Frequently Asked Questions
What is foreclosure?
There are a lot of alarming statistics out there about foreclosures. But when you understand what a foreclosure is and how it works, it takes some of the fear out of the unknown.
To break it down to its bare bones, a mortgage foreclosure happens when a lender exercises its lien against a borrower's home in order to sell the house to pay off the mortgage loan. This, of course, only happens after the borrower has failed to make mortgage payments for an extended period of time, has ignored notices that the payments are behind, hasn't bothered to call the lender to see what can be worked out. So how did we get from popping the champagne cork on closing day to having our belongings set out on the lawn? It didn't happen overnight:
Step 1 - Notice of default is recorded by the bank
This happens after you've missed a payment. Usually, especially in the old days, it happened after several payments were missed. Banks are tightening the reins, however, trying to move homeowners to action long before the point of no return. So you've missed one or several payments, and now the bank officially records the notice of default.
Step 2 - Opportunity to reinstate the loan
This sounds pretty hopeful, doesn't it? You can reinstate your loan! You have the power to stop the foreclosure process anywhere along the way-until five days prior to the auction of your home.but we're getting ahead of ourselves. How do you reinstate the loan? Bring your loan payments current plus the late fees and whatever penalties are assessed, and you have just reinstated your loan. You've stopped the foreclosure. You won't lose your house.
Step 3 - Date of foreclosure is set by the bank
But what if you can't beg or borrow the back payments and other fees? Is all hope lost? Not quite. We've come to the third step of the foreclosure process: the bank sets a date of foreclosure. Typically, the date is three months (about 90 days) after the bank sets the notice of default. You are allowed to live in the house until the actual date of foreclosure. You cannot be evicted or thrown out of the house until this date. You still have time to come up with that money.
Step 4 - Notice of trustee sale is prepared, published and posted
Now the bank prepares the notice of trustee sale. The bank will publish it (you've seen those notices in your local newspaper). The bank then mails you a copy of the notice and physically posts it on the outside of the house. You still have time to bring the payments current.
Step 5 - The house is sold at a foreclosure auction
We've come to the final step: the foreclosure auction sale. If you are still living in the house and it is sold to a bidder at the auction, the winning bidder can have you evicted by the sheriff within 24 hours. If the house doesn't sell, the bank will show the house just like you would if you were selling the house yourself. The bank may also have you evicted within 24 hours, or the bank may decide to let you stay until the house sells.
If you miss a payment, don't let it turn into two. Find the money, even if you have to borrow from family or friends. Although the process can be stopped anytime up to five days before the sale, the earlier you intervene, the easier it is to stop.
Please contact me if you have any questions.
What is a short sale?
A short sale means the seller is trying to get their lender to take less than what is owed on the home. For example, say the seller owes $250,000, but the home is only worth $200,000. If the seller cannot afford to pay the mortgage and cannot sell the home, it will go to foreclosure.
The banks do not want to foreclose on homes and have to deal with a lot of empty homes, vandalism, broken water pipes, tenants and other problems. They are in the money business, not the real estate business!
Short Sales are not short! They can take 6-9 months or longer to close and more often than not they never do close.
Enter, the short sale. The way this works is the seller has to convince their lender to take the "Short" amount instead of going through foreclosure. In our example, the bank might get $200,000 instead of $250,000 to avoid taking the property back.
Because of how complex they are, how long they take to get approval, and the relatively low success rate of completion, most first time buyers avoid short sales if possible. Most of the time, there are no repairs done for the buyer because the seller has no money and the bank won't pay for them.
Just because a property is listed with short sale terms does not mean the lender will accept your offer, even if the seller accepts it
How Do I Start the Mortgage Loan Process?
Your financing will make or break your transaction. Financing is the key to making your best offer, especially in a competitive market. Use the icon above to obtain free copies of your credit report. Begin by disputing any untrue or derogatory reporting.
"A" Borrowers typically can get financed anywhere. "A" borrowers usually have excellent credit and will have been in the same line of work for more than 2 years.
"B" Borrowers can be self employed and/or have less than perfect credit. Many fall into this category. FHA and various conventional lenders are excellent sources for this category.
"C" Borrowers may not be able to verify their incomes, employment history or have filed bankruptcy in the last 2 years. Yes, "C" borrowers can still own their own home.
"D" Borrowers typically will need a minimum of a ten percent down payment or will need to rely on seller financing. "D" borrowers can work to increase their credit scores after they get into their desired property and can later refinance once their credit has been reestablished.
"F" Borrowers may lease to purchase until they are able to clean up their credit report to purchase.
Yes, anyone can own their own home. By choosing the icon below you can determine what amount of mortgage you will qualify for.
What Is My Home Worth?
Each home is unique. By filling out the information requested, you will be able to meet us in person when we come to look at your home. There is no obligation. This service is free.
How Do I Find My Dream Home?
Find your dream home by using the icon below to tell the computer what you desire. By using this service you will be the first to be notified when a home that meets your criteria is listed.
What's involved in relocating?
Are you looking to relocate? Simply click on the "request a consultation" icon below and fill out the survey so that we can help you with your move. Your privacy is important to us. Your information will not be shared, sold or exchanged with anyone else.
How Do I get My Home Ready For a Virtual Tour?
- Understand the camera's perspective. The camera will likely magnify clutter and poor furniture arrangement.
- Make sure each room is spotless as the camera will magnify grime.
- Pick up the clutter. Leave 3 things of varying heights on each surface. Ex. A lamp (high), a plant (medium) and a book (small).
- Still photos will give you an idea of what the home will look like on camera. Let in the light and take down distracting articles.
- Make your space appear larger by removing furniture.
- Create a focal point on the farthest wall to create depth of space.
- Cameras love plants and solid color.
- Keep your home as clean for Buyers as the virtual tour.
Should I Buy or Rent?
Consider this, "Will you be moving in less than two years?" If no, then buy. Buying builds equity. Your payment will stay the same. If you keep making the payment at some time in the future the property will be paid for. The Value of the real estate may increase and current federal tax laws favor home owners.
Why Do I Want Representation?
Brokers know about real estate that may not have a sign in the yard for various reasons. 90% of the homes for sale are listed. Besides, it is time consuming to drive around to neighborhoods and open houses. You may take just one weekend off from looking and loose out on your dream home. A Realtor watches the market for you.
What is an Internal Rate of Return?
Internal Rate of Return IRR equates the present value of the cash inflows and the present value of the cash outflows. The decision rule for IRR is if the IRR is greater than or equal to the investor's required rate of return, the investment should be accepted; otherwise it should be rejected.
How Can I get Started Investing In Real Estate?
There are many types of real estate investments. Questions to ask yourself are:
- How much time do I want to be involved in the investment?
- How much money am I willing to deploy to the investment?
- What kind of a return on my investment do I need?
- Do I want something that I can drive by?
- Am I willing to be involved in a partnership?
- Do I need someone to manage my investment for a fee?
What are the 10 Steps To Sell My Home Fast?
- Drive by your home and notice the exterior from a potential buyer's eye.
- Clean the porch and the entry.
- Pack any extra stuff including photos and personal possessions.
- Clean the windows and dust the cabinets.
- Paint the dirty walls.
- Clean the carpets and wash the floors.
- Haul away trash.
- Trim the trees and bushes.
- Clean out the garage and outbuildings.
- Put in new light bulbs.
How will you know if that person is representing you and not "The Company" or "The Builder"?
Call or email us for frank advice and an honest opinion. Be sure to include how we may contact you by including a phone number and/or an email address.