Money After the Short Sale? Maybe.

In the vast majority of short sales, the seller does not receive any money.  The bank and perhaps some other creditors lose thousands of dollars, and so they will not permit the seller to receive any proceeds from the sale.

You may have to pay…

In some cases, the seller may be expected to pay some money at closing.  In most cases where the seller has to contribute something, the amount the seller pays is just to make up the difference on pro-rated taxes, a higher-than-expected water/sewer bill, or some other shortfall that appears at the last minute.  For example, if the mortgage lender agrees to take a minimum of $132,655.17 and the closing costs are a little higher than expected, the lender will likely be unwilling to take less than the precise amount they stated.  Therefore, the buyer, seller, real estate agents, or other parties must contribute in some way to make up the shortfall.  In some cases, the buyer will refuse to pay more, stating that they will not pay for the seller’s costs.  In such situations, the seller may have to bring some money to closing to cover extra closing costs.  Typically that amount would be fairly low, ranging from a few dollars to a couple thousand dollars.

You may even have to promise…

In some short sales, the mortgage lender may stipulate that the seller must contribute some amount of money or the lender may ask the seller to sign a promissory note to pay back some of the remaining debt.  The mortgage company must declare any such stipulations in their short sale approval letter, so the seller would know well in advance.  In most short sales these days, the mortgage company does not expect the seller to contribute any money as it may be apparent that the seller does not have any funds to give.

But, you may receive money…

In some short sales, the seller may be given some money at closing or upon post-settlement move-out.  The federal government’s Home Affordable Foreclosure Alternatives (HAFA) program provides $3,000.00 for eligible sellers.  Loans insured by the Federal Housing Administration (FHA) may grant $750.00 to $1,000.00 to the seller as a moving incentive.  Some mortgage lenders, like Bank of America and Chase Home Finance, offer to pay $3,000.00 up to $25,000.00 to sellers at closing if they cooperate with the short sale of their property.

The real benefit.

Sellers in a short sale should expect to receive no money at closing.  If they do qualify for a special short sale program, then they should be grateful to receive what little money they do.  The greater financial benefit to the seller is that they will no longer have to maintain a property they cannot afford.

For more information, contact me and see how our team of professionals can help!

Good News for Homeowners Underwater on their Mortgages

While not a done deal yet - the first step has been taken to extend the much needed Mortgage Debt Relief Act past the end of this year to 2015.

Extending the Mortgage Forgiveness Debt Relief Act?

Homeowners who qualify have not had to pay taxes on the debt forgiven by a lender in a short sale transaction. This Act is scheduled to expire at the end of the year and this would dramatically impact anyone that has to sell their home when the amount paid is less than what they owe on their mortgage.

As the attached article states; extension of this Act has been included in the budget. It's believed that both sides recognize the necessity of extending the Act to help millions of homeowners. We'll be watching this closely as it moves through the process and keeping you advised.

Contact me to learn more about how our team of professionals can help you if you find yourself in a short sale position.

Short Sale? Lancaster County has a New Solution with Keller Williams & Significa Corp!

Underwater on your mortgage? Want to avoid foreclosure? Need to sell? 

Significa Corp and Keller Williams Lancaster have teamed up to offer a short solution to home owners that need to sell and/or are looking to avoid foreclosure! Significa works with you, the seller, and your agent to provide the knowledgeable and experienced expertise necessary to get your home listed and sold. In addition to your agent, you'll work with the Short Sale Director who will counsel you through the entire process. Significa, America's Short Sale Solution, will provide you with an Attorney to advise and review contracts. They also provide you with a Processor and a Negotiator to work directly with the lender to get your home sold and protect your best interest. The banks have these resources and you need them too!

Significa has a proven track record in successfully closing short sales and helping homeowners avoid foreclosure. We help create certainty for people in transactions that are inherently uncertain! Your agent does what they do best - list your home and find you a qualified buyer. We do what we do best  - negotiate and close the short sale of your home in a timely manor.

Now you have a team of professionals on your side! Why would you go any where else?


Contact me to learn how our team of professionals can help you during this difficult time.

Kevin Rowley
Short Sale Director
Significa Corp & Keller Williams Realty Lancaster
1630 Manheim Pike
Lancaster, PA 17601
717-735-1145 (o)
717-945-3326 (c)
Kevin@KRowley.com

What is the Average Time to Sell a Home?

In recent years, the average time to sell a home has dramatically increased. This is largely due to the unemployment rate and credit crunch, which are limiting the number of first time home buyers entering the market, as well as the increasing number of short and foreclosure sales. According to the Accredited Seller Agent Council, the average time to sell a home in the U.S. is 10 months. However, there are many factors that can impact how quickly your home will sell.

Factors Affecting the Average Time to Sell a Home

Home listing price - An asking price that is either too low or too high can dramatically reduce the chances of selling your home on a timely schedule. Your agent should be familiar with the local market and provide you with local comps (comparable homes that have recently sold) to help determine what your asking price should be. Whether you take or ignore this advice is a contributing factor to the length of time the house will remain on the market.
Condition of home - The condition of your home during viewings or appraisals is also a contributing factor. When anticipating a showing or other appointment, your home should be spotlessly clean and tidy with no visible flaws. Nail holes, carpet stains and other defects must be patched, cleaned or corrected. Many agents also suggest you ôdepersonalizeö your home by removing personal items such as photos, memorabilia, etc. If you own pets, they should be contained in a separate area of the house with no evidence they live on the premises. Home buyers need to be able to envision themselves living in the home - the less clutter or distraction, the more likely it will sell.
Location of home - Location is always a top factor in the desirability of a home, especially in a soft or surplus market. A home that is adjacent to a busy road, a messy neighbor, or a busy shopping center will be more difficult to sell than a home with open range, unobstructed views, or better school districts. If your home is not in a desirable location, it may take a price reduction as well as additional time to sell.
Region - Home markets vary from city to city based on the employment rate and inventory of available properties. For that reason, the average time to sell a home can vary by months depending on what city or market it resides in. According to ClearCapital, the average time to sell a home for soft markets such as Miami, Las Vegas or Detroit could be 10 to 12 months, whereas in a healthier market such as Washington D.C. or Houston, it can take as little as one to two months.
Home Seller Flexibility - A flexible seller who is willing to accept spur-of-the-moment or random viewings may be more likely to receive an offer than those who limit the schedule or frequency of potential buyers to view the property. Likewise, a seller who is flexible on the price of the property will be more likely to accept a reasonable offer. The seller needs to be realistic and understanding that, in order to sell a home, compromises are needed.
Type of Home Sale - The type of home sale is also a contributing factor in how quickly a house will sell. If the property is a short-sale or foreclosure, the process can take six months to a year (or more). However, if it's a traditional home sale with a quick close, it can take as few as two to four weeks. Unfortunately, in these scenarios, the seller has little control over how long the process will take, as the majority of acceptance and paperwork lies with the lender and title companies.
Clearly there are a variety of factors that affect the average time to sell a home. Being aware of these factors, making the necessary adjustments, and having flexibility and patience will help smooth the process and bring your home to a close within a desirable time frame. If you want to get a better estimate of how long it will take to sell your particular home, let me know. Agents are happy to take these requests even if you aren't sure you are selling your home.

My Top 3 Picks for Outside Dining/Drinking In and Around Lancaster

Not in any order... but my favorite places to hang with friends, have a few drinks and grab something to eat are below. (Click on the name to go to their web page)  I quickly add that I haven't hit all of the places with outdoor decks/patios, so feel free to comment with your favorites.

1. TJ Rockwells

Large multiple decks in a wonderful setting. Just outside of E-Town, Rockwells has a large selection of items from munchies to entrees. The food is good and the portions are significant. Some of my favorites: Baked Tomato Soup (covered in cheese), Ribs, Fish Sandwich and Wings.

2. Annie Bailey's Irish Pub

One of my personal favorites - maybe because I'm half Irish! Downtown Lancaster... and I have a preference for downtown. Nice deck, great service and fun people. The drinks and the food are a hit too. Again, Wings are excellent... as well is almost anything on their menu. and one of the few bars that can make a good Margarita. But my choice is always a Black and Tan. I watched the Women's Soccer World Cup Championship there... now only if they would carry all of the Raven's games!

Oh... I had to show the KW gang on the deck!

3. Loxley's

OK... the setting may not be the greatest... kind of overlooking the most heavily traveled road in the county and next to Rte 30... BUT, the outdoor bar and seating, downstairs and upstairs, are very nice. And, if you haven't noticed, the upstairs bar has water running through it... seriously. Easy parking, which is a huge plus, makes this an easy spot for everyone to gather. The food I had was decent, but to be honest, I drank more than I ate there... so I still have to try more of their menu.

So there you have it.... my top 3 picks....  What are yours? Let me know. Click on 'Post a Comment' and add yours! I'll be doing more "reviews" based on different characteristics/features in the near future...  

Market Insider - Valuable, customized, and up-to-date information on real estate trends in your local communities.

The Myth: Sellers "Pay" Buyer's Closing Costs

Sellers never pay the buyer's closing costs... plain and simple! Forever, all parties to a transaction have used the phrase: "Seller paid closing costs"... or something close to this. The truth is that in every situation I can think of where there is a "seller consession", the buyer is actually still paying the closing costs and financing them in with the mortgage. Let me explain why that is....

One needs to view the transaction from the seller's perspective. They have a house to sell and they have a price in their mind that they will not go below. Or, stated differently, if they get this price or above, they will be happy. For this example, let's say that price is $300,000. They could and probably are asking something more than this amount. Selling the home for $300,000 would net this particular seller $75,000 at settlement.

If a buyer comes to the table with an offer of $300,000, the seller is thrilled and accepts. If the buyer comes to the table with an offer of $315,000 and asks for $15,000 from the seller to cover closing costs; again, the seller will be thrilled and accepts. Under either scenerio the net price to the seller is $300,000. And in both cases he nets $75,000 or close to it after adjusting for a little difference in higher costs for commission and transfer taxes on the extra $15,000. (Approx. $1,000). The seller would not accept any offer that has a net price lower than $300,000.

Since the buyer may now have a loan amount $15,000 more ($315,000 vs. $300,000), the buyer is actually financing the closing costs into the mortgage loan. The seller hasn't "paid" the buyer anything.

It always surprises me that buyers don't get this. When I explain their options as we develop our offer strategy, they have trouble understanding it from the seller's side. And the seller's side is very simple - the bottom line or what is the amount they walk away with at settlement. How it's structured between offer price and seller consession doesn't make any difference to the seller - as long as the home will appraise for that offer price.

Finally, when preparing an offer,what we should ask the buyer is: "Are you paying your own closing costs at settlement or do you want to finance them?"