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Short Sale Frequently Asked Questions

August 18, 2011 By Jamie 1 Comment

Well-planned short sales of Phoenix Arizona Homes may have significant advantages over foreclosures. Indeed, a close look at the Phoenix MLS shows a relatively high percentage of short sales among all Phoenix Homes for Sale. There are many questions to ask as you go through the short sale process. Here a few frequently asked questions about Short Sales:

1.  How do I qualify for a short sale of my Phoenix Arizona Home?

Generally, you need a qualifying hardship such as a job loss, unforeseen medical expenses or some other reason that you shows you have a financial hardship and an inability to pay the mortgage.

2.  Should I move out of my home, or should I stay in the home during the short sale process?

Staying in the home is generally a great idea. A homeowner cleaning and taking care of the home who can also help answer buyer questions helps with the sale process. Additionally, while going through the process, most homeowners are unable to make mortgage payments. So, take advantage of the free rent during the process.

3.  Should I leave the utilities on until my Phoenix Arizona Home is sold?

Yes, the Phoenix Real Estate contract requires the utilities to stay on, but in addition, having the utilities on helps in selling the home. A cooler, comfortable home in summer or a clean, blue pool can make all the difference in swaying a buyer to purchase your home instead of some other home down the street.

4.  What repairs should I complete before selling my home?

As a rule, the only repairs to complete should be inexpensive repairs or repairs that if not complete would prevent the sale of the home.

5.  Do I keep paying the mortgage payment?

As a general rule, as long as you can pay the mortgage, you should pay the mortgage. Not making the mortgage payment is detrimental to your credit score and should be avoided if possible. However, some investors are refusing to process short sales unless a seller is delinquent on a payment. In those cases, a seller must decide whether to miss a mortgage payment or wait to start the short sale.

6.  How long does it take to complete a short sale?

When the bank service companies are doing a great job, a short sale can often be completed within 45 days of the seller accepting an offer. However, many bank service companies tend to drag the process out much longer.

7.  Does my mortgage have mortgage insurance on the loan?

Of about 1 of every 7 short sales we process, an investor took out mortgage insurance on the loan.

8.  How do I get my loan services company to process my file faster?

Begging, pleading, screaming …these are just a few different ways to get a loan services company to move faster. A more effective way is to escalate problems to higher-level management who can make things happen.

9.  Will I be able to buy a car during the short sale process?

Depending on your credit, you may or may not be able to purchase a car. Obviously, if you are missing mortgage payments, new purchases based on credit are less likely to happen.

10.  What are the downside consequences of the short sale?

There are potential tax and legal consequences after a short sale is complete, so be sure to get good tax and legal advice throughout the process.
In a nutshell, short sales can usually offer significant advantages over foreclosures, but they demand specific knowledge, expertise and strategy to successfully complete. Our Phoenix AZ Realtors have the short sale knowledge and experience to help you succeed – give us a call today!

Feel free to add a comment or ask a question!

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It’s Heating Up Outside… and so is the Market!

July 15, 2011 By Jamie Leave a Comment

The Phoenix Real Estate market got “hotter” in June as the daytime high temperatures made their normal move over the 110 degree mark. Our buyer clients were in multi-offer situations and our seller clients enjoyed pricing stability. At first it may seem like a heat-induced mirage, but check out the numbers behind these trends:

  • Overall home supply is low –  For the entire Phoenix MLS at the end of June, the total number of active real estate listings was 30,618 while the number of sold listings for June was  10,940. What’s of note here is that with the strong June sales, the Phoenix market only enjoys a 2.8 month supply of inventory, but for the first time in two years we are below a 3-month supply.
  • Some neighborhoods are even better – For example, the Chandler zip code of 85224 reveals  that for June there were a total number of 217 active real estate listings, with the total number of sold listings coming in at 102. In other words, this zip code has just a little more than a two-month supply of homes for sale.
  • The city of Chandler is doing better yet! – In the entire city of Chandler, the number of active listings in June for single family homes between 1200 and 1500 square feet that was 177. The number of sold listings in June came in at 98 – leaving just a 1.8-month supply of homes for sale. That is less than two months of inventory!
  • Overall, fewer homes are coming onto the market – In the first six months of 2010, a total of 79,186 new listings came on to the market. For the same period this year, there were only 68,393 new active listings. That translates into nearly 11,000 fewer real estate listings coming to market in 2011 – in other words, a reduction of 13.6% in new inventory. This reduction in the glut of Phoenix Arizona Homes on the market should lead to pricing stability for the real estate market.
  • At the same time, MORE homes are selling – During the same six-month period ending in June 2010, the number of sold real estate listings was 48,096 while for the same period this year, the number of sold listings is 53,919. That’s nearly 1000 more homes sold per month in the first six months of this year compared to last year – a much stronger sales market!

A reduction in home inventories, both local and Valley-wide; fewer homes on the market, while more homes are selling – these are all good signs of a reviving real-estate market, reducing the accumulation of homes waiting to sell, and relieving market stagnation.

If you’re interested in learning more about the ever-increasing opportunities in today’s market, or have been waiting to “make your move” until the times look better…  it’s time to get hopping. Our Phoenix AZ Realtors  can not only help you with your Phoenix Homes for Sale, they are specialists in the growth, changes and trends in the market, so give us a call today!

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Important Questions to Ask Before Starting the Short Sale of Your Home

June 15, 2011 By Jamie Leave a Comment

In today’s market, with the prices of Phoenix Arizona Homes for Sale substantially lower than during the housing “boom”, you may find yourself in the position of having to sell your home, yet owing more to your lender than you can get for the house on the Phoenix Real Estate market. One way of solving this problem – and avoiding foreclosure – is to sell your home in a “short sale”. With a short sale, you sell your home for whatever the current market will bear, and your lender agrees to accept the proceeds of that sale and release the lien on the home.

A short sale is not to be taken lightly, but it can present significant advantages. Before you pursue a short sale of your home, you should consider these important questions:

  1. Do I have a Qualifying Hardship? Lenders generally will only accept a short sale when the mortgage holder has a bona-fide inability to meet their current mortgage obligation, or a “qualifying hardship”. There are a number of reasons why a homeowner may face financial hardships — job loss, divorce, and medical bills are just a few. Many hardships will qualify you for a short sale and allow you to sell your home.
  2. Who are the lending institutions for my loans, and how do they handle short sales? Every lending institution has a different set of guidelines and policies to process short sales. Some work quickly and some work slowly. Knowing how your institution works is an important part of being successful.
  3. Does my Realtor understand how to work short sales with my lending institutions? Short sales are relatively new type of sale that many independent Real Estate Agents are unprepared for. If your agent is part-time, new to the process, or has not closed many transactions of this type, be concerned. The bank you are about to negotiate the short sale with is likely processing thousands of these transactions and is fully prepared to get the best deal it can. Make sure you have a Realtor that is fully prepared as well.
  4. What are my tax consequences? When should I talk to a CPA? In every short sale, there are potential tax consequences that a seller must manage. Asking your CPA or tax advisor about your situation and possible consequences is a very important part of planning for your future.
  5. Are my loans “recourse” or “non-recourse” loans? Could I be held liable for the loans later? Most loans are written as “non-recourse”, meaning that the lender will not be able to pursue you in the future for a loss incurred. However, some loans are recourse loans in which the financial institution may choose to pursue legal and collection avenues for the loss. Even this aspect can be negotiated – after all the lender does not want your house back, and stands to lose thousands if there ends up being a foreclosure instead of a short sale. Make sure your Realtor is prepared to help you negotiate if you are in the “recourse” category.

Remember, in most situations, well-planned short sales of Phoenix Arizona Homes have significant advantages over foreclosures. If you are facing financial hardship, if your home is worth less than what you owe on it, if you are unable to pay the bills, if you need to sell due to relocation of a job, then pick up the phone and give us a call – our Phoenix AZ Realtors do more than search the Phoenix MLS , they are experts in navigating through the Short Sale process, and can help you today!

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Selling for Top Dollar – Pricing Strategy

May 16, 2011 By Jamie 1 Comment

With today’s distressed Phoenix Real Estate market and all the competition of low-priced listings like short sales and bank owned properties, many sellers still demand to net as much money as is possible when selling their Phoenix Arizona Homes.  Fearing that they’ll undersell or “give away” their home,  many sellers will not embrace the strategy of “Pricing to Sell.”

“Pricing to Sell” is commonly defined as pricing a home in a price range of comparable homes sold in the last 3 to 6 months. Setting a home’s price more than 5% under the lowest comparable sale would be considered under-pricing a home or “practically giving the home away.” A home priced in excess of  5% above the highest comparable sale would typically be considered “overpriced.”

“Pricing to Sell”, then, is the strategy of setting the selling price of a home very close to the pricing established by recent comparable sales. There are some very strong benefits to a “Pricing to Sell” strategy and here are a few to consider:

  • Pricing to sell means you can be  planning to move, rather than waiting. If timelines are not pushing the sale, then waiting may be OK.  However, many times other life events are on hold until the house sale is complete, making life complicated and stressful. When this is the case, it is time to Price to Sell, so you can plan on moving.
  • Save on carrying costs! How much are the taxes, insurance, mortgage payment, HOA dues, and maintenance costs for your home? Typically, a $150,000 home will cost between $1000 and $1500 a month to carry.  Although that does not seem to be a lot, if a seller waits 6 months for the right offer, the seller just invested $6000 – $9000 in a home they intend to leave.
  • Work with the educated, qualified buyers! Educated buyers know the market and are generally well qualified before getting into a Realtor’s car.  Educated buyers also provide problem-free closings.  However, educated buyers will avoid overpriced homes, leaving the seller to deal with the bad, weird or goofy questions that will come from the remaining potential  buyers who may not be as educated or even qualified.
  • Avoid Perception problems. Do you remember that home listed down the street that took forever to sell? Did you ever ask, “What is wrong with that home that it does not sell?”  You can be certain that if you were wondering that, so were the potential buyers. The longer a home stays on the market, the more time there is for new buyers to see the home listed and ask the same question.
  • One of the main reasons to price a home to sell is to avoid appraisal issues. Even if a seller gets lucky and finds a buyer willing to pay above market value for the home, the final sale price is still dependent on the appraised value. If the lender’s appraiser will not support the value, the home will only close at a price the appraiser will support.
  • Avoid price declines in a declining market. On a recent transaction, the seller sold a home, only to have a similar home close down the street over $30,000 lower than the contract price. With the new sale, the seller was forced to sell for lower or cancel the transaction. If the home had been “Priced to Sell” and had the sale competed just 30 days sooner, the seller would not have lost the $30,000.

These are just a few benefits to the “Pricing to Sell” strategy. Do you want to learn more about this or other ways to get the most money from your sale? Our Phoenix AZ Realtors can not only help you with getting your Phoenix Homes for Sale  listed on the Phoenix MLS,  the can help you work out a pricing strategy that will get your home sold as quickly and beneficially as possible. Contact us today at (480) 776-5214 or www.ThompsonGroupAZ.com, and get your home sold!

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Benefits of a Short Sale Versus a Foreclosure

April 12, 2011 By Jamie Leave a Comment

As unfortunate as it is to miss your mortgage payment and to realize that making future mortgage payments is unrealistic, it is important to realize that there are still options. In life there are usually benefits to being responsible, even in terrible situations.

For a home owner, executing a short sale promises many benefits over just locking the doors and turning the home over to the bank as a foreclosure. Here are a few…

•    A owner whose home is lost in foreclosure will not qualify for a FHA/VA mortgage for 7 years. However, if the owner closes a short sale on the same home the seller will be eligible for a FHA/VA backed mortgage after 2 years.
•    An investor whose home is foreclosed upon is ineligible for a Fannie-Mae-backed mortgage for 7 years. If the seller closes a short sale on the same home they will be eligible for a Fannie-Mae-backed mortgage after 2 years.
•    Credit scores for the foreclosed homeowner will drop 250 to 300 points and typically affect credit scores for 3 years, while short sale homeowner could see a drop in credit score of as little as 50 points and typically affect the credit score for 18 months or less.
•    A foreclosure remains as public record on a credit history for 10 years or more while a short sale is generally not reported on credit history.
•    Lastly, qualified sellers receive up to $3000 through the government’s Making Homes Affordable Program. Homeowners with Phoenix Homes for Sale who are foreclosed upon receive nothing.
•    A well-planned short sale should provide for protection to the seller from deficiency judgment. A foreclosure does not provide any protection.

While navigating the short sale process is at times a headache for the home owner, the homeowner is in control of the situation and is able to influence the outcome. The seller gets to make decisions that are in their own best interest.

Are you or someone you know facing a foreclosure? The short sale process may seem embarrassing and difficult – but actually it can help you to sell your Phoenix Arizona Homes and navigate out of a bad situation. Our Phoenix AZ Realtors are not only specialists in searching the Phoenix MLS and other aspects of the Phoenix Real Estate market – they have extensive experience in short sales and the short sale process. Contact us today to discuss your options.

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Short Sales – The Disturbing Truth about Deficiency Judgments

March 9, 2011 By Jamie 2 Comments

On a recent call, a short sale seller asked me some questions about a short sale completed in the last 90 days. The seller had been required to sign a promissory note for over $60,000 as part of an agreement with the lender to complete a short sale. The seller is now unable to continue payments on the promissory note and had this question for me, “Can the bank sue me in court for a deficiency judgment if I quit paying on the note?”  I told her the answer is “yes” and I recommended she find a good attorney.

Any short sale agreement between a seller and the seller’s lender should have definitive language relieving the seller from future liability of the loan. Without this language from the seller’s lender, the short sale seller continues to live with the liability of the loan and the threat of a deficiency judgment from the lender.

So you may have asked, “In the Phoenix Real Estate market, would I not be better off to let the bank have the home in foreclosure?”  The purpose of a short sale is to relieve the homeowner of future liability from any and all loans secured to the property. If the short sale is performed correctly then the main benefit to the homeowner is to receive relief from the loans. A foreclosure does not provide such relief. In addition, any time there are multiple lenders on a property that gets foreclosed, the non-foreclosing lenders can still pursue the seller for a deficiency judgment for up to six years.

Every short sale situation is different, and sellers need to do some planning in order to make a well-planned exit from a bad situation. A well-planned short sale of your Phoenix Arizona Home should protect you from future liability. If the short sale is unable to provide such protection, then other alternatives exist and should be explored. Got questions about Phoenix Homes for Sale or about anything on the Phoenix MLS? Our Phoenix AZ Realtors have answers – give us a call today at 480-776-5214.

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Getting Ready to Sell? … Freshen Up the Inside

February 19, 2011 By Jamie Leave a Comment

A prospective buyer’s willingness to buy more quickly – and at a higher price – is often driven by emotion. A home that shows exceptionally well helps arouse the prospective buyer’s emotional desires for that home. First impressions count. That’s why you’ll see neat, clean homes getting snatched up while others just sit there on the market. Builders of homes in the Phoenix Real Estate market spend hundreds of thousands of dollars to stage a model home properly, and they do this for good reason. Buyers will buy the perceived value of the property. the image and feeling that they get from experiencing the property. As it’s often been said: buyers buy on emotion.

The emotions that you, the Seller, are trying to stimulate are triggered by sensory experiences. Aim for the senses – especially touch, smell, and sight. Uncluttered, clean, fresh-smelling homes sell faster and for higher prices. Try to clear your mind of any preconceived notions, then walk into your house, close the door, look around… and truly feel your house. Then consider these steps:

  1. Organize and de-clutter! Remove clutter from countertops, desks, and garage. Remove excess furniture. Organize closets, drawers, storage areas. Throw away, sell or store excess! Rent a storage unit if necessary. Clutter makes the home appear smaller and masks the home’s good points.
  2. Freshen interior paint as needed. Again, fresh paint is the best bang for the buck. Light, neutral colors such as beige, white, or off-white have a broader appeal and can make small rooms seem larger and airier. Remove ‘tired’ or busy wallpaper. Brighten drab garage interiors, storage areas with fresh paint. Paint/stain woodwork as necessary.
  3. Make kitchen and bathrooms sparkle. Clean/oil cabinets, clean appliances/fixtures. Add fragrances. New color-coordinated towels are an excellent investment. Fresh looking kitchen and bathrooms will often make or break a sale.
  4. Clean floors and carpeting. Add carpet freshener to carpeting which is ‘tired’ or to eliminate smoking or pet odors. If you have a smoker in the house, ask that person to smoke outside and to dispose of the ’spent’ smokes in the trash.
  5. Make minor repairs. Tighten loose knobs, fix leaky faucets, lubricate squeaky hinges, replace filters, tighten loose banisters, repair doors and doorknobs, remove stains, and make sure your doorbell works.
  6. Make sure all lighting fixtures work. Add new bulbs with the highest wattage allowed to make your rooms seem brighter. Light, airy homes seem bigger and more inviting. It’s well worth the extra cost.
  7. Is the fireplace in good working order? Remove ashes from the fireplace and add fresh logs.
  8. Buy fresh, colorful indoor flowers or plants. They get a lot of mileage, and they will enhance your new home as well.
  9. Exterminate. One bug, dead or alive, will make a bad impression on prospective buyers. Hire a professional.

Selling your Phoenix Arizona home is a process, not a single event. Getting your home ready to sell is part of that process. As you prepare to put your home on the market, make sure to pay close attention to how your home is prepared to show – it can make all the difference in the world.

Our Phoenix AZ Realtors are well versed in home presentation and can help you get your home ready to sell. In today’s market there are thousands of Phoenix homes for sale. If you don’t want to be just another home on the Phoenix MLS, give us a call today and we’ll help you stand out from the crowd.

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The Short Sale – Help Is Here for Financial Trouble!

January 18, 2011 By Jamie Leave a Comment

The last few years of economic turmoil have presented many homeowners with financial hardships and left them unsure of what to do. While some find solutions to their problems, others do not and evidence of the hardships is generally all too obvious. Many homeowners may be considering selling their home, but the economic challenges have left them uncertain as to how to go about that, and often unable to keep up with things.

A few signs of a distressed potential seller might be:

• yard work not done
• home in disrepair
• notices on the door
• the homeowners are not as friendly as they used to be
• divorce
• death in the family
• large medical expenses
• loss of job

If you notice these signs (or other signs like these), it might be a good time to stop by, just say “hello”, and possibly offer information or access to help with the process of selling their home. Many home owners simply do not know where to turn or who to trust. Some just need someone to talk with in order to sort out the details of their situation. A quick call to us about their Phoenix Arizona Home may be just the lifeline they need.

As Phoenix AZ Realtors, we are here to help. Over and over again we have witnessed homeowners of Phoenix Homes for Sale that are either simply overwhelmed, or are otherwise just “sticking their heads in the sand” and going into foreclosure when other solutions exist.

Maybe you have seen these signs of a home owner who is distressed. Most sellers showing these signs are dealing with financial hardships and qualify for a short sale, which can be the perfect help for their financial troubles. It’s possible that they’d be interested in having their home on the Phoenix MLS, or otherwise would like to sell their Phoenix Real Estate, but don’t know how to proceed. If you are interested in a short sale or you know someone who may be, contacts us at www.ThompsonGroupAZ.com or give us a call (480) 776-5214 and we can help.

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Getting Ready to Sell? … Start Outside

November 16, 2010 By Jamie 4 Comments

A home that shows exceptionally well helps arouse the prospective buyer’s emotional desire to buy more quickly at a higher price. First impressions count. That’s why neat, clean homes get snatched up and others just sit on the market. Builders of homes in the Phoenix Real Estate market spend 100′s of thousands of dollars to stage a model home properly. They do this for good reason. Buyers will buy the perceived value of the property… the image and feeling that they get from experiencing the property. It’s often been said that buyers buy on emotion.

Stand across the street and look at your home from a potential buyer’s viewpoint. Next, go to the corners of your back yard and look at your home with the critical eye of a buyer. Consider the following:

The buyer’s strongest first impression of your home is with the front outside entry and door.

Make this area fresh and inviting with plants, flowers, and as needed, fresh paint. Make purchases which enhance the appearance of your home-large planters,  new entry mats. You can take these items with you to your new home!

Is there ‘clutter’ in the front or back yard?

Debris, leaves, dead branches, old swing sets, broken lawn furniture? Pick up tools and toys from the yard. Put garbage cans in the garage and shut the door. Are there too many cars parked in the front or driveway?

Is the lawn trimmed, edged, weed-free, and fertilized?

Edge between your lawn, drive, and walkways. Are the flower and shrubbery beds pruned, free of debris, and fresh looking? Do they need fresh mulch or plants?
Repair cracks and pull weeks from walkways and the driveway. If you are an absentee seller, make arrangements for lawn care.

Is the exterior paint fresh?

Hose it down to remove dust and cobwebs. Touch up or repaint as needed. The expense of repainting has an excellent return on the dollar.

Are all outside systems working?

Is the sprinkler system functioning properly? Have the cooling and heating units been serviced?

Selling your Phoenix Arizona Home isn’t a single event – it’s a process. And, part of that process is getting your home itself ready to sell. As you prepare to put your home on the market, make sure to pay close attention to how your home is prepared to show – it can make all the difference in the world.

Our Phoenix AZ Realtors are well versed in home presentation and can help you get your home ready to sell. In today’s market there are thousands of Phoenix Homes for Sale. If you don’t want to be just another home on the Phoenix MLS, give us a call today and we’ll help you stand out from the crowd.

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Home Owner Associations and Real Estate Transactions

October 19, 2010 By Jamie Leave a Comment

On a recent home sale, the Home Owners Association (HOA) decided to wait until the week of closing to deliver the HOA documents to the buyer. In most cases this is not a problem; however, the HOA decided that the property being sold was in violation of HOA guidelines. The violation is due to the seller did not getting architecture approval for refinishing the front sidewalk 4 years prior. Wow, the lender, the title, the buyer and seller are ready to close escrow and the HOA decides to deliver a notice of violation and hold up the closing on a technicality. Incidentally, the front sidewalk looked FANTASTIC! So, what do you do 3 days prior to closing? In this situation, the seller and I pursued the HOA board members and the management company and cooler heads prevailed, allowing the home to close on time, but not without some serious headaches.

The Thompson Group takes each Real Estate transaction seriously. We will do what it takes to have a smooth and timely transaction, even during last minute emergencies!

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