at a given point in time. To make their determination, appraisers consider square footage, construction quality, design, floor plan, neighborhood and availability of transportation, shopping and schools. Appraisers also take lot size, topography, view and landscaping into account.A comparative market analysis is an informal estimate of market value, based on comparable sales in the neighborhood, performed by a real estate agent or broker. You can do your own cost comparison by looking up recent sales of comparable properties in public records. These records are available at local recorder's or assessor's offices, through private companies or on the internet.Other resources include:
- The Home Sales Line allows people to use their telephones to find the exact selling price of houses anywhere in the state 24 hours a day. Call 1-800-585-HOME.
- Dataquick Information Systems tracks home sales statewide and prepares reports for specific properties. Call 1-800-999-0152.
- Go to Web sites such as www.homeshark and www.dataquick.com.
Q: What standards do appraisers use to estimate value?
A: Appraisers use several factors when estimating value including historical records, property
performance, condition of the home and indices that forecast future value. For detailed information on appraisal standards, contact the Appraisal Institute at 875 N. Michigan Ave., Suite 2400, Chicago, IL 60611-1980; (312) 335-4458.
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WHOM TO CONTACT - Q & A
Q: Where do I get information about closing costs?
A: For more on closing costs, ask for the Consumer's Guide to Mortgage Settlement Costs, Federal Reserve Bank of San Francisco, Public Information Department, P.O. Box 7702, San Francisco, CA 94120 or call (415) 974-2163.
Q: Where do I get information on filing consumer complaints?
A: For information about filing consumer, look to these sources:
- Consumer Federation of America, 1424 16h St., NW, Suite 604, Washington, DC 20036; (202) 387-6121.
- United Homeowners Association; 1511 K Street, NW, Washington, DC 20005; (202) 408-8842.
- Consumers Union, 1535 Mission St., San Francisco, CA 9103 or call (415) 431-6747.
- Consumer Action Council, 116 New Montgomery St., Suite 233, San Francisco, CA 94105; (415) 777-9648.
Q: Where do I get information on housing market stats?
A: A real estate agent is a good source for finding out the status of the local housing market. So is your statewide association of Realtors, most of which are continuously compiling such statistics from local real estate boards.For overall housing statistics, U.S. Housing Markets regularly publishes quarterly reports on home building and home buying. Your local builders association probably gets this report. If not, the housing research firm is located in Canton, MI call (800) 755-6269 for information; the firm also maintains an Internet site. Finally, check with the U.S. Bureau of the Census in Washington, DC (301) 495-4700. The census bureau also maintains a site on the Internet. The Chicago Title Company also has published a pamphlet, Who's Buying Homes in America. Write Chicago Title and Trust Family of Title Insurers, 171 North Clark St., Chicago, IL 60601-3294.
Q: Where do I get information on IRS publications?
A: The internal Revenue Services publishes a number of real estate publications.
They are listed by number:
- 521 Moving Expenses
- 523 Selling Your Home
- 527 Residential Rental Property
- 534 Depreciation
- 541 Tax Information on Partnerships
- 551 Basis of Assets
- 555 Federal Tax Information on Community Property
- 561 Determining the Value of Donated Property
- 590 Individual Retirement Arrangements
- 908 Bankruptcy and Other Debt Cancellation
- 936 Home Mortgage Interest Deduction
Order by calling (800) TAX-FORM
Q: How do I reach the IRS?
A: To reach the Internal Revenue Service, call (800) TAX-1040.
Q: Where do I get information about finding a real estate attorney?
A: To find a real estate attorney, contact the local bar association, which may offer local referral services. You may also ask friends or your real estate agent for their recommendations. When you have several names, call each to find out about fees and their level of experience.
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DEED IN LIEU OF FORECLOSURE - Q & A
Q: Can a home seller sell a home for less than its mortgage?
A: This situation is known as a short sale. Sometimes homeowners can negotiate with lenders and have them split the difference between the sale price and loan amount, which still must be paid.A short sale may be complicated if the loan has been sold to the secondary market because then the lender will have to get permission from Fannie Mae or Freddie Mac, the two major secondary-market players.If the loan was a low-down payment mortgage with private mortgage insurance, then the lender also must involve the mortgage insurance company that insured the low-down loan.Resources:
- How to Fight Foreclosure, Jeff Jensen, Jensen Publications, 200 Main Street, Suite 104-201, Huntington Beach, CA 92648; (714) 843-0321.
Q: When does foreclosure begin?
A: Lenders will initiate foreclosure proceedings when homeowners become delinquent in their mortgage obligation, usually after three payments are missed. The lender will then notify the buyer in writing that he or she is in default. The lender can request a trustee's sale or a judicial foreclosure, in which the property is sold at public auction.A borrower can cure the default by paying the overdue amount and the pending payment after the notice of default is recorded, usually no later than a few days before the property's sale.Some sales allow the successful bidder to take possession immediately. If the former owner refuses to vacate the premises, the court can issue an unlawful detainer that allows the sheriff to come out and evict them.Borrowers should do everything they can to avoid foreclosure, which is one of the most damaging events that can occur in an individual's credit history.
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DISCLOSURE - Q & A
Q: Whose obligation is it to disclose pertinent information about a property?
A: Obligations to disclose information about a property vary from state to state.Under the strictest laws, the seller and the seller's broker, if there is one, are required to disclose all facts materially affecting the value or desirability of the property which are known or accessible only to him.Items sellers often disclose include: homeowners association dues; whether or not work done on the house meets local building codes and permits requirements; the presence of any neighborhood nuisances or noises which a prospective buyer might not notice, such as a dog that barks every night or poor TV reception; any death within three years on the property and any restrictions on the use of the property, such as zoning ordinances or association rules.
Q: Do sellers have to disclose the terms of other offers?
A: According to experts, sellers do not have to disclose other offers.
Q: Will a neighbor's problem reduce the value of my property?
A: While it may not reduce the actual value, a cluttered landscape can detract from the positive aspects of your home. Review your local laws, which should be on file at the public library, county law library or City Hall.A typical junk vehicle ordinance, for example, requires any disabled car to either be enclosed or placed behind a fence. And most cities prohibit parking any vehicle on a city street too long.It also may be worthwhile to check into local zoning ordinances. An operator of a home-based business usually is required to obtain a variance or permanent zoning change in residential areas.In addition, if a neighbor's repair work produces loud noises, he may be breaking local noise-control ordinances, which are enforced by the police department.Before bringing in the authorities, you may want to make a copy of the pertinent ordinance and give it to your neighbor to give them a chance to correct the problem.Resources:
- Neighbor Law: Fences, Trees, Boundaries and Noise Cora Jordan, Nolo Press, Berkeley, CA; 1991.
Q: What are standard contingencies?
A: Most offers include two standard contingencies: a financing contingency, which makes the sale dependent on the buyers' ability to obtain a loan commitment from a lender, and an inspection contingency, which allows buyers to have professionals inspect the property to their satisfaction.A buyer could forfeit his or her deposit under certain circumstances, such as backing out of the deal for a reason not stipulated in the contract.The purchase contract must include the seller's responsibilities, such things as passing clear title, maintaining the property in its present condition until closing and making any agreed-upon repairs to the property.
Q: What repairs should the seller make?
A: Most sellers like to make all minor repairs before going on the market in order to seek a higher sales price. In addition, nearly all purchase contracts include a buyer contingency inspection clause, which allows a buyer to back out if numerous defects are found. Once the problems are noted, buyers can attempt to negotiate repairs or a lower price.
Q: How do I get the real scoop on homes I am looking at?
A: Home inspections, seller disclosure requirements and the agent's experience will help. Disclosure laws vary by state, but in some states, the law requires the seller to complete a real estate transfer disclosure statement. Here is a summary of the things you could expect to see in a disclosure form:
- In the kitchen - a range, oven, microwave, dishwasher, garbage disposal trash compactor.
- Safety features such as burglar and fire alarms, smoke detectors, sprinklers, security gate, window screens and intercom.
- The presence of a TV antenna or satellite dish, carport or garage, automatic garage door opener, rain gutters, sump pump.
- Amenities such as a pool or spa, patio or deck, built-n barbeque and fireplaces.
- Type of heating, condition of electrical wiring, gas supply and presence of any external power source, such as solar panels.
- The type of water heater, water supply, sewer system or septic tank also should be disclosed.
Sellers also are required to indicate any significant defects or malfunctions existing in the home's major systems. A checklist specifies interior and exterior walls, ceilings, roof, insulation, windows, fences, driveway, sidewalks, floors, doors, foundations, as well as the electrical and plumbing systems.The form also asks sellers to note the presence of environmental hazards, walls or fences shared with adjoining landowners, any encroachments or easements, room additions or repairs made without the necessary permits or not in compliance with building codes, zoning violations, citations against the property and lawsuits against the seller affecting the property.Also look for, or ask about, settling, sliding or soil problems, flooding or drainage problems and any major damage resulting from earthquakes, floods or landslides.People buying a condominium must be told about covenants, codes and restrictions or other deed restrictions.It's important to note that the simple idea of disclosing defects has broadened significantly in recent years. Many jurisdictions have their own mandated disclosure forms as do many brokers and agents. Also, the home inspection and home warranty industries have grown significantly to accommodate increased demand from cautious buyers. Be sure to ask questions about anything that remains unclear or does not seem to be properly addressed by the forms provided to you.
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ESCROW & CLOSING COSTS - Q & A
Q: What contingencies should be put in an offer?
A: Most offers include two standard contingencies: a financing contingency, which makes the sale dependent on the buyer's ability to obtain a loan commitment from a lender, and an inspection contingency, which allows buyers to have professionals inspect the property to their satisfaction.A buyer could forfeit his or her deposit under certain circumstances, such as backing out of the deal for a reason not stipulated in the contract.The purchase contract must include the seller's responsibilities, such things as passing clear title, maintaining the property in its present condition until closing, and making any agreed-upon repairs to the property.
Q: Where do I get information about closing costs?
A: For more on closing costs, ask for the Consumer's Guide to Mortgage Settlement Costs, Federal Reserve Bank of San Francisco, Public Information Department, P.O. Box 7702, San Francisco, CA 94120 or call (415) 974-2163.
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FORECLOSURES - Q & A
Q: Are foreclosures an option?
A: A foreclosure property is a home that has been repossessed by the lender because the owners failed to pay the mortgage. Thousands of homes end up in foreclosure every year. Economic conditions affect the number of foreclosures, too. Many people lose their homes due to job loss, credit problems or unexpected expenses.It is wise to be cautious when considering a foreclosure. Many experts, in fact, advise inexperienced buyers to hire an expert to take them through the process. It is important to have the house thoroughly inspected and to be sure that any liens, undisclosed mortgages or court judgments are cleared or at least disclosed.
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LEASE OPTIONS - Q & A
Q: What is a lease option?
A: When a renter signs a lease with an option to purchase the property for a specific price within a certain time frame, that is called a lease option. In most lease-option situations, a portion of the rent is applied to a future down payment.Lease options are most popular among buyers who don't have enough funds for a down payment and closing costs.
Q: Where do I get information on lease options?
A: For information on lease options, How Lease Options Benefit Realty Buyers, Sellers, Agents and Investors is available from Tribune Media Services, 435 N. Michigan #1500, Chicago, IL 60611; (800) 245-6536 or Publication House, Burlingram, CA; (800) 736-1736.
Q: How do lease options work and what are the benefits?
A: Most lease-option agreements specify that a portion of the rent on the property in questions is applied toward the purchase if the option is exercised. This is referred to as rent credit. Institutional lenders accept rent credits as part of the down payment if rental payments exceed the market rent and if a valid lease-purchase agreement is in effect, a copy of which must be attached to the loan application.For sellers, lease options give them several advantages, especially in a slow market. These include a monthly rent higher than market rent, top-market value for the property and tax-free use of the option consideration until the option expires or is exercised. Also, the renter is more likely to treat the property like an owner, tax-free use of option consideration until the option expires or is exercised.Lease options should be read carefully for details on transferring the option and other important concerns.For more information, get a copy of How Lease Options Benefit Realty Buyers, Sellers, Agents and Investors, available for $4 from Tribune Media Services, 64 E. Concord St., Orlando, FL 32801
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PRICING THE HOUSE TO SELL - Q & A
Q: Is a low offer a good idea?
A: While your low offer in a normal market might be rejected immediately, in a buyer's market a motivated seller will either accept or make a counteroffer.Full-price offers or above are more likely to be accepted by the seller. By there are other considerations involved:
- Is the offer contingent upon anything, such s the sale of the buyer's current house? If so, low offer, even at full price, may not be as attractive as an offer without that condition.
- Is the offer made on the house as is, or does the buyer want the seller to make some repairs or lower the price instead?
- Is the offer all cash, meaning the buyer has waived the financing contingency? If so, then an offer at less than the asking price may be more attractive to the seller than a full-price offer with a financing contingency.
Q: What is the difference between market value and appraised value?
A: Appraised value is a certified appraiser's opinion of the worth of a home at a given point in time.
Lenders require appraisals as part of the loan application process; fees range from $200 to $300.Market value is what price the house will bring at a given point in time. A comparative market analysis is an informal estimate of market value, based on sales of comparable properties, performed by a real estate agent or broker.
Q: How does someone sell a slow mover?
A: Even in a down market, real estate experts say that price and condition are the two most important factors in selling a home.The first step is to lower the price. Also, go through the house and see if there are cosmetic defects that you missed and can be repaired.Secondly, home sellers should make sure that the home is getting the exposure it deserves through open houses, broker open houses, advertising, good signage and a listing on a multiple listing service (MLS).Another option is to pull the home off the market and wait for the market to improve.Finally, frustrated sellers who have no equity and are forced to sell because of a divorce or financial considerations should discuss a short sale or a deed in lieu of a foreclosure with a mortgage lender.A short sale is when the seller finds a buyer for a price that is below the mortgage amount and negotiates the difference with the lender.In a deed-in-lieu-of-foreclosure situation, the lender agrees to take the house back without instituting foreclosure proceedings. But these would be considered more radical options than lowering the price.
Q: How is the price set?
A: It is very important to price your home appropriately relative to current market conditions. Because the real estate market is continually changing, and market fluctuations have an effect on property values, it's imperative to select your list price based on the most recent comparable sales in your neighborhood.A comparative market analysis provides the background data on which to base your list-price decision. Study the comparable sales material presented to you by the different agents you interviewed initially. If the analyses are more than two or three months old, have our agent update the report for you.If all agents agreed on a price range for your home, go with the consensus. Watch out for an agent whose opinion of values is considerably higher than the others.
Q: How do you prepare a house to sell?
A: Doing whatever you can to put your house's best face forward is very important if you want to get close to your asking price or sell as quickly as possible. Short of spending a lot of money, there are several steps people can take to make their home show better:
- Sweep the sidewalk, mow the lawn, prune the bushes, weed the garden and clean debris from the yard.
- Clean the windows (both inside and out) and make sure the paint is not chipped or flaking. And speaking of paint, if your home was built before 1978, a new federal law gives a buyer the right to request a lead inspection. If you think you might have some problems, do the inspection yourself beforehand and make any fixes you can.
- Be sure that the doorbell works.
- Clean and spruce up all rooms, furnishings, floors, walls and ceilings. It's especially important that the bathroom and kitchen are spotless.
- Organize closets.
- Make sure the basic appliances and fixtures work. Get rid of leaky faucets and frayed cords.
- Make sure your house smells good: from an apple pie, cookies baking or spaghetti sauce simmering on the stove. Hide the kitty litter.
- Put vases of fresh flowers throughout the house.
- Having pleasant background music playing in the background also will help set your stage.
Q: What are the standard ways of finding out what a house is valued at?
A: A comparative market analysis and an appraisal are the standard ways consumers, lenders and realty agents determined what a home is worth.Your real estate agent will be happy to provide a comparative market analysis, an informal estimate of value based on comparable sales in the neighborhood. You also can research the comps yourself by checking on recent sales in public records. Be sure that you are researching properties that are similar in size, construction and location.This information is not only available at your local recorder's or assessors office but also through private companies and on the Internet.An appraisal, which generally cost $200 to $300 to perform, is a certified appraiser's opinion of the value of a home at any given time. Appraisers review numerous factors including recent comparable sales, location, square footage and construction quality.
Q: What is the difference between list and sales price?
A: The list price is the price tag put on a house in a real estate listing; it usually is only an estimate of what the seller would like to get for the property. The sales price is the amount a property actually sells for. It may be the same as the listing price or higher or lower, depending on how accurately the property was originally priced and on market conditions.A seller may need to adjust the listing price if there have been no offers within the first few months of the property's listing period.
Q: What is the best time to buy?
A: Because many buyers prefer to move in the spring or summer, the market starts to heat up as early as February. Families with children are anxious to buy so they can move during summer vacation, before the new school year begins.The market slows down in late summer before picking up again briefly in the fall. November and December have traditionally been slow months although some astute buyers look for bargains during this period.
Q: What are the two most important factors when selling a home?
A: Even in a down market, real estate experts say price and condition are the two most important factors in selling a home. So, the first step is to lower the price. Also, get through the house and see if there are cosmetic defects that you missed and can be repaired.Home sellers should make sure that the home is getting the exposure it deserves through open houses, broker open houses, advertising, good signage and a listing on the local multiple listing service.If the seller is using a real estate agent and the property isn't getting proper exposure, find another agent.
Q: Where do I get information on housing market stats?
A: A real estate agent is a good source for finding out the status of the local housing market. So is your statewide association of Realtors, most of which are continuously compiling such statistics from local real estate boards.For overall housing statistics, U.S. Housing Markets regularly publishes quarterly reports on home building and home buying. Your local builders association probably gets this report. If not, the housing research firm is located in Canton, MI call (800) 755-6269 for information; the firm also maintains an Internet site. Finally, check with the U.S. Bureau of the Census in Washington, DC; (301) 495-4700. The census bureau also maintains a site on the Internet. The Chicago Title Company also has published a pamphlet, Who's Buying Homes in America? Write Chicago Title and Trust Family of Title Insurers, 171 North Clark St., Chicago, IL 60601-3294
Q: What is the difference between list price, sales price and appraised value?
A: The list price is a seller's advertised price, a figure that usually is only a rough estimate of what the seller wants to get. Sellers can price high, low or close to what they hope to get. To judge whether the list price is a fair one, be sure to consult comparable sales prices in the area.The sales price is the amount of money you as a buyer would pay for a property.The appraisal value is a certified appraiser's estimate of the worth of a property, and is based on comparable sales, the condition of the property and numerous other factors.
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SELLER FINANCING - Q & A
Q: What are the benefits of seller financing?
A: Seller financing offers benefits to both buyers and sellers including tax breaks for the seller as well as offering an alternative when conventional loans can't be found.The risks involved are the same risks facing any lender. Is the borrower a good credit risk? Will the property hold enough value over time to allow for the repayment of all loans made against it?Sellers should run a full credit check on the borrower, require hazard insurance on the property and include a due-on-sale clause. There also are financing, disclosure and repayment-term requirements that should be met.
Q: How are the rates set for seller financing?
A: The interest rate on an over-carry loan is negotiable. Ask your agent to check with a lender or mortgage broker to determine the current rate on institutional first (or second) loans.Seller financing typically costs less than conventional financing because loan fees (points) typically aren't charged. The interest rate on a seller-carry loan will also be influenced by current Treasury Bill and Certificate of Deposit rates. Sellers usually aren't willing to carry a loan for a lower return than they would earn if their money were invested elsewhere.
Q: What is seller financing?
A: Homeowners who are anxious to sell often consider seller financing, which may include taking back a second note or even financing the entire purchase if the seller owns the home free and clear.Seller financing differs from a traditional loan because the seller does not give the buyer cash to complete the purchase. Instead, it involves extending a credit against the purchase price of the home while the buyer executes a promissory note and trust deed in the seller's favor. These special circumstances must be acceptable to the lender who makes the first mortgage on the property.The necessary paperwork is prepared by the title or escrow company after the terms are worked out between the buyer and seller.If is critical to thoroughly evaluate the creditworthiness of the buyer first. Fear of default makes many sellers reluctant to take back a second. But seller financing can bring a higher price plus complete the sale sooner in some situations.Resources:
- IRS Publication 537, Installment Sales, Order by calling (800) TAX-FORM.
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COMMON Q & A ABOUT SELLING YOUR HOME - Q & A
Q: Do sellers have to disclose the terms of other offers?
A: According to experts, sellers do not have to disclose other offers.
Q: Should I add on or buy a bigger home?
A: Consider these questions before making a choice between adding on to an existing home or moving up in the market to a bigger house:
- How much money is available, either from cash reserves or through a home improvement loan, to remodel the current house?
- How much additional space is required? Would the foundation support a second floor or does the lot have room to expand on the ground level?
- What do local zoning and building ordinances permit?
- How much equity already exists in the property?
- Are there affordable properties for sales that would satisfy housing needs?
Ultimately, the decision should be based on individual needs, the extent of work involved, and what will add the most value.
Q: What are some tips on negotiation?
A: The more you know about a seller's motivation, the stronger a negotiating position you are in. For example, a seller who must move quickly due to a job transfer may be amenable to a lower price with a speedy escrow. Other so-called motivated sellers include people going through a divorce or who have already purchased another home.Remember, that the listing price is what the seller would like to receive but it is not necessarily what they will settle for. Before making an offer, check the recent sales prices of comparable homes in the neighborhood to see how the seller's asking price stacks up.Some experts discourage making deliberate low-ball offers. While such an offer can be presented, it can also sour the sale and discourage the seller from negotiating at all.
Q: How do you prepare a house to sell?
A: Doing whatever you can to put your house's best face forward is very important if you want to get close to your asking price or sell as quickly as possible. Short of spending a lot of money, there are several steps people can take to make their home show better:
- Sweep the sidewalk, mow the lawn, prune the bushes, weed the garden and clean debris from the yard.
- Clean the windows (both inside and out) and make sure the paint is not chipped or flaking. And speaking of paint, if your home was built before 1978, new federal law gives a buyer the right to request a lead inspection. If you think you might have some problems, do the inspection yourself beforehand and make any fixes you can.
- Be sure that the doorbell works.
- Clean and spruce up all rooms, furnishings, floors, walls and ceilings. It's especially important that the bathroom and kitchen are spotless.
- Organize closets.
- Make sure the basic appliances and fixtures work. Get rid of leaky faucets and frayed cords.
- Make sure your house smells good: from an apple pie, cookies baking or spaghetti sauce simmering on the stove. Hide the kitty litter.
- Put vases of fresh flowers throughout the house.
- Having pleasant background music playing in the background also will help set your stage.
Q: What do all of those real estate acronyms in the ads mean?
A: If you find yourself stumbling over weird acronyms in a real estate listing, don't be alarmed. There is method to the madness of this shorthand (which is mostly adopted by sellers to save money in advertising charges). Here are some abbreviations and the meaning of each, taken from a recent newspaper classified section:
- Assum. Fin - assumable financing
- Dk - deck
- Gar - garage (garden is usually abbreviated gard)
- Expansion pot'l - may be extra space on the lot, or possibly vertical potential for a top floor or room addition. Verify actual potential by checking local zoning restrictions prior to purchase.
- Fab pentrm - fabulous pentroom, a room on top, underneath the roof, that sometimes has views
- FDR - formal dining room
- Frplc, fplc, FP - fireplace\
- Grmet kit - gourmet kitchen
- HDW, HWF, Hdwd - hardwood floors
- Hi ceils - high ceilings
- In-law potential - potential for a separate apartment. Sometimes, local zoning codes restrict rentals of such units so be sure the conversion is legal first.
- Large E-2 plan - this one of several floor plans available in a specific building
- Isd pkg - leased parking area, may come with additional cost
- Lo dues - find out just how low these homeowners dues are, and in comparison to what?
- Nr bst schls - near the best schools
- Pvt - private
- Pwdr rm - powder room or half bath
- Upr - upper floor
- Vw, vu, vws, vus - view(s)
- Wow! - better check this one out
Resources:
- Real Estate's Ambiguous Language You Oughtta Understand, Glennon H. Neubauer, Ethos Group Publishing, Diamond Bar, CA; 1993.
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SHORT SALES - Q & A
Q: Can a home seller sell a home for less than its mortgage?
A: This situation is known as a short sale. Sometimes homeowners can negotiate with lenders and have them split the difference between the sale price and loan amount, which still must be paid.A short sale may be complicated if the loan has been sold to the secondary market because then the lender will have to get permission from Fannie Mae or Freddie Mac, the two major secondary-market players.If the loan was a low-down payment mortgage with private mortgage insurance, then the lender also must involve the mortgage insurance company that insured the low-down loan.Resources:
- How to Fight Foreclosure, Jeff Jensen, Jensen Publications, 200 Main Street, Suite 104-201, Huntington Beach, CA 92648; (714) 843-0321.
Q: How does someone sell a slow mover?
A: Even in a down market, real estate experts say that price and condition are the two most important factors in selling a home.The first step is to lower the price. Also, go through the house and see if there are cosmetic defects that you missed and can be repaired.Secondly, home seller should make sure that the home is getting the exposure it deserves through open houses, broker open houses advertising, good signage and a listing on a multiple listing service (MLS).Another option is to pull the home off the market and wait for the market to improve.Finally, frustrated sellers who have no equity and are forced to sell because of a divorce or financial considerations should discuss a short sale or a deed in lieu of a foreclosure with a mortgage lender.A short sale is when the seller finds a buyer for a price that is below the mortgage amount and negotiates the difference with the lender.In a deed-in-lieu-of-foreclosure situation, the lender agrees to take the house back without instituting foreclosure proceedings. But these would be considered more radical options than lowering the price.
Q: How does a home go into foreclosure?
A: Foreclosure proceedings usually begin after a borrower has skipped three mortgage payments. The lender will record a notice of default against the property. Unless the debt is satisfied, the lender will foreclose on the mortgage and proceed to set up a trustee sale.
Q: When does foreclosure begin?
A: Lenders will initiate foreclosure proceedings when homeowners become delinquent in their mortgage obligations, usually after three payments are missed. The lender will then notify the buyer in writing that he or she is in default. The lender can request a trustee's sale or a judicial foreclosure, in which the property is sold at public auction.A borrower can cure the default by paying the overdue amount and the pending payment after the notice of default is recorded usually no later than a few days before the property's sale.Some sales allow the successful bidder to take possession immediately. If the former owner refuses to vacate the premises, the court can issue an unlawful detainer that allows the sheriff to come out and evict them.Borrowers should do everything they can to avoid foreclosure, which is one of the most damaging events that can occur in an individual's credit history.
Q: How long do bankruptcies and foreclosures stay on a credit report?
A: Bankruptcies and foreclosures can remain on a credit report for 7 to 10 years.Some lenders will consider a borrower if they have reestablished good credit. The circumstances surrounding the bankruptcy can also influence a lender's decision. For example, if you went through a bankruptcy because your employer had financial difficulties, a lender may be more sympathetic. If, however, you went through bankruptcy because you overextended personal credit lines and lived beyond your means, the lender probably will be less inclined to be flexible.
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