How long will it take for a short sale approval? Definitely one of those questions that many buyers and sellers are asking. When we first began riding the wave of short sales in 2008, lenders were simply not prepared for the high volume of requests. But as we move through the housing market crash, lenders have staffed up, developed departments and professionals and we are beginning to see improvements in the short sale approval process. However, there are a lot of variables in how long it will take to obtain short sale approval when buying for selling a home. Here are 10 reasons why a short sale approval can be delayed: 1.) Who is the bank and/or lender? Some banks are simply better at the short sale approval process than others. Wells Fargo, Chase, and Bank of America have seemingly put the most effort into streamlining the process. Bank of America utilizes EQUATOR (an online transaction management system) and this has definitely helped in reducing the amount of duplicate requests for paperwork. Wells Fargo and Chase have implemented fast track processes where they don’t require complete financial package documentation if the seller has already attempted a loan modification. 2.) Has the seller submitted all the paper work? Some sellers are not at good at record keeping and many times, bank statements, pay stubs, and tax returns take time to locate and submit to the lender. The lenders want all pages and sometimes sellers simply throw documents away. Requesting back statements and copies of tax returns can take time. Sellers may also have to provide copies of divorce decrees, alimony and child support statements and all of these documents must be updated at the time an offer is presented to the lender for approval and every 30 days after. 3.) How…
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This is becoming more and more an issue in Santa Clara County. During the housing boom, sellers and buyers turned a blind eye to the permitted work. But now, lenders have placed a magnifying glass on the issue of non-permitted work and buyers have become much more savvy about asking about permits. Appraisers (specifically FHA) can be asked by an underwriter to comment on whether or not additions or remodeling was completed with permits. In speaking with an appraiser, if it is obvious that an addition or major remodeling was completed, they will make a call to the city and/or county to inquire about permits. They add these comments to the the appraisal and can adjust the value of the home down if square footage, beds, baths, stories were added without permits. But this is not simply an issue of value and square footage. It can be a safety issue. What may seem like simple updating regarding new electrical receptacles, newly re-plumbed baths with nice new tile, or more extravagant kitchen remodels can look good but have hidden issues. I see this more and more with “flipped” foreclosures. Investors comes in, applies granite to the kitchen, and new tile to the bath but disclosure indicate no permits and many times, no documentation the work was completed by a licensed contractor. The debate goes on regarding the cost of permits for “simple” work but the rules are the rules and sometimes buyers are more concerned with “updated” than permitted work. There are not enough inspectors to keep up with the number of foreclosed flips and many times non-permitted work has been a part of the house for several decades without any issues. The obvious converted garage is not the only type of non-permitted work but commonly San Jose residents have made…
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Question: We are in escrow to close on a house.The home is being sold out via a trust and we found out 2 weeks before close of escrow that a small portion of the driveway is on the neighbor’s property. We found out that the drive-way was a hand-shake deal between the previous owner and the neighbor. The sellers tried to get an easement agreement with the neighbor; the neighbor refuses to sign the easement. In the meantime we moved into the seller’s home because a) it was unoccupied, b) we had sold our house with the intent of buying the new place c) the sellers told us they have hired a lawyer and the whole deal should be over in 30 days. It is now 2 ways past escrow. Since the neighbor does not want to sign the easement, the seller wants to move a portion of the driveway. This house is on a hill, with a steep driveway. We are concerned that if we move the driveway, then fire trucks or any delivery person will not be able to reach the house (the movers, with the existing curvature of the driveway could not reach the house). What are our options if we want to get out of this contract and still get our full deposit back? Thank you. Answer: 1.) This issue is best resolved before close of escrow. Understanding the cost, the implications, and possible solutions is critical to making a decision on whether or not to follow through with the purchase. Since you have already move into the house and I assume some money has been exchanged it is best to resolve it instead of cancelling the deal. Work it out with the seller to find an acceptable solution to all regarding the easement and/or the…
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Closing costs are any fees related to the purchase of a home that are outside the price of the home. Different states, counties, and cities calculate closing cost differently so it is best to speak with a real estate professional who is familiar with the area you intend to purchase your home. Closing cost are the combined fees charged by different entities to close the deal. Costs can include title fees, escrow fees, prorated fees such as taxes, insurance, and interest. Closing fees can also include the down payment, points on the loan, lender fees, and any inspections or repairs negotiated within the purchase offer. There is a ball park average for closing fees at about 1-2% of sales price. How much are Santa Clara County transfer fees? There are fees related to the transfer the property and in Santa Clara County these are paid by the seller. However San Jose, Mountain View, and Palo Alto also have a city transfer tax and this is typically split 50/50 by buyer and seller. Other counties such as Santa Cruz, Contra Costa and Napa do not have city transfer fees. Normally the transfer tax is calculated by multiplying the rate by sales price per $1000. An example of Transfer Tax: A home with a $500,000 sales price in San Jose would have the seller paying $1.10 per $1000 or $550 for the county transfer tax. The city transfer tax for this example would be split 50/50 by the buyer and seller and would be at a rate of $3.30 per $1,000 which would equal $825 each. There are also document recording fees, courier fees, electronic copy fees and miscellaneous fees such as notary and FedEx normally adding up to less than $500. Lender fees include the cost of completing the loan and…
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On October 25th, President Obama visited Nevada, one of the hardest hit foreclosure areas in the United States, and announced changes in the HARP program to help more homeowners who are underwater on their mortgage. Based on calculations from The Federal Housing Finance Administration an “estimated an additional 1 million people would qualify. Moody’s Analytics say the figure could be as high as 1.6 million.” and potentially could help 1 in 5 Californians that are underwater on their mortgage. The HARP program has been around for awhile but one of the biggest limiting factors regarding its application is the loan to home value ratio could not be greater than 125%. In other words as long as your home only lost 25% of its value in the last 4 years you could qualify. Obviously, many home owners have lost more than 25% and some took out second mortgages that decreased their value up to 50%. With the revised guidelines, there is no loan-to-value ratio limit. To qualify for the program you must meet three basic requirements: You must be current on your mortgage and have not been over 30 days late in the last year. Your loan must have been initiated prior to May 31st, 2009 Your loan must be backed by Fannie Mae or Freddie Mac The biggest challenge to the program for Bay Area homeowners is few of the mortgages made prior to 2009 were backed by Fannie Mae and Freddie Mac. You can determine whether or not your loan(s) is owned by Fannie Mae or owned by Freddie Mac by entering your loan account number on these web sites. Also recognize this must be your primary residence and the program only replies to senior liens not home equity lines or second mortgages. Also, recently maximum loan limits for…
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No wonder the consumer is confused about where our real estate market is heading. One headline reads “More Foreclosure Activity”, another reads “Home sales up 19% year to year”, and don’t even bother listening to the news because everything is negative, negative, negative! That is why you need local market information! Thank goodness, you know me! So here is the local scoop. Out of 27 zip codes within San Jose: SIX had an increase in price per square foot in July and August over 2010. NINE had an increase in median sales price on average 15%! Highest increase by zip? 95112 – downtown with a nearly 23% increase over last year! (#2 Willow Glen, #3 Santa Teresa) ELEVEN had an increase in volume of sales with 95130 increasing nearly 50% over last year. Some of you have heard me say it but here it is again; Investors are buying homes. Willing to buy without leverage, all cash because they believe the potential upside is there. With nearly 30% of them paying all cash, it is hard to believe this is the whim of speculators. Consider the fact that your leveraged dollar is now at or below 4% because of interest rates, and that affordability is at a 30 year high for San Jose. There are opportunities for those who truly want a home. You will either be a home owner building equity or you are a renter building equity for these investors. “Last month absentee buyers – mostly investors – purchased 21.3 percent of all Bay Area homes sold, up from 20.5 percent in July and 17.8 percent a year ago. The peak was 23.4 percent in February this year, while the monthly average since 2000 is 13.8 percent. Absentee buyers paid a median $242,818 in August, up from…
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I am from the South and toilets are not toilets they are “commodes”. But no matter what you call them, as a home owner or potential home owner do not make light of trouble these porcelain thrones can cause if not cared for properly. One of the simplest items in the home to care for (above gutters) can cause quite a bit of damage if maintenance is deferred. Many times I have been witness to the lack of a $2 wax ring causing extensive sub floor damage underneath the vinyl or tile of a bathroom floor. To repair a bathroom floor after a loose toilet or wax ring failure, many times the entire bathroom floor must be pulled up, the sub floor removed, and the floor joist scraped and treated for fungus. All due to failure to keep a water tight seal between the toilet and sewer pipe. Here is a step-by-step guide to how to replace a wax ring on a toilet. Below you will also find a video from Joe Schmidt at the Home Remodel Workshop You Tube Channel to help you walk through this simple home maintenance item. There are great videos on this channel for home maintenance do-it-yourself tasks. Tags: Buyers’ Tips, Sellers’ Tips, diy, floor damage, fungus, home maintenance, toilet, wax ring
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A short sale is a real estate sale by the private owner (not a bank) where the home’s market value is less than the what the seller owes the bank. Therefore, the seller is asking the lending bank to allow them to sell the home short (at a loss). Because the lending bank is not receiving complete pay off, they have the right to approve or not approve the sale. The short sale lender will weigh the cost of selling short against the cost of foreclosing and make a decision about how to proceed. This decision is very much based on the housing market in which the home is located, the amount the sale will be short, and the cost of completing a foreclosure in the state where the home is located. In the beginning When short sales first returned to our housing market in 2008, the lenders were reluctant to approve and many times proceeded to foreclosure. Over the last three years we have seen a change in the approval process and more short sales are being approved every day. The second challenge to selling a short sale was the amount of time it took to process the short sale. The banks were overwhelmed and simply did not have the staff to keep up with volume of short sale requests. Third, the banks did not really have a process in place for how to approve a short sale in this current market and arbitrary decisions were being made in regards to which seller/borrowers qualified. The initial short sale packets required by the short sale lender included pretty much every piece of documentation they possibly think of from the seller/owner and all via fax. Pages were missed, packages were deemed incomplete, and the clock kept ticking along for months. Now,…
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As Senior Real Estate Specialist, I am a proud member of the Long Term Care Network. This very resourceful web site provides seniors and their families with lots of great information. As a member, I wanted to share this great post on the process of changing the home to accommodate the needs of seniors as well the incredible service professional organizer can provide. Enjoy! When Robert and Anne bought their family home thirty years ago, their plan was to live through retirement in this home. They had furnished their home with refurbished antiques acquired from their many trips together. It was one of their cherished antique coffee tables that Robert tripped over, breaking his hip. Now with his return from the hospital in a wheelchair, the overwhelming task of making their home accessible for Robert’s wheelchair and safe for both of them faced Anne. Remodeling for wheelchair access, organizing home furnishings and daily living items or downsizing and relocating to a smaller living area are monumental tasks that are many times thrust on senior home owners. Sometimes the need to do this is brought on by injury or age related illness. Home and yard maintenance can become a daunting chore for even the healthiest of seniors, requiring them to make a downsizing decision. There is a large and growing industry of specialists who understand these challenges of elderly homeowners and are ready and willing to help with remodeling, organizing or the sale of the home and with the move to a new location. A professional organizer provides skills in making the home safe and manageable. Relocating furniture, removing hazards such as electrical cords, throw rugs, heavy objects on shelves that might fall are some of the ways they make a home more senior friendly. They specialize in helping seniors part…
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With the rising cost of oil, home owners are looking for ways to improve the efficiency of their homes past CFL light bulbs. However, with the change in the lending environment, home equity loans are few and far between and many times interest rates are not appealing. Now home owners have another option in the FHA PowerSaver Program. This program is a new loan program offered through the FHA to help home owners make cost effective improvements that can save energy and allow for greener homes. The program provides up to $25,000 in a 20 year note that can be utilized to make improvements of their choice, based on a list of DOE (Department of Energy) and FHA approved projects. Energy efficient heating and air conditioners, water heaters, duct sealing, and solar panels are just a few of the approved items on the list. It is recommended that the homeowner complete an energy audit that will allow them to choose the most appropriate items to include in the energy remodel/upgrade. The interest rates are competitive but only certain lenders are approved to make these loans. For a list of approved lender click here. This loan will be a subordinate lien and can be just the right answer to homeowners looking to lower their energy bills. These loans are backed by the government up to 90% and FHA has promised a stream-lined approval process for loan applications for this program. The borrower must have a credit score of at least 660 and their total debt-to-income ratio can not exceed 45%. The loan to value total can not exceed 100%. Tags: Buyers’ Tips, Sellers’ Tips, energy costs, energy efficiency, ernergy audit, FHA PowerSaver, greening your home, home improvements
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In January the State of California was provided federal dollars to help unemployed home owners pay their mortgage. The program is called Keep Your Home California. The program was allocated $874,995,915.28 (Really, 28 cents?) and intended to help home owners avoid foreclosure while looking for new employment. Eligibility requirements include: Homeowner must qualify as a low-to-moderate income household, as follows: Low-to-moderate income of 120% or less of the HCD Area Median Income (as defined by the California State Department of Housing and Community Development), for a family of four, in the county where homeowner resides. (For Santa Clara County, for a family of four HCD is $124,000) A loan financed in whole or in part by bonds that are tax-exempt under IRC section 143, the homeowner is presumed to satisfy income limits. Homeowner must complete and sign a Hardship Affidavit / 3rd Party Authorization documenting the reason for the hardship. Homeowners who have recently encountered a financial hardship due to underemployment or unemployment, including those whose financial hardship is related to their military service. Homeowner must agree to provide all necessary documentation to satisfy program guidelines established by CalHFA MAC. Homeowner must be currently eligible to receive unemployment benefits. Mortgage loan is delinquent or at risk of imminent default as substantiated by homeowner’s hardship documentation. Loans in foreclosure are not eligible. Homeowner in an “active” Chapter 7 or Chapter 13 bankruptcy is eligible for the program subject to the homeowner’s counsel or bankruptcy trustee approval in accordance with local court rules and procedures. General program eligibility is determined by CalHFA MAC, the housing counselor or servicer based on information received from the homeowner. Program-specific eligibility is determined by CalHFA MAC on a first-come/first-approved basis until program funds and funding reserves have been exhausted. Loan servicer will implement the HHF program…
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If you are getting ready to move to a different home, you need to be aware of scams that happen every day in the moving industry.
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