Todd & Lisa Sheppard
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Archive for September 2011

Windows of Opportunity Beginning to Close for Sellers

September 19th, 2011   by lisasheppard

We have suggested that sellers who need to sell within the next 18 months had a ˜window of opportunity™ to sell at higher prices. They needed to put their houses up for sale immediately before a flood of distressed properties were introduced to the market. This window is beginning to close. The paperwork challenges faced by banks that caused a delay in the foreclosure process over the last ten months are starting to clear. It seems that these houses are now coming to the market.RealtyTrac reported in their September Foreclosure Report:œDefault notices were filed for the first time on a   total of 78,880 U.S. properties in August, a nine-month high and a 33 percent   increase from July ” the biggest month-over-month increase since August 2007.James Saccacio,  chief executive officer of RealtyTrac explained:œThe big increase in new foreclosure actions may be  a signal that lenders are starting to push through some of the foreclosures  delayed by robo-signing and other documentation problems. It also foreshadows more bank  repossessions in the coming months as these new foreclosures make their way  through the process.Diana Olick, of CNBC™s Realty Check quoted a spokesperson for Bank of America:œ Strong gains like that from July to August demonstrate our progress “ primarily in judicial states ” clearing more volume to advance to foreclosure once we pass the numerous quality controls we have in place and exhaust all options with homeowners.The impact will be felt from coast to coast. New Jersey Superior Court Judge Mary Jacobson recently cleared the way for the top banks to resume foreclosures in the state. The impact this will have on the number of distressed properties can be clearly seen in these statistics reported by Housing Wire:œIn October, New Jersey had the 24th highest foreclosure rate in the country, with servicers filing roughly 5,200 foreclosures that month, according to RealtyTrac. By July, the Garden State™s foreclosure rate dropped to 42nd with just 1,112 filings last month.ForeclosureRadar, which handles research in California, Oregon, Washington, Arizona and Nevada, last week reported:œForeclosure starts rose in every state.

Bottom Line

If you currently are selling your home, price it to compel a buyer to purchase it now. Waiting will cause you to compete with an increased number of distressed properties which sell at dramatically discounted prices.

Disasters and Real Estate

September 8th, 2011   by lisasheppard

In the wake of last week™s hurricane Irene, I wanted to chat a bit about some of the occasional disasters (natural and otherwise) that can befall a real estate transaction. After the hurricane, many transactions were put on hold, awaiting inspections by buyers, appraisers, engineers and even insurance companies. The assessing of any damage has left many transactions in danger.Does a buyer want to risk some structural damage or even mold problems? How long will it take a seller™s insurance company to respond, pay and complete repairs? Some homes were even damaged beyond repair. No one really could have prevented these issues, but some other œdisasters could have been¦

§ Title Issues “ chain of title, past mortgages, judgments, foreclosures, old tax bills, certificates of occupancy, and other thorns in the side of closings often can be dealt with much earlier in the process. The attorneys, agents and lenders who are proactive in attacking title challenges are not the norm. Making sure you have them on your team can save you a lot of headaches. § Appraisal Issues “ sellers who engage real estate agents often neglect one of the most important roles an agent can play¦.the sales person to the appraiser. Agents can have some influence on the value that appraisers establish, by providing the best possible comps, thereby saving the appraiser time and energy. A well prepared agent is huge. An agent who can help make a home look more appealing through staging is invaluable in exciting buyers and appraisers. § Credit Issues, Asset Issues, Employment Issues “ home buyer™s loan applications are under more scrutiny than ever. Buyers who work with a loan officer who is a coach (properly structuring loans, optimizing credit scores, explaining deposit and job abnormalities) are buyers who can avoid some of the biggest disasters.

Bottom line, some problems are unavoidable¦but many pitfalls can be avoided if you have the right people around you. Whether you are buying or selling¦YOU NEED THE BEST! Seek them out and hold onto them because they are rare. And don™t forget to refer them to those you care about. Excellence should not be a secret!

5 Great Reasons to Sell Your House Today

September 6th, 2011   by lisasheppard

We are often asked œIs the time to sell my home? The answer to that question is based on what your families™ goals are. If you don™t need or want to move for a few years it might make sense to wait for the housing industry to recover and prices to appreciate. However, if you wish to move within the next six to eighteen months, it is probably better to sell sooner rather than later. Here are five reasons why:

Your House Will Get More Exposure Now Than the Winter  

Housing sales usually level off in the summer and then regain momentum in September and October. The spring buyers™ market has passed. Don™t miss the early fall market. It has consistently outperformed the winter season.

Distressed Properties Will Impact Prices

Distressed properties (foreclosures and short sales) on the market will increase this fall and winter. This will put tremendous downward pressure on prices for at least the next 12-18 months. Get your home sold before they become your competition.

Mortgages Will Become More Difficult to Attain

Lending standards are continuing to tighten. There is legislation currently being considered that will make it even harder for buyers to qualify. Less demand will equate to lower prices.

It is the Perfect Time to Move-Up

With prices where they are and interest rates at all time lows, there may have never been a better time to move-up into your dream home. If you move into a more desirable home now, you will be in position to gain larger equity as prices eventually appreciate.

You Get to Move On with Your Life

Probably the most important reason to sell is so you can get on with your life. You  are considering selling  for a reason. Do not allow a less-than-stellar housing market prevent you from reaching your goals as an individual or as a family. Think about the reasons you are thinking about moving . Are these reasons  really important to you? If you have to take less than you were originally hoping to get for your house, your family has a question to ask each other: Is the dollar difference in sales price worth putting off our plans? Only you and your family know the answer to that question.

Short Sales: The Road Is Now Paved

September 2nd, 2011   by lisasheppard

Money to Purchase AND Renovate Your Home

September 1st, 2011   by lisasheppard

Whether you™re looking at a foreclosed home, bank REO, a Short Sale or  really any home, you need to be aware of the FHA 203K Program. The general condition of real estate has taken a dip over the past few years, as homeowners are not sprucing up their home as they have in the past.(Pssst¦there™s a recession going on¦people are afraid of losing jobs¦and they believe they won™t œget back the money they spend by renovating upon sale).The 203K loan can be used for small repairs (with a minimum of $5000 of work)  such as  a new roof or replacing the boiler.  It can go all  the way up to practically rebuilding the home and anything in between.   Maybe you love a home, the neighborhood, etc., but you hate the kitchen cabinets. The 203K may be for you. As long as the existing foundation stays intact, we can talk about any type of repair, upgrade, modernization or expansion.

With one closing, we will give borrowers money to satisfy their contract with the seller AND establish a Rehab Escrow Account to fund the agreed renovations. The Rehab Escrow Account is managed like a Construction Loan. Money is released after work is completed, the property is inspected by the lender and the title is updated.Like all FHA loans, the property must be owner occupied and loan approval requires full documentation of income, assets and credit worthiness. At the same time, underwriting guidelines have some flexibility built in. (In theory, we can lend up to 110% of the After-Improved Value of the home for example.)Loans are processed in the same fashion as any other loan (in terms of income, asset and credit) with the exception of the appraisal. Appraisers work in conjunction with the home improvement contractor and a HUD Approved Pre-Planner to determine: œAs-Is Value, œAfter-Improved Value, costs of construction and the draw schedule of the renovation portion of the loan. This work typically adds about a week to the approval process, largely because it should be done BEFORE contracts are signed.SOME UNIQUE FEATURES OF THE 203K § Mixed-Use Properties may be eligible! As long as the commercial space is no more than the allowable square footage based on the number of floors in the building and none of the renovation monies are used for a commercial renovation, the 203K gives tremendous interest rates for Mixed-Use Properties. § The loan can be used   to change property usage (when appropriate municipality approval)¦..converting a 1 Family Home to a 2 Family or a 4 Family to a 3 Family or any variation that stays within the 1-4 Family boundaries works. § On major renovations we will finance up to six months payments into the loan. In these cases,the house will not be habitable until after the work is completed. § There is a Streamline 203K for projects that require less than $35,000 of repairs. Typically, we like to see only one or two items of work that can be done quickly (with one inspection).It is recommended that you work with an experienced loan officer when exploring the 203K Program, as there are many details that need to be considered (from selecting a qualified contractor to the inner workings of the draw schedule and preparing for different contingencies). While the program is more intricate, with the right education ahead of time, it is extremely manageable.