For Sellers
This area provides information and education for sellers. In this section a Seller can choose between different topics. Seller topics will be added as we go along:
Seller Topics:
What are my options?
What is a Notice of Default?
How much time do I have?
What is a Short Sale?
What is a Deed in Lieu of Foreclosure ?
Foreclosure Process
Bankruptcy and Short Sales
Do I have to Move ?
Debt Counseling
Credit Counseling
Loan Modification
5 Stages of Grief in a Short Sale
March 1st, 2010 categories: Ask the "Specialist", For Sellers, Short Sales
As a former Social Worker I am reminded of Elizabeth Kubler-Ross book “On Death and Dying’ and the five stages a terminally ill patient goes through when informed of their life threatening illness.
The five stages she identifies in her book are:
- Denial ( this isn’t happening to me!)
- Anger( why is this happening to me?)
- Bargaining ( I promise I’ll be better person if…)
- Depression ( I don’t care anymore)
- Acceptance ( I’m ready for whatever comes)
As I reviewed these five stages and relate them to Sellers I have worked with or am currently working with I am drawn to how these same stages are exactly what sellers go through when selling their home in a short sale.
Stage 1 Denial:
Many sellers who are falling behind in their mortgage payment often do not get help or seek help because they are in total denial. They often think nothing is going to happen to them even after the bank has sent them the Notice of Default letter.
Stage 2 Anger:
This is a very difficult stage. Many homeowners remain angry through the Short Sale/Foreclosure process. Reports of homes being trashed and appliances missing are usually the signs of people who have a lot of anger and direct this anger onto the property.
Stage 3 Bargaining:
This is the stage where sellers exhibit a lot of ambivalence. They do not want to loose their home and will do almost anything to keep it. Some sellers will contact their lenders and try to negotiate a loan modification while you are doing a short sale. You have to be aware of your seller in this stage because they are very vulnarble and will sabotage any efforts you have initiated because they have not truly accepted the need to sell their home.
Stage 4: Depression:
Sellers in this stage just stop caring about the house and will withdraw from you as their agent. It is important to maintain contact with your sellers during this stage and give them support and assure them that what they are doing is in their best interest.
Stage 5 Acceptance:
This is when you see your seller come out of their shell and begin to prepare for a life after the Short Sale.
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Home Affordable Foreclosure Alternative (HAFA) Explained
February 11th, 2010 categories: Ask the "Specialist", For Sellers, Short Sales
Home Affordable Foreclosure Alternatives (HAFA) will begin April 5th of 2009.
What is HAFA?
It is a new Foreclosure prevention program designed to streamline the Short Sale and Deed-in-lieu of foreclosure process.
- Those homeowners who are not eligble for the Home Affordable Modification Program (HAMP) can apply for the HAFA program. Those who do not qualify for HAMP and wish to avoid foreclosure can do so by applying for the HAFA program.
Who is Eligible for HAFA?
- Home owners who are delinquent or in default on their mortgage on their principal residence.
- Loan must have origination date January 1, 2009 or sooner.
- Amount of loan cannot exceed $730,000
- Current mortgage exceeds 31% of homeowners gross income.
What are the Steps?
Borrowers expresses interest in HAFA program.
Servicer has 14 days to determine Net Proceeds they will accept in Bank Directed Short Sale. This amount is expressed as a :
- % of current market value;
- % of list price;
- fixed dollar amount.
Step 2:
A Short Sale Agreement is put into action with a written agreement between lender/servicer and borrower. This agreement shall include:
- List Price/ Allowable Net proceeds to lender
- Guarantee 120 days or greater before lender can pursue foreclosure.
- Homeowner must agree to pay 31% of gross income while Short Sale is being considered
- Maximum Real Estate Commission of 6%. Realtor must also agree that out of the real estate commission a % or $ amount will be paid a third party vendor.
Step 3:
Borrower must provide evidence within 14 days of Short Sale Agreement (effective date)
- A signed copy of a Broker Listing Agreement at Approved List price.
- Information regarding any Subordinate Liens.
- Market the property 120 days or greater
- 3 business days to submit all offers
- Servicer has 10 days to approve all offers.
- Buyer has 45 days to get financing and close
- Borrower has 45 days to move out of the house from date contract has been acccepted.
HAFA Agrees to the following Payments :
- B orrower to receive $1,500.00 for moving expenses.
- Servicer to receive $1,000.00 for processing costs.
- Investor to receive a $1,000.00 back on maximum $3,000.00 paid to all subordinate liens.
Advantages to HAFA:
- No hidden administrative fees can be asked from borrower from servicer.
- The investor must waive all rights to seek a deficiency judgement.
Disadvantages of HAFA:
- Subordinate liens may not agree to $3,000.00 maximum payment.
- Investor owned property does not qualify.
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Family Searches Web For Help
October 26th, 2009 categories: For Sellers
By
Betty Cunningham
Re-Max Realtor and Staging Lady.
I recently received an email from a young couple who were on my website.
They were looking for an agent who could help sell their home.
After speaking with them it became apparent that the sale of their home was going to be a Short Sale.
They purchased the home 3 years ago, had multiple mortgages with no equity in the home. The recent loss of a job and having to care for 2 twins and a 4 year old has become a real hardship on the family.
I listed the home and continued to make price adjustments until I received a buyer for the home. We are in the process of negotiating the offer with the bank as a Short Sale.
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How Your Credit is Affected …
May 13th, 2009 categories: For Sellers
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How much Is Your Home Worth Today?
April 15th, 2009 categories: For Sellers
How much is your home worth today?
Depending on which county you live in your home has lost between 22%-42% of its value since 2007.
(Information provided in the table below comes from the MLS)
| County | Avg Price 2007 | Avg Price 2008 | Avg Price 1st Qtr 2009 |
| Cook | $377,370 | $327,801 | $231,606 |
| % Decline | 0% | 13% | 29% |
| Lake | $430,467 | $378,877 | $282,680 |
| % Decline | 0% | 12% | 25% |
| McHenry | $284,958 | $257,313 | $212,640 |
| % Decline | 0% | 10% | 17% |
| Kane | $299,724 | $275,390 | $208,937 |
| % Decline | 0% | 8% | 24% |
| Dupage | $449,508 | $415,413 | $357,122 |
| % Decline | 0% | 8% | 14% |
| Will | $286,961 | $266,858 | $221,381 |
| %Decline | 0% | 7% | 17% |
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Are You Upset about Declining Home Values?
April 2nd, 2009 categories: For Sellers, Local Markets
Are you upset about declining home values in your neighborhood. If you are you are not alone.
The other day I was asked by a neighbor to do a “Market Value” on her home because she is a senior and is thinking about selling her home and moving to a retirement community.
When I completed the “Market Value” I was shocked to see the lower value of homes even in my own neighborhood.
I remember 15 years ago several neighbors decided to put additions on their homes and we used the same contractor and were very happy with the results. Each year we saw our home values increase as a result of our home improvements.
Today is a different story. There are 3 homes on my own block which are listed as “Short Sales” and another 3 homes in the neighborhood that are bank owned foreclosures.
On a personal level I feel very sad about the current affairs of my neighbors and my neighborhood. I also realize that home values will continue to decline in my neighborhood just like other neighborhoods and there is little I can do about it.
I do have confidence that the home values will eventually stabilize and we will see the real benefits to home ownership in the near future.
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