Liz Novotny - Realtor

Persistence Pays Off

2011-12-28T06:41:00.000-08:00

I want to share a celebration in my success with you all. The success of closing one of my short sales is credited mainly by my persistence and unwillingness to take NO for an answer.
I had an offer negotiated with a seller's lender, awaiting a buyer to return from over seas to close. We needed to close a few days before the end of the redemption period so that all paperwork could be filed and sent to the proper authorities in time. Unfortunately, this buyer backed out of the deal as he wasn't sure if he'd be home in our tight timelines to close and thus cancelled two weeks before closing. During my typical attempts to obtain another buyer, in such a short period of time, I was able to find an agent that had a few buyers watching the property and able to purchase quickly. All the pertinent pages were sent to my negotiator with Wells Fargo, with what seemed like plenty of time to get a supplemental approval letter as the new buyer was purchasing the property for the same amount as the old buyer. My negotiator didn't respond for four days, only to tell me then that there wasn't enough time to get a new approval letter from the investor.
In this line of the real estate business, it pays to be persistent. I didn't take 'no time left' for an answer from my assigned negotiator and proceeded to call as many people as I could to explain the situation at hand. I am lucky enough to know a branch manager with Wells Fargo that conveniently had a contact in the 'higher ups' departments of the company. We spoke briefly about the what was needed to close so that the home didn't go back to Wells Fargo in the end. After she took the reins on the situation, I was sent a new approval letter to close the very next morning!
I am still very proud that I was able to get the property closed, just in time for the sellers and will continue to ride this great feeling of success well into 2012. Positive thinking and persistence will always get what you want in life and your business, so long as you believe in yourself. If you know of anyone struggling to get an offer negotiated or is apprehensive at successfully selling their home, pass along my name and number as the chances of my being able to do what others can not is very great!

Requesting Repairs of a Short Sale Seller

2011-12-07T06:12:00.000-08:00

I had an offer presented to one of my sellers, who's selling their home as a short sale, requesting the seller to do a lengthy list of repairs. Most buyers do not request repairs of a short sale seller and rarely do they request repairs of a bank until after the appraisal. I wanted to discuss the situation briefly, to help buyers out there understand how to approach repairs when it comes to short sale properties.

Because my seller's financial situation is where it's at, along with most short sale sellers, my seller does not have the means to correct or perform most of the repairs requested by the buyers. Some of the repairs requested were to fill in holes and replace doors that had holes, due to damages over the last few years of occupying the home. The rest of the repairs were items the buyer wanted to help update the home, i.e. new carpet and painting.

In this situation, my seller countered the buyer's offer on most of the repairs requested and rejected performing many of the items. We were fortunate to have a second offer presented at almost the same time and ended up rejecting the buyer's offer who requested the repairs and moved on with the second offer presented. Yes, it's true that there are situations where a seller is trying to get away with strategic default.

However, the percentage of those sellers coming on the market is much smaller than one would expect. I choose only to work with sellers that are in stressful financial situations and want to sell their home as a short sale because it will help their credit in the long run. Their reason for selling is based almost solely on the fact that they can not afford to pay their mortgage, therefore the sellers do not have the funds to update their property or increase curb appeal with fresh carpet and paint. A buyer's agent should be coaching their buyers on making offers on short sale properties and what to ask for repairs. Common sense isn't always a part of the equation, when it comes to real estate. Especially in today's market, considering the realtors who are still working have either been around long enough to know better or have experienced at least one sale that was difficult to maneuver through.

As a buyer, when it comes to requesting repairs on a home, be conscientious about the type of seller and look around at the home to see if you can figure out the background story of the home. Using a little common sense about the situation will help you determine if it's worth taking the time to write out your requested repairs when you'll more than likely be rejected. Then you'll need to decide if this is the home you want to write an offer on in the first place.

Offer, Counter, Wait?

2011-11-02T06:13:00.000-07:00

I've got an offer submitted to Wells Fargo on one of my short sale listings. The buyer's offer was countered by Wells fairly quickly, with reasoning that the private mortgage insurance company had a net they must meet. The buyer decided to try and counter with Wells, a few times even, to no avail. When the buyer finally came up to the net desired by the private mortgage insurance company, almost two weeks had passed.

See this buyer is an investor, who wanted to try their hand at negotiating a lower offer in a short sale situation. This negotiating back and forth is very common when offering on a bank owned property, but short sales operate rather different in these situations. A lender countering on a short sale will almost always give it's bare minimum if the buyer's offer doesn't meet their net. This is usually because there's already a fair amount of time spent waiting on the decision of the offer in the first place and the short sale lender isn't set up to go back and forth on pricing. Another reason is that the lender reviewing a short sale offer doesn't give much of a 'discount' on pricing. They have a minimum they must meet in this stage of foreclosure and give that minimum in the form of a counter to the buyer. Banks are much more forgiving in their 'discounted' price, especially if the home has been on the market for a lengthy time or you're a cash buyer that can close in two weeks. This is one of the reasons that investors don't typically purchase short sales, as they've had experience trying to negotiate a lower purchase price in exchange for a cash offer with a quick close.

Now we are waiting, waiting on the lender to generate the approval letter on the accepted counter. This process likely would have taken less time had the buyer accepted the lender's counter in the first place. The lender had to re-open the file so the offer could be submitted to the investor and now that we're in the redemption period, there has to be a manual review of the package before the letter can be issued. We've been waiting almost two weeks now, when we may have only had to wait a few days had the buyer moved forward when the counter was first received.

If you have questions about offering on a short sale or negotiating a purchase price with those lenders, feel free to give me a call or send me an email as I'd be happy to help shed some light on these situations!

Ready, Set, Show!

2011-10-17T05:59:00.000-07:00

I showed a home the other day that was in by far the worst condition of an occupied home than any other home I've shown yet. Yes, I've seen some pretty rough and dirty homes walking through the bank owned properties. However, I've always been prepared for those showings due to inevitable condition some of the properties are in.

Because of our current market, it's my opinion that some sellers feel they don't necessarily need to clean or de-clutter their home as often as they would have 5 years ago as they're clearly in competition of the bank owned homes. A larger portion of the bank owned homes than you expect have been damaged by the former owners or tenants, but most banks will not list a home until it has been properly cleaned out. Damage is easy to look past and when trying to identify the amount of work needed to bring a home up to move in condition. But when you're looking at an occupied home, that's full of clutter and obviously hasn't been cleaned in weeks it is very tough for a buyer to look beyond the immediate picture to see if the home has good 'bones' to work with.

While it may not be necessary to deep clean ahead of every showing, picking up debris and trash along with pulling out the vacuum or broom can really go a long way. Removing clutter or boxing the nick knacks and storing in the basement until the home sells will greatly improve your chances of selling quicker. Being able to see a home's potential is so much easier when there is little in the way of each room and hallway you walk down.

Buyers are certainly prepared to see some awful things when walking through a bank owned, vacant, home. It's the occupied properties they always find surprising and are immediately turned off once they walk in the door and see what's ahead of them.

Extending the Redemption Period?

2011-10-10T05:07:00.000-07:00

I recently had some clients that were nearing the end of their redemption period. They had received an offer at the last minute and wanted to ask their lender to extend the redemption period. We were prepared for the unlikelihood that this could happen, but still submitted the offer on the off chance their bank would do something to make it work out for the sellers.

Unfortunately, my sellers were unable to get their redemption period extended. After speaking with the foreclosure attorney, I found that the lender could do nothing to extend the redemption period in order for this to work for the sellers. However, if the sellers wanted to extend there is another trick that may have worked. The trick would be that of the sellers filling bankruptcy. If the sellers were to file bankruptcy, the redemption period could be extended another 60 days from the date they filled. My sellers had no intentions of filling bankruptcy at the time and therefore this 'trick' wasn't truly an option.

I just wanted to share this scenario, in the event you or someone you know might be in a situation where an offer comes late in the redemption period. If you have questions on redemption periods, click here or feel free to give me a call or send an email.

New rules for FHA Loss Mitigation Options

2011-09-29T06:21:00.000-07:00

Recently, FHA announced some changes to their Loss Mitigation procedures when mortgagors participate in loan modifications and partial claims. These new rules will take effect October 1st and require a servicer to comply with their new guidelines.

The most important detail of this change revolves around the trial payments. FHA is going to require borrowers to participate in a trial payment plan, lasting at least 3 months, before they will modify the loan permanently. This is typical of most modifications being offered to buyers, but setting guidelines for the servicers means the borrowers will know what to expect ahead of agreeing to the trial modification and in turn the permanent modification. The permanent modification rate must be determined when a servicer approves the trial modification payments for the homeowners.

Another rule helpful for homeowners is that the servicers for FHA can not charge more on the final modification payment than that of the trial period payment. The trial period is set to ensure a borrower is successful in making consistent, timely payments at a reduced rate. Regulating the trial payment will help homeowners that can make their mortgage payments timely, in that there won't be a big surprise on what the permanent payment will be once the trial period is over. Often, the modifications offered to mortgagors today end up having two different payments for a homeowner. The homeowners rarely are given the amount of the permanent modification payment until the trial period is over. For FHA's partial claim process, the trial modification payment must be the same as the future monthly payment. To referesh your memory on FHA's partial claim process, see my previous blog on June 20th of this year.

With FHA's new guidelines on their modifications, a homeowner knows upfront what the payments will look like and can decide with better knowledge on whether the modification will help them keep their home because they will be able to successfully make their payments on time. Click here to learn more details about FHA's guidelines that will take effect October 1 and let me know if you have additional questions on this topic or any other real estate concern you might have.

Buyers Backing out of Condo/Townhome Purchases

2011-08-16T15:19:00.000-07:00

I recently had a buyer of my condo listing in St Louis Park cancel their offer on the property. My seller and I were both rather disappointed and left feeling glum about the news, however, I felt this would be a good opportunity to discuss the different times a buyer can back out of purchase agreement and still retain their earnest money.

There are several contingencies a buyer can add to their purchase agreement offer on a property and when those issues fall apart, they can cancel their offer with no penalty to a buyer. These contingencies include the ability to obtain financing, an inspection of the property, the sale of another property and even that of reviewing the Home Owner Association documents. Most of the contingencies are fairly self explanatory in that a buyer can cancel their purchase agreement with minimal details in regards to the reason and a seller will be appeased enough to hand the earnest money back to the buyer. For example, when a buyer's offer to purchase is contingent on the ability to finance the purchase and finds out along the road of closing that said buyer can no longer obtain financing; the seller isn't left speculating the exact reasons why. The buyer provides their loan denial letter to the seller, all sign off on the cancellation and the seller moves on to find another buyer. During inspection contingencies, a buyer can back out of the purchase agreement after their inspection has been completed, so long as it's within the timelines stated on their contingency form. If subject to the sale of another property and the deal falls through, submitting applicable paperwork to the listing agent could be sufficient enough for a seller to release the earnest money funds.

When a buyer cancels during the Home Owner Association document reviewing period, this can easily lead to speculation on the true reasons for the buyer to cancel. Buyers know there's an association on a property when they look at it, as they've already discussed each particular association for each complex prior to or at the showing of the home with their agent. They also have some knowledge on what the association charges per month and whether or not pets are allowed. Most buyers want to know this info before making an offer so they don't jump into a home if they don't these paticluar details on the home and complex. Every once in a while, a seller has a copy of the Rules & Regulations along with other pertinent info about the association to pass along to a buyer to review before making an offer. If the association's financing is not in order or up to a buyer's lenders standards, a buyer can cancel their offer using this 10 day right of rescission period. They can also cancel if they don't like the associations rules for renting out a unit/townhome.

What seems to get the sellers concerned or left confused is when a buyer is well aware of an associations practices, rules and regulations and uses this contingency as an excuse for other reasons the buyer does not wish to disclose (often personal). As there's little a seller can do to change a buyer's mind, we are left with the feeling that it just wasn't the right buyer for the home. That can be tough to accept and move on, for any person during these tough economic times.

If you have questions about buyer cancellations, do not hesitate to give me a call at 651-203-1769 or write me a note at liz@liznovotny.com.

Minimum Down Payment Change - Take ACTION Now!

2011-07-13T06:06:00.000-07:00

Currently there is a rule being discussed by congress that will affect the amount a buyer is required to put down on a home purchase. This down payment rule being discussed would require a lower loan to value of the buyer's home purchase to 80%, thus requiring one to put 20% down. Today, a typical buyer using conventional financing would only need to bring 5% of the purchase price to closing.
If this new rule gets put into law, this will not only affect a first time buyer but up all buyers financing home purchases. Another example of a group of buyers soon to be effected would be that of the move up buyer. This change could be crucial in today's market where home values have declined so much that the sellers that still have equity in their homes have become a small portion of the population. These sellers who would normally turn into move up buyers after so long would need to wait much longer to move up than is typical due to the need to save more for the down payment.
Since this change could affect our housing market considerably in a time where we are still trying get the numbers from slumping, I ask that you take a minute to contact your legislatures about your thoughts on the proposed change.
Click here to start the process of fighting for home ownership and ensuring this 20% down rule does not get passed into law. Thank you for your time today on this as we'll all see the benefits of keeping the down payments of home purchases to a minimum by ensuring the continued growth of the housing market.

FHA Pre-foreclosure Options

2011-06-20T08:47:00.000-07:00

I recently attended a breakfast meeting that brought in a Housing and Urban Development (HUD) counselor to discuss pre-foreclosure options for homeowners that are struggling to make their payments or have already missed a payment with an FHA loan. I was aware of a few of their options but was surprised at how much HUD wants to keep homeowners in their homes with the other options available.
The Federal Housing Administration (FHA) insured loans offers homeowners four options if you want to keep your home and two options if can't keep your home. Both FHA and your lender will want to know the reason(s) you have or will be unable to make your mortgage payment and whether or not the situation is temporary. Once you've had the discussion with your lender or HUD-approved housing counseling agency, you'll need to submit your financial information to the lender along with supplemental paperwork, depending on the type of request, to your lender for review.

The options to stay in your home include a special forbearance, a mortgage modification, a partial claim or even a FHA-Home Affordable Modification Program option. The partial claim option of FHA insured mortgages is what struck me as the most important and beneficial option for the financially distressed homeowners. This partial claim is a 'one-time' loan from the insurance fund to bring your account current. The loan is interest free and does not need to be repaid until you either pay off the first mortgage or sell your home. The other three options are somewhat common of those offered by conventional lenders.

If your situation is permanent and you're unable to make any payments anymore, you can sell your home as a short sale or sign over the Deed in Lieu of foreclosure to your lender. It's important to remember that any of the options mentioned above could have tax consequences involved once all is settled on your loan. Your own situation of payment or not being able to repay will truly dictate which of the options are available to those that have an FHA insured mortgage.

As with any of the information I share, you are welcome to call or email additional questions as I'd be glad to share the knowledge so that you can choose the best path for your situation.

Mortgage delinquencies still in play

2011-05-18T07:21:00.000-07:00

I just read an article on DSNews, the leading magazine that discusses the latest on the default servicing industry, that mortgage delinquency rates rose from the March. April's data shows that there are 6,388,000 mortgages that are at least 30 days late or in the foreclosure process. The article did not go into detail about the reasoning behind the increase in delinquent mortgages, but we can certainly speculate some reasons for this while looking around at our communities.
While the unemployment rates seem to be on the slow track showing slight improvements in the job sector, there are many other indicators showing that our country is begining to dig it's way out of the rescession. However, that does not mean that mortgage delinquencies immediately dissappear because there are small sign of improvement around the economy. Take a look at your own community and neighborhood conversations to find what people are stresssed about. People are still in distressed financial situations, still looking for jobs and trying to play catch up on their bills.
Loan modifications are still playing a big roll for mortgagors and lenders alike. I have taken some time out of my days to help a few clients with loan modifications as they've been given the run around by other non-profit and profit agencies alike. These companies are dropping the ball somewhere, somehow on the mortgagors and their files sit at a stand still with the lenders because the follow up and persistence just isn't a priority while working the cases. While helping these clients, I've discovered that most lenders require a homeowner to be behind on their payments by at least 30 days before they can even submit a modification request. This is one contributor to the 6,388,000 delinquent home loans.
If you'd like to see more of the article, click here. If you know of anyone that is in a distressed financial situation, please have them give me a call. I've successfully negotiated loan modifications for Bank of America, GMAC and Wells Fargo, so if you know someone that is struggling to get this completed I can help in this areana as well.
Your friend in the business,
Liz Novotny
651-203-1769 or liz@liznovotny.com

Who's negotiating my short sale?

2011-05-04T06:13:00.000-07:00

I was speaking with a newer friend recently about his experience selling his home as a short sale. I was not the listing agent on this situation as this friend had already signed on to another realtor about the time that we were getting to know each other. I wanted to hear about his experience, first to ensure that the process went smoothly and secondly to see how this agent negotiated with the bank in the event there was something I could learn.
I found out rather quickly this agent ended up taking money out of my friend's pocket. His agent hired an attorney to negotiate the short sale in lieu of taking the time to do this themselves. Agents do this so they can continue focusing their time on the rest of their business instead of getting bogged down to a phone and computer while working with the bank. While this is becoming more common place in the distressed market, I've yet to see an attorney get an offer negotiated faster or smoother than when the agent negotiates themselves. The price of hiring an attorney to negotiate a short sale could get expensive, depending on the attorney doing the negotiating. The attorney will either charge a flat fee or a percentage of the commission on the sale. Most agents will deduct this fee out of their own commission, as they feel this is their price to pay. However, this was unfortunately not the case in my friend's situation.
My friend ended up paying the attorney's fees out of their own pocket! As part of the listing agreement, they had agreed to pay the attorney's fees themselves instead of the agent deducting this from their commission.The sellers were to receive a small amount of relocation assistance at the closing table because they had an FHA loan and FHA allows for $1000 to the seller at closing. Most loans do not allow funds to go to the seller, due to the fact that the lender is writing off the remaining balance. While the sellers didn't have to come up with the money out of their own pocket before closing, they did lose out on money that was rightfully theirs at the closing table.
I share this story with you to illustrate that how they were taken advantage of. In this housing market, there are many realtors out there that will do what they can to keep as much commission in their pocket as possible. If that means charging a seller a fee that should have come from themselves, they apparently see nothing wrong with this situation. People in distressed situations should never have to pay to sell their house, even as a short sale. I ask you to please keep this in mind when you hear about folks discussing short sales with you in the future. Remind them that a realtor with INTEGRITY will never charge a distressed seller uncustomary fees to sell their home.
Feel free to call or write with questions or comments on this situation, I'm always happy to help.

Have we closed yet?

2011-02-24T20:28:00.000-08:00

A situation that's becoming more common at the closing table is when a buyer signs closing paperwork but does not take possession of the home immediately after wards. This is almost always due to the seller not signing off on the settlement pages by the time the buyer has. While this particular situation happens more than often happens with bank owned properties, it can also happen with short sale properties from time to time.

For a buyer purchasing a bank owned property, generally the seller is residing in the state the property is located. Reasons behind the seller delay in signing the documents in time can vary from property and in turn their situations. The results of the delay can be caused by: a title company not providing documents to the seller in a timely fashion, an investor taking longer than usual to review and sign off an adjustments of the costs listed on the HUD as well as needing supplemental parties to agree to the figures. Very often in these situations a bank deliver the signed settlement pages by the end of business on the scheduled closing date or even the day after, thus leaving the buyer(s) without possession no more than 24 hours.

For those buyers purchasing a short sale property, possession issues can also happen despite there being a live seller who does in fact reside in the state. The source of the delay can be that of a seller's lender(s) having not approved the final settlement pages prior to the scheduled closing date. Per the terms of a short sale approval letter; the title company, real estate agent and/or seller must obtain final approval on the HUD statement prior to delivering possession and allowing the funds to disperse to the lender that has been shorted. A delay in the final sign off on the settlement pages can be a result of many things. One being that the loss mitigation departments are truly understaffed due to the many short sale requests happening today and in turn those managing the files are sincerely unable to get to all requests they've received in any given day. Another being that of needing additional party approvals, such as the mortgage insurance company, investor approval of the HUD statement. Involving additional parties to the process always ends up time delays.

For any of the reasons listed above the delay of passing on of the keys to the home after signing the closing paperwork can and usually is frustrating. It's difficult to spend the time moving through a lengthy process, such as a home purchase, to then be cut short where the contract has not been completed as agreed upon at the closing table. The most frustrating piece of this situation is how little a buyer and their agent can do to remedy the situation. Phone calls and follow up notes are typically the best tools accessible to a buyer or their agent to ensure the final step has been completed.

To know if there are other efforts that can be effective in transferring possession of the property, please send me a note or give me call to discuss your situation. Your friend in the business, Liz

Winterizations - Inconvenience or Necessary Evil?

2010-12-15T02:22:00.000-08:00

Because our lovely state is at or below freezing temperatures for such a large portion of the year, banks and sellers with vacant homes will hire a plumber to winterize the property in an effort to preserve the plumbing during the cold temperatures. Winterizing a property will include, but is not limited to; turning the main water valve off inside the home, blowing out all water pipes to clear them of any remaining water, pouring anti-freeze (or comparable solution) down all drains and toilets, disconnecting the water meter, draining the water heater, draining the boiler and last but not least, blowing out the sprinkler system lines when there is one in place. Buyers will encounter more and more properties in this condition now through mid-Spring even.

This can easily pose a delay in the inspection and/or appraisal process for both the buyer and seller. The effects of the winterization almost always outweigh the hassle of getting the home prepped for these steps. One of the best ways to keep the process moving smoothly through the specified time frames is to ensure the winterization/de-winterization is discussed in the purchase contract. Be sure to let the listing agent know as soon as possible what day and time you'd like to inspect the home, giving at least two days notice or longer when possible. Often times the seller and/or bank will hire a separate company take care of all preservation work and orders like this must be called in to the preservation company before a vendor can perform the work. If there is a sprinkler system on the property, do check to ensure that part of the home was winterized at the same time as the rest of the plumbing. If it was winterized properly, check with your inspector and appraiser on whether it's necessary to de-winterize the system in order for them to do their jobs properly.

Once both the inspection and appraisal have been completed, the seller will more than likely require that the home be re-winterized after wards. Again, this may seem like another 'hassle' to deal with once you've closed and are ready to move in or begin repairs. However, the flip side to not having the property winterized after inspection can very easily lead to plumbing damages in the future and in turn make the home more costly to the buyer and seller in the long run.

Let me know if you have questions on winterized homes and how best to proceed, feel free to drop me a line or give me a call.

Ready, Set, Close! Part 2

2010-11-08T20:11:00.000-08:00

Many emotions surround closing day. To ensure some of the anxious and stressful feelings are kept to a minimum, here are some things a seller will have on their list to ensure the last few weeks before the big day go over smoothly.

Packing and cleaning the home are obvious items on a sellers checklist. They will also need to close out the utilities with each of the city and area service providers as well as telephone, cable and internet. A change of address form will need to be submitted to the post office. It's best to turn it in about a week before closing so there's no delay in receiving your mail at your new address.

The title company hired to complete the transaction will set up the payoff of a seller's mortgage(s). The title company will also close out the escrow account where the insurance and property taxes may have been set aside each month. Recording the paperwork signed is one of the most important jobs the title closer has. If you sell your home as a short sale, make sure to read over the approval letter(s) ahead of time with your lawyer to ensure accuracy. Checking in with these processes is a good way for a seller to help ease their mind on the progress of closing.

Closing day will include a moment to hand keys over to the buyer and a good time to inform them of any special features of the property. Bring your license and any questions you might have before the closing is finalized. Leave any/all paperwork and pamphlets for the appliances, mechanicals, etc. at the property so the buyer can read through at their leisure. This will shrink the list of things needed to bring to closing significantly. Keep copies of your closing documents in a safe, dry place in the event they're needed for future reference.

If you have any questions on closing or other real estate topics, please give me a call or send me an email.

Ready, set, Close!

2010-10-24T07:29:00.000-07:00

Closing day can be an exciting, yet anxious day for both buyers and sellers. Besides all the packing and moving, there are many things that need to be handled in order for the process to go smoothly at the closing table.

Let's start by taking a look at what a buyer needs to do in order to be prepared to close the transaction properly.

How you as a buyer will pay for the home at closing plays a big role in what is needed for completing this transaction. For example, if you pay for the home by securing a mortgage lien on the property you will have some lender paperwork to sign at closing as well as provide financial paperwork ahead of time to a loan officer representing the lender. This pre-paperwork includes, but is not limited to, pay stubs, bank statements, previous years taxes and even letters explaining certain situations of your financial history. The lender more than likely requires that little to none of your financial history can change in between the time that they approve the financing and when you sign the closing documents. This would mean waiting to order new furniture, buying a new car, etc. until after the closing has occurred. If you are paying for the home with cash, then you will need to bring the cash in the form of certified funds to the title closer.

Say you are moving from an apartment to the house, then you will need to finalize all utilities that are being serviced to that apartment for the day that you plan to move out. You will have to give your landlord notice of vacating per the terms of your lease. A buyer will also need to start utility service in your name as of the date of closing. If you've sold or are selling your previous home you will also need to finalize the utilities servicing that property according to the city and utility company requirements (i.e. final water, gas or electric meter readings).

For the closing, a buyer will need to bring a valid form of government identification (driver's license, passport, etc.), a cashier's check for the amount of money that will be out of your pocket as part of the loan requirements, 10 years of address history, an insurance binder for the required hazard insurance determined by your lender, proof of sale on your previous residence (if selling that home and moving to the new home) and of course any other paperwork your lender would require to see at closing.

Walking through a list will help you remember to do all that is necessary to close out one residence and open up another. Most buyers tend to give themselves some time in between moving from one living situation to the new home so that they can paint, clean or replace carpet or other flooring, do repairs or clean the home. The amount of time you should allow yourself to complete the things you want to do before moving in will depend on the amount of work you want to put into the property ahead of time. In my experience, buyers tend to be less stressed if they don't plan closing one day and moving that day or even the next day. You will feel less anxious and stressed when you all for transition time. If you have any questions about what is needed to close from a buyer's perspective, do not hesitate to contact me.

Properties with Mold - To buy or not to buy?

2010-10-01T15:43:00.000-07:00

I recently showed a property that had water damage in the basement with evidence of mold beginnings. I've noticed that most buyers tend to shy away from these properties; however the clients that I accompanied were open to the idea of purchasing this home despite this typically negative feature. These particular clients were not as leery as a 'typical buyer' out shopping for homes when it comes to mold. This visit with said clients has compelled me to write a little 'tid bit' on mold in an effort to help people understand how much work could or could not be needed to remediate.

The State of Minnesota's Seller's Disclosure form dedicates an entire page to discussing evidence of mold spores and water presence throughout the home. While the visible mold is certainly cause for concern, most of the time it can be treated and with minimal disruption to the area infected. Remediation to the infected areas can usually mean cutting out the affected sheetrock in order to get into the walls and correcting what could be the cause of this moisture intrusion at such a rapid pace. Mold is inevitable in every home, most of the time you may not be able to see it! Finding the cause of the moisture issue is what ends up taking the most time and effort to assess. It's entirely possible that you may not even correct the issue the first time you 'repair' the affected area. Mold very often originates in basements and most of the time it is caused by the landscaping (or lack thereof) surrounding the exterior of the home. Other causes can be poor construction of the homes walls, leaking windows or a lack of airflow through a bathroom that does not have a fan to keep the moisture from condensing on the walls.

There are indeed homes that are so greatly affected by mold where it is best to redo the entire walls, rooms and even demolishing the home completely. When mold is left untreated for any length of time, it continues to grow and fester throughout the level that it originated in and once there's no more room to grow it quickly moves up/down the different levels of a home. This is why it's always best to get to the bottom of the mold origination sooner rather than later. Mold is one repair that a homeowner cannot procrastinate on fixing.

So, before you make any harsh judgments on a home that has mold, bring a mold remediation contractor out to look at the affected areas and give you a professional bid on what it would take to remove and correct the cause for the moisture leakage.

Please contact me for a referral of a mold contractor if you're having trouble with your current home or are interested in purchasing a home that has evidence of moisture issues.

Realtors - Which ones know what they're talking about?

2010-09-16T16:28:00.000-07:00

I was recently at a networking event where a veteran realtor gave a short, ten minute talk on the market to come and included some tips on selling a property in our current market. This particular realtor stated she had 25+ years of experience before jumping into her speech. I will gladly admit the realtor had some great tips for sellers and was surprisingly blunt when talking about seller’s expectations and the difficulties they are having with adjusting their frame of mind on the value of their home.

On the flip side, I was rather disappointed that this realtor was so eager to report that 2011 would be the start of the market's turning point for the better. It is very difficult for economists to predict the economy ahead and am surprised this agent was so quick to claim 2011 would be the year the housing market will begin turning for the better. I find myself curious as to what sources this realtor researched to come to this conclusion and most importantly, which of the top 5 REO Realtors did she interview? (An REO Realtor is one who markets and sells bank owned properties.) Citing your sources or quoting specific professionals for a 10 minute speech is not truly necessary for such an event. However, I found myself asking many questions while she was speaking. I instantly wondered if the majority of buyers or sellers have the background knowledge to tell that this agent’s statements were in fact accurate or if she was just misinformed? Was she merely projecting her personal optimism that most of us keep secret in our minds? How would the ‘average Joe’ know if her interpretation of the market was skewed due to her lack of research?

As an agent that works side by side with an REO Realtor, I've learned so much more than I would have had I started real estate solo in the 'traditional' real estate office. Not only have I learned firsthand how to approach a bank with an offer, but I’ve also seen what happens ‘behind the scenes’ in order to get a home ready for marketing. During my time spent working with this REO agent, I've seen the rise and fall of property assignments over the years sync up with the federally required foreclosure moratoriums and initiatives set up to try and keep homeowners in their homes.

Working closely with an REO Realtor has also given me insight on what is to come to our particular market, as well as around the US, and the potential issues that could and most likely will harm the real estate upswing. I've personally seen their inventories begin to rise in the last few months and find myself questioning this 'veteran' realtor's statement that 2011 is the year the market will begin it's slow, yet steady upswing.

I bring this to your attention for one reason and one reason only. In this day and age where information is readily available at your fingertips at any time of the day, it's imperative that you cross reference the information you've learned with multiple sources before making speeches or significant statements like this to any sized group of people. We all must do our own due diligent research on the information we read, see or hear before repeating it others at the time that we’re claiming our expertise in a particular subject area.

If you have any questions about this particular topic or any others I've not discussed, feel free to give me a call or send me a note!

HAMP Trial Program Disappoints

2010-08-23T16:30:00.000-07:00

A recent article in DS News reports that the government’s HAMP foreclosure prevention initiative stated that 616,839 HAMP trials were cancelled out of the 1,307,489 trials that were started when the program began.

This is definitely disappointing news considering the big push over the last year to keep homeowners in their homes in lieu of the foreclosure process. The article goes on to discuss some of the reasons for the cancellation of the trial programs and the different numbers in each group of reasons. The article can take you to the report that goes into great depth on the details of the program and what it has accomplished thus far. Some of the main reasons for falling out of a HAMP trial modification program can include insufficient documentation, trial plan payment default and borrowers who are ineligible as their income to debt ratio is well above the 31% guideline.

While there is no doubt that this is disappointing news, however the flip side of this is that short sales are becoming easier to process with the lenders. They are taking less time to review the offers, less time to obtain investor approval of the offers and in turn less time to approve the short sale offers.

Do not forget about my Foreclosure Prevention Seminar being held on August 31, 2010 at the Maplewood Community Center at 7:00pm. This is a great opportunity for one to come and learn about the different options available to homeowners that are currently struggling with their payments and want to plan ahead.

Homeowner Foreclosure Prevention Seminar

2010-08-17T16:57:00.000-07:00

Click below for details on my upcoming seminar.

August 31, 2010

Maplewood Community Center

2100 White Bear Ave

7:00 - 8:00 pm

Please RSVP Liz Novotny @ 651-203-1769 or liznovotny.com

Can't wait to see you there!

Online Help for Homeowners - Fannie Mae's New Website

2010-08-03T15:54:00.000-07:00

Have you ever started on a web search, trying to find information on a particular subject, only to find that you have to read through multiple sites just to get one answer? Ask.com has certainly helped in this arena, but it doesn't quite solve the problem that Fannie Mae's website has figured out for homeowners that are struggling with their mortgage.
This new website goes into great detail about the different options available to a mortgagor based on your current financial situation. There is a woman that comes on to the page and immediately starts talking about the site, how to move through the different tabs, and some simple tips on what to do first. The site also has links to general forms a mortgage servicer may require when submitting information for a loan modification, pursuing a short sale, etc. After spending some time walking through all the different scenarios and I found the site easy to understand and navigate through along with a list of numbers to call if you want to speak to a live person about your situation and even a glossary explaining all the key terms used while working with your mortgage company on a solution.
I am very pleased to see a website that is clear and concise with its information and lists ALL options available to homeowners who are struggling with their payments. If you would like to speak with someone about your situation in particular, please give me a call or send me an email and I'd be happy to visit with you to find the best solution or help navigating the website.

Save The Date - Foreclosure Prevention Seminar - August 31, 2010

2010-07-27T15:37:00.000-07:00

I will begin teaching Foreclosure Prevention Seminars with my first one in August and will continue teaching these seminars until the interest runs out!

This seminar will go through the different options a homeowner has available to them while behind on their mortgage payments. My first seminar will be held at Maplewood's Community Center on August 31st from 7:00-8:00pm. Please pass along this information to anyone you may know that would like to learn about their options with my contact info to sign up.

Formal invitation to follow, can't wait to see you there!

Multiple Offers - What to do?

2010-07-15T15:01:00.000-07:00

It seems we're now in a market where the best houses go quickly and the so-so ones sit at the same list price for months or one minor price reduction. With the houses that do go quickly, the majority of the time they end up with multiple offers. As a buyer, this can be frustrating when you finally find the house you like. Below are a few tips on how to work this type of situation.

Let’s start off with a situation where you presented your offer first. Likely you presented an offer that is lower than what you originally expected to pay for the home, testing the waters to see what the minimum that seller will accept. Within hours/days of submitting that offer, one or more offers are also submitted and in turn are asked to come back with your highest and best offer for the seller to review. You say you love the home and would be sad if the end result is someone else winning the bidding process. In this situation, I would suggest updating your offer so that the net will give the seller the closest dollar amount to the list price as possible. If you’re not approved to purchase at list price, make sure it is as close as possible. If you’re purchasing with cash, you might even be best served with an offer above list price. You could even consider offering $100 above the highest submitted offer, so long as it doesn’t exceed a pre-determined amount.

How about the flip side, where you submit your offer after someone else already has? This is a situation where you want to come in with your highest and best from the get go. Again, if you’re paying cash for the property and are comfortable submitting an offer over list price or one that would beat out the highest offer by $100, then by all means do so. With financed purchases, you would proceed the same way as described above when your offer was presented first. Write your offer to be as close to the list price as possible or slightly over list price.

With financed offers, you’ll want to be careful not to go over the list price too much as the home must appraise for your offer price or you could find yourself having to come up with cash for the difference. In multiple offer situations, you’ll want your purchase agreement to be as ‘seller friendly’ as possible. This could mean closing sooner (or later, depending on whether the seller’s readiness to close), writing cash in lieu of a financed offer, omitting the inspection and even buying the house with debris/trash left in. Reducing the amount of work needed to close can weigh just as heavy as a higher priced offer with lots of contingencies to a seller. Show the seller you want to close this transaction as soon as possible with as few potential problems capable of surfacing while in the process of closing. Another important factor is delivering your highest and best offer as quickly as possible, don’t waste precious time deliberating how you should proceed or trying to speculate what the other buyers are thinking.

If you have questions about multiple offers or other real estate topics, please call or send me an email and I’m happy to help!

It's Official ~ Tax Credit Deadline Extended!

2010-07-01T14:52:00.000-07:00

Congress officically passed the bill late yesterday to extend the closing deadline of the qualifying purchase transactions to September 30, 2010.

If you've got a contract ready and just haven't closed yet you are in good shape as you'll now have another 3 months to complete the transaction and earn the $8,000/$6,500 after all!

Tax Credit Deadline Extension - Update

2010-06-30T15:48:00.000-07:00

Great news folks, the House of Representatives passed the bill to extend the tax credit closing deadline yesterday! All that needs to happen now is to have the Senate pass the bill.

This extension was part of a larger bill that fell through on the Senate floor last week. There was wide support amongst the senators for amending the American Jobs and Tax Loopholes Act by adding the tax credit extension to this bill, however the much larger bill stood still last week when discussed within the Senate.

There seems to be lots of support within Congress for the extension of the tax credit, it'll all depend on whether both sides can come to terms and agree to pass it once and for all.

Again, I will continue to keep you posted on the progress of the extension as it happens.
Feel free to contact me with questions!

Is there an inspection needed to list my home on the market?

2010-06-28T18:25:00.000-07:00

Did you know that a large portion of the cities in the Metro Area now require that an inspection be performed on their home prior to transferring ownership? Quite a few of these cities even require the inspection be performed prior to listing on the MLS, so that the report is available to all interested parties prior to offer submission.

Nowadays, more and more cities are joining the ‘inspection train’ where a seller must have a property inspection be performed prior to the transfer of ownership. The inspection is very different than that of the buyer’s inspection performed in that it only goes over the specific city's code requirements. All cities that require these inspections have a detailed form, specialized by each city, that an inspector must go through when evaluating the structure. Most cities allow for qualified home inspectors perform this inspection, so long as they’re approved by the city to perform said inspections. Some cities require a city employed inspector perform the inspection. No matter who does this inspection, the inspector must go over a specific list of items to test or evaluate and disclose the findings on a report. Each city has their own way of ‘checking the list’ but they do have similar levels of notating whether or not the item is up to city code. For the most part; an item can either meet the minimum requirement, be below the minimum requirement or considered hazardous if not repaired.

Once you have the report, you may need to complete some of the items ‘flagged’ prior to transfer of ownership. Which items need to be taken care of will depend on each city. For example, in the City of St Paul, all homes must have at least one hardwired smoke detector in the home. If the home does not contain one of these detectors, then this item is marked Hazardous and requires the installation of the detector prior to the sale of the home. This is the only item on the St Paul report that is required to be addressed before transferring ownership. Almost all cities will allow the transfer of ownership on the required repairs to a buyer, so long as they repair and have the items re-inspected within a specified timeframe. A buyer must submit a signed form to the city and include a copy in their closing paperwork in order to move forward with the sale. Some cities even require an escrow agreement be put in place for the required repairs notated on the report.

Now you ask yourself, should I complete all the repairs notated on my report? While most buyers are agreeable to assuming repairs, if you are in a financial position to complete them, I highly suggest that you do so. In this real estate market, most of the homes being sold are now ‘As-Is’ sales. This means that the seller will not be doing any repairs to the property, unless required by the city to do so, prior to closing and the buyer must accept the property condition as is. Banks and servicers are already taking a large financial hit on these assets as it is and have little intention of spending any more money to sell the home than is necessary. The sellers who sell their home as a short sale have experienced great financial difficulty and do not have the means to fix every item flagged on their report. Lenders who approve these short sales also require these particular sales to be As-Is anyways. A home that has an inspection report that is ‘clean, where there are no repairs required to sell, is much more appealing than a home that has required repairs already notated before even viewing the home. Every buyer will have built in expenses with the purchase of a new home, furniture, paint or even fixture updates. No need to pass along the additional expense of fixing the required repairs and hiring an inspector to re-inspect the completion of the repairs if it isn't absolutely necessary.

If you have any questions regarding the different city required inspections, or are in need of a quality, certified inspector, please feel free to ask me.

Tax Credit Deadline Extension - Update

2010-06-23T16:07:00.000-07:00

I'm sure you've been hearing in the news that there is movement to extend the $8,000/$6,500 tax credit deadline. Last week, senate passed the vote on this matter however it has been attached to a jobless benefits bill that is still in need of passing. While this is good news for most, it may seem slightly misleading.

All parts of the tax credit are not being extended, merely the closing date portion. The two important criteria of this tax credit are those of buyers having a purchase contract executed by April 30th, 2010 and that of closing the transaction by June 30, 2010. The portion that is in the middle of debate is that of the closing deadline, where the powers that be are in the process of extending this deadline to September 30th, 2010. A new buyer can not have an executed contract after the original April 30th deadline, close by September 30th and expect to receive an $8,000/$6,500 check in the mail. A buyer must have already had a purchase agreement executed by April 30th, but was struggling to close in time for the June 30th deadline in order to be eligible for this credit.

This extension was initiated due to the heavy inventory of the properties being sold in these transactions being either bank owned or homes sold as a short sale. Very often, these transactions are delayed due to title issues, short sale approvals and other miscellaneous reasons not caused by the buyer's actions. Congress has clearly taken note that the buyers in these circumstances should not be penalized when they’ve done everything in their power to close the sale in the designated timeframe.

Again, while this is good news to the buyers who fit the criteria of having an executed contract by April 30th, do not be confused and think you can find a home and close by September 30th and receive the tax credit.

I’ll be watching this closely and in turn post at the time that it does come into law. If you have any questions regarding the tax credit or other real estate issues please give me a call and I’d be happy to answer!

Home Inspections - Are they really necessary?

2010-06-18T15:48:00.000-07:00

I've had many buyers ask this over the years, whether or not an inspection of the property is really necessary when buying a home. A lot of cities now require some sort of inspection be done prior to or at the time of listing, whether it be just a well/septic inspection or a full structural inspection. While this information is very handy when looking at properties, it should not be the only inspection you rely on to decide if that particular home is the right one for you. These city inspections do not go into the full depth that a buyer's home inspection will dig.

I think I'll have my handy father do the inspection. Or maybe my uncle who's a contractor? While these people may have a good base of knowledge on a home, they have not gone through the training required to be an inspector. It's very possible they may not know what to watch for on a foundation, in a particular neighborhood or style of house, to adequately inform you on whether or not it is collapsing. Your father or uncle likely specialize in certain areas and can be a great sounding board for rehab/remodeling ideas in the future, but they will not give you the scope of information that a quality licensed inspector can.

It is always best to perform a full home inspection, prior to committing to the purchase, so that you can truly get a feel for the home's strengths and weaknesses. It's extremely important to be present during said inspection as well. This will give you a chance to have someone walk you through how the mechanicals work, if there's moisture seeping in, where to find certain things (like your gas/electric/water meter!) and how each part of the home functions. If after the inspection, you find that there is much more work than the naked eye could detect, you may be able cancel your purchase agreement. However, your purchase agreement must be contingent on the home inspection in order to have the right to cancel and retain your earnest money.

If you have any questions on home inspections, need the name of a quality inspector or any other real estate topics, please give me a call or send me an email and I will be happy to help.

HAFA - Lenders and Servicers are now sending solicitation letters

2010-06-11T15:56:00.000-07:00

Hello Folks-

I just heard in one of my latest Partner First training sessions that lenders and servicers are now sending out solicitation letters about short sales or a deed in lieu to gauge interest with the homeowner on how they would like to proceed with their mortgage/home after missing one or more payments.

The most recent list of lenders/servicers that are officially participating in the HAFA/HAMP program is as follows:

Bank of America
Citibank
GMAC
Wachovia
Wells Fargo

If you pay your mortgage to one of these companies and are behind on your mortgage payments, do not be surprised to find a letter in your mailbox asking if you would like to sell your home as a short sale. The letter will also ask if you're interested in a deed in lieu.

If you find yourself with one of these letters and want to discuss which option is best for you, please give me a call or send an email.

Tenants - Where is the rent?

2010-06-07T16:39:00.000-07:00

So you've got rental property. You have a lease in place (verbal or written) with tenants to occupy the home. Soon you find yourself wondering each month if the rent will come by the first. Some months it comes on time, others days or even weeks later.
What do you do if it doesn't come for 30 days? What exactly do you do if it's not coming at all?

If this is familiar territory for you, I sincerely advise you to meet with a real estate attorney. While this may pull anywhere from $150-500 out of your pocket, the return on investment will be the information obtained from this meeting. You will gain knowledge of how to approach the situation surrounding eviction, how to proceed in accordance with the lease you have in place with your tenant. This can also be a great time to discuss all sorts of topics revolving around your rental property, including the leases you are currently using or have used in the past.
Researching topics on the internet will only get you so far. Once it comes to enforcing the contracts you have in place, you'll more than likely find yourself feeling as though the meeting with an attorney can be priceless! They will not be able to do the 'work' for you, but at the very least, they will point you in the right direction.
If you need a real estate attorney referral, please let me know and I'll send you a few good names.
If you have questions on this topic of real estate or the market your home is in, do not hesitate to drop me a line.

Free Government Program Eligibility Surveys

2010-05-25T15:35:00.000-07:00

Liz Novotny, CDPE

This resource now contains eligibility surveys for government programs offering help to distressed homeowners, including the Home Affordable Foreclosure Alternatives Program, or HAFA, which increases the likelihood of a short sale or deed-in-lieu of foreclosure.

These surveys will let homeowners quickly discover new options made available by the government. When faced with the possibility of foreclosure, I’ve seen too many homeowners make mistakes because they hadn’t been advised by a qualified professional. These people didn’t know the options available, or even how to find any information on their situation. My website helps to solve this problem.

Liz Novotny, CDPE acts as a hub for information on the facts and issues for struggling homeowners, putting all the necessary information in one, easy-to-use location. With the addition of these new eligibility surveys, the site lets homeowners make educated decisions about their future.

Seven out of 10 homes that have gone into foreclosure did so without even being listed on the market, said Alex Charfen, co-founder and CEO of the Distressed Property Institute. Agents like myself, with the CDPE designation are helping distressed homeowners understand that there may be options available to avoid foreclosure.

The CDPE designation provides real estate professionals with specific understanding of the complex issues confronting the real estate industry. Through comprehensive training and experience, CDPEs are able to provide solutions for homeowners facing financial hardship in today’s market.

For more information about the CDPE Designation, visit www.cdpe.com.

Sticking it to the bank or the community?

2010-05-17T05:58:00.000-07:00

Recently I sent out a mailing to homeowners whose homes had recently sold at a sheriff's sale. The intent of the mailing was to gauge interest of these homeowners in trying to save their credit by pursuing a short sale offer to negotiate with their lender before the end of the redemption period.

I received a return call from one homeowner who stated that he was 'not interested in helping out the bank' as they did nothing to help him out when he needed it. He was also not interested in inconveniencing his family for showings over the next few months trying to sell if he didn't have to. While I can certainly empathize with folks that have initiated conversations with their lender, trying to get help with their mortgage situation before it comes to default, I have a hard time understanding why a person would want to purposefully jeopardize their credit situation just to 'stick it to the bank'.

Foreclosures certainly do affect a bank's bottom line and will not improve the business' standing. However, foreclosures also hurt the surrounding community the home resides in and harms them more in the long run than the foreclosure hurts the bank. A bank has ways of dealing with the repossessions in the form of tax write offs, depreciation of the asset, etc. With foreclosures at an all time high, neighborhoods across the country are losing their stability due to an increasing number of vacant and vandalized homes. The community pays the price with the loss of neighbors, increased vandalism and homes that are left in disrepair. In the end, it's our neighbors and communities that suffer from a foreclosure, not the bank.

When you're trying to decide how to move forward with your mortgage stress do keep in mind that there really isn't a way to 'stick it to the bank' without hurting your community at the same time.

What in the world is HAFA?

2010-05-05T15:09:00.000-07:00

HAFA

Now that the tax credit has expired, are the buyers gone?

2010-05-04T16:03:00.000-07:00

Not at all folks, not at all.

It is very true that the tax credit pushed buyers that were on the fence about purchasing a home, giving them an extra $ incentive to 'take the plunge', so to speak. These buyers knew there was $8,000 available to them if they could find ‘the one’ in time to execute a contract by the 4/30/2010 deadline. Some of those buyers worked frantically at finding their best choice during the month of April. However, the past few weeks of real estate has taught me that money isn't everything! Not only in real estate, but many other aspects of life as well.

Buyers today want to get the best house for their money. This means looking at more homes, taking longer to decide the pros & cons of their favorite(s) and/or realizing that a home purchase is not something to settle on. This has become the mentality we real estate agents are finding in most buyers today. They may have said to their agent “I’ll jump at writing an offer, so long as it’s the perfect house in the perfect location” before the tax credit expired. However, if they didn’t find that perfect house, in its perfect location then they will continue to take their time but in the end still make the purchase.

Sellers have become weary that the buyer pool has been eliminated by the expiration of the tax credit. Do not fret, I say to my sellers and all others with homes on the market currently. There are still plenty of buyers out looking at homes, who may have ‘missed the boat’ on the tax credit, yet are serious about a home purchase. There will be more buyers added to the pool each month due to their recent employment changes as well. These buyers may have just gotten a promotion, a raise or are hitting their two year history of employment over the summer. Any of those circumstances will bring new buyers each week and in turn hundreds of buyers added to the pool each month.

When deciding whether or not to pull your home off the market, because the buyer pool may have potentially shrunk, one must be sure to focus on your long term goals in addition to the short term ones. I've heard sellers say that they'll pull their home off the market and try again in a few years. Except, no one can guarantee that the market will indeed turn two years from now. While we enter the next ‘wave’ of foreclosures; i.e. folks that were laid off, injured or had a decrease in pay/hours, it will be tough to truly estimate what year the market will turn again. Many numbers have been thrown around by economists over the last few months, most landing in the 8-10 year range, on when home prices will show consistent value increases year over year. The difference between two years and 8-10 is huge, when it comes to the necessity of selling your home. Deciding whether or not now is the time to sell will significantly depend on the latest estimates of when the market truly will turn around.

As always, keep me in mind if you would like to sit down and discuss your situation in an effort to help determine whether or not you should continue pursuing a buyer. I am happy to help counsel on your options, no matter what the outcome of the discussion is.

Who's that knocking on my door?

2010-04-27T09:46:00.000-07:00

A door to door sales person? Fed Ex/UPS? Your neighbor? The mailman?

Maybe, just maybe, it's your mortgage company/servicer with a possibility to save your house. Wait a second, "Why would a mortgage company/servicer want to help you stay in your home?" you ask. You probably thought banks want to foreclose??? Not at all my friends, not at all.

Banks are in the business of loaning money, not in owning homes. With all the new government programs available to homeowners today, banks are trying harder than ever to keep people in their homes. One of the ways they do this is to hire Home Retention Consultants (HRC).

An HRC works for Titanium Solutions, a company hired by your mortgage servicer that specializes in sending people (yes, live people!) out to mortgagors in trouble with the express intent of having a conversation with you about the possibilities available to stay in your home. HRC's will come to your front door to discuss these options; if there has been no response to previous attempts of communication through letters or phone calls. Your mortgage servicer will always send a letter ahead of time notifying you that the HRC will be stopping by soon, this letter may even come from Titanium Solutions themselves.

If you're not home when an HRC rings your door bell, they will either leave a letter or business card behind with local contact information of the HRC that stopped by. If you are home and don't answer for whatever reason, the HRC will still leave this letter or business card behind. The HRC will attempt contact with you over the next several days, maybe even a week, as their main goal is to have this face to face conversation with a distressed homeowner. I ask you to please, take the time to call this HRC and arrange a time for their return so that they can discuss the possibilities your mortgage lender/servicer has to offer. An opportunity to save your home is worth much more than the cost of the embarrassment of answering the door in your robe to speak to a stranger. Most of the time, they will not be able to discuss the opportunities over the phone and need to speak to you face to face (for verification purposes as they can only speak with the person on the mortgage), and thus will make multiple attempts to reach you. So, the next time your door bell rings, do not hesitate to answer the door as it could be just the solution you were hoping for to keep your home. If you do find a letter or business card on your door, feel free to call the HRC to let them know when you’ll be home next. Because of privacy laws, an HRC is not allowed to discuss anything regarding your account to anyone for any reason and thus your information is safe. If you are in the process of bankruptcy or are not interested in staying in your home, all you have to do is state this and they MUST leave you alone. Keep in mind that an HRC will never ask for money or collect mortgage payments from you. If this person does, let them know you’re not interested as this is a scam and these people do not work for Titanium Solutions or your mortgage lender/servicer.

If you have any questions about this or other foreclosure rumors/facts, do not hesitate to contact me as I’ll be happy to answer them.

Will the lender tack on the remaining balance of your short sale to the new loan of your next purchase?

2010-04-22T11:18:00.000-07:00

I was just asked this recently and want to clarify what happens with the mortgage balance that was not paid off with a short sale.
The definition of a short sale is that where a lender approves a 'short' payoff of your mortgage as payment in full when selling. There are a few places for the remaining balance of your loan to go and they will always be stipulated in the written approval letter from your lender/servicer.

Lender writes off the balance and waives their right to pursue the deficient balance.
Lender writes off the balance but holds their right to pursue the deficiency from the mortgagor at a later time.
Lender accepts the short sale offer, but requires a promissory note signed by the seller in an amount negotiated at the time of the offer. This could be the remaining balance or a portion thereof.

In all cases, the lender has the right to issue a 1099 for the unpaid balance. The amount on the 1099 will reflect what was negotiated at the time of the short sale offer. How to proceed with this 1099 will be determined by your financial situation and ownership status of the home that was sold as a short sale.
Do not hesitate to contact me regarding this and any other short sale questions you may have. I look forward to helping you determine if a short sale is the best option for your current and future financial needs.

Deficiency Judgments

2010-04-15T09:26:00.000-07:00

A lot of homeowners have questioned what happens after a short sale and in particular the possibility of their lender filing a deficiency judgment against them.
While the State of Minnesota may be considered a deficiency judgment free state, it's important to understand the facts regarding this statement.

It is widely assumed that if you let the home go through foreclosure that you are free from receiving this deficiency judgment down the line since the bank was able to recover a portion of their loss through the sale of the bank owned home. This is, in part, true within Minnesota so long as the foreclosure is conducted by advertisement with a redemption period. https://www.revisor.mn.gov/statutes/?id=582.30
The negative side to this aspect is that of the second mortgage. Second mortgages are governed by different laws and those lenders can file a deficiency judgment for the entire balance of the second mortgage or even the balance of the loan that was ‘dismissed’ with the short sale acceptance.

Selling your home as a short sale does not erase the possibility of your first mortgage filing said deficiency judgment. It's important to be aware of this fact and request certain language be inputted into the short sale approval letter to protect yourself in the future.
A statement to protect the mortgagor could be as follows:
“Only upon receipt of certified funds and the final HUD-1 Settlement statement, will XYZ mortgage release its mortgage on the property and waive any deficiency against John Doe.”
Request this language in the hardship letter as well as the intro letter your realtor submits with the short sale package once an offer is received.
i.e. “Please accept this offer as payment in full and waive your right to deficiency against me/us”

Most lenders already have this language detailed in the letter. If it is not, you can negotiate this verbiage at the same time of negotiating the short sale offer of which can also be negotiated into the second mortgage's approval letter as well.

Please be sure to consult an attorney when considering your options of short sales and foreclosures to determine your best course of action considering your financial sitaution and future goals.

How does a person's home get to foreclosure?

2010-04-06T10:24:00.000-07:00

The word foreclosure is thrown around daily, without much thought on how a person's home gets there.
So you ask, how does a property go through foreclosure?
Foreclosures in Minnesota are typically non-judicial and are commonly called 'foreclosure by advertisement'. Here is a breakdown of this process within the state of Minnesota, keeping in mind that each state is different.

Once you become 90 days late on your mortgage, your lender/servicer can legally file that you are in default on your mortgage. Most mortgages have a 'power of sale' clause written within them which permits the mortgagee to sell the property that secures the mortgage loan where timely payments have not been made. The lender/servicer hires a foreclosure attorney to begin this power of sale process. The attorney drafts a demand letter and sends via US mail to the last known address of the mortgagor(s).
This demand letter will tell you the total amount owed (including processing and attorney fees) to bring your account current and that you have 30 days to cure the default. At this point, you must pay the total amount owed (unless otherwise noted). If you ignore this letter (or can not pay), the attorney then schedules the sheriff's sale and proceeds with the required 6 week public notice and 4 week private notice.
Public notice is that of publishing a notice of foreclosure sale date in a general circulatory newspaper in the county where the property resides. Private notice is that of a letter to the occupants/owners of the property 4 weeks ahead of the sale, 8 weeks if the home is homesteaded.

The sheriff's sale is more like an auction, where the property is sold to the highest bidder (including the bank). After the sheriff's sale, there is a statutory 6 month right of redemption period where a mortgagor can redeem the loan (by paying the entire balance in full + costs incurred during the redemption period) or negotiate a short sale with their lender. The redemption period is 12 months if the amount due is less than 2/3 of the prinicpal balance and property exceeds 10 acres or if the property exceeds 40 acres. One can shorten the redemption period by court order to 5 weeks if the property has been abandoned.

Once the redemption period has ended, the property immediately transfers ownership to the winner of the sheriff's sale bid (almost always the lender that foreclosed upon). This new owner must go through the process of evicting the occupants/owners of the home, paying special attention to what type of occupants are in the home currently. Minnesota law recently changed where the owner must now give a tenant 90 days to vacate and can not evict this tenant until the 90 days are up.

After reviewing this timeline, you can see that there is plenty of time and opportunity to try and negotiate a short sale on your home. While it is possible to negotiate during the redemption period, there are some lenders/servicers that do not allow short payoffs during redemption. Please check with your lender/servicer before putting your home on the market as a short sale to ensure this is possible.

Also, it is very possible to postpone a sheriff's sale with your lender/servicer so long as you have an offer presented for review and there is enough time for the attorney to postpone said date with the sheriff (best to request 1 week ahead of time). The longer it takes to put the home on the market, the less likely it will be possible to secure an offer in time to negotiate with your lender/servicer. Negotiating short sales can take anywhere from 30-120 days, so the sooner you get the home on the market the better chances you will have to negotiate and close before the end of redemption.

Security Clearance

2010-03-31T10:28:00.000-07:00

Did you know that if you go through foreclosure that you could lose your security clearance?

This is one of the most challenging issues against security clearance, outside of a serious misdemeanor or felony conviction. If you have a foreclosure and work as a police officer, in the CIA, airport or business security, are in the military, or any other position that requires a security clearance, in almost all cases security clearance will be revoked and in turn your position terminated.

A short sale does not challenge most security clearances on it's own. This is yet another good reason to try and sell your home if you are, or will be, having problems making your payments. It's always best to try and modify your loan with your lender/servicer, but if the modification doesn't get approved or adjusted to a payment that you can afford, find a realtor (like ME!) that has the Certified Distressed Property Expert designation so they can properly submit offers once your home is on the market. Since the 'foreclosure' stamp goes on your credit record at the time of the sheriff's sale, you are best served by putting your home on the market at the time of your first missed payment.

Do not hesitate to call or write me if you're concerned about your financial position during these stressful times or if you know of friends or family that could benefit from my services. I am always ready to help people out of a bad situation and thank you in advance for your referrals.

CDPE - What does this mean?

2010-03-29T15:01:00.000-07:00

You may see this from time to time, yet another acronym for a particular training a real estate agent has gone through on top of their basic yearly continuing education credits. This stands for Certified Distressed Property Expert. A person with this designation has spent 2 full days learning how to properly submit short sales to the lenders and servicers for distressed property owners.
As a realtor who has built her business on short sales, I found it necessary to attend the training and ensure I haven't missed any tips and/or secrets of the trade. After the 2 days, I was pleased to see that I've gone through the process of submitting short sales exactly as was taught to us. Watch out for this designation when it comes to hiring a realtor to sell a distressed property home. While people can claim they are an 'expert', not everyone has gone through this training and has this designation. Not to mention years of experience of working with these types of real estate transactions as I do.
http://www.cdpe.com/home