Don’t offend. Unless you are offering on a property which has been held purely for investment, the seller is emotionally invested in his property. Do not try to be Donald Trump; trash-talking the seller’s shelter is not a winning strategy. Statements like “This offer reflects the fact that the premises will require professional cleaning with a blow torch prior to possession” may just get you and your offer kicked to the curb.
Do get personal. Write a cover letter summarizing why you believe this is the right home for you. On many occasions, I have seen sellers accept a lower offer because they felt a connection with the buyer. The seller has a dog? It never hurts to mention that your own Scruffy, who has been on Prozac since moving to your current top floor studio apartment, is (or soon will be) “digging” the large rear yard. The seller raised his children in the home? Why not mention that the glow cast by the cozy brick-trimmed fireplace will be the ideal backdrop for your own little Einsteins to read Tolstoy aloud as they so often do? It may not help, but it can’t hurt.
Don’t defend your offer the wrong way. As in, by saying it is all you can afford or that you are basing it on what you believe values will be during the next lunar cycle. This approach will likely leave the seller with the notion that there is a buyer out there, one who isn’t you, who can afford his home and at the price it is worth now.
Do know the seller’s circumstances. Does the seller want to move or does he need to move? Does he need to be out of Dodge by sundown, or is he just toying with the idea of relocating to the Catskills if he can get “his” price? Circumstances will dictate whether there is a bargain on the horizon, and knowing this in advance can save everyone the aggravation of a long trip to nowhere.
Don’t preach. Your Charleston SC real estate agent has given you information on comparable property sales. Beating the seller over the head with your 16-column spreadsheet will not endear you to him. He has set a price, presumably after having taken this same data under consideration. You may believe his price to be high, but it is his price. Insulting his intelligence (even if you believe this intelligence, based on the price he is asking, is of the artificial variety) will not further your cause.
Do be prepared to negotiate. No buyer wants to think they paid too much, and no seller wants to think he sold out. Expect to go a round or two. “Take it or leave it” offers are rarely met with high-fives and bear-hugs from the seller, regardless of the price and even in this market. In negotiations, everyone wants to feel like they were in control and that they prevailed.
Don’t be unreasonable. There is value, and then there is crazy-talk. If a home is offered for X, and you are willing to pay 10% less than X, do not offer X minus $2 million and then ask the seller to throw in his bedroom furniture and a pony. You will not be taken seriously.
Lets sell your home
Today’s real estate market in Charleston South Carolina is teeming with opportunities for the buyer. Great values, values relative to prices a year or two or more ago, are plentiful. But, insanely great “deals” are still needles in the proverbial haystack, because market value will always be determined by what a buyer is willing to pay. This buyer might be you, but if you are unrealistic or even simply careless with crafting your offer, it will probably be someone else.
What is a distressed sale? – The sale of a property whereby the homeowner is in financial distress and can’t afford to pay the mortgage any longer also known as a forced sale. Which is an action taken in a civil court forcing the owners of a piece of real property to sell their property and to divide the profits (usually there aren’t any). A forced sale is generally the result of a petition to partition action such as: foreclosure action or bankruptcy .Distressed HomesHOW TO GO ABOUT BUYING A FORECLOSURE…Please note this is for Charleston county, SC only and that your county and state likely has its own rules and protocol so contact your local office. However I think this is the general gist of most transactions around the country as this has been going on for hundreds of years.Thank you for your interest in foreclosure sales. This page was prepared in an effort to answer the most frequently asked questions about this process. If you have further questions, please contact me at 843.478.8061.
If you are interested in bidding on a piece of property in Charleston County, SC, which has been foreclosed upon and is scheduled to be auctioned for sale in the near future, the following are some things you may find helpful to know:
1.) When real property is ordered to be foreclosed in Charleston County, a judge called the Master-in-Equity will issue an order directing the mortgaged premises (or part thereof as required to satisfy the claims established) be sold by or under direction of the Master.
2.) The judgment (often called a Master’s Decree of Foreclosure) will contain a legal description of the property being sold, a provision for the necessary legal advertisement, the time and location of the sale, and notice of any senior liens, taxes or other rights to which the property to be sold is subject.
Sales are held the 1st and 3rd Tuesday of each month at 11 a.m. at the front entrance of the Charleston County Judicial Center located at 100 Broad Street in downtown Charleston.The judgment also will specify the amount of good faith deposit necessary at the time of the sale, which is usually 5% five percent of the successful bid at the sale. Compliance must be made with the bid by 4 p.m. that same day. This deposit is required to be in cash or certified funds and is not refundable. The plaintiff or any other party may be a purchaser on such sale. You have 30 days to comply with the balance of the bid with cash or certified funds.Some Plaintiffs seek a deficiency judgment against the Defendant. This means the Plaintiff is not only foreclosing its mortgage but is seeking a money judgment too. Unless the pleadings state that no personal or deficiency judgment is demanded or any right to such judgment is expressly waived in writing, the bidding will not be closed upon the day of sale but remains open until the thirtieth day after such sale exclusive of the day of the sale. When the sale is re-opened for final bidding, the highest bid is accepted. The Plaintiff can only bid at the first sale.Short Sale– is a sale of real estate in which the sale proceeds fall short of the balance owed on the property’s loan.If you want a short sale the process is very much like a traditional real estate transaction except in one way. The hassle. For you to take advantage of a short sale, you’ll definitely want a local Charleston area real estate agent on your side. Primarily because the bank is technically the seller. Even though the seller might still be the owner of record, for a short sale to occur the seller’s mortgage lender has to approve it. Unless the seller just sells the home for less than they owe and pays the difference to their lender.If the seller can’t do that then the lender with the mortgage will have to O.K the home being sold for less than is owed on it. The largest problem with purchasing a short sale home is that the bank is not willing to work with you (the buyer) to make the purchase easy or cheap for you. Usually when putting an offer on a home that is approved for a short sale the bank will only sell the home “As Is”, and doesn’t care if there are problems with the home even if you get a home inspection. Secondly, they usually will drag their feet because if you make an offer they probably have a couple other offers on the table that they will work against you so you must make sure you have a large earnest money deposit ready, and no contingencies. Otherwise they will not consider it and/or they will contact the current offers they may already have.When looking to buy a home that is a short sale you must keep in mind that since the home isn’t being sold for profit that there is no room for the seller to pay a buyer’s agent commission. Therefore, be prepared that you may have to pay a buyer’s commission out of your own funds. However, President Obama and HUD have instructed banks that they have to allow agents to be paid when representing a buyer in a short sale, but this isn’t always the case.*Don’t worry. If this seems like too much of a scary proposition, there are plenty of unbelievable cheap homes on the market that are great deals for sale the traditional way.
According to many experts in housing and economics there will be a few place in the next coming years where buying real estate is a good investment, and Charleston, South Carolina is one of them. Read the recent article by MSN.Home prices of course, are variable and depend on many factors, each of which is difficult to predict. Still, average home prices will drop by 7.9% nationwide in 2010, according to Moody’s Economy.com. In the few areas where there could be positive price growth, the projected increase is modest. “These areas will essentially be flat next year,” says Steve Cochrane, managing director at Moody’s Economy.com.The top 5 cities for home prices
Smaller areas across the Southeast are expected to fare well in 2010 primarily because they fared relatively decently during the housing crisis, says Jeannine Cataldi, a senior economist at IHS Global Insight. “They didn’t have such a big run-up, and they have a diverse economic base that enabled them to stay stable,” she says. Home prices in Charleston, South Carolina didn’t get out of line with household incomes; also, Boeing is investing in a fairly large manufacturing plant there, which could create some potential for income and job growth, says Cochrane.In short; these pockets of the country share a few important characteristics. One is that they are starting with a limited supply of housing stock. Another is that throughout most of the decade, prices basically stayed in sync with household income, says Cochrane.
A short sale is a transaction in which the lender, or lenders, agree to accept less than the mortgage amount owed by the current homeowner. In some cases, the difference is forgiven by the lender, and in others the homeowner must make arrangements with the lender to settle the remainder of the debt.
Supplemental Directive 09-09 (November 30, 2009) gives servicers (those who process payments) guidance for carrying out the program. All servicers participating in HAMP must also implement HAFA in accordance with their own written policy, consistent with investor (lender) guidelines. The policy may include such factors as the severity of the loss involved, local market conditions, the timing of pending foreclosure actions, and borrower motivation and cooperation.
A short sale agreement (SSA) will be sent by the servicer to the borrower after determining the borrower is interested in a short sale and the property qualifies. It informs the borrower how the program works and the conditions that apply. After the borrower contracts to sell the property, the borrower submits a “request for approval of short sale” (RASS) to the servicer within 3 business days for approval. If the borrower already has an executed sales contract and asks the servicer to approve it before an SSA is executed, the Alternative RASS is used instead. The Servicer must still consider the borrower for a loan modification.What are the steps for evaluating a loan to see if it is a candidate for HAFA?1. Borrower solicitation and response.
2. Assess expected recovery through foreclosure and disposition compared to a HAFA short sale or DIF.
3. Use of borrower financial information from HAMP. (May require updates or documentation.)
4. Property valuation.
5. Review of title.
6. Borrower notice if short sale or DIL not available (to borrowers that have expressed interest in HAFA).
Why was the number of short sales rising?
Due to the economic crisis, including rising unemployment, and drops in home prices in communities across the nation, the number of short sales is increasing. Since a short sale generally costs the lender less than a foreclosure, it can be a viable way for a lender to minimize its losses.
A short sale can also be the best option for a homeowners who are “upside down” on mortgages because a short sale may not hurt their credit history as much as a foreclosure. As a result, homeowners may qualify for another mortgage sooner once they get back on their feet financially.
What challenges have short sales presented for REALTORS®?
The rapid increase in the number of short sales, and the short sales process itself present a number of challenges for REALTORS®. Major challenges include:
Limited experience Many REALTORS® are new to the short sales process; a difficulty which is compounded by many lenders’ lack of sufficient and experienced staff to process short sales. Even if the REALTORS® are experienced, most servicers are under-staffed and still not adequately trained, making negotiating a short sale particularly difficult.
Absence of a uniform process and application Currently, both short-sales documents and processes are lender-specific, making it very difficult and time-consuming for REALTORS® to become knowledgeable and efficient in facilitating these transactions.
Multiple lenders When more than one lender is involved, the negotiations are much more difficult. Second lien holders often hold up the transaction to exert the largest possible payment, in exchange for releasing their lien, even though in foreclosure they will get nothing.
As a result of these challenges our members have reported difficulties with: unresponsive lenders; lost documents that require multiple submissions, inaccurate or unrealistic home value assessments, and long processing delays, which cause buyers to walk away.
What is being done to address or eliminate these challenges?
Well it goes without saying that we are in tough times economically as a country and Charleston South Carolina is no different, and even more so as it pertains to real estate. With all the bad news we hear about real estate and the economy there is some good news to report. Even though our government is has made many mistakes with our money recently it appears as if those in the white house are doing their best to help homeowners.There is a program to help those who can’t afford their homes any longer quickly sell their homes (that’s relative) without being forced into foreclosure. It’s called (HAFA) or Home Affordable Foreclosure Alternatives program.HAFA is designed to simplify and streamline the use of short sales and deeds-in-lieu of foreclosure by improving the process. Specifically, HAFA will:• Complement HAMP by providing a viable alternative for borrowers (the current homeowners) who are HAMP eligible but nevertheless unable to keep their home.
• Use borrower financial and hardship information already collected in connection with consideration of a loan modification under HAMP.
• Allow borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).
• Prohibit the servicers from requiring a reduction in the real estate commission agreed upon in the listing agreement (up to 6%). This is to ensure the seller/borrower can still utilize the expertise of a real estate agent.
• Require borrowers to be fully released from future liability for the first mortgage debt and if the subordinate lien holder receives an incentive under HAFA, that debt as well (no cash contribution, promissory note, or deficiency judgment is allowed).
• Use standard processes, documents, and timeframes/deadlines.
• Provide financial incentives: $1,500 for borrower relocation assistance; $1,000 for servicers to cover administrative and processing costs; and up to $1,000 match for investors for allowing a total of up to $3,000 in short sale proceeds to be distributed to subordinate lien holders (on a one-for-three matching basis; up to 3% of the unpaid principal balance of each subordinate loan).HAFA is a complex program with 43 pages of guidelines and forms. To help everyone better understand the process, below are some frequently asked questions that address the basics.Initially announced on May 14, 2009, with guidance and standard forms issued on November 30, 2009, the program will help owners (referred to below as borrowers) who are unable to retain their home under the Home Affordable Modification Program (HAMP). A borrower (the current owner) may be able to avoid a foreclosure by completing a short sale or a deed-in-lieu of foreclosure (DIL) under HAFA. The guidance and forms released on November 30 do not apply to loans owned or guaranteed by Fannie Mae or Freddie Mac. Those enterprises will issue their own HAFA guidance and forms.
On May 14, 2009, the Obama Administration announced its upcoming Foreclosure Alternatives Program. Among other things, the new program:
Establishes financial incentives for servicers, sellers, and second lien holders to encourage the completion of short-sale transactions.
Requires that a timeline, of no fewer than 90 days, be set to allow a homeowner to sell a home, without threat of foreclosure action.
Requires the short sale agreement to specify reasonable and customary real estate commissions and costs to be deducted from the sales prices. (The servicer must agree not to negotiate a lower commission after receiving an offer.)
Will provide standardized documents, including short-sale agreements and offer acceptance letters.
The Foreclosure Alternatives Program is anticipated to launch in late July.
If you are interested in bidding on a piece of property in Charleston County, SC, which has been foreclosed upon and is scheduled to be auctioned for sale in the near future, the following are some things you may find helpful to know:
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