Short Sale 101 for Real Estate, Part 1

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avoid foreclosure, short sale

avoid foreclosure, short sale

Today’s economy has been rough on most everyone’s pocketbooks, and when it comes to prioritizing payments, mortgage payments can take a hit. If you find yourself in a bind, owing more than your real estate is worth and you can’t afford your current mortgage, then you might want to consider talking to your real estate agent and bank about the possibility of a short sale.  

To help you prepare for those conversations, here are the basics about short sales:  

  • What is a short sale? A short sale is an agreement that your real estate agent negotiates between you and your bank to sell your home for less than you still owe. The bank absorbs the loss so that the seller doesn’t have to repay the balance of the mortgage.
  • Why would you do this? Your home is now worth less than you owe, which is called being underwater, and you have a financial hardship. There are a number of things that could put you in financial hardship and have you considering a short sale — such as unemployment, job transfer, illness, underemployment or divorce.
  • How does it work? A real estate agent lists your home at its current market value. Then a buyer places an offer that is usually much less than the amount required to pay off the loan. The seller or agent (if the seller has given written permission for the agent to do so) takes the short sale purchase agreement to the bank holding the mortgage in hopes that they’ll accept it.
  • What do you need? Basic guidelines usually include a hardship letter about why you need a short sale, bank statements for the last three months, two years of tax returns and permission for your real estate agent to negotiate short sale terms with your bank.
  • How should you proceed? Most accountants agree that a short sale is better for your credit score than a foreclosure. Talk to your agent and have him or her refer you to an accountant who can evaluate your situation and help you take the steps necessary to secure a good financial future.  

There’s a lot more to short sales than I’ve outlined here, but this gives you a starting point.  

If you’re finding it difficult to meet your monthly mortgage payments and still owe more than your home is worth, then you might want to consider a short sale for your Cape Coral/Fort Myers real estate. It can decrease your debt and release you from that monthly financial burden. Call me at 239-699-0142 or email me at  Liloc@att.net  for more information. Or sign in at  http://www.lilorealtor.com/Contact_Us/page_2461249.html

Real Estate Investing: Buying a Short Sale Steps 6 through 10

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If you haven’t read “Cape Coral Real Estate Investing:  Buying a Short Sale Steps 1 through 5,” start there.  This blog post provides steps 5 through 9 of the short sale process.

6.  Visit the Cape Coral real estate on your short list.  You’ve already searched for short sales, researched them and narrowed your list to a few short sales that meet your criteria and have the best chance of making it to closing.  Now it’s time to personally visit the few on your short list.  Your primary purpose in visiting the property is to get an estimate as to how much it’s going to cost you to repair the home.  As a real estate investor, you want a property that needs some work so that the average home buyer won’t want it, and you can get it at a lower-than-average price.   But, you also want a property that is in good enough condition that the cost of the property plus repairs still gives you a good return on your investment.

7. Get a home inspection.  Since short sales are typically sold “as is,” it’s crucial that you have a licensed home inspector evaluate the condition of the short sale that you’ve decided is the one you want to buy.  An inspection will find problems you might not have been able to see in your initial visit to the home.  It will also give you a more precise idea of how much it’s going to cost you to repair and renovate the property.

8. Make an offer.  Now that you’ve found the short sale you want to buy, you’re ready to prepare an offer.  Have your Cape Coral real estate agent prepare all the documentation and submit the offer to the seller’s agent.  The seller’s agent will submit the documentation to the lender.  Hopefully, you’ve chosen a short sale with only one lender, but if there is more than one lender, remember that all lenders have to agree on the terms of the sale.
9. Make a counter offer or walk away.  After getting your offer, the lender has his real estate agent evaluate the offer.  More than likely the lender will make a counteroffer.  That’s the time for you to do a final evaluation.  Double check your numbers using the higher purchase price and ask yourself, “Is this property really going to give me the profit I want?”  If the answer to this question is no, or if you’ve already reached the maximum you’re willing to pay for the property, it’s time to walk away.
10. Finalize the deal.  After you, the seller and the lender have all reached an agreement, get everything in writing and officially record it.  Go to closing, and the property is now yours.  Congratulations!
If you’re a Cape Coral real estate investor looking for a well-priced property to invest in, I can help.  Give me a call today at 239-699-0142 or email me at Liloc@att.net for more information.

Real Estate: Buying Remains More Popular Than Renting

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  In today’s environment, do you think buying  real estate has become less popular than renting?  If so, you’ll probably be surprised to learn that 81% of American adults still think that buying a home is the best investment a person can make.  
In comparison, two decades ago, a CBS News/New York Times survey found that 84% of American adults thought buying a home was the best investment a person could make.  That’s only a 3% decline in 20 years. 
The new information is based on two nationwide studies performed this year by the Pew Research Center and Trulia, a real estate website.  The Pew Research Center’s survey sample included 2,142 adults.  Fifty-seven percent of the people who answered the survey own a home, 30% rent and the remainders have other arrangements, such as living with family members. 
Here are some other findings provided by the studies: 
Buying is more affordable than renting in 78% of America’s major cities. 
  • 81% of renters would prefer to own a home rather than continue to rent.
  • 47% of homeowners say their home is worth less now than before the recession started.  31% say its value is the same.  17% say their home is worth more than before the recession. The bottom-line?   In most areas of the country, even though home prices have declined in the past four or five years, homeownership is still preferred and is also a practical financial decision.  

If you’re ready to buy Cape Coral real estate, I can help you find a home that you’ll love in a price range that fits your budget.  To find the Cape Coral real estate of your dreams, give me a call today at 239-699-0142 or email me at Liloc@att.net

Home Buyers: 3 Mistakes First-Time Buyers Make (and How to Avoid Them)

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 click her for your Buyers reportThere are a few mistakes that many first-time home buyers make.  Here are three of the most common mistakes and how you can avoid them when purchasing your first Southwest, Florida home.

Mistake #1:  Assuming your credit is good.
The information in your credit report determines whether you can get a loan — and how much interest you will have to pay – so it pays to be certain your credit reports are accurate.

Check your credit reports for free from all three credit reporting companies — Equifax, Experian, and TransUnion — to make sure everything is correct.  If you find errors, contact both the credit reporting company and the information provider (the person, company or organization that provided information about you to a credit reporting company) involved in the errors and ask them to fix the credit report errors.

Mistake #2:  Getting pre-qualified, not pre-approved, for a loan.
It’s far better to be pre-approved for a loan than to be pre-qualified.   Here’s why…

With pre-qualification, your lender does a preliminary evaluation of your ability to pay for a home and gives an estimate of the mortgage amount they’ll give you.  The lender does not verify the information you provide. 

With pre-approval, your lender verifies your income, assets, debts and credit history.  They provide you with written confirmation of the mortgage amount for which you’re approved. That written confirmation demonstrates to the seller that you are committed to buying; this can give you an advantage over other buyers.

Mistake #3:  Allowing emotions to influence your decisions.
Buying a home is an investment.  It needs to be treated as any other investment.  You don’t buy stocks because they are pretty and you shouldn’t pick your Cape Coral home that way either.  Make sure the home you buy fits your needs and allows you room to grow over the next few years. As with any sound investment, time is the key to a good return.

If you are a first-time home buyer, I would be happy to help you find (and get the best price for) your first Cape Coral home.   Give me a call today at 239-699-0142 or email me at Liloc@att.net.
Please visit my website at www.LiloRealtor.com and sign up on my Buyers List. You will receive all the newest homes daily and also a complete Buyers report

Streamlining Short Sales for Home Owners and Home Owners Nationwide

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Short sales in Southwest Florida and Cape Coral/Fort Myers

Short sales in Southwest Florida and Cape Coral/Fort Myers

Just over a year ago, the federal government launched the Home Affordable Foreclosure Alternatives (HAFA) program.  It was supposed to streamline the short sale process for home owners and home owners nationwide.  This article provides an update on HAFA.

How does HAFA benefit home owners?

Home owners who don’t qualify for a loan modification can apply for a short sale through HAFA.  If the home owner qualifies for a HAFA short sale, the difference between the sale price of the house and the loan balance is forgiven.  In addition, HAFA offers qualified home owners $3,000 for moving expenses.

How well is HAFA working?

From April, 2010, to December, 2010, HAFA had disbursed just $9.5 million of the $4.1 billion in its budget.  And, through May, 2011, only 8,541 HAFA short sales had been completed.

However, HAFA short sales have increased.  There were only 320 HAFA short sales pending in September, 2010. Now, there are 18,000 pending nationwide.

What went wrong with HAFA? 

Because the loan balance is forgiven with HAFA short sales, lenders cannot collect that amount.  Lenders can collect the loan balance on short sales that go through them, so the majority of short sales are still handled by individual lenders’ programs.  Although HAFA provides a $1,500 incentive to the lender, it isn’t enough to entice them to go along with the program.

What’s next for HAFA?

The HAFA program expires at the end of 2012, and by then, the U.S. Treasury hopes to have a model process with uniform documents that banks could use to speed the process and avoid greater losses that come with foreclosure.  In the meantime, changes are being made to HAFA to ease eligibility requirements.

If you have any questions about selling your Cape Coral/Fort Myers home, whether through a regular sale or a short sale, please give me a call at 239-699-0142 or email me at Liloc@att.net.
Please visit my website at www.LiloRealtor.com

Answers to Your Questions about Online Cape Coral Real Estate Valuations

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Home in Dean Park, Fort MyersI’ve been getting a lot of questions about the estimated Cape Coral real estate values provided by online sources, so I thought I’d answer a few of the most frequently asked questions here today.
Why is the price you think my home can sell for different than the estimated home values provided by online real estate sources?

Because computer programs set those prices.  Here’s how it works in general.  A computer pulls the description of your Cape Coral real estate from public records.   Using that extremely basic information,  such as square footage and number of bedrooms and bathrooms, the computer comes up with a price for your home.

Computer programs cannot personally visit your home and other homes in your neighborhood to see the differences and similarities.  For example, they cannot see that your home has recently been painted and renovated.
Are there any circumstances in which those computer generated values are at least fairly accurate? 
 The estimated home values could be in the ballpark if all the following are true: • Your home is in a subdivision in which homes are very similar;
• Several homes just like yours have sold recently;
• Homes are not being sold as short sales or going into foreclosure;
• Your home is newer and has not had a major renovation or addition that is not in the public records.

While it’s fun to go online to see what your neighbor’s home sold for, don’t use that information as the final word on what your home could sell for in today’s market.
If you’d like a free, in-person, professional analysis of what your Cape Coral real estate could sell for in today’s market, give me a call today at 239-699-0142 or email me at Liloc@att.net.  No obligation, just information.
Please check out my Website: www.LiloRealtor.com  and  www.Lilosellscapecoral.com

How to Buy Cape Coral Homes Long Distance

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Buying Cape Coral homes when you live in another state or country can be challenging.  Here are a few simple ideas to help make things a little less hectic. 
Investigate online.  Most people know to search for Cape Coral homes online, but what about searching for a neighborhood?  Although you can’t search each and every individual neighborhood, you can research almost any city online.  This gives you a pretty good idea of what the area has to offer in the way of schools, shopping and safety.

  • Hire a buyer’s agent.  While you’re searching online, your buyer’s agent can search the Multiple Listing Service (MLS) for you.  She or he can email newly listed properties to you daily.
  • Use your buyer’s agent as your eyes, ears and nose.  When you find a home that meets your needs, ask your buyer’s agent to visit it in person.  Have him or her take photos of the interior and exterior of the property and email them to you.  S/he can even take a video and post it on YouTube for you to see.  Ask your buyer’s agent to tell you what the home smells like and how loud (or quiet) the neighborhood is.
  • Share as much information with your agent as you can.  The more you research the area, the more information you are going to have to give to your agent.  Talk with your agent and let her or him know what you have found and any areas that you may have decided against.  This will save you and your agent time.
  • Visit to get a personal impression.  If at all possible, after you’ve narrowed the properties down to the top two or three, personally visit them.  While you can buy a house sight unseen, it’s best to make at least one trip to get a feel for which home most appeals to you.

For more information on long distance home buying or other tips to make your search for Cape Coral homes easier, give me a call at 239-699-0142 or send an email to Liloc@att.net.

Light the Night to Sell Your Cape Coral Home Faster

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Have you ever thought about what your Cape Coral home for sale looks like at night?  You should, because potential buyers certainly do.

Imagine a potential buyer driving by your home after sunset.  What will they see – a beautifully lit walkway leading to a welcoming front door – or a house that’s dark and dreary?

Many potential buyers want a home that looks lovely both day and night.  Why do they care what it looks like in the dark?  They entertain primarily at night, they frequently come home from a long day at work after dark, and they want the added level of security provided by a well-lit home.

Here are some ideas to light the night to help your Cape Coral home sell faster:

• Add landscape lighting.  Create a gentle moon-glow lighting effect on flowers, trees and other landscaping features.  To do this, conceal the light source behind shrubs or other foliage.  Unless the light fixture is the decorative element, you want it to disappear when the lights are on.
• Put in path or walkway lighting.  This adds a measure of safety.  For the best results, use light sparingly.  When you place too many lights along walkways and borders, it creates an unattractive runway effect.  Instead, use taller path- or spread-light fixtures to create pools of light that illuminate the walkway and the surrounding flowers, shrubs or trees.
• Improve security lighting.  A well-lit home is more secure.  Use spot lights and flood lights to spread light across a wide area and light up a work or play area.  Place flood lights above garage doors, sheds and patios.
• Keep the outdoor and indoor lights on.  While your home is on the market, leave the lights on during the evening hours. If you don’t get home until after dark, put the lights on a timer.  You never know when a potential buyer will drive around the area at night checking things out, so be prepared.

Pathway lights, flood lights and accent lights aren’t overly expensive, and provide a dramatic effect. Choose “green” outdoor lighting options to keep your electric bills down.

If you’re thinking of selling your Cape Coral home, and need help lighting the night, give me a call today at 239-699-0142 or email me at Liloc@att.net.
Please visit my websites at www.LiloRealtor.com and www.Lilosellscapecoral.com

Buying Cape Coral/Fort Myers Real Estate: What Type of Mortgage is Right for You?

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You’ve been watching the news, reading blogs and you know this is the perfect time for you to buy a piece of Cape Coral/Fort Myers real estate.  You want to do all the right things to get the best deal, and you know one of the first steps is to line up your financing.  

To help you pick a mortgage that matches your goals and financial situation, here’s an overview of three of the most popular mortgages available today.

Fixed Rate Mortgage

If you plan on keeping your new Cape Coral/Fort Myers real estate for more than 10 years and you don’t expect your income to change, this is probably the loan for you.  Although fixed rate loans charge a bit more interest, the rate will never change.  This provides financial stability and the security of knowing what your monthly mortgage payment will be.  By locking in the current low interest rates, you’ll save thousands of dollars over the life of your loan.

ARM (Adjustable Rate Mortgage)

With the ARM loan, the interest rate is usually very low at the beginning but can increase over time.  If you plan on keeping your Cape Coral/Fort Myers real estate for only a few years (up to 7) or you expect your income to increase, then this might be a better choice for you. If you expect your income to increase, an ARM loan can allow you to buy a more expensive home now. The drawback to this type of loan is that you do not know what your mortgage payment is going to be in the future; if the interest rate jumps dramatically, then so does your payment.  A particularly popular ARM is the 5/1 ARM.  The interest rate of a 5/1 ARM is fixed for a period of 5 years.  In the 6th year, the loan becomes a typical Adjustable Rate Mortgage.  So if you plan to own your home for less than 5 years, the 5/1 ARM may be your best choice.

FHA Mortgage

If your credit is a bit shaky, an FHA loan may be a good fit for you.  The qualifying criteria for FHA loans are not as strict as for traditional mortgages.  Also, because these loans are guaranteed by the FHA, lenders often allow you to provide a smaller down payment than they would allow for other types of mortgages.  If you’re in a time crunch, an FHA loan may not be right for you; processing times are typically longer than other types of loans because of the government paperwork involved.

If you have any questions about mortgages or need a referral to a lender, give me a call today at 239-699-0142 or email me at Liloc@att.net.
Please visit my Website at www.LiloRealtor.com