Short Sales 101 - Could This Be the Answer To Your Problems?

According to the latest Realtors Confidence Index (RCI), one out of every 10 recent homes sales has been a short sale. What's a short sale you ask? A short sale is when the lender agrees to let the homeowner sell their home for less than what they owe that lender to avoid a foreclosure, which can be a win-win for both the seller and the lender. How can this be? Typically a foreclosure will cost the lender more than taking less than what is owed on the property due to legal fees. The win for the seller is the fact that they will be able to get another home loan within 24 months after the short sale. Those looking to get a home loan that have been foreclosed on would have to wait at least 5 years.

Something a potential buyer of a short sale property needs to remember is that yes, you can get a good deal on a short sale, most of the time better than when a property has gone into foreclosure, but the deal has to make good business sense to the lender. It must make the lender more money than what they would make if they foreclosed, paid the legal fees, and sold the property closer to market value. Thus, most lenders will not agree to a short sale for 50% of asking price!

Homeowners, remember that the short sale must be approved by your lender. If you financed your home with two liens, a first and a second, the secondary lender in theory should receive nothing if a short sale doesn't cover what the first lien holder is owed. However, the second-lien holder must release their claim in order for a short sale to proceed, which gives them some leverage. There is not much incentive for them to agree to a short sale and receive nothing, so both lenders and your real estate agent must work together to make the process come together. This is just one of the reasons why short sales are known to be a long process. Still, the benefits to a short sale are well worth patience from both a buyer and a seller.

Are you behind on your mortgage payments, facing foreclosure, and think a short sale may be the answer for you? First, find a good real estate agent (BW Home Team has excellent, highly trained agents in the short sale process!) and start gathering documentation. Your real estate agent can help you with this.

The paperwork you will need for most lenders is:

1) Authorization to release information to your real estate agent. You can't start the file without this.
2) Detailed financial information. This includes 2-3 months of bank statements, federal income tax returns for the past two years, and paycheck stubs for the last 2-3 months. These must be provided by all borrowers on your lien. You must state you are unemployed if you are.
3) Financial worksheet - Each bank may have their own you can download. This worksheet shows all assets and debts. This will establish whether you are financially going through hardship.
4) Hardship Letter - You must state the hardship you are facing. Lenders would like to see that the hardship is not temporary. Make sure the letter is clear and legible and have your real estate agent proof it for you!
5) Bankruptcy - Are you going to decide to file for bankruptcy? This can cause delay to the short sale. Make sure your short sale is done before any legal proceedings begins.
6) Listing agreement with your real estate agent - Lender would like to know that you have made an attempt to sell the property.
7) Offer - The lender will not start or take your short sale seriously until you have an offer on your property.

Contact the BW Home Team today if you are interested in finding out more about short sales, whether you are a buyer or a seller. As a buyer, you can even search our website via keywords such as short sale, lender must approve, etc.! It's as easy as typing those words in the description box.

List courtesy of Jimmy Nguyen and Short Sale Rockstars - Facebook

The Tax Credit Extension for Homebuyers is Official!

Obama has officially signed the bill that extends the first time homebuyer tax credit of up to $8,000 through June 2010 as long as the homebuyer executes a contract by April 30, 2010. This new legislation expands the tax credit program to include an up to $6,500 tax credit for existing homeowners who buy another home as long as they have lived in their current residence 5 years or more.

The bill caps the eligibility for the credit to homes costing less than $800,000 and raises the current income limit from $75,000 per year for a single person or $150,000 per year for a couple filing jointly to $125,000/single and $225,000/jointly.

For all future homebuyers that have been waiting for this, visit www.bwhometeam.com for all your homebuying needs!

Voters Strongly Support All 11 State Amendments

Yesterday, with expected low turn out, Texans approved all 11 Texas Constitutional amendments on the ballot Tuesday.

Voters approved three amendments related to Texans' property taxes that the Texas Taxpayers and Research Association said will lead to "the most signifigant property tax reform in 30 years."

The specific results on these 3 propositions are as follows:

Proposition 2, which requires tax appraisals of a person's primary residence be appraised to the property's value as a homestead instead of the "highest and best use" standard, including a property's potential value as a commercial site: For - 68 percent / Against - 32 percent

Proposition 3, which allows the state to enforce uniform property appraisal standards across all of Texas' 254 counties: For - 65 percent / Against - 35 percent

Proposition 5, which lets adjoining counties consolidate review boards that hear appeals to appraisals: For - 61 percent / Against - 39 percent

Our Agents KNOW New Construction! Way to go Jeannette!

If you are interested in buying a new construction home in Prosper or anywhere else in the Metroplex, we have the some of the most knowledgable agents in the area! Click Here to see Jeannette Rohan of Team Rohan, who was one of the agents featured in this past Sunday's Hot On Homes! television show, discuss D.R. Horton Homes at the Glenbrooke Subdivision in Prosper.

Way to go, Jeannette!

Vote YES for Property Tax Appraisal Reform Nov 3rd!

There will be a statewide election on November 3, 2009 to pass much needed appraisal reform into law. The Texas Association of REALTORS along with others have been fighting hard to help homeowners by seeking reform to reign in various unfair property tax appraisal methods.

The following propositions are on the ballot:

Proposition 2 - Ensures that a residential property is appraised as a residential property, not a hypothetical value based on "highest and best use".

Proposition 3 - Allows the state to have oversight of central appraisal districts and enforce uniform appraisals standards across the state.

Proposition 5 - Allows two or more adjoining appraisal districts to have a combined appraisal review board to ensure qualified and knowledgeable board members.

All propositions on the November 3 Ballot require a majority vote to amend the Texas Constitution.

Remember, VOTE YES! 2 + 3 = 5

October 19, 2009 - First Day of Early Voting

October 30, 2009 - Last Day of Early Voting

November 3, 2009 - Election Day

For more information about real estate trends in the Dallas/Fort Worth area visit http://www.bwhometeam.com/ .

Two New Programs to Help TX First Time Homebuyers!

Texas homebuyers who qualify for the federal first-time buyer tax credit have two new programs from the Texas Department of Housing and Community Affairs that enable them to turn that credit into cash for a downpayment.

• The 90-Day Down Payment Assistance Program enables buyers to receive 5% of the first-lien mortgage amount up to $7,000 for downpayment or closing costs as a 90-day no-interest loan.
• The Mortgage Advantage Program works in conjunction with the 2009 Texas Mortgage Credit Program and the Texas First Time Homebuyer Program. Eligible buyers could receive 5% of the first lien mortgage amount up to $6,000 for downpayment or closing costs as a 120-day no-interest loan.

Both programs require buyers be eligible for the federal first-time buyer credit, complete homebuyer education, and file an amended 2008 federal tax return. Funds are available on a first-come, first-served basis for qualifying purchases made before Dec. 1, 2009. For more information and full details about both TDHCA's programs click here!

Still looking for a 100% Financing loan? You might consider the USDA!

Yes, you read that right, the United States Department of Agriculture is offering government insured loans in "rural areas" with 100% financing, that you can obtain through a mortgage broker. A rural area is classified as an area with a population below a certain number based on the 2000 census. In the DFW area, those areas include Hickory Creek and Lake Dallas along with other small towns scattered across the metroplex. The home must be located in a town or city with between 10,000 to 25,000 residents or open country and places with a population of less than 10,000. There are loan limitations and income restrictions, but this is something definitely worth looking into! You may be surprised.

Contact us today for a referral to a lender that handles USDA loans. Click here to search for homes in Hickory Creek or homes in Lake Dallas.

Texas Senate Passes Bill to Help Landowners

Published : Monday, 04 May 2009, 7:47 PM CDT

• Associated Press

AUSTIN, Texas - The Texas Senate voted Monday to expand the rights of property owners who face having their land taken by the government.

The bill by Sen. Craig Estes, a Wichita Falls Republican, would limit eminent domain land takings to projects for public use only and would require governments to make a "bona fide" offer for the property before condemnation.

A property owner would be entitled to be paid for any loss of market value if the taking impairs their access to the land they still have. Any land taking would also have to be done by a record vote in a public meeting.

"Private property and the right to profit from it is fundamental to not only our economic liberty, but also our personal liberty," Estes said.

Gov. Rick Perry vetoed in 2007 an eminent domain bill that addressed diminished access. Perry, a Republican, is now pushing a constitutional amendment to safeguard landowners' rights.
Perry said the bill has "essential" safeguards to "shield landowners from abuses of eminent domain for generations to come."

The Senate bill requires property owners be given an initial offer for the land in writing, and prohibits governments from requiring confidentiality agreements. And if a court rules the government did not make a bona fide offer, it could order the government to make another offer and to pay the landowners' legal fees.

Governments would also have to tell the landowner that he or she and their heirs may someday be able to repurchase the land for the price paid to acquire it. That option would kick in if the public project for the land is canceled or no progress has been made in 10 years after the condemnation.

The bill passed the Senate 31-0 and now goes to the House.

Land condemnation has been a key issue for farmers and ranchers and the Texas and Southwestern Cattle Raisers Association said it supports the Senate bill.

While population growth may require some land and water takings in the future, it "shouldn't be at the expense of property owners," said Dave Scott, president of the cattle raisers group.

The bill passed Monday "levels the playing field for property owners," Scott said.
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The eminent domain bill is SB18.

Afraid to jump into the real estate market?

Many buyers and sellers that I have spoken to recently are afraid to jump into the real estate market right now. With all the doom and gloom from the media, who can blame them? Sellers are afraid that they'll lose all their profits and equity, while buyers are afraid they'll buy a home and it will lose a big percentage of its value in a short time. So, when is the right time to buy or sell?

In Dallas/Fort Worth, any time is relatively safe. Our market was never in a real estate bubble like we've seen on the east and west coasts and while we have seen home values go down 1 - 2 percent or so in certain areas, mainly home prices are holding steady, not rising or falling. Granted, there are more foreclosures on the market right now and some relocation company owned homes are basically being given away, so there are deals out there, but I don't see home prices tetering on the edge of a cliff, getting ready to plunge down a large percentage.

I will be putting my own personal home on the market this coming spring and purchasing again, regardless of the news the media is putting out at the time. There are always going to be buyers out there, and DFW has gotten some good press on being a great place to work and live. The main thing you should be concerned about is whether your family needs a larger/smaller/more efficient, etc. home right now. The market is not as scary as the national news makes it sound. We are still moving here in Texas!

The Need for Title Companies in Texas

Here I interview Cathy McMullen of LandAmerica American Title in Texas about the need of a title company in Texas.

Demystifying Texas Homeowners' Insurance

Watch Jason Ridley with Allstate and I discuss pertinent topics regarding Texas homeowners' insurance.