SHORT SALE - you're hearing it a lot but what is it?

Real Estate 411 – What is a Short Sale?

What you need to know about a Short Sale

#1 A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property's loan. It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the current debtor. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers.

#2 Before you eagerly climb aboard the short sale bandwagon, consider these four statements that determine whether you may qualify for a short sale. If you cannot answer TRUE to all four statements, you may not qualify for a short sale.

· The home’s market value has dropped.

· The mortgage is in or near default status.

· The seller has fallen on hard times.

· The seller has no assets.

#3 The seller must submit a letter of hardship that explains why the seller can not pay the difference due upon sale, including why the seller has or will stop making the monthly payments. Examples of hardship are: unemployment, divorce, medical emergency / sudden illness, bankruptcy, and death

The hardship letter is the beginning of the financial documents process in a short sale package. The items you attach to that letter will ultimately have a great deal of influence on the decision of the lender about whether to approve a short sale or not, and for the amount of the offer they'll accept.

Whether you're the borrower, a real estate agent, or an investor trying to purchase the home in a short sale, everyone involved should be concerned about providing all the documentation that will sway the decision of the lender.

· Financial statements

· Pay stubs

· Bank statements

· Hospital bills

· Divorce decrees

· Credit reports

· Tax returns

It's a game of adding up numbers to show that the borrower is in an impossible situation leading to foreclosure or bankruptcy. It's the opposite of the process to get a loan. Then you're trying to prove you don't need it and that you're prosperous. Now the goal is to prove a hopeless payment situation.

#4 A short sale is dependent on a buyer making an offer to purchase. If you do not receive an offer, you will not qualify for a short sale. So even if you meet all the other criteria, it is possible that no one will buy the short sale. It is also dependent on the lender accepting the buyer's offer. If the lender rejects the offer, a short sale will not take place.

#5 There are tax consequences to a Short Sale. If the lender agrees to the short sale, the lender may possess the right to issue you a 1099 for the shorted difference, due to a provision in the IRS code about debt forgiveness. Many situations are exempt from debt forgiveness, according to the Mortgage Forgiveness Debt Relief Act of 2007. You should speak to a real estate lawyer and a tax accountant to determine the amount of short sale tax consequences, and whether you can afford to pay those taxes, if any.

Contact your CENTURY 21 Judge Fite Real Estate Associate to get started with your real estate transaction.

Call 800-451-8055, or email 411@judgfite.com.

Real Estate 411: Why Buy Now?

Here are Jim Fite's top 5 reasons why you should buy real estate NOW! Jim Fite is President of CENTURY 21 Judge Fite Company in the Dallas/Fort Worth Metroplex. Click here to search for your dream home!

What is "Staging" anyway?

Click here to watch the video.

"Staging" is the latest buzzword in real estate, but it simply means to present your home in its best and most appealing light. If you are preparing your home to sell, it is to setup your home to appeal to prospective buyers and showcase the property in a way that makes buyers eager to purchase! In theory, "staging" isn't hard or costly, but in reality, many homeowners find it difficult because it's often hard to see something objectively when we love it. An easy way to see effectively "staged" homes is to visit decorated models. Decorating a model is expensive, but builders are willing to invest the cost because they understand just how well a "staged" home sells.

What Are the Benefits of Home Staging?

>> A staged home sells faster and for more money in most markets
>> Inspectors view a staged home as a home that has been well cared for
>> Appraisers are more likely to appraise a staged home at full value
>> You can't sell what is covered up in clutter
>> Homes that are staged, clean, and free of clutter have an immediate advantage in any market

WHAT IS THE ULTIMATE GOAL OF STAGING?
To sell your home faster at top dollar!

BASIC STAGING RULES
Clean - put the sparkle back!
Fix – anything broken, cracked or dripping
De-Clutter – get rid of 50%
Go Neutral – Neutral colors sell
De-Personalize – Remove objects your buyer can’t identify with

For more on Staging Your Home for Sale….visit http://www.century21judgefite.com/ or click here to download the “10 Easy Steps to Staging…” printable PDF.

I am ready to sell my home, where do I start?

Maybe you're moving to a larger home to accommodate a growing family, relocating for a new career opportunity, or purchasing a townhouse for retirement. Whatever the reason for the move, you'll need to take the necessary steps to sell your home for the best possible price, within a reasonable amount of time. Where do you begin?

If you're like most people, you'll start by seeking assistance from a professional. A local real estate sales associate, who knows your neighborhood, can help you determine a fair market price. The sales associate should also recommend the extent to which you should make repairs or improvements to your house.

In order to select a real estate professional who's right for you, ask family, friends and neighbors for referrals. Attend open houses and interview several sales associates to find out how professional or experienced they may be. Get a written outline of how they plan to market your property and the services they will offer you.

Once you've identified a qualified professional, the rest is chemistry. Is the sales associate someone with whom you would like to work closely? Do you feel comfortable with the sales associate as your partner, working with you to give you advice and acting as your representative? Does he or she practice a consultative selling approach, focusing on the long-term client relationship and on the importance of exceeding client needs and expectations or is he or she caught up in the proverbial 'hard sell?'

The brokerage firm that your agent is associated with is also important. Research the firm's success rate and commitment to quality service. Does it survey existing clients in order to ensure customer satisfaction? What are the results of those surveys? How in tune are they with consumer needs? Do they offer guidance with mortgages or any discounts for other home related or moving services?

"To be competitive in today's real estate market, as agents, we have to offer the buyer/seller products and services above and beyond the sale. That's why the CENTURY 21 System has established partnerships with various companies that allow us to offer everything from mortgages to moving services. This network of providers has enabled us to satisfy a consumer need while maintaining a high-level of quality service," said Eric Fite, Director of Operations for CENTURY 21 Judge Fite Company.

Determining your home's fair market value is one of the most important decisions you'll make during the home-selling/buying process. Your sales associate can help you set a fair price based on local market conditions. For instance, she or he will provide sale prices and other statistics of homes similar to yours that have recently been sold. Prospective buyers will be comparing your home to others on the market. Therefore, setting a comprehensive price can determine if your property will or will not sell.

For the first offer made, it's rare that the prospective buyer matches the asking price. If the offer is reasonably close to the asking price, carefully consider the offer before you consider turning it down. Curiously, it's the first offer that can often be the best offer. If the first offer is unacceptable to you, it may in your best interest to have your sales associate respond with a counter offer. Whenever considering an offer, ask yourself if you would purchase the property for the amount being offered. Always be willing to negotiate, especially if the prospective buyer is pre-qualified for a mortgage.

Once you decide what terms are acceptable, let your sales associate negotiate with the prospective buyer to work out the best agreement for you. You'll need to be patient while the buyer arranges financing and as the real estate company compiles and prepares pertinent data.
Careful planning and sound advice from a real estate professional can make selling your home a very satisfying experience. For more information, please contact CENTURY 21 Judge Fite Company at 1-800-451-8055, or visit www.C21JudgeFite.com.

Do Sellers Want More Communication with the Agent?

When trying to sell a home, silence isn't always golden especially when you're expecting your real estate agent to call. In fact, it's one of the leading complaints among sellers in the real estate market. Often times you find an agent who is more than willing to take on your listing, but once the relationship is made, the seller enjoys getting a call at least once a week.

"A seller should establish with the agent up front the expectation that regular communication will occur. Even if it's just to check-in, the seller will be more satisfied being kept 'in the loop'," said Jim Fite, President of CENTURY 21 Judge Fite Company.

Keeping the communication lines open between the two parties assures the seller that the agent is keeping them apprised of any and all offers. In addition, agents often provide valuable tips on why prospective buyers weren't interested. Often times, an agent is privy to the buyer's dislikes of the property. For instance 'this room's too dark' or 'the kitchen has a funny smell.' This allows the agent to give the seller constructive feedback and offer important tips on how to make the home more attractive to future buyers.

If you're a seller and are not hearing from your broker, be sure to keep calling them until they get the message that you expect a regular update. If the broker doesn't return your calls, leave a message for your broker's office manager. The manager will see to it that your broker becomes more attentive to your listing.

Selling a home can be a lot of work and sometimes quite stressful. It is incumbent upon an agent to satisfy the seller's expectations of routine updates, this will ensure the possibility of future business not to mention a successful sale. Furthermore, as a seller you must demand the communication exchange between you and your agent. If both parties work in a cooperative effort, the selling experience will be more successful and enjoyable for both the agent and the seller involved.

You can reach CENTURY 21 Judge Fite Company at http://www.c21judgefite.com/ or by calling 1-800-451-8055.