Neighbor: Pay Thy Bill!

You already knew your neighbors could impact your sale.  How their home looks, how they act when they see someone coming to look at your home… it all matters because it impacts the buyer’s view of the neighborhood and of the home.  But neighbors can impact your ability to sell in other ways, too, like if they don’t pay their bills.

Delinquency: It’s long been a standard on FHA loans for condo purchases. The number of households who are delinquent in their condo association dues can not exceed 15% of the total homes in the association.  Today we’re seeing lenders for other types of loan looking at the delinquency rate of condo associations and, even home owner associations, before they will make a loan.  It’s a sign of the times.  More and more home owners and condo owners associations are being impacted by a growing number of households who are unable to pay the fees.  And, when that delinquency exceeds 15% it can be a big issue… It can mean difficulty finding a buyer for ANY HOME in the association.

I have a transaction I am working on right now… We ratified the contract rather easily.  The listing agent is available, cooperative, even pleasant to deal with.  The home inspection and appraisal went through without a hitch.  The lender is assuring me the buyers qualifications look good. Things are rolling along.  AND THEN… Then came the call from the lender.  The condo questionnaire came back and the delinquency is over 15%… Just barely over, but it’s over, and that means no loan.

In this case, we only need 3 people to pay their bill to reduce the delinquency to below the threshold and the loan can go through – THREE PEOPLE.

Neighbor, PAY THY BILL!

I am not sure how this will work out – I will keep you posted, but it’s a terrible situation to be in, because none of the parties to the transaction are responsible for this issue… and yet, we’re all being held accountable for the late payments of a few.  So, I will keep you posted.  I won’t let this kill the deal for my clients, although I do not know what the resolution will be – yet.

What I do know is that homeowners everywhere should take note.  When you’re interviewing management companies ask about their collection procedures, and hold them accountable.  Their ability to collect association dues can impact your ability to sell your home.

Stay tuned for the resolution – there will be one.  In the meantime, call your association and get a copy of your delinquency report.

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10 Things A Seller Should Know About Short Sales

I am slowly but surely migrating to using ONLY my wordpress site for blogging.  So please visit me there: www.VickyChrisner.com/News.

Here are 10 things everyone who is “under water” on their home should know:

1. If you owe more on your home than it’s worth, you can still sell in most cases, even if you do not have the money to pay the balance of the loan. This is called a short sale.
2. If you do a short sale, in most cases lenders are processing these fairly quickly – from listing to close can be as little as 60 days, 90-120 days is more common.
3. Most lenders will stop the foreclosure process if you are working on a short sale.
4. Most sellers can get full debt forgiveness from their lenders (meaning after the sale they no longer owe their lender).
5. If you get debt forgiveness THIS YEAR (this requires you close your sale by 12/31/2012), most people will not have to pay taxes on that forgiven debt. (See information on the Debt Forgiveness Act here.)
6. A seller’s credit WILL be damaged; but it is temporary. Before you do the short sale, consider your credit related needs, especially as it relates to finding your next place to live.
7. Although high security clearances often require credit reviews, I have never had a seller have trouble renewing their security clearances because of a short sale. Especially in these circumstances, short sales are preferred over foreclosures.
8. Some sellers are eligible for financial assistance when they file for a short sale… It’s mind blowing and I know it, so let me say that one again: YES, some sellers receive CASH from their lender for doing the short sale.
9. Short sale sellers without extenuating circumstances can restore their credit to above 700 – in most cases – within 2 years.
10. Most short sale sellers can be eligible for a home purchase loan in as little as 3 years (via an FHA loan which only requires 3.5% down). Some sellers can get loans sooner.

These 10 things reflect “typical” experiences with short sales…. it does not account for every “what if” which may apply to you.  I am happy to talk with you more to learn about your circumstances and then I can provide you with information about what the most likely scenario is for you, should you need to do a short sale.

Vicky Chrisner, Fieldstone Real Estate

703-669-3142

MyAgentVicky@Gmail.com