Distressed Property- Rent, Short Sale or Foreclosure?

With the decline in the real estate market, many home owners are now upside down on their mortgage.  They may have over borrowers and over paid related to what our market can produce today.  There are many options for homeowners to consider.  You should also consult your financial or tax advisors when making these significant investment decisions.

Foreclosure- the option that everyone should try to avoid and only use it if it is your last resort. A foreclosure on your credit history can drastically affect how you can borrow and spend money in the future. It can lower your credit score up to 200-300 points. It is not the choice to take unless someone has lost everything else and has no other options.

Renting- a homeowner might need to change their thinking about their home.   Real Estate is a long term investment. During the fast days of 2003-2007, people were buying and selling so quickly because the market was shooting up so fast. Those days are gone and so real estate appreciation has slowed to a steady level once again. The value of your home WILL go up again but it might not be at the level you purchased for quite some time. If you can consider a rental and stomach covering the additional amount of the mortgage, taxes and insurance- then you might not lose your equity, it would have no affect on your credit and you could move and rent another home that is within your budget. You might have to change your thinking about her mortgage payments- think of it as a payment into an IRA. You might have to tighten your belt a bit but at least you won’t lose your equity.

Short Sale- we are doing a lot of short sales now. Short sales are a good option for home owners that have lost a lot of equity and now owe more in their mortgage than the home is worth. The paperwork and length of time it takes to get a reply from the bank takes a lot of patience so you have to be prepared to make it wait once you submit the paperwork. The bank assigns you a negotiator and then you work with them to lower the loan pay off amounts and release the debt deficiency. Often, there is none or very little affect on one’s credit score. The bank is usually more willing to work with people that are in some type of financial distress- job loss, income reduction, etc. But I have seen sellers will high net worth’s have success with short sales. If you are considering a short sale- you will need a real estate agent with short sale experience that can assess your situation and see if a short sale is a viable option.

Loan Modification- this is also an option but a difficult one to obtain.  Your bank might be willing to work with you to modify your mortgage to decrease your monthly payments if you are in a financially distress situation.  Contact your mortgage holder’s loss mitigation department for more information.

December 31, 2009 · Filed Under Coaching for Sellers, Market/Pricing Assessment, Real Estate, Real Estate Trends

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Priced to Sell and Show Well

The direction of pricing in our current market is no longer “priced right and looking food.”  Rather homes that are “priced to sell and show well” are compelling buyers to take action.

What I have seen a lot of in this ‘recessionary’ market is that buyers have become even more demanding than they ever were before.  They almost have an attitude of entitlement – like it is their turn to be the winners in negotiations.  They take it for granted that they are going to get a good buy and wait and they have no compunction about making low offers and standing firm.

The problem is that with all the choices and the many houses on the market these buyers are often successful with their posture, and if they are not it is not uncommon for them to wait on the sidelines for a better deal on the next one.  Sellers- do you want to wait for a better market or sell now in the market you have?  All homes for sale get “priced” in the marketplace, and the ones we see selling are priced at very compelling values.  Otherwise, there are many houses on the market that are waiting for something to change.  And the problem is that we have learned that change in this market has mostly been moving lower, not higher.

Value seems to be the primary focus of current buyers and can you blame them?  With the present fear in the financial market- everyone is acting more conservative with their investments. Property condition has become secondary to property value.  Perhaps this market has allowed buyers to seek more potential in their home’s condition rather than the appreciating value of the home.

December 31, 2009 · Filed Under Coaching for Buyers, Coaching for Sellers, First Time Home Buyers, How to Choose..., Market/Pricing Assessment, Pricing Your Home, Real Estate

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How to Winterize Your Home

You’ve pulled your sweaters out of mothballs & your mittens from the bottom of drawer. What about your house? Is it prepared for the cold? Our experts have boiled down your autumn to-do list to 10 easy tips!

1. Clean the gutters– once the leaves fall remove the leaves and other debris from your gutters by hand, scraper or spatula. Use a good hose rinse to see if there are any cracks in your gutters.

2. Block the leaks– Seal any leaks on the inside and outside of your home using door sweeps or caulk.

3. Insulate– Spend some money to add additional insulation to your home. You’ll get it back in the form of lower energy bills. Have at least 12 inches of insulation.

4. Service the Furnace– HVAC specialist to service every 1-2 years for approx $120.

5. Get your ducts in a row– Central heating ducts can lose up to 60% of heated air before that air reaches the vents if ductwork is not well-connected and insulated. Check your ducts in the attic and crawl space, repair places where the pipes are pinched and fix gaps with . . . . . . . duct tape!

6. Face your windows– Take down window screens and put up storm windows. Consider upgrading to new windows which will help lower your energy bills.

7. Inspect and clean the chimney– See reverse for our recommended contractors.

8. Make sure your crawl space or basement is properly vented– Keep your crawl space vents OPEN during the winter months so the space will be properly vented when it rains or snows. If you have a sump pump– make sure it is working properly and the vapor barrier is properly graded for optimal water drainage.

9. Wrap pipes and hose bibs– Install a Styrofoam cup around hose bibs and wrap all un-insulated pipes in unheated areas of your home.

10. Check alarms systems– Change batteries and check the operation of your home’s smoke detectors, carbon-monoxide detectors, and generators.

Businesses and People We Recommend For Help Winterizing Your Home

Gutter Cleaning

CJ’s High Climbing Services 503-228-9278

Metro Gutter Service 503-771-5529

Chimney Repair/ Inspections

Oregon Chimney 503-231-2588

Paramount Masonry 503-260-3911

Drainage Contractor

John’s Waterproofing 800-810-5883

HVAC Specialist

AAA Heating and Cooling 503-284-2173

Ron Hardy Heating 503-222-9654

Insulation Contractor

All Weatherization 503-649-6542

Alpha Energy Savers 503-658-2212

Tree Trimming

Rich’s Tree Service 503-465-2133

Wind Thin Tree Services– 503-481-4628

Window Installer

Alpha Energy Savers 503-658-2212

Oregon Window Installers– 503-829-8117

December 7, 2009 · Filed Under Real Estate, Uncategorized

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