Minna Reid's Blog

Situations that will complicate your short sale

Single mortgage short sales for folks with significant hardships are the simplest short sales to close.  But more often than not, short sales come with complicating factors that will make it more difficult to get your short sale closed.

The most common complications to your short sale are:

• Second mortgages. These are very common, but present another party that needs to approve you short sale.  Second mortgages can make your short sale more complex.
• PMI. Private Mortgage Insurance companies are highly likely to complicate your short sale. Your MI company will be covering any loss to your lender, and will also have to approve your short sale. MI companies tend to be more demanding than second mortgages.
• Judgment liens.  Every cloud on title needs to be resolved in order for clean title to pass to the buyer. Collectors for credit card companies can be very nasty to deal with and are generally very demanding. Be prepared to have to fork over cash to resolve some of these judgment liens. If you’re facing severe debt problems, it’s better to take action before your collectors do.
• Lack of documentation. Haven’t filed tax returns for two years? This will be a problem. Your short selling lender will want full financial documentation in order to process your short sale application.
• Unheated, unpowered home. This makes your home almost impossible to sell. Most buyers won’t pick up utilities in their name or pay your back due fees in order to have a functional home for inspections and approval. Take measures to keep your protected and sellable before moving out.
• Uncooperative title holders/mortgagors. This would be the ex who is on title with you but has gone MIA or Mom who went on the mortgage with you to help you qualify. Anyone on title or mortgage will have to get on board with your efforts to short sell, or it won’t happen.
• Having assets/good credit. The better off you are financially, the harder your short sale will be. You don’t have to be destitute to get a short sale approved, but the more you have –  the higher the odds that you will be required to contribute to your short sale.
• Being current on your payments. While most investors do not have a requirement that you be in default to qualify for your short sale, current borrowers can expect more scrutiny of their financials and have a higher likelihood of being asked for a cash contribution.

GET THE RIGHT HELP! You’ll have the best odds of getting through your short sale successfully and with the least damage by having the right professionals represent you. Choose your short sale agent carefully.

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THE STATISTICS:

Well I’ll just send the keys in then- the bank can have the house!

Just wait a minute there! Unfortunately it’s just not that easy. Despite popular belief that you can just slip your keys in an envelope, mail them to your lender and then walk away from your house- it simply doesn’t work that way.

Giving the house to the bank   – known as a deed in lieu of foreclosure, involves a process and the lender does not have to agree to a deed in lieu. You can call the lender and discuss the deed in lieu and they will tell you what the process is and you can apply. However a deed in lieu is usually not a possibility for you:

• If you have more than one lien against your property
• Until you have attempted a short sale

Most lenders will force you to consider alternative solutions before accepting a deed in lieu, and will want to see your house listed as a short sale for a period of time before accepting the deed in lieu.

After going through their application process, and/or attempting a loan mod or short sale and failing, the lender may agree to take the deed in lieu.

Meanwhile – sending in your keys accomplishes nothing except leaving you a set of keys short for your house.

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The writing is on the wall;  10 signs your home is overpriced

10. You priced along with other homes listed for sale, rather than homes that had actually sold.

9. Despite the fact values have fallen all over town and continue to decline, you believe this doesn™t apply to your home.

8. You priced your home based on how much you spent improving it.

7. You priced your home based on an appraisal from well over 3 months ago.

6. You believe your house is unique and different from all other homes, despite its similarities in size, age, condition and location to other homes. You believe your homes œuniqueness  warrants a higher price than all those other homes.

5. You sincerely believe that if you just stay on the market for long enough,  eventually that one œright buyer will come along, fall in love with your house and pay whatever you’re asking.

4. Despite many  showings, no one has made an offer on your home.

3. Your home has been on the market for a very long time..6 months..12 even.

2. Your Realtor didn™t agree with your pricing, or worse –   the original Realtor wouldn™t list your home at œyour price so you had to search for someone else who would.

1. You are getting NO SHOWINGS. This is the number one sign that your home is overpriced. If its been marketed, but no one is interested in coming inside the market has already rejected your home at its current price.

Whats your CT  home worth?

Minna Reid is  a  full-time, full-service, Connecticut REALTOR ®,   specializing in short sales,  serving  central  and eastern CT including, but not limited to; Andover, Ashford, Bolton,  Columbia, Coventry, Cromwell,  East Hartford, East Hampton, East Windsor, Ellington, Enfield, Glastonbury, Hebron, Lebanon, Manchester, Mansfield, Marlborough, Middletown, Portland, Rocky Hill, Somers, South Windsor, Stafford, Tolland, Vernon, Willington and Wethersfield.      

Small town life in Coventry, Connecticut

Coventry, CT 06238  is a  low-key bedroom community on the outskirts of Metro Hartford.

Located at the end of I-384, just a short commute from Hartford and 10 minutes from the UCONN Storrs campus, Coventry is an attractive place to live for those who work in the city of Hartford or at UCONN.

Incorporated in 1712, Coventry was originally a farming town. Residents were drawn by the fertile soil and Mill Brook provided the waterpower for mills serving the local needs. South Coventry was the center of activity in town. The South Coventry Historic District (in the southeastern part of the town of Coventry, Connecticut, just east of Lake Wangumbaug) is listed on the National Register of Historic Places. Historic Coventry Village retains many of  Coventry’s  earliest buildings and is  currently home to many small local businesses.

The Coventry Historical Society keeps an inventory of   the many old and historical homes in town. Most notably, CT state hero Nathan Hale, was born here in Coventry in 1775. The Nathan Hale Homestead located on 2299 South Main St, Coventry, can still be toured seasonally.

There are several restaurants in town, most notably the Bidwell Tavern on Main Street “ which has a great variety of unusually flavored wings that are ABSOLUTELY DELICIOUS.

Although there has been a lot of development of Coventry over recent years including some commercial development,  the town still retains its quaint country feel. Coventry, along with many of the other small towns surrounding it, is still a fairly rural area with a lot of farmland and many offerings for lovers of the outdoors, including Hop River Trail in nearby Hop River State Park.

Coventry Lake is also one of the main attractions in town offering swimming, boating and a great 4^th of July fireworks display over the water.

Official Coventry, Connecticut Statistics

Get help with buying or selling a Coventry, Connecticut home

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Minna Reid is  a  full-time, full-service, Connecticut REALTOR ®,   specializing in short sales,  serving  central  and eastern CT including, but not limited to; Andover, Ashford, Bolton,  Columbia, Coventry, Cromwell,  East Hartford, East Hampton, East Windsor, Ellington, Enfield, Glastonbury, Hebron, Lebanon, Manchester, Mansfield, Marlborough, Middletown, Portland, Rocky Hill, Somers, South Windsor, Stafford, Tolland, Vernon, Willington and Wethersfield.      

AVOID CT FORECLOSURE

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HOW TO GIVE YOUR LOWBALL OFFER AN INKLING OF HOPE

As  an agent, I will admit I hate writing up lowball offers and I hate receiving them. However, once in a while a lowball offer gets accepted and many times it can open the door to a negotiation that ends in mutual agreement and a sale. The key is in the presentation. There’s a wrong way and a right way.

SUREFIRE WAYS TO EXPEDITE YOUR OFFERS TRIP TO THE GARBAGE CAN:

Not sending a current  preapproval or proof of funds  with  the offer. Who cares if you’re offering 60% of market value. Why should you  have to  prove you have  the money until they accept? Your time is too valuable to be bothered with minor details like that now…

Leave a lot of blanks in the contract –  Sellers name? Unimportant. Close date? You’ll worry about that later. Why bother when you have  7 more lowball offers to write today – right? Just send that sloppy contract!

Compile a list of all the (exaggerated)  undesirable aspects of the property and pull the lowest comps (even if they’re not really all that similar) and make sure these  accompany your offer…An offended seller is highly likely to realize just how badly they need to accept your offer once they are faced with “the truth” about their beloved home. You’ll show them!

There’s really no need to have your agent call or email to discuss the offer with the other agent. Just have them fax it to whatever number appears on the mls and hope for the best. The sellers agent will surely  receive it and understand why the lowball should be considered. ITS A BUYERS MARKET! HELLO? No explanations or discussions  necessary…

Why stop at a low price? In addition to a 25% discount, you will also ask for an inspection and mortgage condition, and for the seller to cover your closing costs, and for those lovely red curtains they had in the living room….and why not have them wash the carpet too? The more you ask for, the more you will receive!

I see the above all too often. If you’re writing up a lowball now and are considering any of the above – stop now and reconsider your approach.

HOW TO PRESENT YOUR LOWBALL OFFER IN ITS BEST LIGHT:

Send a complete contract. Fill out  ALL the blanks and if the property  involves a special situation ( probate, short sale..) address this issue in the contract!

Provide a current proof of funds or preapproval letter with the offer. By the way – if you are offering cash, you need to provide actual proof of CASH –  liquid in your possession. A pre-approval letter for a mortgage is NOT CASH. A note from Aunt Mary saying she will lend you the money is NOT CASH. Your boyfriends bank account – NOT CASH ( or not your cash anyway). A letter from a hard money lender is NOT CASH. SEND PROOF OF CASH IN YOUR NAME IF YOU ARE OFFERING CASH.

Consider the big picture. CASH is always king – that will usually buy you some leeway – BUT WITHIN REASON. If you are offering a low price, it may also be best to ease up on the conditions. And if you have a difficult loan, you probably dont have a leg to stand on with a lowball offer. Trust me you are not the only first time homebuyer with an FHA loan hoping to buy for pennies on the dollar – it just wont happen.

Consider the sellers situation. For example – if its a short sale, dont ask for the personal possessions or offer  a 10 day close as incentive – IT WONT HELP! Being flexible with timeframes and offering an extended time on short sale approval may though overcome a price on the low side…Taylor your offer to the specific needs of the seller.

Have your agent call or email to verify where the offer will be sent and  to prepare the other agent for the incoming offer.

Then stay openminded for negotiations!

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Minna Reid is  a  full-time, full-service, Connecticut REALTOR ®,   specializing in short sales,  serving  central  and eastern CT including, but not limited to; Andover, Ashford, Bolton,  Columbia, Coventry, Cromwell,  East Hartford, East Hampton, East Windsor, Ellington, Enfield, Glastonbury, Hebron, Lebanon, Manchester, Mansfield, Marlborough, Middletown, Portland, Rocky Hill, Somers, South Windsor, Stafford, Tolland, Vernon, Willington and Wethersfield.      

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But my house is worth much more than that….my home is  UNIQUE!

If I only had a dollar for every time I’ve heard this one!

The truth is – ALL HOMES ARE UNIQUE! There are simply no two homes that are exactly alike in every way…

When pricing your home there are some key factors that your Realtor will consider:

• Style of the home ( cape, ranch, colonial, condo, townhouse, etc)
• Age of the home
• Square footage
• Number of beds/baths
• Size of the lot
• General condition of the home
• Any special amenities: Garage, pool, shed, in law apartment, finished basement…etc
• And of course #1 -LOCATION LOCATION LOCATION!

Your home will always fall into a range of pricing along with other homes similar to it and close in proximity. No matter how unique your home is it will still fall into that range. If your home is freshly painted – it will still fall into that range. If there’s a hot tub on your deck- it will still fall into that range. If your home has an extra half bath rarely found in your area – it will still fall into that range. If your home is made of brazilian  logs – it will still fall into that range. If all your appliances are new – it will still fall into that range. If you had all the wall coverings handmade overseas – it will still fall into that range. If your  basement is finished  - it will still fall into that range. If Grampa built the house by hand – it will still fall into that range. If  the home has been regularly maintained  - it will still fall into that range.

While having additional desirable features over other homes similar are nice to have while you live in the home and will help you sell faster,   your home will still sell in line with other homes in the neighborhood, even if it is in fact “UNIQUE”. No matter how  fancy  your 3 bedroom, 2 bath 1500 square foot ranch really is, if all the other 3BR/2BA 1500 square foot ranches are selling in the $180,000 – $220,000 range, no improvement to the home will push the value of your home into the $250,000-$300,000 range.

So while your home is in fact unique, so is every other home for sale in your town. While everyones home is special to them, buyers will not consider your home unique to a point where they will pay over market value for it. Price along with the SOLD comps of similar homes in your area, even if you think your house is “THE BEST!”.

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Minna Reid is  a  full-time, full-service, Connecticut REALTOR ®,   specializing in short sales,  serving  central  and eastern CT including, but not limited to; Andover, Ashford, Bolton,  Columbia, Coventry, Cromwell,  East Hartford, East Hampton, East Windsor, Ellington, Enfield, Glastonbury, Hebron, Lebanon, Manchester, Mansfield, Marlborough, Middletown, Portland, Rocky Hill, Somers, South Windsor, Stafford, Tolland, Vernon, Willington and Wethersfield.      

AVOID CT FORECLOSURE

Contact Me

Visit My Website

Overpricing: The kiss of death in a downward market

The reality of market has been difficult for a lot of Connecticut homesellers to digest. While most have realized that values have declined, many are still in denial about the severity of our declines (yes – even in YOUR CT TOWN). Furthermore, I still run into may sellers who think if they just hold out a little bit longer – things are bound to turn the corner.

While these types of ideas pose no real harm to those with those with no need to sell,  homeowners who need to sell now or in the very near future need to be very realistic about the state of the current market or risk losing a lot of time and money.

When looking around your neighborhood you may notice a lot of homes for sale and  assume that the homes on the market indicate how you should price your home also. WRONG!. A home for sale only indicates that the HOME HAS NOT SOLD. You should not attempt to become competitive with homes that are NOT selling. The real target is the SOLD PRICES of homes that have actually CLOSED recently, or are currently pending. These homes are the only true reflection of what buyers today are willing to pay for homes like yours.

Recent market reports for our local areas all seem to hold certain similarites:

• There  is a serious discrepancy  between the prices of homes  actively listed for sale and the average prices of homes that actually sell
• Roughly 50% of all CT homes on market DO NOT SELL AT ALL
• Only about 1 in 10 homes in  any given market area in CT sell in any given month
• Values are still declining

That means  there may be be ten homes in your neighborhood that will not sell this month for every one that does sell.

Which group do you want to be in as a serious homeseller? And how do you accomplish that?

By pricing right from the start. When getting your home ready for market your Realtor will provide a comparative market analysis for your home. When studying these comparables, pay special attention to the homes that have sold, as well as homes that are currently under contract to sell (pending). These are the only comparables that really matter as they indicate what buyers are actually willling to pay. There will be many active comps as well, but these are not the homes you want your pricing to fall in line with. You want to price in line with the homes that buyers have actually signed up to buy.

KEEP IN MIND  - PRICING WITH HOMES THAT HAVE NOT SOLD WILL ONLY LEAD YOU DOWN THE SAME PATH OF NOT SELLING.

Once you realize the true market value of your home….don’t make the same mistake as most others will: Asking for more in hopes of getting more.

Yes, you will likely negotiate down a bit once a buyer makes an offer but by grossly overpricing your home with the expectation that you will just leave more room to “negotiate”  you’re making a serious  misjudgement about buyers today: that buyers will come to look at your overpriced home in hopes of talking you down.

Sorry – it doesnt work that way anymore.  When you overprice, especially in a downward market, the buyers just wont come at all.

Which leads you down an ugly road….You overprice…no one comes….values keep falling…you then reduce your price to attract interest  but now you are still too high as the market has fallen so….no one comes….values keep falling…you reduce your price but again you are still too high as the market has fallen so…no one comes…values keep falling….and on and on you go…

It’s called chasing the market. It will inevitably lead you to get MUCH less than you could have for your home had you priced for market to begin with, if you  are lucky enough to sell  the home at all. This fantastic graph courtesy of  Gary Keller’s book “SHIFT”  says it all:

In fact in most of the markets I’ve studied, home that sell do so in less than 2-3 months on the market. Despite popular belief, sitting on market for 6-12 months is not normal nor is it  a necessary  recipe for ultimate success.

When buyers see a home that has been listed for 6 months, despite the price corrections that have occurred their first impulse is to assume there is something wrong with the house. Which buyer wants to buy the house no one else wants? NONE OF THEM DO.

The best solution here is to price right right out of the gate. If the market says your home is worth $275,000, DON’T price it at $325,000 with hopes of “negotiating” or “reducing later”. You’ll only set yourself up for a losing proposition and down the ugly path of chasing the market later.

And if your Realtor agrees with an overpricing strategy, or worse, makes such a suggestion…I highly recommend you seek another Realtor ASAP.

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Minna Reid is  a  full-time, full-service, Connecticut REALTOR ®,   specializing in short sales,  serving  central  and eastern CT including, but not limited to;Andover, Ashford, Bolton,  Columbia, Coventry, Cromwell,  East Hartford, East Hampton, East Windsor, Ellington, Enfield, Glastonbury, Hebron, Lebanon, Manchester, Mansfield, Marlborough, Middletown, Portland, Rocky Hill, Somers, South Windsor, Stafford, Tolland, Vernon, Willington and Wethersfield.          

AVOID CT FORECLOSURE

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SKIP THE REALTOR AND SAVE THE COMMISSION!

The other day I got an email from a buyer to see one of my listed properties. As I usually do, I forwarded the request on to a buyer’s agent I know who is highly qualified, local to the property, and an all-around good guy. I have never felt 100% comfortable with dual agency and I avoid it as much as I can.

The buyer refused to speak to the agent and emailed me this:

“We already have an agent who sends  us housing information  on  the  area. However I saw this house on the internet before she contacted me. Is it possible for us work with you directly on this property to cut down the commission cost? We would like to take a look the  house and  if we like it we may make an offer.”

I felt sorry for the misguided buyer…(and even more so her agent!)

As this is a common, re-occurring theme I wanted to clarify what exactly happens when buyers  call the listing agent in an attempt to “save money”:

• THE  LISTING AGENT WORKS  FOR THE SELLER. The listing agents duty is to get the seller the best price and most beneficial terms. When you show up, do not assume the listing agent works for you too. The LISTING AGENT HAS NO RESPONSIBILITY OR LOYALTY  TO YOU  unless specifically expressed in writing.
• The Listing Agent has contracted with the seller for their commission. The listing agent  voluntarily offers part of this commission on the MLS as compensation to a buyers agent. Do not assume that if you show up, that money ends up in your pocket ( IT LIKELY WON’T). It is not even likely that it will end up in the sellers pocket. You know whose pocket the money likely goes into? The Listing Agent’s pocket. So this means  A – You ended up with NO HELP. B – The Listing Agent likely just doubled her commission. How did this help you exactly?
• Your home purchase is likely the largest financial transaction of your life. Having an experienced buyers agent protect your interests and see you through the transaction is invaluable and will cost you nothing. Its paid for already. Would you ever go to court as the defendant and let the prosecutor handle your defense to “save a few bucks”? NO? Then why would you decline assistance ( free assistance at that ) through the largest purchase you’ll ever make? Sounds foolish doesn’t it?

A fool and his money are soon parted.

Don’t be a fool. When considering buying  a home – get yourself proper representation in the form of a buyer’s agent.

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Minna Reid is  a  full-time, full-service, Connecticut REALTOR ®,   specializing in short sales,  serving  central  and eastern CT including, but not limited to; Andover, Ashford, Bolton,  Columbia, Coventry, Cromwell,  East Hartford, East Hampton, East Windsor, Ellington, Enfield, Glastonbury, Hebron, Lebanon, Manchester, Mansfield, Marlborough, Middletown, Portland, Rocky Hill, Somers, South Windsor, Stafford, Tolland, Vernon, Willington and Wethersfield.      

AVOID CT FORECLOSURE

Contact Me

Visit My Website