Getting a Mortgage on a Foreclosure/Bank Owned Home – CAN IT BE DONE???

Getting a Mortgage on a Lehigh Valley Foreclosure/Bank Owned Home – Can it be done??

Yes!  All Day long…The question is what type of mortgage can you get?  That is the question.

When dealing with any type of large purchase you should make sure that you are working with experienced professionals all the way around.

Real Estate Sales – Is a sales business but you should weed through those fast talking sales type personalities…and look for a Real Estate agent that works more like a Real Estate Consultant instead.

This is one of the largest purchases a person makes in their life – I do not care how much you spend but next to buying a car and getting married this is the 3rd most expensive investments and just as stressful as the rest.  Interview and ask questions – make sure you know who you are working with before you make a written commitment to work with them.

Okay – So, what kind of loans can you get on a Bank Owned/Foreclosure? Well, It Depends!

Let’s talk about Residential Owner Occupied properties in this Blog.

It depends on what type of loan you are looking for: The best way to think about this is, How much do you have saved to buy a home? Are you looking to purchase a home with the least amount of money out of pocket? Do you want to avoid paying mortgage insurance?

1) I always ask my buyer’s are you looking for the least out of pocket type of loan? If so, then there are a few options.  There is the typical FHA loan and this is a loan for owner occupied properties – with this loan you only need 3.5% down and if the property you want to purchase has a bad roof or mold in the basement or even the cooper piping has been ripped out – you can get an FHA 203K Rehab loan and you will be set.

2) If you are looking for purchase a home anywhere above North of Coplay, west of Macungie, North East including Bath and above than the property may be eligable for USDA Rural Housing loan which is 100% financing. This means you do not have to put anything down to get the loan like with FHA you must put 3.5% down to get the loan.

3) If you have saved money for your purchase and/or you are selling a home and plan on putting a significant amount of money down on your purchase then you best bet is a conventional loan – There are less restrictions on this type of loan but depending on the condition of the property you still may need a renovation loan.

4) Are you a First Time Home Buyer? Do you find it difficult to save money and will you have less then $5000 in savings/checking but you can pay your monthly obligations on time and you currently live in Lehigh County and want to purchase a home in Lehigh County -Depending on your Family household monthly income, you could qualify for a special program through the Neighborhood Housing Services of the Lehigh Valley – They work with 2 local mortgage companies that will help you with a 2nd loan that will give you 5% down and 6% closing costs necessary to purchase a home.  If you keep the home for 5 years – this loan will be forgiven!! There are also programs for Northampton counties but no loans are forgiven there.

Sometimes – repairs needed are unknow until you have a professional home inspector out to the property you plan on purchasing – When you make an offer on a property you typically have a minimum of 7 to 10 days to conduct due diligence or inspections to make sure there isn’t anything about the property that you do not accept – an unknown material defect like Mold, Roof, defective Heating, plumbing systems etc.  Basically, anything that is going to cost over $2000.00 total to replace/repair.

Looking for More Details: Click here Lehigh Valley Down payment and Closing cost assistance programs.

Hope this Blog was helpfu.

Short Sales – What is the Current Market Value???

Lehigh Valley Short Sales – What is the current Market Value?

LEHIGH VALLEY REAL ESTATE Home Search

 

 

 

 

 

 

So, Short Sales are sold at current market value in as is condition OR maybe a hair less…like $5000.00 under.  If you get a better deal from today forward – Please let me know because you gotta understand that the seller’s lender is already loosing money because the seller owes more than the property is worth.  The purpose of a short sale is for the property to be sold at current market value in as is condition.

So, How is current market value established? This is HOW It should be estiblished.

1) A Real Estate agent should do research in the local MLS to find out what other properties sold for over the past 3 to 6 months that are similar to the subject property.

2) VERY IMPORTANT: The properties that have sold that are simular must be simular in the following ways. you can not just pick from all of the properties that sold over the past 3 to 6 months – they must be simular to the subject property (the subject property is the property you want to make an offer on)

  • They must be within 300 sq feet smaller or larger then the subject property
  • They should not be Bank owned or short sale properties if it can be avoided.
  • The should by the same or  simular sytle of the subject property – Like if the subject is Ranch – The sold property should not be a Bi-Level it should be a ranch. If the subject is a Twin it is expectable to use Row or end of Row for a comparable.
  • They should be within the same year of the property or max of 25 years if possible.
  • They should have about the same lot size.
  • They should be within .5 or 1 mile radius of the property if Urban (city) 2 to 4 miles if Suburban (just outside city) 5 miles is okay in Rural areas (country) and 10 miles is acceptable if a very unique property.

3) After 3 sold and settled properties are found then they must be compared to the subject property condition vs condition – if the sold properties are in better condition then you should subtract the repairs that are needed on the subject.  An experienced Real Estate Agent who works with Short Sales and Foreclosures should be able to price out a property for you during the showing and tell you a ball park that it will costs to rehab the property – I can do this within about 15 mins of viewing a property.  This information must be proven with written contractor estimates which the real estate agent should be able to get for you at no cost – again this is only for those who specialize in these types of properties.

4) All of this information above will establish current market value for you in as is condition – In a short sale situation it does not matter what the property is listed at because so many real estate agents do not know what they are doing in a short sale situation – You should have proven sold and settled comparables as I explained above and expect to pay current market value for the home – otherwise it is a complete waste of your time to wait around for 90  days to see if the seller’s lender is going to approve your offer – Short Sales are sold at current market value in as is condition and nothing less.

I hope this information was helpful to you.

 

 

Short Sales – Top 5 Buyer Offer Tips – Don’t make an offer without them!!!

Lehigh Valley Short Sales – Top 5 Buyer Offer Tips and maybe a few more

we-moved

 

 

 

 

 

 

 

So, you want to make an offer on a Short Sale?  Please consider these Top 5 Tips when considering to make an offer on a Lehigh Valley Short Sale property.

1) You need to give the seller’s lender at least 90 days to get written short sale approval.  This is the average time  it takes an experienced short sale negotiator to get written short sale approval.

2) Understand that the seller’s lender WILL NOT approve a short sale at anything less then $5000.00 under current market value in as is condition.  So, be prepared to get a counter offer from the seller’s lender if your offer is NOT at current market value in as is condition.  More information will be coming soon on “How do you know the current market value of a short sale?”

3) If you are interested in getting inspections – which you certainly should if you are a home buyer and not an investor – You need to do the inspections within the first 15 days after the seller signing your offer – What more information check out this video I made last year. 

4) Need Seller’s Assist?  Fine but do not expect to get any more then 3% seller’s assist approved by the seller’s lender.  If the seller has an FHA loan that is going through a short sale only 1% is approved if the buyer is getting an FHA loan to purchase the property otherwise you will need to wait another 30 days to get 3% seller’s assist approved through what is called a variance with FHA.

5) Other conditions no allowed in a short sale buyer offer:

  • You can not have a home to sell first – No home sale conditions
  • Cash purchases do not allow any seller’s assist.
  • If the buyer agent and the seller’s agent is the same person the lender will automatically cut the commissions by 1 to 2% so 4 to 5% commission is the max that will be paid as real estate agent commission.
  • The settlement date should say “within 30 days of written short sale approval” if the Buyer is getting a Mortgage and  If a cash transaction – settlement should be within 2 weeks of written short sale approval.
  • If there is a ReSale inspection/CO inspection required where the property is located – This is negotiable in the state of PA but typically the seller pays for the inspection and the buyer is responsible for all repairs after settlement. (The property inspection will catch any of these items)
  • Yes as a buyer you can get any type of loan for a short sale – This includes FHA, FHA 203K which is a rehab loan, USDA or Conventional.
  • You should make sure you write in the condition in your PA Agreement of Sale that you will not be ordering your appraisal until 2 days from written short sale approval or you will be in default of your agreement in 8 days from the seller execution date – If you do not pay for and order your appraisal.
  • The short sale agreement of sale and short sale addendum plus all other documents should be wet signed before sending it to the seller’s lender – one of the main reasons short sales take so long is because of the paperwork being sent in without being full executed.  They prefer wet signatures not Esignatures.

So, as you can see short sales should be left up to those Real Estate Agents that have experience on both the listing side and the buying side.

 

Buying a Short Sale – 3 Things you need to know BEFORE deciding to view short sales

Buying a Short Sale – 3 Things you need to know BEFORE deciding to view short sales

 

 

 

 

 

You have come to the right place, as Short Sales are my speciality – I have a passion for helping homeowners avoid Foreclosure via Short Sales – So, of course, I also help those who want to Buy a short sale.

There are honestly a few things you should consider before making your decision to even view short sales as part of your home purchase opportunities.

1) Timing is the most important question for you.  Are you looking to find a home and move into this home within anything less then 3 to 4 months from the time you make your offer? If so, Short Sales may not be the right choice for you.  In most cases, not all of course – Short Sales take 90 days to get negotiated/approved and then it takes about 30 more days for the buyer’s mortgage to be prepared before settlement can occur.  This could be a great opportunity, but not for those in a hurry.

2) Extra Closing Costs In most cases – Not all of course – Short Sales that are handled by experenced short sale processing/negotiating companies have a Buyer Negotiation fee that must be paid.  This can be anywhere from $3000.00 to $5000.00.  I believe $3500.00 should be the most charged for this service, but that is another conversation. So, if you do not have an extra $3500.00 on top of 3% closings costs – Then you will want to pick and choose which short sales you even view. (Those with additional Fee’s and Those without – Keep in mind if there is not a fee – These short sales are most likely being processed by inexperienced Real Estate Agents)  That’s why they work for free.  BUT, once in awhile experienced agents negotiate short sales without a fee too – The best course of action is to be working with a Buyer Agent  that knows how to negotiate short sales so they can help you navigate the process and also assist the listing agent and/or understand how to push them when needed.

3)  Are you looking for a Discounted Property? This is a Myth about Short Sales – There are NOT deep discounts given on short sales.  Short Sales are sold at current market value in as-is condition.  So, the entire point to buying a short sale is that the property is your DREAM HOME and location, style, and layout is what is the most important.  If you are looking to get a discount on a property – Foreclosed Homes/Bank owned homes are where you should be looking, NOT Short Sales.

If you are okay with the above items – Then a Short Sale should be part of your home buying search.

Information is power – as long as you are aware of these up front then there will be no surprises…well, unless you are working with an uneducated Buyer Agent for your short sale purchase…because there is a right way and a wrong way to make an offer on a short sale too. One Hot Topic is having inspections done prior to written short sale approval –  Click Here for a 6 min video about this.

12 Surprising Factors Affecting The Short Sale Timeline – Information about Short Sales

12 Surprising Factors Affecting The Short Sale Timeline

Information useful for Homeowners going through a Short Sale and The Buyer who purchases that short sale

 The amount of time it takes to sell a property via a short sale depends on a number of factors, all of which must align to produce a sale.  It may take anywhere from a couple of months to well over a year to complete a short sale.

Below are some of the factors:

  1. The seller’s responsiveness.  One of the biggest causes of a delay in the short sale is the seller themselves.  Their mortgage lender asks for documentation throughout the short sale process, and many times the lender will ask for updates on paperwork that was already submitted.  Many sellers are slow to produce paperwork, either because they are disorganized, emotionally upset, or confused about the nature of the paperwork.  The ideal short sale seller responds immediately to requests for paperwork without questioning why the lender wants it.
  2. The lender’s internal policy.  Each lender has its own timeframe for a short sale. They may have a policy on who has authority to advance or escalate the file to the next stage.  Many borrowers attempt a loan modification first, and many lenders will not consider a short sale while a loan modification is being considered.  In most cases, the lender’s staff is overwhelmed and that delays the process.
  3. Involvement of other lienholders.  If there are multiple lienholders, that might prolong the short sale negotiation because everyone has to approve the sale.  In most cases, each lienholder may attempt to limit what the other lienholders receive, which can complicate the negotiation.
  4. Involvement of a mortgage insurer.  If a mortgage insurer is involved, then they have to agree to the amount of the loss that the lender will take.  That injects an additional decision maker into the process.  The mortgage insurer may have certain rules about what they would approve, and the lender may have to abide by those guidelines.
  5. Involvement of a Government Service Entity (GSE).  If Fannie Mae, Freddie Mac, the Veterans Administration (VA), the U.S. Department of Agriculture (USDA), or the Federal Housing Administration is involved, then they too have to approve the short sale.  That injects an additional decision maker into the process, and each entity has their own procedure.
  6. The type of short sale program.  There are federal short sale programs, like the Home Affordable Foreclosure Alternatives (HAFA).  There are lender programs, like the traditional short sale and the cooperative short sale.  Each program has guidelines on timing.  One program may require that the property not have an offer on it yet, while another lender’s program may only consider a short sale if there is a signed contract with a buyer.
  7. Involvement of a third party vendor negotiating for the lender.  Some lenders, particularly Bank of America, like to use third party vendors to help negotiate with the seller.  These third party vendors work for the bank and may have their own procedures in addition to the lender’s rules.
  8. Involvement of a third party vendor or attorney negotiating for the seller.  A third party vendor or attorney working for the seller may have their own guidelines. They may only advance the short sale if all paperwork is received from the seller up front.
  9. The ability of the listing agent to procure a buyer.  Even if the short sale approval process is moving along quickly, it is essential to have a ready, willing, and able buyer.  Without a buyer, there is no closing.  Some properties, such as houses in need of repair, may only appeal to a certain segment of the buyer pool.  If a lender pre-approves a short sale at a certain price, but buyers believe that price to be too high, then there will be extreme difficulty in finding a buyer.
  10. Expiration of the appraisal or Broker’s Price Opinion (BPO).  Even if there is a buyer and if the process is moving along quickly, a lender may slow the negotiation because the previous valuation of the property is too old.  Some lenders may only consider an appraisal if it occurred in the past three months, while others may only approve a short sale if the appraisal is less than six months old.  Also, it may take days or weeks for an appraiser or BPO agent to submit their report.
  11. The amount of time it takes to prepare a preliminary HUD-1 Settlement Statement.  Sometimes a title agent or attorney may not be able to put together the preliminary HUD-1 form fast enough.  A lender needs to see a preliminary HUD-1 statement prior to making an approval decision.  The title clerk may have insufficient information about the outstanding liens and payoffs to meet the deadline posed by the lender.  The lender could arbitrarily close a file if a single document is not received.
  12. The buyer’s willingness to stay in the deal.  Some buyers back out of a short sale even when it is approved.  They may lose their ability to obtain financing, or they may find a more enticing property to buy.  Some buyers become frustrated and terminate their contract, which may occur mere days before an approval is granted.

Lehigh Valley Short Sales – Available Short Sales Listings as of October 20th, 2012

Lehigh Valley Short Sales Listings as of October 20th, 2012.

Available Short Sale Listings in Lehigh & Northampton County ONLY.

  • We will post Free Monthly links to properties that are Available as of the above date. The Report is in Summary format – If you are interested in a full report – Please contact me and we can work together to get you what you need. NO CHARGE & No Pressure!

  • If you would like to get Notified by Email when I add content to this site…sign up to the RIGHT.
  • If you would like us to set you up on a Daily email list of Lehigh Valley Short Sale Listings that fit your specific needs…Please Contact us and we will set you up for FREE.

  • Listings are pulled by Lehigh & Northampton Counties and Separated by Detached/Single Family Homes and All other property Types – The listings are in order by list price least to greatest.  If you need information on another area in the Lehigh Valley, Please contact us.

Follow Link to Access Report

  • Lehigh County Detached/Single Family Short Sale Listings:  81 Properties – Link Here

  • Lehigh County ALL Other Property Types – Short Sale Listings: 108 Properties – Link Here

  • Northampton County Detached/Single Family Short Sale Listings:  76  Properties – Link Here

  • Northampton County ALL Other Property Types – Short Sale Listings: 69 Properties – Link Here

Important Real Estate Disclosures

Moriah Represents the Buyer for the Listings above NOT the seller. The Seller’s agent information is available UPON Request. This report is provided by running a consumer summary report from the Lehigh Valley MLS.

This information is provided to you by Moriah Martin, Real Estate Agent with Prudential Regency real estate through a report generated by the Lehigh Valley MLS system owned by The Lehigh Valley Association of Realtors.

This information is deemed reliable but not guaranteed. Changes to property Status and/or listing Prices can change on a Daily basis…please contact Moriah Martin for any questions on the current status and/or Listing Price of a property.

Lehigh Valley Bank Owned/Foreclosures as of October 20th, 2012

Lehigh Valley Bank Owned/Foreclosures Listings as of October 20th, 2012.

  • We will post Free Monthly links to properties that are Available as of the above date. The Report is in Summary format – If you are interested in a full report – Please contact me and we can work together to get you what you need. NO CHARGE & No Pressure!

  • If you would like to get Notified by Email when I add content to this site…sign up to the RIGHT.
  • If you would like us to set you up on a Daily email list of Lehigh Valley Foreclosed/Bank Owned Listings that fit your specific needs…Please Contact us and we will set you up for FREE.

  • Listings are pulled by School District and we have provided the most popular Links..If you need information on another area in the Lehigh Valley, Please contact us.

Follow Link to Access Report

  • Allentown, Southern Lehigh School District Listings:   32 Properties – Link Here

  • Bethlehem, Nazareth, Whitehall/Coplay School District Listings: 19 Properties – Link Here

  • Easton, Wilson, Bangor Area School District Listings: 23  Properties – Link Here

  • Northampton, Catasauqua, Northwestern, Northern Lehigh Area School District Listings: 19 Properties – Link Here

  • East Penn & Parkland, Salisbury Area School District Listings: 14 Properties – Link Here

Important Real Estate Disclosures

Moriah Represents the Buyer for the Listings above NOT the seller. The Seller’s agent information is available UPON Request. This report is provided by running a consumer summary report from the Lehigh Valley MLS.

This information is provided to you by Moriah Martin, Real Estate Agent with Prudential Regency real estate through a report generated by the Lehigh Valley MLS system owned by The Lehigh Valley Association of Realtors.

This information is deemed reliable but not guaranteed. Changes to property Status and/or listing Prices can change on a Daily basis…please contact Moriah Martin for any questions on the current status and/or Listing Price of a property.