Elaine VonCannon, ABR, SRES, REALTOR, Notary Public, Team Manager
Are you thinking of selling your home on your own, without the aid and professional advice of a qualified REALTOR? You may want to re-examine your decision to do so, because chances are good that you will not increase your net gain by selling your own home.
Do you believe your savings on commission will be your reward after you attend a seminar or two on selling your own home? A home sale is a complex series of transactions with multiple parties. Not only is it time consuming, consultation and coordination with professionals at every level is necessary. Attendance at a seminar or two does not make you an expert on home selling.
The average person will buy two to three homes in one lifetime, unless they are a property investor. A top producing REALTOR will average 5-10 transactions per month. A REALTOR with knowledge and experience in the profession will be able to enhance your bottom line on a home sale. Here are some common questions I am frequently asked by For Sale by Owner sellers.
Q: I recently attended a seminar on selling my own home. Won't this enable me to do it on my own?
A: The seminar was probably sponsored by a lawyer, closing attorney, titling company, or lender. The facts you can obtain in three hours or less are not enough to teach you how to get more money for your largest investment: your home.
Q: How do REALTORS sell homes quickly?
A: A staggering 80% of home sales are done through a Multiple Listing Service. REALTORS have access to this. With a listing on MLS sellers have the entire membership of the MLS working for them. Sellers may have as much as several thousand members depending on the area or residence. An MLS listing is the most effective way to bring in qualified potential buyers.
Q: What information is most critical when selling a home?
A: A seller needs to know what the state requires as well as what the lender requires when it comes to home sales transactions. He or she also needs to know the timeframe for all transactions. If time frame is not adhered to the contract can become null and void.
Q: I live in a residential community and am selling my home. How do I deal with the Home Owner's Association effectively?
A: Do you know the timeframe for the Home Owners Association (HOA) packet in your area? If the HOA package is not received in the required timeframe of your state then the buyer may cancel the contract with no penalties to the buyer. These matters are of the utmost importance when dealing with an HOA.
Q: Why does a home seller even need a real estate agent?
A: If there is no middle party to negotiate between the buyer and seller, you can become deadlocked on terms, have your property tied up, or end up in litigation. If your property is tied up for months you might have missed the right buyer who is willing and able to pay the price you want. Also a REALTOR will not have the emotional ties to the transaction that a seller has. The REALTOR is also separate from the buyer's objectives.
Q: Doesn't hiring an attorney take care of contracts?
A: If you think an attorney drawing up a contract makes you free and clear of worries and responsibilities - you're wrong. The attorney does not have the time to stay on top of this to make sure everything required is done on the home before closing. If you do want the attorney to handle the details, you'll pay a lawyer's fee, which is usually $100 per hour and up.
Q: How does a REALTOR arrive at a market price on a home?
A: A REALTOR will price your home much like an appraiser would. A REALTOR compares your home to what has sold in the area in the past three months. They know the inflation record in your area. A REALTOR's research also consists of checking court records to see what has sold in this area. This covers home sales not listed on MLS, but by law has to be recorded at the court house for a specific area.
Q: How can a REALTOR possibly improve my bottom line on home sales, when I'm saving on commission?
A: On every listing I have sold, I have procured for my sellers $10,000-$50,000 above what they thought their property would sell for - after they had paid all the fees including commission. A majority of For Sale by Owner's homes have sold for less than what a REALTOR would have obtained.
I would like to reiterate the importance of the seller selecting a REALTOR who knows the ins and outs of contractual agreements and has some experience behind him or her. Hiring an experienced REALTOR to help sell your home will the wisest investment you've ever made.
Visit VonCannonRealEstate.com to view the listing engine on the website.
Monday, January 17, 2011
Friday, January 7, 2011
A Primer on Bank Owned Properties for Sale in VA
Elaine VonCannon, ABR, SRES, REALTOR, Notary Public, Team Manager
For perhaps the first time in history, bank owned properties are numerous in just about any real estate market. First time homebuyers, investors, and the average homebuyer in the U.S. markets are eager to purchase bank owned property.
On the surface, bank owned properties seem like a great deal. Often, they do offer significant savings. Yet the purchase of a bank owned property, whether it is a short sale or a foreclosure, also comes with specific parameters and cautions for the buyer and the seller. Buyers must remember that a bank owned property purchase is vastly different from the routine property acquisition.
Bank Short Sales Statistics in Southeastern Virginia
Halfway through 2010, there are over 50 bank owned property listings in Williamsburg, James City County, Yorktown, Northern York County and sections of New Kent County and Charles City. In Hampton and Newport News Virginia, there are approximately 175 bank owned homes for sale. In the Northern Neck Counties on the Chesapeake Bay, there are 28 short sales and foreclosures for sale. These numbers indicate the recession is not over. Homebuyers can expect bank short sales and foreclosures to be listed for some time to come.
Short Sale Process
For property owners who are underwater, or owe more on the home then it is currently worth (and/or cannot afford their present mortgage due to reduction in income, unemployment, or change in life circumstances) a bank short sale may be a viable option.
Bank short sales are a tedious process. Those banks who accepted TARP money, such as Bank of America or Wells Fargo (the former Wachovia) are more inclined to short sale a property. These banks actually have the leverage to take the loss on the loan.
Some banks are not so amicable about a short sale. Instead these banks allow properties to go into foreclosure. Statistically, an average of 75% of short sales are withdrawn or often end in foreclosure. Banks can hold the inventory this way, and wait for property values to increase.
Buyers and sellers need to know that a short sale may take anywhere from four weeks to eight months or more to complete. If a buyer and seller are participating in a short sale, they must be patient.
Bank Short Sale Issues
There are some tricky issues with short sales of properties. To complete a short sale, a good attorney is necessary. The attorney will negotiate with the bank to obtain the best possible conditions for sale of the property. When there is a second mortgage on a property, there is little chance the company will receive any proceeds from the short sale. Since the second mortgage stands to loose the most from a short sale, the company may hold up the process.
Making a short sale on a property does not ensure the property owner will leave free and clear from financial responsibilities. Mortgage companies may still elect to hold the former homeowner responsible for financial losses even after a short sale is completed. A knowledgeable REALTOR will retain a qualified real estate attorney to ensure that the final contract includes verbiage requesting the remainder of debt owned by the first or second lien holder is forgiven. Inserting this clause may or may not work, but it should be written into the contract.
Foreclosures
The best way to find a foreclosed property (or a short sale) is to retain a qualified REALTOR in the desired area. This REALTOR will conduct a special search on the MLS for bank owned properties.
Foreclosed properties may be recently vacated, and some may have been left empty for a year or more. Some property owners elect to speak with their lender about their inability to maintain the loan, then voluntarily vacate the property instead of waiting for foreclosure. The homeowner will send the deed and keys to the lender and leave the premises. If a homeowner leaves in this manner, some banks may even forgive the unpaid balance.
Mortgage companies and banks like to privately "extend and pretend." This means the lender acts as if the loan is performing so they don't have to declare it as a non-performing loan. If the loan were classified as non-performing, the bank would have to pay more reserve money to ensure the investment. Bank owned properties stand vacant longer in this market for this precise reason.
Once the lender takes possession of the property, it has the option to auction the foreclosure at the courthouse. Often these home auctions will only net 50% of the home's value. If a lender cannot obtain enough money for the foreclosed property through public auction, it may hold it and leave it vacant or put it on the real estate market.
Condition of Bank Short Sales and Foreclosed Properties
Short sales and foreclosures are sold 'as is,' without negotiating repairs. The property can be inspected, but even if something is found wrong, the property owners are not required to do anything. The buyer, on the other hand, may need to meet certain conditions for the lender. Some may require moisture and termite inspections, or well and septic inspections, and theses costs are the buyer's responsibility. Do they want to bear it? The seller will more than likely not want to pay for inspections or upgrades to present systems.
Some short sales and foreclosures are in pristine condition, whereas others are 'buyer beware' since they have repair issues. It just depends on the situation. An inspection is well worth the money, and certainly a good decision for a short sale or foreclosed property. Buyers and REALTORS should be on guard for extensive damage, wear and tear and possible structural problems. Avoid purchasing homes where large capital investments are needed to make the home livable: faulty sewers or wells, asbestos, bad roofs, lead or leaky waterlines and malfunctioning electrical are some of these. Even a small or negligible repair issue may grow greater the longer the house is uninhabited and the problem is ignored. Vacant homes are more likely to be filled with rodents and pests and even snakes and small animals. Look for signs of these when viewing the property.
Even if you are not the type of person who wants to take the risks of purchasing bank owned properties, do not let it defer you from purchasing a home altogether. All investments are a risk. It is often better to know what these risks are up front. If, after reviewing the conditions of buying bank owned properties, you decide it's not for you, then consider purchasing a home through a traditional real estate transaction instead. There are still plenty of great bargains on home purchases.
Visit http://www.voncannonrealestate.com to view bank owned properties for sale in VA.
For perhaps the first time in history, bank owned properties are numerous in just about any real estate market. First time homebuyers, investors, and the average homebuyer in the U.S. markets are eager to purchase bank owned property.
On the surface, bank owned properties seem like a great deal. Often, they do offer significant savings. Yet the purchase of a bank owned property, whether it is a short sale or a foreclosure, also comes with specific parameters and cautions for the buyer and the seller. Buyers must remember that a bank owned property purchase is vastly different from the routine property acquisition.
Bank Short Sales Statistics in Southeastern Virginia
Halfway through 2010, there are over 50 bank owned property listings in Williamsburg, James City County, Yorktown, Northern York County and sections of New Kent County and Charles City. In Hampton and Newport News Virginia, there are approximately 175 bank owned homes for sale. In the Northern Neck Counties on the Chesapeake Bay, there are 28 short sales and foreclosures for sale. These numbers indicate the recession is not over. Homebuyers can expect bank short sales and foreclosures to be listed for some time to come.
Short Sale Process
For property owners who are underwater, or owe more on the home then it is currently worth (and/or cannot afford their present mortgage due to reduction in income, unemployment, or change in life circumstances) a bank short sale may be a viable option.
Bank short sales are a tedious process. Those banks who accepted TARP money, such as Bank of America or Wells Fargo (the former Wachovia) are more inclined to short sale a property. These banks actually have the leverage to take the loss on the loan.
Some banks are not so amicable about a short sale. Instead these banks allow properties to go into foreclosure. Statistically, an average of 75% of short sales are withdrawn or often end in foreclosure. Banks can hold the inventory this way, and wait for property values to increase.
Buyers and sellers need to know that a short sale may take anywhere from four weeks to eight months or more to complete. If a buyer and seller are participating in a short sale, they must be patient.
Bank Short Sale Issues
There are some tricky issues with short sales of properties. To complete a short sale, a good attorney is necessary. The attorney will negotiate with the bank to obtain the best possible conditions for sale of the property. When there is a second mortgage on a property, there is little chance the company will receive any proceeds from the short sale. Since the second mortgage stands to loose the most from a short sale, the company may hold up the process.
Making a short sale on a property does not ensure the property owner will leave free and clear from financial responsibilities. Mortgage companies may still elect to hold the former homeowner responsible for financial losses even after a short sale is completed. A knowledgeable REALTOR will retain a qualified real estate attorney to ensure that the final contract includes verbiage requesting the remainder of debt owned by the first or second lien holder is forgiven. Inserting this clause may or may not work, but it should be written into the contract.
Foreclosures
The best way to find a foreclosed property (or a short sale) is to retain a qualified REALTOR in the desired area. This REALTOR will conduct a special search on the MLS for bank owned properties.
Foreclosed properties may be recently vacated, and some may have been left empty for a year or more. Some property owners elect to speak with their lender about their inability to maintain the loan, then voluntarily vacate the property instead of waiting for foreclosure. The homeowner will send the deed and keys to the lender and leave the premises. If a homeowner leaves in this manner, some banks may even forgive the unpaid balance.
Mortgage companies and banks like to privately "extend and pretend." This means the lender acts as if the loan is performing so they don't have to declare it as a non-performing loan. If the loan were classified as non-performing, the bank would have to pay more reserve money to ensure the investment. Bank owned properties stand vacant longer in this market for this precise reason.
Once the lender takes possession of the property, it has the option to auction the foreclosure at the courthouse. Often these home auctions will only net 50% of the home's value. If a lender cannot obtain enough money for the foreclosed property through public auction, it may hold it and leave it vacant or put it on the real estate market.
Condition of Bank Short Sales and Foreclosed Properties
Short sales and foreclosures are sold 'as is,' without negotiating repairs. The property can be inspected, but even if something is found wrong, the property owners are not required to do anything. The buyer, on the other hand, may need to meet certain conditions for the lender. Some may require moisture and termite inspections, or well and septic inspections, and theses costs are the buyer's responsibility. Do they want to bear it? The seller will more than likely not want to pay for inspections or upgrades to present systems.
Some short sales and foreclosures are in pristine condition, whereas others are 'buyer beware' since they have repair issues. It just depends on the situation. An inspection is well worth the money, and certainly a good decision for a short sale or foreclosed property. Buyers and REALTORS should be on guard for extensive damage, wear and tear and possible structural problems. Avoid purchasing homes where large capital investments are needed to make the home livable: faulty sewers or wells, asbestos, bad roofs, lead or leaky waterlines and malfunctioning electrical are some of these. Even a small or negligible repair issue may grow greater the longer the house is uninhabited and the problem is ignored. Vacant homes are more likely to be filled with rodents and pests and even snakes and small animals. Look for signs of these when viewing the property.
Even if you are not the type of person who wants to take the risks of purchasing bank owned properties, do not let it defer you from purchasing a home altogether. All investments are a risk. It is often better to know what these risks are up front. If, after reviewing the conditions of buying bank owned properties, you decide it's not for you, then consider purchasing a home through a traditional real estate transaction instead. There are still plenty of great bargains on home purchases.
Visit http://www.voncannonrealestate.com to view bank owned properties for sale in VA.
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