By JOEL LANDAU Staff Writer Press of Atlantic City

GALLOWAY TOWNSHIP — Joe and Stephanie Tucci spent a year and a half looking for the right house.

And six months after submitting a bid, they’re still waiting and waiting and waiting to find out whether it will work out.

Stephanie and Joe Tucci, of Mays Landing, stand in front of a Galloway Township home that they hope to buy in a short sale. They submitted a bid six months ago and have been waiting for bank approval.

The township home that the couple bid on is a short sale, which means the owner of the house could no longer afford to pay its mortgage and is working out a deal with the lender to sell at a price lower than what the owner owes. When a potential buyer makes a deal with the seller, the lender’s approval is required for the sale to take place.

Local real estate agents say short sales are becoming a larger part of the local market and can often translate into a lower price for a buyer willing to be patient.

“People walk away from short sales because they get tired of waiting,” said Robert Shamberg, owner of Prudential Diversified Realty in Galloway Township. “Everyone wants a deal. Everyone knows short sales are a good deal. But they may not realize it takes a lot of time.”

The home could have several lenders that all need to be satisfied, Shamberg said. The bank could take longer than expected to give an answer or make a counteroffer, he said.

Shamberg counseled Joe and Stephanie Tucci through the process and said they could get a good deal if they were willing to wait. The couple placed a bid at $200,000, which Shamberg said is about $50,000 less than a realistic market value.

But sellers and banks are often willing to accept less rather than go through the long and costly foreclosure process.

That’s the hope of the Tuccis, who fell in love with the home that was recently renovated and features an open kitchen and cathedral ceilings. The couple placed the bid in April and hope to hear within the next few weeks.

“You can get a really good deal but you have to have time,”Stephanie Tucci said.

The couple has continued renting in Mays Landing and have looked at some other homes as a potential backup plan.

“It’s just a waiting game,” Joe Tucci said. “Hopefully they’ll take our bid or they’ll lose out and have a vacant property.”

Brenda Lawn, a real estate agent for Prudential Fox & Roach in Northfield, said short sales are an “absolute roller coaster”that can take an emotional toll on the buyers.

“The first thing I do is educate them. I tell them it’s a long process and there will be a certain degree of frustration,” she said. “It’s hard to do that. The buyers are so enthusiastic. But it really is difficult because it doesn’t always have a happy ending.”

Lawn said short sales and foreclosures have taken up as much of a third of the housing market in most of the region.

She said she’s had buyers wait between three months and a year for the bank to approve a deal, but Jeff Quintin, of Prudential Fox& Roach in Ocean City, said he has had some recently that took only a few months.

Conducting a short sale “is a skill providing you know how to manage the lenders and structure the deal properly,” he said. “If you know what you’re doing and get it structured the right way, a short sale can be like a typical sale.”

Quintin said larger banks may not open the file on the property until the bid is submitted, so it’s impossible to know what the bank would accept.

“In most cases there is not a predetermined (price) for the short sale unless you have already gone through the process,” he said.

But a short sale is often worth it to the bank considering it can take more than two years to foreclose on a property owner, Quintin said.

“You never know what a bank will approve,” he said.

Short sales also benefit the seller because they avoid foreclosure and leave the seller in a better position than if they waited to get more money on the sale, Quintin said.

“Their credit may go down 100 points but they can improve it faster than the market can improve itself,” he said, adding many sellers are finding it too difficult to redo their loans.

And the program has had its results.

Quintin said he recently had a home valued at $4 million approved for a $1.425 million short sale in Ocean City. Another Ocean City property valued at $2.765 million closed at $780,000, he said.

“The buyer is always getting a property under market value,” he said. “It’s worth it many times to go through it.”

By Jeff Reeves, editor for InvestorPlace.com

Now could be the best time in history to buy a home. Presuming, of course, you have the money and the credit to do so.

The average rate on a 30-year fixed mortgage hit record lows last week, down to 4.01%, according to Freddie Mac. The Federal Reserve’s recent “Operation Twist,” which was designed to do just this, appears to be doing the trick.

There are a lot of reasons to consider buying a home right now. The big savings on interest is just one of them — the difference between a 4% rate and a 5.5% rate on a $200,000 home loan is just shy of $200 in monthly payments and can save a homeowner more than $60,000 in interest payments across the life of the loan.

Another motivating factor could be the fact that rents remain sky-high in the U.S. right now, and in many markets it’s actually cheaper to buy a home than rent a two-bedroom apartment.

While housing might not be at a “true” bottom just yet, there are many signs it is nearing one in many markets. Housing prices rose from June to July in 17 of 20 cities tracked by the Standard & Poor’s/Case Shiller home price index. It marked the fourth straight month of rises in most U.S. cities.

That’s to say nothing of the case-by-case bargains to be had. Here are two personal stories that show the opportunities to be had in this housing market:

I live in the Washington, D.C., area and purchased a short-sale home in 2009. Although three months of back-and-forth with the bank drove my wife and me crazy, we finally closed on the property just hours before a foreclosure auction — after which my Realtor asked if I wanted to immediately re-list my home with him for about 30% more than we had just paid. I had purchased the property for a growing family and good schools, so I politely declined. But the message was clear: If you suffer through a painful distressed property purchase, you get a hefty discount for your trouble.

On the other side of the coin, my brother purchased a newly constructed home in Roanoke, Va., as his wife attended medical school at Virginia Tech. Seemed like a good idea at the time — but now he’s 40% upside down on his house and renting it for barely enough to cover the mortgage. Unfortunately, he now lives six hours away, so it’s no picnic to manage his rental. My brother recently decided he has enough stress in his life so he will list the house at slightly below market rate just to get rid of it — even if it’s going to cost him big-time. Very bad for him, but some lucky southwest Virginia family is going to get a nearly brand-new home for a heck of a deal.

I’m sure many of you have your own story to tell about the housing market. Share it with me (see below) or better yet, post it in our comments section so everyone can read and weigh in.

There are plenty of other bank-owned homes or desperate sellers that folks can pursue, with deals akin to the two listed above. But the million-dollar question, of course, is whether prospective homeowners can get a loan — and if they can, whether they want one.

After the mortgage meltdown, banks have wisely tightened lending standards . That’s as it should be, but it understandably shuts many folks out of the market. Other people have good credit but don’t have the necessary savings for higher down payments some lenders now require. That’s to say nothing of folks who perhaps could sign up for a new home but are just too uncertain about their job or retirement.

Whatever the reasons, it all adds up to a decided lack of demand in the housing market. Many factors have created great deals right now, but those factors also might just be too daunting for many to overcome right now.

I remain convinced that I made the right choice in buying my home — not because it was an “investment,” but because it’s in one of the best public school systems in the country and I now have two beautiful daughters who wouldn’t fit very comfortably in an apartment. And by the way, that two-bedroom apartment rented for only about $100 less a month than my current mortgage. Buying a home was the right thing for my family, and for my finances.

And perhaps that’s the biggest lesson of all: The best reason to buy a house is because it will become your home — not a path to profits.

Timing is everything ! Everything is timing !

Reuters is out with a new report on the state of real estate in Dubai. According to the report, prices in Dubai are expected to continue to decline. Here on the Jersey Shore in Cape May County, we are expecting prices to steady. Unlike many international markets we continue to have an influx of yearly vacationers to Sea Isle City and the Jersey Shore.

Buyers have been enjoying the benefits of the lower than normal interest rates are quietly buying up most of the low hanging real estate before next spring when the sellers seem to have some footing on the prices and have the benefit of the summer rental income wind at their backs.

My peers and I used to joke about having clients cruise down during snow storms with borrowed SUV’s to get a brand new property listing under contract before the weekend when herds of potential home owners would weigh down the Islands with cash filled pockets and deposit checks already written and signed before even seeing the house.

To put this in prospective this is the fall and winter season that buyers will be rambling down for the last of the distressed inventory. More of the available properties are priced to market than anytime in the past seven years.

Contact Ian or any well trained agents of The Lazarus Team, The Landis Co., Realtors, for market data that an engineer would cry for. We can explain the information so that your four old grandchild can grasp as long as he didnt just get off the boat from . . . . .

Get the point? We do easy, easy ! As my son Rami says “Relax and let use do the heavy lifting.” The apple doesn’t fall far from the tree I see.

For all of the reader who have been lulled to sleep over the past seven years and congratulating themselves in not getting caught purchasing a shore home at the top of the market for what ever reason. Don’t get to cocky because even the smart and very smart money are moving in.

Let us know what part of the buying process we can help. We are saving our clients thousands of dollars today!

For those who are interested we do have a Jersey Shore Foreclosure & Short Sale Email List Available.

From the beautiful beaches of the Jersey Shore to Florida , I serve discerning home buyers and sellers.

Sea Isle City, NJ – Outer Banks, NC – Corolla, NC – Greenville, NC – Fort Lauderdale, FL

Houses are more affordable than they’ve been in a decade.

Jersey Shore Waterfront Home

By Pat Mertz Esswein, Associate Editor

From Kiplinger’s Personal Finance magazine, October 2011

1. Prices have nearly hit bottom.

In most areas, most of the excess has finally been wrung out of the market. But if you’re buying a first home or looking to trade up, there’s no need to rush. Although prices may fall some more — blame foreclosures still working their way through the system and tighter credit — they won’t fall by much. Fiserv Case-Shiller, which tracks home prices, forecasts that the median price nationwide will ratchet down for about six more months, then stay flat for three or four years.

In most of the cities where home values experienced a double dip after the expiration of the home buyer’s tax credit in mid 2010, median prices won’t fall below their 2009 or 2010 lows, says David Stiff, Fiserv’s chief economist. These cities include San Francisco, San Jose, San Diego and Washington, D.C. But in cities with lingering oversupply of homes for sale, Fiserv forecasts a decline of 10% or more in the median home price (for the year ending March 31, 2012). These cities include Riverside–San Bernardino, Cal.; Las Vegas; and Miami.

2. Houses are affordable again.

Homes haven’t been this affordable since 1991. Economists often define affordability as the ratio of median home price to median family income. According to Fiserv Case-Shiller, the U.S. ratio now stands at 2.6 — down from a peak of 4.1 in mid 2005 and just under the long-term average of 2.8. Of course, some areas continue to defy affordability. In California’s coastal cities and the New York metro area, the ratio is 5 or more. Average mortgage payments are another way to look at affordability. Since the housing market’s peak in 2006, the average principal-and-interest payment in the U.S. has fallen from $1,063 to $645.

Renters considering the jump to homeownership may be encouraged by the price-rent ratio, or the median home price divided by the median annual rent. In 2005, the national median home price had inflated to nearly 21 times the median annual rent, according to Marcus & Millichap, a commercial real estate brokerage company in Encino, Cal. Since the bust, the ratio has deflated to 14, less than the historical average of 15. During the same period, the difference between the median monthly mortgage payment and median monthly rent fell from $745 nationally to $102. Marcus & Millichap expects rental vacancy rates to hit pre­recession levels this year, allowing landlords to raise rents by an average of 3.5%.

3. Mortgage rates won’t go any lower.

For the past couple of years, interest rates have hovered at levels last seen when the veterans came home from the Korean War. According to HSH.com, which tracks mortgage rates, at the beginning of August the national average 30-year fixed rate was 4.5%. FHA loans, which require only a 3.5% down payment, had a 4.3% rate. Adjustable-rate mortgages are even cheaper, and even rates for jumbo mortgages have hit lows not seen since the 1980s.

Freddie Mac forecasts a 30-year fixed rate of 5% by year-end and 6% by late 2012. Standard & Poor’s downgrade of the U.S. credit rating won’t have an immediate effect on rates because of the weak economy. But credit is tighter, and you’ll need a credit score of 740 or more and a down payment of at least 25% to nab the lowest rates. If you fall short of that, you’ll pay interest-rate risk premiums if the bank plans to sell your loan to Fannie Mae or Freddie Mac. For example, lenders must charge an extra 0.25 point if a borrower has a 740 credit score but puts down less than 25% (but at least 20%).

4. It’s a buyer’s market.

Demand is low; supply is high. In early summer, the National Association of Realtors reported that sales of existing homes (single-family houses and condos) fell by 9% from the year before. NAR also reported 9.5 months’ supply of homes. That’s how long it would take to sell all the homes on the market at the current pace of sales, and it strongly favors buyers. (Four to six months’ supply is considered balanced between buyer and seller.)

With so much selection, you’ll find more properties in good school districts or near your job, or homes that offer added value, such as a mother-in-law suite, says Thomas Popik, research director with the Campbell surveys of real estate professionals. You’ll spend less time shopping and competing against other bidders. And you don’t have to waste time with sellers who set unrealistic prices (although they’re still out there).

One caveat: If you’re searching among entry-level homes, which had more extreme price declines than upper-end houses did over the past year, you may face stiff competition from investors. They typically pay cash, which makes them attractive to sellers who want to close the deal fast. However, says Popik, you may find opportunities in homes that were bought and fixed up by investors, who intended to flip them but have had difficulty making a sale.

5. You may find a distressed property.

Bank-owned foreclosures (or REOs, for “real estate owned” properties) sell for an average discount of 35% off the per-square-foot price of conventional homes for sale, according to RealtyTrac. In the first half of 2011, lenders owned about 870,000 REOs but listed only about one-fifth of them for sale, concentrated in such high-foreclosure states as Arizona, California, Florida, Michigan, Nevada and Ohio; even with the slowdown in the foreclosure pipeline due to legal-processing issues and new supply exceeds sales. Find more on buying foreclosures.

Short sales, or homes sold with lenders’ permission for less than their owners owe on their mortgages, have also grown in number. Lenders have become more amenable to them as they seek to avoid the often huge losses associated with foreclosures, says Rick Sharga, of RealtyTrac. Short sales offer buyers less of a bargain than REOs, but the homes tend to be in better condition. Banks may still take two to six months to sign off on a short sale, so patience is imperative.

6. Homeownership is still attractive.

A home is the biggest purchase most people ever make. But deciding whether and what to buy isn’t purely a financial decision, says Chris Herbert, research director at Harvard’s Joint Center for Housing Studies. When you own a home, you can control your living environment and security, upgrade and change your home as you see fit, and create a sense of rootedness in your community.

You can offset some of the cost of homeownership by deducting mortgage interest. But don’t mistake a home for an investment, at least not in the short run. “If your goal is to jump in and get a return of 6% annually, that’s a bad idea,” says Fiserv’s Stiff, given the forecast for weak price appreciation. Instead, you need to commit to owning the home for at least five to seven years to ride out any further price declines and recoup your down payment and transaction costs. If you think that you might need a bigger home before that time to accommodate a growing family or that you might have to move to another area for your job, don’t buy unless you’re willing to become a long-distance landlord.

Shop carefully, and be patient. Exclusive buyer’s agent Michael Crowley of Spokane, Wash., tells buyers it may take three to four months to find the right house. “We can be in a hurry, or we can be particular, but we can’t be both,” he says.

Florida Real Estate Agents:
Florida Enhanced Short Sale Relocation Assistance
Florida homeowners may receive $5,000 to $20,000
in relocation assistance.

Bank of America encourages distressed homeowners to explore a short sale as a viable option for avoiding foreclosure. To that end, for a limited time we are offering enhance relocation assistance to help motivate homeowners to engage with us on a pre-offer short sale. An additional benefit for these pre-offer programs – such as the Home Affordable Foreclosure Alternatives (HAFA) and Bank of America’s proprietary program – is that deficiency may be waived for the homeowner.

Eligibility:

• Homeowners with property in Florida
• Short sales initiated without an offer between September 26 and November 30
• The customer will have to be eligible for one of the without offer programs such as the HAFA program or our proprietary program (specific investor participation and eligibility criteria do apply to these programs)
• Successful closing of the eligible short sale by August 31, 2012
• Minimum relocation assistance is $5,000 and maximum is $20,000, with the specific amount calculated based on the unpaid principal balance

Exclusions:

• Ginnie Mae, FHA, VA and USDA loans are ineligible for participation
• Lot loans are ineligible for participation
• Properties outside the state of Florida are ineligible for participation
• Short sales initiated with an offer are not currently eligible for the enhanced relocation assistance

Frequently Asked Questions:

Q: How can I find out if my client/homeowner qualifies for this relocation assistance?

A: Call a Bank of America short sale specialist at 1-877-xxx-xxxx.
Monday – Friday 8 a.m. – 10 p.m.; Saturday 9 a.m. – 5:30 p.m. Eastern

Q: Do I have to do anything differently when initiating or completing the short sale?

A: No. As long as the homeowner’s short sale is initiated between September 26 and November 30, 2011, and the property closes by August 31, 2012, they will be eligible.

Q: Will the relocation assistance funds be reported on the HUD-1?

A: Yes, they will be documented on the HUD-1, and a 1099-MISC will be issued.

Q: Can the relocation assistance funds be used to pay off existing liens?

A: Yes, if the investor approves it.

Q: Is the relocation assistance added to any other incentives, such as the HAFA or Bank of America proprietary program incentives?

A: No. A homeowner will receive the $5,000 to $20,000 in place of the typical incentive paid out by these programs. The relocation assistance is essentially an enhancement to the standard payout offered on these programs.

Q: Is the enhanced relocation assistance available for other programs?

A: Currently, the enhanced relocation assistance is only available to short sale programs initiated without an offer. However, as we gauge the success we may extend this incentive to other programs.

Questions?

Homeowners and may call Ian Lazarus, Abraham and Associates, Davie, Florida. 609-457-0258 ian.lazarus@mygo2realtor.com

Short Sale vs. Foreclosure

Give Yourself Plenty of Time to List and Sell That Short Sale

By Elizabeth Weintraub,

If you’re thinking about doing a short sale, it’s smart to try to time the listing of that short sale. People are always trying to time the real estate market, and it really can’t be done. But you can be strategic about when you list a short sale.

There is an absolute worst time to list a short sale. That time is a few weeks to a few days before the sheriff’s sale or trustee’s auction. Ideally, you want to be as far away from that date as possible. Because there are too many things that can go wrong in a short sale.

Basic Steps of a Short Sale

• First, you need to find a committed buyer.
• Your agent will send the accepted offer and all paperwork to the bank.
• The bank will screw around for a few months, ask for more paperwork, lose stuff, demand revisions, in general, make your life a living hell as the bank’s collection department continues to hound you.
• Finally, somewhere between 2 to 4 months, on average, you will receive a short sale approval letter from the bank.
• Elated, your agent will notify the buyer, who will have canceled without telling anybody.
• You start the short sale over.

You may think I am joking, and while I have firmly planted tongue in my cheek, this scenario is all too familiar to many of us in the short sale business. With any luck, you have hired a short sale agent who is prepared for disaster and will not give up on you, no matter what.

Because starting over on a short sale is not the end of the world. It only becomes scary if you are behind on your payments. Many short sale lenders will not consider a short sale for a borrower if the borrower is not in default. Whether you should stop making your mortgage payments depends entirely on your lender’s guidelines.

If you are doing a Fannie Mae short sale, for example, Fannie Mae says you must be in default at the time your short sale is granted. Yes, our government is telling homeowners to stop making mortgage payments. It’s disgusting, isn’t it? But Fannie Mae is a government-sponsored entity that is supposed to be making a profit. It is not a non-profit organization.

If you are too close to the auction date, closer to that date than to closing your short sale, the likelihood is Fannie Mae will direct the bank to foreclose and reject your short sale. Therefore, you don’t want to get too close to that auction date. It’s a matter of careful juggling.

On the one hand, you might need to be in default. On the other hand, you don’t want to be so far into default that the bank will seize your home. Every state’s default procedures are different. You should check with a lawyer to find out the default period in your state.

If you stop making your mortgage payments, you could lose your home. It might be wise to keep those payments in reserve in case you need to bring your loan current to stop the foreclosure. However, if you have a lot of money in the bank, you might have a difficult time writing your hardship letter to explain your financial hardship. Unless you are doing a Bank of America cooperative short sale, the likelihood is your bank will want you to prove some sort of hardship.

The Ideal Time to List a Short Sale

You need time to properly market your home for sale, receive offers and to select the best offer to present to the bank. You want a buyer who will wait for approval. Sometimes buyers write offers just to see which offer is accepted first by a short sale bank and that buyer might not be dedicated to buying your home. Not every real estate agent is an honest agent, and an agent might not disclose if the buyer is writing multiple offers.

The best time to list a short sale is to time the listing so the bank receives an offer at a few weeks prior to the official 30-day behind mark. For example, if your mortgage payment is due on June 1, it will be 30-days delinquent on July 1. Therefore, July 1 might be the target date for your bank to review the short sale. If the bank takes 10 days to process the paperwork prior to review, you will want the offer to arrive at the bank around June 18th.

Most banks take 10 days to 2 weeks to pull together the documentation and assign a negotiator to study the file. From that point forward, it can take a few more weeks or months to get approval. Some banks are faster than others. Ideally, you want to leave yourself enough time that if a buyer flaked out on you or a bank required that you perform some other action that eats time, that you have the time to resubmit an offer.

The best time to talk about listing a short sale is before you go into default. Talk to your agent about your bank’s guidelines. You might not need to be in default at all to do the short sale. But if you must in default, then put that home on the market as fast as can you can. Do not wait for a good time. When you’re in default, there’s no such thing as a good time to list a short sale. Just do it.

SEARCH JERSEY SHORE PROPERTY HERE

Brought to you by Ian Lazarus

The Lazarus Team

The Landis Co., Realtors

609-457-0258 direct cell

ian.lazarus@mygo2realtor.com

Are you late on payments Sea Isle City, Avalon, Stone Harbor, The Wildwoods or any other city in New Jersey?

Cape May County Ethical, Trustworthy Professionals that Represent YOU!

House or Condo worth less than what you paid for it?

We can help

The Cape May County, Sea Isle City, Avalon, Stone Harbor, The Wildwoods or any other city in New Jersey Short Sale Solution: 

We understand that this is a sensitive time for you and are compassionate to your needs and will try to make this process as easy and painless as possible from this point forward. Trustworthy, ethical professionals.

When a lender or mortgage holder agrees to do a short sale, it means the lender or mortgage holder is accepting less than what is owed on the mortgage.

A short sale means the seller’s lender is accepting a discounted payoff to release an existing mortgage instead of foreclosing.

Sell Your Home in the Sea Isle City, Avalon, Stone Harbor, The Wildwoods or any other city. – Avoid Foreclosure on Your House or Condominium with a Short Sale:

Why us?

The Lazarus Team can help you with your short sale locally in Sea Isle City, Avalon, Stone Harbor, The Wildwoods or any other local city in New Jersey. We have vast experience in the short sale process in Cape May and Atlantic County . Along with a local New Jersey attorney who’s a short sale expert we can provide the best chance of getting you out of your home and avoid foreclosure. You must be with a company that knows what they are doing. If you are looking for a company in the Sea Isle City, Avalon, Stone Harbor, The Wildwoods areas to help you with the sale of your home or condo you want trustworthy and ethical people helping. We have a HUGE success rate closing short sales.

We understand this is a sensitive time for you and are compassionate to your needs and will try to make this process as easy and painless as possible from this point forward.

       With an experienced New Jersey attorney on your side you will have the best advice

       With a experienced New Jersey Realtor you’ll have local assistance

       We provide the same quality level service we would expect

       If you have any questions regarding the short sale process we will answer them or find out the answers as quickly as possible

Trust and Ethics above everything else! With the sharks swimming and taking advantage of many people in financial distress you can rest well at night knowing we are on your side.

Jersey Shore Opportunities

By Bernice Ross, Tuesday, September 7, 2010

The tsunami of bad real estate news seems to grow daily. The key to overcoming the tidal wave of bad news is to identify the opportunities in your local market and then target your business to maximize your sales.

The National Association of Realtors reported that existing-home sales in July hit a 15-year low. Although NAR still expects existing-home sales to surpass the 5 million mark this year, the annual rate of sales dipped to a seasonally adjusted 3.83 million homes during July, down from June’s pace of 5.26 million.

If you would like to do more business, here are three opportunities worth investigating for your business.

1. Interest rates are down, making homes even more affordable
As of December 2008, interest rates were at 5.1 percent. A year ago they were averaging 5.12 percent. Today’s average is 4.42 percent. That’s a 13.7 percent decline from 2009. The housing affordability index has also decreased by 5 percent since December 2008.  

Opportunity: Buyers are often worried that prices may decline. News reports that discuss a double-dip recession or the possibility of further price declines make both buyers and sellers skittish. The net effect is that many potential clients are afraid to take action. To motivate your buyers to take action now, point out the historically low interest rates.

Because of the way mortgage loans are amortized, the reduction in a borrower’s monthly payment is not directly proportional to the reduction in interest rate. A 13.7 percent reduction in interest rate, for example, will reduce a borrower’s monthly mortgage payment by a little less than 8 percent. So a monthly mortgage payment that would have been $1,000 in December 2008 would be about $923 today.

When buyers voice their concerns about prices declining further, here’s another way to handle their concerns:

“Mr. and Mrs. Buyer, did you know that by buying now your mortgage payment would be almost 8 percent less than it would’ve been at the end of 2008?”

To really drive home this point, explain what happens when interest rates increase. For example, if interest rates increase from 4.42 percent to 5.42 percent on a $200,000 loan, the buyer will pay $43,802, or 27 percent, additional interest over the life of a 30-year loan. If the interest rate increases from 4.42 percent to 6.42 percent, the buyer will pay $89,908, or 56 percent, additional interest on a $200,000 loan.

Another strategy for closing is to ask, “How much do you believe this property will be worth a year from now?”

If the buyer believes that the market will be down by 10 percent, suggest, “Would you like to see if you can buy this property with this year’s great interest rates and next year’s price?”

2. Serve the bargain-hunter and investment market
According to the latest data from the Mortgage Bankers Association, the nation’s overall delinquency rate dropped from 10.06 percent to 9.85 percent in the second quarter of 2010. The percentage of seriously delinquent loans (current REO inventory or homes that are 90-plus days late) dropped from 9.54 percent to 9.11 percent.

While these numbers provide some glimmer of improvement, HAMP (Home Affordable Modification Program) cancellations have increased by approximately 50 percent. Furthermore, the number of loans that have gone into default and then brought current has declined by 25 percent. These two numbers suggest a significant increase in REO inventory in the upcoming months.

Opportunity: Smart investors are contrarian. They purchase when buyers are not buying and sell when sellers aren’t selling. Reach out to investors and those who are searching for bargains. Provide your Web visitors with a list of the REOs that are the best-priced and in the best condition.

If you are working with short sales, give priority to those where the bank has already set a potential sale price. Also, don’t forget about regular sellers who have to sell. These homes are often the best values in the market because they have been well maintained and haven’t been sitting vacant for months.

3. Global buyers still want U.S. real estate
Did you know that global buyers close 50 percent of their transactions as compared to 33 percent for domestic buyers? Did you also know that agents who represent clients from outside the U.S. earn 50 percent more on average than those who don’t have global clients?

Working with buyers from elsewhere in the world has several other advantages. Global clients are accustomed to large downpayments. They are also likely to pay all cash. This group may be one of the most important market segments that can help to stem the tide of foreclosures.

There are opportunities in every market. It’s simply a matter of recognizing the trends in your local market and then focusing your business on those areas that are most likely to generate the highest rate of return.

Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of the NAR #1 Best Seller, “Real Estate Dough: Your Recipe for Real Estate Success.” Hear Bernice’s five-minute daily real estate show, just named “new and notable” by iTunes, at www.RealEstateCoachRadio.com. You can contact her at Bernice@RealEstateCoach.com or @BRoss on

Deed in lieu of foreclosure

By Sean Sposito/The Star-Ledger

February 11, 2010, 4:00AM

AP PHOTO The fourth-largest mortgage servicer in the country is offering homeowners in New Jersey who are 90-days late on their payments a chance to walk away with cash.

CitiMortgage, a unit of Citigroup, will announce today a trial program that lets borrowers remain in their homes for six months after signing a deed-in-lieu of foreclosure contract — so called because owners agree to hand over their homes to the lender.

These borrowers also will receive at least $1,000 in relocation expenses.

“Basically, the lenders are giving defaulted owners cash for their keys,” said James Bednar, who writes a real estate blog at njrereport.com.

He said some participants could eventually end up saving as much as $20,000 after relocation expenses and mortgage payments.

The process, however, isn’t simple.

To participate, the borrower’s first mortgage must be with Citi and there must be no other liens on the home. Even then, the bank can turn down a deal after taking a closer look.

Still, it offers some benefits for the bank. Rather than going through a costly foreclosure, the bank gets the property without paying lawyer and court fees. And under the new pilot program, Citi does not have to wait eight months to a year-and-a-half after filing an initial foreclosure notice before getting its hands on a property.

“It’s probably going to take you 200 days to just get up to the sheriff’s sale mark,” Bednar said.

Real estate agents also said the program could have an adverse effect on New Jersey’s already troubled housing market by driving down prices.

“They’re going to have to be at a lower price than everyone else,” said Sal Poliandro, a Saddle River-based real estate agent, of the homes that will eventually go up for sale. “Not only are they going to have these houses on the market, they are going to be encouraged to sell them quickly.”

But the program is relatively small. And while a spokesman for the lender could not say how many people will be eligible for the pilot here, he did say the lender only expects a small number of owners from New Jersey, Texas, Florida, Illinois, Michigan and Ohio to participate initially.

“We’re ramped up to handle about 1,000,” said Mark Rodgers, a New York-based CitiMortgage spokesman. “If we get close to that number, we would have to reconsider.”

Citi is eventually expecting about 20,000 participants in total. There is no end date for the program. Share/Bookmark]]> http://findashorehome.com/2010/02/11/citimortgage-offers-option-n-j-homeowners-default/feed/ 0 http://findashorehome.com/2010/02/11/truth-short-sales-last-minute-concessions-break-deal/ http://findashorehome.com/2010/02/11/truth-short-sales-last-minute-concessions-break-deal/#comments Thu, 11 Feb 2010 21:16:06 +0000 Ian Lazarus http://findashorehome.com/?p=225 By Dian Hymer
Inman News February 09, 2010

Buyers often shy away from considering short-sale listings, either because they’ve had a bad experience or have heard horror stories about the deals that take forever and never close. Buyers’ agents sometimes steer their clients away from sales that are subject to the lender agreeing to accept less than what they’re owed, because it can mean a lot of work for nothing.

Short sales will probably be a part of the home-sale market for the next couple of years. They provide opportunities for buyers, particularly those attempting to buy a home in a low-inventory market.

Before you enter into a contract to buy a short-sale listing, make sure that you understand the process and set your expectations accordingly. One of the biggest differences between a short sale and a conventional sale is that short sales take longer. Although many lenders are streamlining the short-sale process, it can still take 45 days from contract acceptance to receive lender approval.

Make as clean an offer as possible, but be sure to include contingencies for inspections and appraisal and loan approval. Your contract should also include a short-sale addendum that includes a time frame for lender approval.

Listing agents often want the buyers’ contingencies to begin when the offer is accepted by the seller. However, buyers usually prefer to pay for inspections and the appraisal after lender approval. As in all home-sale transactions, these items are negotiable.

Your short-sale offer will stand a better chance of lender approval if you are preapproved for financing. Include verification of the funds needed for your downpayment and closing costs and a preapproval letter from your lender with your offer. The ratified purchase offer and supporting documentation from the seller and listing agent will be submitted to the lender.

Short-sale approval is often contingent on the buyer and seller making concessions. This means that the lender could ask the buyers to pay a higher price. The seller could be asked to bring money into escrow so that the lender nets more from the sale than the contract provides. If either party is unable or unwilling to do so, the transaction will fail unless the lender reconsiders.

HOUSE HUNTING TIP: Regardless of how committed you are to buying, it’s not wise to bid on every short sale you come across that might work for you. Approximately one-third of the short-sale listings on the market don’t close, either because the lender won’t approve a realistic price, or because there are multiple liens secured against the property. Generally, if there are more than two liens, the likelihood of the short sale going through is slim.

Don’t look at a short-sale listing until your agent has talked with the listing agent to find how much ground work has been done. Does the listing agent have the sellers’ written authorization to negotiate on their behalf with the lender? Has the listing agent been in touch with a representative of the lender’s loss mitigation department? Have the sellers provided all the documents that will need to be submitted to the lender when an offer is accepted, such as a financial statement, hardship letter, bank statements, pay stubs, etc.

Stay away from short-sale listings where the listing agent doesn’t have the seller’s cooperation. For instance, the sellers may not have their paperwork in order to present to the lender. Understandably, it’s difficult for most people to face losing their home and good credit. But, without the sellers’ cooperation, the sale won’t go through.

THE CLOSING: Short sales require a lot of patience, a cooperative effort between the buyers, sellers and agents involved, and frequent communication to keep everyone involved in the process up-to-date.

Dian Hymer, a real estate broker with more than 30 years’ experience, is a nationally syndicated real estate columnist and author of “House Hunting: The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide.”