Investor News, Info and Video
What are short sales?
A short sale happens when a homeowner needs to sell the property for
less than what is owned. The net proceeds of the sale are then not
sufficient to cover the mortgage(s) and commission of the realtor in
full, thus the lender pays the difference.
Who can consider a short sale?
A borrower that cannot afford to pay their mortgage or investment
property should try to avoid foreclosure on a property, since it has a
much higher effect on credit score than a short sale.
Why will a bank approve a short sale transaction?
It costs a bank or lender much more to foreclose on a property than
accept a short sale in most cases. Foreclosures are very expensive due
to legal fees which involve attorneys, realtors, locksmiths, lost
payments, lost interest, lost market, asset management services and
much more. Banks do not want to own the property.
Can a seller consider a short sale?
Yes. Homes are taking longer to sell and are declining at a record
rate. Time is really important in deciding if a short sale is a good
option. You do not want to enter the foreclosure process at the point
of no return when short selling could have been an option.
How to do a short sale?
Find the help of an experienced realtor who can close the deal and
has experience working with lenders and banks with this type of unique
transaction.
How much is a short sale?
Free, on your behalf since the bank will be paying out of pocket for
the realtors commission and the net loss. If someone approaches you
promissing a short sale service with an up front fee, do not sign with
them. You shouldn’t have to pay for those services. The commission is
paid to the Realtor as part of the closing costs approved by the bank.
If you are interested in learning more about Short Sales, I have a phenomenal company I can refer you to that can assist you in finding product.
darren@azpowerbroker.com
Slight U.S. Real Estate Recovery Forecasted By Second Half Of 2008
April 24, 2008 10:24 a.m. EST
Vittorio Hernandez - AHN News Writer
Washington,
DC (AHN) - Despite the general gloomy outlook across the American real
estate industry, indicators point to a slight recovery in the coming
months.
According to the Conference Board's Index of Leading
Indicators, positive growth is likely by the second half of 2008. The
positive outlook was shared by a National Bureau of Economic Research's
March report.
The NBER report cited data from the Mortgage
Bankers Association of America's national survey which said
applications for mortgages went up by 2.1 percent, its second uptick
for two straight weeks. The federal government, meanwhile, said the
decline in house prices had been arrested between January and February
and home prices even increased slightly by six-tenths of one percent.
Interest rates continued to remain below 6 percent, with 30-year fixed loans at 5.74 percent and 15-year loans at 5.27 percent.
To
the contrary, Bloomberg reported the mortgage application index dipped
by 14.2 percent last week, its worst drop in four months, based on the
MBA's index of applications.
Realty Times said the slight
increases "are not ballgame-changers for the real estate industry,"
adding the U.S. housing inventory must significantly decrease before an
end to the down cycle could be proclaimed.
Perhaps
foreign buyers can at least bring to the U.S. market what it's been
lacking and may provide a psychological support of confidence. It is no
surprise that with the weak dollar, foreigners are seeking more than
just a holiday on American soil. There seems to be a trend growing
especially in resort states like Florida. In fact the National
Association of Realtors has found that 65 percent of Florida Realtors
have a client base of at least one international customer. Furthermore,
it has been published by the trade organization as part of its profile
that at least 7 percent of home sales transcations were completed by
foreign clients. Should this be alarming or just a sign of the times?
Is this a trend we are just now realizing or a practice ingrained
within the real estate industry?
While
foreign property ownership of American land is not something new, in
fact a practice with origins in colonial times, and considering the
status of the weak dollar against other international currencies, one
cannot help but envy the foreign buying power. It seems logical as a
wise investment to purchase real estate here. Another factor is real
estate prices are dirt cheap comparitively speaking with some highly
populated areas of western Europe and Asia. In other words, foreigners
get more bang for their Euro or Yen. As Americans, we can appreciate a
good bargain, after all, we invented the concept.
Another
astonishing trait of this trend is the common practice of foreign
buyers paying cash for their homes. One can analyze why this happening
with many different possibilities, but also one can easily attribute it
to the current exchange rate. The percentage of foreign cash buyers
greatly exceeds that of the American cash buyer for family homes. The
foreign cash buyer comprised 28 percent of buyers whereas American
buyers were only 8 percent of the population. Also it seems that
international buyers can more realistically afford to do this type of
investment of a second home abroad because they are often
demographically from upper class wealthy households with higher
disposable incomes, cash reserves and prime credit ratings. This makes
for greater buying power. Still what separates the foreign cash buyer
from the pack of this type of investor pool is the fact they are
motivated by paying cash mainly due to tax reasons. Much of the tax
break would depend upon the buyer's tax status and their country's tax
regulations, but this factor greatly influences their decision against
taking out a mortgage.
Just as with any home buyer, the foreign
buyer has reasons for purchasing a home. Their desires are as varied as
ours when it comes to what they want in a home: size, style and price.
They may not chose to live in the property fulltime and this sets the
tone for their reasons for buying in the United States as different
from local buyers.
Because of their desire to be in resort
locations, it is not at all shocking that according to the NAR study,
Florida, California and Texas are the top three states for the foreign
buyer to purchase. However, other locations such as Las Vegas and areas
of upstate New York are also quickly catching on as desirable.
Another
factor that sets the international buyer apart from the American buyer
is their spending power. They can simply afford more house. Further
research into understanding the foreign client and their demographic
traits found that they came from different areas of the world. The top
five home countries for the international buyer were: Mexico, the
United Kingdom, Canada, India and China. While it appears the American
economy is in distress due the housing market downturn, purchase of
United States real estate remains a popular option for many foreigners.
The
NAR study found that out of the five top countries of origins for
international buyers, those from the United Kingdom and China paid the
most for their United States property. For some this may demonstrate how
demographic features correspond with buying trends. It was found that
Canadian buyers were more likely to purchase homes at the million
dollar mark, more so than anything other countryman.
What is
most interesting is how much foreigners respond to the desire for the
American dream leading one to believe is not just an American concept
but a universal one.
Article taken from: http://www.investorsloungeonline.com/index.php?option=com_jomcomment&task=trackback&contentid=1005&opt=com_myblog