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Maryland

Buying a home - Five Ways To Identify A Fake Seller

I was recently in escrow with a young couple. We ended up cancelling the escrow because so many things were going wrong. It was very frustrating to them that the sellers were missing contract deadlines and they became strangely non-cooperative. I knew exactly what was happening. We were working with fake sellers! Today I’m going to share with you five tips on how to spot a fake seller. If you need to get out of escrow or before you even open escrow, you will know exactly what’s happening. Tip #1: Unrealistic The most common reason the house doesn’t sell is because of the price. If the sellers say they can’t sell their house, what’s really happening is that they’re testing the market condition. They’re not real sellers. Real sellers may initially overprice their home but very quickly (generally within 5 days) bring their price back to the realistic market value. Tip #2: Not motivated Motivation is going to look like a wedding, a baby on the way or job transfer. A real seller will always be motivated which will show up front. Tip #3: Don’t have timelines Fake sellers don’t have a timeline. If there’s a job transfer they have a timeline, if a school is starting they have a timeline, if they’re closing escrow on their next home, they have a timeline. But, if you’re working with a seller without a timeline, you may not be working with a motivated seller. Tip #4: Not forthright Fake sellers are not forthright. They try to hide things. Real sellers, on the other hand, are extremely forthright. In fact, they are disarmingly candid about the condition of the home, the area that you are buying into, and even the neighbors next door. Tip #5: Non co-operative Fake sellers are non-cooperative as they have no reason to co-operate with you. Real sellers will be co-operative as much as they possibly can. They want the transaction to go smoothly, they want to work with you to solve problems. They have a ‘let’s make things happen’ attitude. So, if you’re suddenly running into inconsistent behavior, having a lot of surprises, you may be working with a fake seller. You may decide to run and not walk away from such transactions.  (Dec 22, 2009 | post #1)

Maryland

Three Reasons Why a Short Sale Is Better Than Foreclosure

What not many Realtors or advisors are willing to admit from the very beginning is that when a homeowner is in debt, both the foreclosure and a short sale can have a devastating impact on the credit history. However, choosing the lesser of the two evils is important. It’s natural for sellers to be concerned about the impact of a short sale on their credit score. Who wouldn’t? As a homeowner who is facing a foreclosure, don't expect that a short sale will not leave any marks on your credit record. But keep in mind that a short sale will affect your credit score for a shorter period and that you have better chances to buy a home again soon. Here are three issues that affect you the most. Reason #1 Every state has different regulations on credit ratings but most often realtors talk about 80 to 100 point decrease in credit score due to a short sale. The score may be a little higher or lower depending upon other variables affecting the credit score as well. In case of a foreclosure, the credit drops by over 250 points! Even if you start off with an excellent 800 points credit, once you get a foreclosure on your report you will end up with 550 points, which is poor and hopeless. Reason #2 What I find to be the biggest difference between foreclosure and short sale is that a short sale allows the purchase of a new property in case the owner does not miss any mortgage payments, has not signed a promissory note or a deficiency judgment has not passed. In case of any one of the occurrences, a homeowner has the freedom to buy a house within two years. On the other hand, if the homeowner signs a foreclosure, about 5 to 7 years are needed to apply for a new mortgage. And as if that wouldn’t be enough the borrowing terms for the new mortgage may become tighter as well. Reason #3 A big minus that foreclosure carries is the deficiency judgment and that makes a short sale to be a better option. The chances of deficiency judgment with a short sale are lower compared to a foreclosure as the lender agrees on solving the problem together. This implies that the bank is not acquiring the property in a short sale and the homeowner is selling it to a buyer which he would do otherwise. And that’s very important when thinking of your future financial security! The decision is up to you in the end. But before making it think of what now affects you the most and most importantly, what will affect you in the future: your credit score, the period in which you won’t be able to buy another home and the deficiency judgment. Best, Charles  (Dec 7, 2009 | post #1)

Maryland

What is timeframe for foreclosure risk? Start to End

I have come across a number of cases where the homeowners who have missed the monthly mortgage payments, judged the timeline for foreclosure of their house either too soon or too late. Both situations can have detrimental consequences. However, every state has different regulations and the timeframe for foreclosure differs accordingly. Let me guide you through the progression of missed payment proceedings and period for a foreclosure. Let’s take it from the first month of the missed payment-The mortgage lender will mail or call you up and bring the missed payment to your notice. There is not much explaining to be done but it is better if you tell them the true reason for missed payments. Second month, the lender will hire a debt collection agency to contact you over the phone and know your situation. At this stage, it is a good idea to take all the phone calls and explain everything to the agency and that you are making efforts to change it. Try and avoid the third consecutive missed payment, and make least one payment. A third consecutive month of missed payment will bring with it some amount of strong resentment from the lender. The lender will send you a ‘Demand letter’ or a ‘Notice to accelerate’, suggesting that you pay the due amount on the suggested date. If you fail to make the payment on the due date, the lender can start foreclosure proceedings. You can still work with the lender to figure out a way, but in most cases, the lenders do not take a lesser amount than the total payment due. In the fourth month, if you have not worked around your situation with the lender, the lender’s attorneys will contact you. The attorney’s costs will be added to the total amount you owe. If you still do not work with the lender and find a way out, the foreclosure proceeding will begin. The attorney will schedule a date for the sale of your house.. The foreclosure notification will be sent to you through mail. The sale date isn’t the actual date when you move out but you are nearing the dead end. In most cases the time difference between a demand letter and the actual sale can be in the range of 2 to 3 months, and it depends on the state’s policy. The time after the sale date is known as the redemption period and the actual date of leaving the house will be sent to you along with the demand letter. My advice when facing foreclosure risk is to stay calm and talk with your lender as much as possible. Another great idea would be to meet a housing counselor during the first four months of missed payments. Foreclosure risk may be a nightmare but can be avoided.  (Dec 2, 2009 | post #1)

Maryland

Is This Home Buying Spree Just Another Bubble?

You must be tired of hearing the ‘experts’ saying that NOW is the best time ever to get into the buying spree. And I must tell you that the statistics generally tend to support this statement. Just by looking at the rise in short sales and foreclosures it’s obvious that investors have more opportunities flowing in as loan delinquencies increase. Let’s check the stats for the first two quarters of this year. A Federal Housing Finance Agency report suggests that short sales rose by 45 percent between April and June 2009. In 2008, the total number of short sales was reported at 15,704. In just the first two quarters of 2009 the number of short sales has reached to 19,759, an increase of about 25 percent. The causes are easy to identify. The rise in short sales is primarily because of the rise in unpaid mortgage loans. The one month delinquent loans increased by 11 percent while the over two month delinquent loans saw a rise of 21 percent in the second quarter of 2009. In addition, foreclosures increased by 23 percent in the second quarter of 2009 with a rise in over three month unpaid loans. A logical conclusion would be that the numbers mentioned in the Federal Housing Finance Agency report clearly indicate that buyers will be flooded with opportunities from short sales and foreclosures. But there are many skeptical people that are describing these phenomena as ‘just another bubble’ and frankly speaking the previous period has taught us to be at least more cautious. Why do I still think that indeed it is the best time to buy? The answer is simple: merely because the processes of short sales have been accelerated. And that is not shown only by their increased number but also by the average period that is nowadays required to close the process and also by the increased level of authority for servicers to participate in short sales. You see, homes on the verge of foreclosure seem to be everywhere and I agree that it looks like another bubble ready to burst if there’s not a strong base to facilitate and accelerate the process of moving these properties from the market to the buyer. And in my perspective it’s not the case as now it takes a shorter time to make it happen and there are more people who can do it. That is why, besides the rising loan delinquencies, I have reasons to believe that NOW is the right time to buy a property.  (Nov 23, 2009 | post #1)

Maryland

Top 5 Guidelines That Will Prepare the Buyer for a Home I...

Planning and preparation are two essential aspects before considering home inspection. If the proceedings are not planned properly, you may lose out on time, efforts and money. 1. Cross check for the Home Inspector Before hiring a home inspector, ensure that the person is a part of the American Society of Home Inspectors (ASHI). ASHI qualified inspectors have appropriate knowledge and are considered dependable. 2. Get his contact details Request the home inspector to give you his contact information so that in case your bank or insurance company asks for additional details, you can call him back. 3. Communicate with the seller As a buyer, it is important that you communicate with the seller to figure out if he has any particular issues that he wants to be checked. Make a note of these points. 4. Arrange the information into ‘Categories’ Categorize and record each potential component of a house that a home inspector would look at. You can categorize them as roof, flooring, heating system, septic system, garden, swimming pool, air conditioning and others. 5. Do some asking to the Home Inspector a) Clarity on the condition of the house Inquire about the condition of the roof and other components and take down estimates required to repair them. Before buying your house, try to choose a house in good condition. However, do not be disheartened if the home inspector points out some negative characteristics. Examine your contract carefully to see which components need to be worked upon and which ones can be left. For example, even your air conditioning system is old but if it works fine, there is no need for you to replace it. In some cases, your contract may not entail any repairs, which frees you from the seller’s unreasonable refusals. b) Geography Ask whether the geographic location of your house can damage it in any way and what would be the cost of protection. c) Safety Issues Ask if he has observed any safety issues that you must specially consider because of the presence of pets or children. d) Structure of the Report Ask him to explain the structure of the report and briefly state the important points. e) Environmental Issues Ask questions about other environmental issues such as UFFI, radon, lead paint and the septic system certification, if necessary. Bookmark and Share  (Nov 18, 2009 | post #1)

Washington, WV

Home buyer tax credit results?

The Senate agreed on extending the first time home buyer tax credit. Additionally they have a $6,500 tax credit incentive for existing home owners. The new deadlines are the end of April for signing the sales agreement and the end of June for closing the deal. All the best, Charles  (Oct 29, 2009 | post #2)

Q & A with Charles Heyward

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Realtor in Maryland and DC

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http://heywardhomes.com