Phoenix Short Sale Real Estate Blog

Phoenix Short Sale

noreply@blogger.com (MLS Ken) — Thu, 24 Sep 2009 17:22:00 +0000

Phoenix Short Sale vs. Foreclosure.

It is consistently being confirmed daily across all mediums that many people still do not understand the pro’s and con’s of a short sale. The Phoenix Short Sale market is growing almost daily and they are in many cases selling in a matter of days. That’s the easy part.

The real trick is sifting through the mounds of paper work, dozens of hours on the phone and hundreds of emails and faxes only to end up with a whole lot if nothing. It is very important that you have a short sale specialist who has done more than a bunch of reading on the subject; they need to know what goes on behind the lines. What is the truth and what is hype when it comes to the negotiators at the banks.

I have heard many stories from many seemingly qualified Realtors who ended up loosing the Short Sale negotiations to Foreclosure and in my opinion some of them could have been avoided others should have never been considered for a short sale in the first place. That is where the inexperience hurts the home owner. If the Realtor new better they would have advised the client to consult a real estate or bankruptcy attorney. Why you ask? Well there are some instances where depending on circumstances, opting for a foreclosure or bankruptcy might be the best thing to do and you need a professional in that field of expertise to help you make that decision. I don’t think a realtor is the person who should be playing with peoples hard earned money and sending them down a long 4 to 6 month path only to end up costing them thousands more in house payments to end up in bankruptcy or foreclosure when it’s all said and done. Nationally the average short sale that actually makes it to the closing table is 1 out of every 3. I think many of these could have been avoided if they had been properly evaluated in the first place.

Please folks, if you don’t have the time to dig into all of the rules of the game of short sales, take care to find someone who can.

Am I an expert? In short, no. But I have aligned myself with the people who are. I am a Realtor. I help clients buy and sell homes. That’s what I’m trained to do and that’s what I do best. I hire the best and most qualified company to evaluate and process my short sales. If it is a good candidate we will get it done if not we are careful to not waste people’s time and money.

I think more realtors need to start understanding that.

Thanks for reading.

Type at you soon,

Sincerely,

Ken Cuellar

Phoenix Short Sale / Foreclosure Anti Deficiency Laws continued.

noreply@blogger.com (MLS Ken) — Fri, 18 Sep 2009 21:34:00 +0000

We ended our last post feeling a bit unsure of the consequences if a Phoenix home owner where to Foreclose or Short Sale. So lets pick up with that shall we?

Although we did mention that if the loan fell under the category of a Non Purchase Money Mortgage and did not qualify under the Arizona Anti Deficiency Law Statutes, the lender could come after the individual borrower for up to 20 years to recover the deficiency. We did not touch on the subject of potential tax liability. Put simply, in the past if there was a deficiency that was not collected by the lender and it was a forgiven debt to the homeowner, the homeowner would receive a 1099-C from the lender letting the IRS know that this debt was forgiven leaving the homeowner liable for the taxes because it is considered pretty much a gift from the bank.

There have been several changes to this situation one of which is called the The Mortgage Forgiveness Debt Relief Act of 2007 which takes care of some of these issues. The Act only applies to transactions after January 1, 2007, and before January 1, 2010, and permanently removes the debt forgiveness or (gift from the bank) from income if (a) the real property was the principal residence of the taxpayer; (b) the debt was for the purchase, construction or substantial improvement of the foreclosed or short sale property; and (c) the foreclosed or short sale property was the taxpayer’s primary residence for two of the past five years.

Of course this is the short explanation and as always, I would recommend talking with a tax attorney to be sure this Debt Relief Act applies to you.

That's all for now, more to follow.

Thanks for reading,

Ken Cuellar

Beware. Do Anti Deficiency Laws apply to your Mortgage???

noreply@blogger.com (MLS Ken) — Thu, 17 Sep 2009 14:33:00 +0000

If you are considering Foreclosure or Short Sale you have probably heard the term Anti Deficiency State. Yes, here in Arizona we are an Anti Deficiency State, but it is important to consult a qualified Real Estate Attorney. No, not a Real Estate Agent, an Attorney. Shame on any Agent, no matter how qualified as an Agent they are, if they tell a homeowner anything, but get advice from a qualified Real Estate Attorney.

Something to think about.

Is your mortgage a Purchase Money or Non Purchase Money Mortgage? Put simply, did you use the money to buy the home in which the mortgage is attached to? Is this the original mortgage, or did you refinance? Is there a second or Junior Lien on the home?

The list of questions is deep and all should be explored before a homeowner embarks on the path of foreclosure or short sale.

Basically, any money from a loan that was obtained by using the home as collateral, but was not used to actually buy the home, is considered a NON Purchase Money Mortgage, i.e. Home Improvement Loans, Equity Lines of Credit, etc.... If a homeowner forecloses or short sales on a home and there is not enough money to pay off all of the liens against the house, the Junior Liens, or second mortgages will not be wiped clean if they are NON Purchase Money Mortgages and the creditors have the legal right to pursue that money from the homeowner for in many cases up to 20 years if it is written into your original loan documents as such. This is why consulting an experienced Real Estate Attorney is so important.

I believe it is perfectly reasonable for an experienced Real Estate Agent to initially consult with a potential foreclosure or short sale candidate as a first step. A good realtor could eliminate your eligibility with no out of pocket expense. However, if things on the surface look promising for the homeowner to pursue a foreclosure or short sale, the next step is to talk with that Attorney before proceeding on.

While there are many other things to be considered, there are to many to mention in this post so I will be coming back to this subject on future posts. Check back periodically for more updates.

As always, thanks for reading.

Sincerely,

Ken Cuellar

The Phoenix Market.

noreply@blogger.com (MLS Ken) — Tue, 15 Sep 2009 14:56:00 +0000

Things are getting tough in Phoenix and in many other cities in the country. Although there are indicators that not only the market, but the economy is trying to turn around. It doesn't bring comfort to the many people who are already in a desperate situation as a result of the preditory lending that put them into the spot they are in today. I have noted numerous times on my other blog, www.scottsdalehomesforsale.org, that the housing market has hit bottom and we are seeing home prices creep up ever so slowley and yes, I believe they will continue to recover. Unfortunately, for all of those who are already upside down the market simply is not going to recover in time to help them. In some of the hardest hit cities, Phoenix being one of them, I believe it will take aproximately 10 to 15 years before home values reach what they were at the peak. If you are one of the many thousands of people who bought at that time, you will either have to stay there for a while or consider alternatives.

Many of the struggling homeowners also don't qualify for the loan modification programs being offerd leaving them little choice but to throw in the keys and start over. What many people are unaware of is the option of a short sale. Here in Phoenix, short sales are becomming more and more common every day and we are seeing the number of short sales rival the foreclosures on the market.

The down side is short sales still have a very low success rate when it comes to actually making it to the closing table. Frankly, many of the short sales that don't close were not really good candidates for a short sale to begin with, but many that didn't close were due to inexperiance on the negotiators part. This is where an experienced negotiator is critical.

Make certain if you are thinking of doing a short sale, that you seek someone who has educated themselves with the process. I believe a good indicator of a qualified professional is one who doesn't feel the need to charge the homeowner in advance for their services. If they know what they're doing, they will be closing a higher number of short sales and they won't feel the need to charge in advance because they know they will get paid at the closing table. There are numerous ads plastered across the internet offering short sale services so please, beware of the upfront fees.

If you would like an evaluation of your situation and you live in the Phoenix Metro area, I can schedule you in for a consultation. Just send me an email at kencuellar@qwest.net. The cost is a little bit of your time. If you are not a good candidate I will be frank with you. What you do not want to do is start the process, continue to make payments on a house you can't afford, only to find out four to six months later that the deal will never make it to the closing table. That will only cause you to spend six months of extra payments on a home that will remain upside down for another 10 to 15 years.

Thanks for reading.

Best of luck,

Ken Cuellar

Phoenix Short sale vs. foreclosures

noreply@blogger.com (MLS Ken) — Tue, 01 Sep 2009 22:13:00 +0000

Lets face it, nobody wants a foreclosure on their record and although a short sale still effects your credit it is minimal compared to foreclosure.

In many cases for example, if you were not late on any payments prior to your short sale being sold, you may qualify for a new Fannie Mae home loan Immediately. And yes you can qualify for a short sale without being late on your payments contrary to the many rumors floating around. It all depends on your circumstances, short sales are approved every day for people who have never missed a payment and have perfect credit. It is all up to providing an accurate and well written Hardship Letter explaining in detail the reason for the need to short sell your home. I will explain some of those reasons on a future post.

The important thing is that you have a Phoenix Short Sale Specialist help you evaluate your options to see if you really do qualify for a Short Sale.

Be leery of companies that ask for money to help you perform a short sale on your home, this should be your first red flag. Although there are a few legitimate companies out there, many just want a fee up front and all to often don't produce as promised. Also, many times these companies are not looking out for your best interests and even if they are successful in short selling you home, they don't do the due diligence on your behalf and depending on your circumstances, if you have junior liens or second mortgages that on the surface settle with the first position lean holder for a loss, many of these junior leans can, and many times will come after you for the difference for as many as 20 years later going after and attaching leans on new home purchases that you may have made once you have gotten back on your feet. It is important that you seek Legal Advice regarding these Junior Liens before entering into a short sale agreement to insure this does not happen to you. Sometimes unfortunately it doesn't make sense to do a short sale, you just need the professional guidance that a short sale expert will have to help you determine if it is right for you.

If you are in a situation where a Phoenix Short Sale or a short sale anywhere in the Phoenix metropolitan area may become a necessity for you, please give is a call. We can help answer any questions and the important thing is there is no fee for our help.

Call Ken Cuellar at 623-340-3139

Phoenix Short Sale vs. Foreclosures

noreply@blogger.com (MLS Ken) — Tue, 25 Aug 2009 20:54:00 +0000

In the Phoenix Metropolitan area the number of Foreclosures has jumped dramatically! In fact, Foreclosures have risen so much that the students of the Arizona State University have begun to separate the annual home sales that they track into two categories, Traditional vs. Foreclosure, as of the end of 2007. As an example, at the end of 2007 in the Phoenix Metro area, there were 87,610 Traditional Sales and 9,530 Foreclosures. That number changed quite a bit by the end of 2008 at 70,320 Traditional Sales and 38,270 Foreclosures. That equates to an additional 28,740 Foreclosures in just one year! You can find more statistics tracked by the ASU Students at;

http://realty.wpcarey.asu.edu/arec.market_update.html#sales

I suspect that the numbers, when they come out for the end of 2009, may be even higher in the Foreclosure column than it will be on the Traditional side.

The shame of it all in my experience is that many of these Foreclosures can and should be avoided. I'm certain many of you are familiar with the term Short Sale and all of the stigma that comes with it. For example, it takes many months to get an approval and there is no guarantee that the bank will except the offer when they finally get to it and there is a mountain of paper work to send in and on and on. In reality, things are changing in the Short Sale arena. Over the last two years many banks have taken tremendous losses due to Foreclosures and are now coming to realize that the Short Sale option ends up being much less expensive than Foreclosure. In many cases from their past experience, the Short Sale offers that the banks rejected, went into Foreclosure and ended up selling for a lot less as a Foreclosure than the Short Sale offer they had on their table a month earlier and to add insult to injury, it cost the bank additional money in the form of legal fees to go through the Foreclosure process. What we are seeing now is more and more Short Sales being approved and in a little less time to boot. The trick is to hook up with the right Real Estate Agent who is knowledgeable and proficient in the area of Short Sales. There are many Real Estate companies in Phoenix who are handling these Short Sales in house setting up their own Short Sale Department. I too considered following suit and hiring agents to handle all of the negotiations with the hundreds of banks and lending institutions across the country and decided it was in my opinion a bad idea. Instead, I started my search for the right partnership with a company that could handle the negotiations for me leaving me to do what I do best, service my clients. After interviewing literally hundreds of companies, I decided to join forces with National Quick Sale. For information on this amazing company check out this site http://www.nationalquicksale.com/about.aspx be sure to click on the Sellers tab to get an idea of what they do. Also, browse the rest of the information to get a feel for how well this company will be able to help. Please don't forget to return here if you decide to make a move toward a Short Sale. I believe with our new partnership we can truly call ourselves one of the top Short Sale Experts in Phoenix and the surrounding area. If you choose to conduct a Short Sale, you want to make sure you are aligned with a Phoenix Short Sale Specialist.

It is my guess that in the years to come the students at ASU will be adding another category to their sales statistics called Phoenix Short Sale. They are going to be a staple for the next several years until the Real Estate Market recovers and all of these bad debts are gone.

For Sale By Owner.

noreply@blogger.com (MLS Ken) — Wed, 19 Aug 2009 01:24:00 +0000

I can understand why someone would want to sell their home By Owner and if successful save the cost of a Realtor fee. However, I can't for the life of me understand why anyone would try to list and sell their home as a Short Sale. Not only is the Short Sale very tedious and time consuming, it in all cases pays nothing to the home owner. After all a short sale is an agreement between the bank or lender and the homeowner to allow the homeowner to sell the home at less then the owner owes on the loan. In most cases many thousands of dollars less.

That means the homeowner will not receive a penny from the sale no matter what, whether there is a commission or not.

Also in most cases the bank will not even except an offer on a short sale from a homeowner unless it is listed with a Realtor anyway, Many homeowners find this out only after spending time and money marketing their home, finding a buyer with an offer only to be rejected by the bank without consideration. There are many reasons for this one of which is the initial BPO from the listing agent, which is how the initial asking price is derived.

Phoenix Short Sale Information Starts Here

noreply@blogger.com (MLS Ken) — Sun, 16 Aug 2009 21:06:00 +0000

The idea of starting a Phoenix Short Sale blog, and the timing of such a blog, was created to assist my existing and future customers, as they wish to find an alternative to loan modification, or in some cases, walking away from their mortgage all together. Don't do it! Go for a short sale, and if you live in the Phoenix area especially, get in touch with me. I have aligned myself with one of the country's top Short Sale Specialists to help get the job done and save your credit.