Short Sale

The difficult real estate market along the South Carolina coast and the rest of the country has led to short sales becoming more common nationwide. Whether you are considering buying a short sale home or condo, or need to complete a short sale to sell your home, it is important to understand what the process entails and how to increase your chance of a successful transaction.

What Is a Short Sale?

In brief, a short sale occurs when the lending institution allows a home to be sold for less than the mortgage amount. Up until 2007 to 2008 home prices had consistently gone up around the country for over a decade as the housing market boomed. Low interest rate financing was easy to get and plentiful up until the bubble popped and the boom became a bust. Many people bought their home at the peak of the market, only to find home prices rapidly decline after their purchase.

This created a situation where many homes across the US were worth less than the mortgage used to purchase the home. As many people lost their jobs due to a struggling economy, it became hard for them to make their payments, which means the banks and lending institutions had to decide between foreclosing on the homeowner and allowing a short sale.

Tips for Buying a Short Sale

As real estate values declined many people who have been priced out of the market can now afford to purchase a home that is a short sale. Unfortunately, this process can be agonizingly slow, so there are a few things that you should do to give yourself the best chance of being able to buy a short sale home for a discount.

Find a Realtor with Experience – The rules for short sale are changing all the time. As the national and local governments work to make the process easier for homeowners and lending institutions begin to realize that they can reduce their losses by allowing a short sale instead of a foreclosure, short sales are becoming more common. The problem is that few realtors have true in the trenches experience on closing a short sale transaction other than attending a class on the topic. Find someone that is up-to-date on the latest short sale rules and regulations, so that you have the best chance of a successful transaction.

Be Patient – A successful short sale can take many months to complete. Patience and dedication are required to see this process through to its end. The reward for your diligence is that you could purchase a home for far less than what you would normally be able to find on the market.

Get an Inspection – Once the seller has gotten permission from the bank to go ahead with the sale, you should get a home inspection completed. You will find some short sales in immaculate condition and move-in ready, but a more common occurrence is that financial hardship has led to deferred maintenance on the home. Understanding any repairs that are needed before completing the purchase is essential to negotiating the right price.

Gauge the Seller’s Involvement – Most of the upfront work required to complete a short sale falls on the shoulders of the seller. They are the ones who have to repeatedly follow up and submit paperwork to the lending institution as it decides whether or not they will accept a short sale on the home. A seller who is not motivated can easily allow the situation to drag on, which means it might be a better idea to find someone who is working hard to meet the bank’s requirements and sell their home.

Ultimately, a short sale can be beneficial to everyone involved in the transaction. The seller is able to get out from under a loan that they cannot afford any more. The buyer gets a great deal on a new home that is more in line with the current real estate market. The lending institutions, while taking a loss on the first loan, are able to recoup some of their investment and eliminate the need for the far more expensive and time-consuming for closure process.

The problem with insurance is nothing in life is ever completely certain. One day the housing market can be rolling along, everyone certain prices can only ever go up. The next day, we’re pitched into a recession, major banks are in trouble and the housing market has collapsed. Because insurance is based on the concept of good faith, there’s supposed to be give and take on both sides of the relationship. An insurer cannot physically inspect every property it agrees to cover. To some extent, it must always rely on the honesty of the home owner to get proper estimates for the cost of rebuilding. After all, if the owner innocently underinsures, he or she will have to pay the additional costs out of savings. The insurer will not be at risk. If there was fraud, the insurer has the right to cancel the policy and avoid any payment. This protection for the insurer is fairly comprehensive. Hence, to offer better balance, most insurers offer guaranteed or extended replacement cover cover.

The point of this cover is simple. No matter how hard you try, no pre-estimate of the cost of rebuilding is ever absolute. It’s only when you get on the ground and start work you find out what all the problems are going to be. Costs have an unfortunate habit of rising and it’s relatively common for owners to have to sacrifice features of their old home to get the building work finished within budget. But, if you’re prepared to pay about 10% more on the premium rate, you can buy guaranteed cover, i.e. the insurer will pay the actual cost.

Let’s go back to the beginning again. Many insurance policies have a cap, i.e. the insurer places an upper limit on the amount you can claim. This may be a limit for all standard policyholders, or the cap may vary depending on the amount of premium you pay. The only way you can avoid the cap is by buying the extended cover. Why might costs go up significantly more than you expect? Suppose you bought an older home. It was picturesque with a wooden frame and shingles. If you now come to rebuild it, you can find reproducing the traditional building methods are expensive when you face compliance with the current building code. Everything may need to be redesigned including the electrical and plumbing systems. Once you are talking in hundreds of thousands for rebuilding, paying an extra 10% in premium can be very good value to get guaranteed completion.

Stepping outside the scope of the homeowners insurance policy, some insurers are now offering Home Value Protection policies to safeguard against a fall in the resale value of your property. In reality, this is slightly closer to a bet than most insurance policies and you need to read the terms carefully. Most have a high deductible if you claim during the first two years. Since most experts believe the housing market will begin to pick up again within the next two years, you may conclude such policies are not good value for money. Nevertheless, the next time you’re reviewing your insurance portfolio, it may be interesting to get additional quotes for Home Value Protection when you get your homeowners insurance quotes.

The American economy seems to be recovering, albeit on very wobbly legs. The housing market, however, is still in rough shape. Many American homeowners are unable to meet their debts, either because of adjustable rate mortgages that got ahead of them or because of recent job losses. Whatever the reasons for their struggle, many homeowners are now facing foreclosure and weighing all of their options. After a bit of research, many narrow down their decision to one of two choices–short sales or filing for bankruptcy. While neither is a particularly appealing option, homeowners will likely have to consider both and then decide on the lesser of two evils.

While foreclosure is a dirty word for many Americans, bankruptcy is usually thought of in even lower regards. It conjures up destroyed credit scores and financial futures. In actuality, bankruptcy is designed as a way for someone to get something of a fresh start financially. Essentially, it relieves a debtor of many of their debts, albeit with some fairly harsh penalties. Normally bankruptcy involves the total liquidation of a debtor’s assets. Any money made through the liquidation is divided amongst those that they owe money to, according to different factors. Bankruptcy will indeed decimate your credit score and make it almost impossible to receive any type of loan for quite some time, seven years in general.

Short sales are an alternative that many Americans have begun to utilize. Essentially they involve the sale of your property for a lower amount than you actually owe the lender for it. It may be hard to convince a bank to agree to these arrangements, but under certain circumstances they will. Your credit will still be negatively impacted, but not quite as dramatically as if you slipped into foreclosure or declared bankruptcy. There are certain tax implications that may make it more difficult to go with this option, although for many people it is a much more attractive course of action.

The sad truth is that there is no easy way to escape foreclosure. Whether you elect to filed for bankruptcy or attempt to get your lender to agree to a short sale, you’ll still face repercussions, especially in your credit score. No matter what path you take, the years ahead of you will be difficult. But a bit of research will help you decide on the right course of action. Consulting a professional may be a very wise idea, as the intricacies involved in any of your options are likely to be complex.

A home remodeling cost and budget setting are important leading steps to take because they help keep you and your funds in shape. As a moneymaking activity, home remodeling is a popular way to boost property value if done correctly backed by a solid research.

As it takes some time and care, projecting your home remodeling cost from start to finish will likely be both exciting and stressful. Possibly, it’ll be less so than having to build a new house and move into an unfamiliar neighborhood.

When you begin to think of remodeling or home improvement, the first thoughts that come to your mind might be …”maaan, it’ll cost a fortune!” Venture out and ask about home remodeling grants that may be available in your area. A real estate office or your town hall officers may be able to help you with that.
And since not all home improvements are created equal, begin asking about your housing market.

If you’d like to remodel your home, or even a part of it, make sure that it is still worth the money and efforts. In other words, will your remodeling efforts pay you back the money you’ve put in?

Asking for a professional cost estimate on your home remodeling plan is the key move to make. It may fall between 15% – 20% of the home value. From there, about 40% of an expert remodeling cost is labor. It’s this part of the total budget you can decrease by picking the jobs that are right for you.

However, a general remodeling cost estimate consists of more than just the cost of labor and materials. There are many other reasons to consider before projecting a clear path on your expenses. Contractor’s pay, interest charges, legal fees, permits, extra shipping charges, unexpected specialized trades services, final clean up fees, and delay charges are all examples of such reasons. Be sure to include them in your cost estimate.

Most home renovations, especially improvements like bathrooms and kitchens, have great long-term returns in the areas of quality of life, improved resale value, and lower energy expenses. Depending on your housing market’s economic activity, it may just simply make sense to borrow money for remodeling projects without having to dip deep into your savings. Just know that you can get a good return on investment by doing so.

Bear in mind that a sluggish housing economy may allow to recoup only a portion of your remodeling investment while a booming one may make you smile all the way to the bank.

In some housing markets, it’s common to remodel for a single reason alone – and that is making your property look and feel more attractive to potential buyers. Kitchen and bathroom remodeling alone are the most popular and effective to consider first.

As we can all think of ways to save money on these projects by “doing it yourself”, it is often a misunderstood part. A hasty decision may run the overall cost through the roof.
The reasons that stand out and in the way are overestimating one’s abilities, unavailable specialized tools, installations that must be done by licensed trades, and free time we’d have to devote to finishing what we’ve started. Facing problems like these in the middle of the project may indeed run the costs higher than getting professional help first.

Why face it? You can either postpone your remodeling till it makes more sense, or offer to work alongside a professional during your days off to cut costs down.

How about getting extra insurance during your remodeling? Discuss it with your insurance agent if he or she suggests there be one in your case. If it helps you sleep better, so be it.

A well-designed home remodeling plan can save you hoards of time, money, and most of all disappointments and heartache. Feeling strapped emotionally and financially is the last straw anybody wants while home remodeling cost keeps climbing. Use the suggestions above. Consider them all and brainstorm for more. Avoid the common pitfalls and turn your home remodeling into a huge success.

If you and your spouse have a good relationship, despite getting divorce, things are going to be so much easier for you both on the financial end. However, you should still have your own lawyer and you should know about what joint assets you have. In divorce financial planning, you should realize that both parties have rights to all assets unless otherwise spelled out in a contract signed before marriage. Even then, that contract may be null and void depending on the reason the marriage is breaking up. If these things are simple, you can come out as clean as possible.

Those that work with divorce financial planning will tell you that those that fight tooth and nail always end up losing out. What can make things is hard is when one party decides to try to hide things or remove money from joint accounts or retirement accounts. These are all important with divorce financial planning. Those things, if drastic steps are taken to hide them, can come back to bite you. You can also find that fighting indefinitely over these things is going to ruin credit and eat up said money. Keep that in mind.

If you own a home together, divorce financial planning is going to be much harder. This is even tougher when the housing market is down and out. If you have to sell the home, it could take years to do it. When the mortgage is due and one or both of the people involved have to pay rent or a new mortgage somewhere else, money is going to be tight. This can happen with cars and even vacation properties that must be sold. These are often stalling points in divorce financial planning. Try to keep an open mind. By trying to hurt your spouse, you are going to hurt yourself as well.

Talk with someone at your bank about divorce financial planning. If you have good credit when you first decide divorce is imminent, there may be things that you can do to ensure that you do not fall deeply into the hole as you go through the separation of assets. There may not be much you can do in this regard to divorce financial planning, but it never hurts to talk with someone about what is going to happen and what your options might be.