With so much time and effort dedicated to this particular type transaction, you’d assume that everyone was relatively educated about what a short sale real estate transaction is and if interested in selling, Ěýwhether they qualified to sell their property in this manner.

Unfortunately, the subject is filled with misconceptions, misinformed agents and brokers, apathetic lenders and worse yet, predatory greedy slime balls presenting themselves as “short sale consultants” and advising and teaching their “clients” to commit bank fraud!

So What is a Short Sale?

A “short sale” occurs when a lender agrees to accept less than the amount owed on a promissory note (mortgage). It is often utilized when a seller cannot pay the mortgage on their property. Often, both the seller and the lender will agree or consent to the short sale process Ěýbecause if allows both parties to avoid foreclosure. This agreement, however, does not necessarily release the seller from the obligation to pay the remaining balance of the loan known as the deficiency. Only the lender can release the deficiency at their own discretion.

What are the Signs of a Short Sale?Ěý

Short Sales are usually thought to be useful to both mortgage companies and sellers in situations where:

* The seller isĚý±ô±đ˛µľ±łŮľ±łľ˛ąłŮ±đ±ô˛âĚýbehind in their payments or is thought to be in imminent danger of becoming delinquent

* The seller has a legitimate hardship; and/or, the seller has little or no equity (generally 8% or less)

What’s Constitutes a Hardship?

A “hardship” is typically limited to job loss, decrease in income, increase in expenses, divorce, medical emergency or death. Most lenders will consider a short sale if mortgage payments or property taxes are too significant for the seller to pay.

What to Expect After the Short Sale is Agreed to by the Lender?

Although the lender is not “a party to the sales contract”, (this is between the seller and buyer only) – they do hold the cards with respect to final acceptance of the buyers offer. ĚýRegardless, unless the lenderĚýreleases the seller without recourse for the deficiency, they still have the right to sue for the balance, 1099 you for income tax purposes, or attach this amount to any other assets owned by the seller.

The lender may ask the seller to sign a promissory note for the difference at closing as well. Even if this does not happen, they do reserve the right to sue the seller for up to six years after the the closing date for the deficiency. ĚýThis is especially true if any subsequent investigation uncovers a fraudulent hardship or attempt to hide sufficient assets to satisfy the original loan.

What is Mortgage Fraud as it Relates to Short Sales?

Any material misstatement, misrepresentation or omission (filtering of information) relied upon by the bank, their lenders or investors and used in the decision making process to approve the short sale transaction.

This can happen as the result of a number of various situations and willing parties. Examples include but are certainly not limited to the following:

* The seller willingly and knowingly withholding or hiding sufficient assets to qualify for a short sale transaction

* The agent/broker artificially pricing the home significantly below true “market value” to induce a sale and then withholding information or subsequent offers to avoid delaying the sales process

* Colluding with an agent/family member/organization to conduct a follow up “flip” of the property back to the original seller after the short sale transaction has been completed

What is a Deficiency?

A deficiency stems from a seller defaulting on a promissory note. A promissory note is a promise to pay. The fact is, a short sale is a default. Although it does not carry the same stigma or consequences as a Foreclosure or certain types of Bankruptcies, it’sĚýstill a defaultĚý˛ą˛Ô»ĺĚýWILLĚýhave a negative affect on the sellers credit.ĚýBeforeĚýa short sale is accepted and the transaction is complete,Ěýall sellers should consult with a tax advisor regarding any possible tax implications

What Next?

The worst thing a home owner can do is to stick their head in the sand and not get involved immediately to help mitigate their situation. Become informed, be careful, ask lots of questions.

Our best advise?ĚýĚýWe’ll help you navigate through the confusing process and advise you every step of the way.

You’ll find we’re one of theĚýbest educatedĚýand informed Short Sale teams available. ĚýOur team includes our managingĚýBrokerĚýwho was instrumental in composing the short sale contractual exhibits in use today and, were also affiliated with one of the leadingĚýReal Estate Law FirmsĚýanywhere, complete with aĚýseparate department of specialist specifically dedicatedĚýto Short Sale transactions.

We look forward to speaking with you soon and assisting in anyway we can.

The post What is a Short Sale? – and Do I Qualify to Sell this Way? appeared first on şÚÁĎÉç Living.

Unless you’ve been living under a rock, everyone is aware that home values have dropped significantly over the past 5 years reverting back to values seen prior to 2003-2004. The decrease varies from 13 – 34% depending on where you live and when you first purchased your current home. Regardless, the effects have been far reaching.

One of the biggest impacts has been to our County Governments who are strapped for cash. Sales tax and property tax revenues are down across the board and County assessors are either reducing assessments begrudgingly or not at all without a fight. Subsequently, it’s going to be up to you to challenge the County to get your assessment adjusted, Ěýjust don’t expect it to be easy.

Most Counties have a rather complex process for adjusting property values and hope they’ll wear you down in the process and give up. It’s worth the slight inconvenience, especially given the fact that failure to act can result in even higher Property Taxes. This happens when the county adjusts or raises it’s millage rate to account for falling values. ĚýThe millage rate is the calculation (per thousand) used to calculate your property taxes based on 40% Ěýof your homes current market value.

Unfortunately, the drop in revenues does not provide the County any incentive to make adjustments. Accordingly, it’s also important to note that it would be physically impossible for the county to re-appraise every home each year without adequate resources. So – what’s next ?

First, be on the lookout for your homes Property Tax Assessment from the County. These are sent out at different times. I’ve included the approximate distribution dates from various Atlanta area Counties below for your reference.

Dekalb County- Sent out mid May

Forsyth County – Sent out April 15th

Fulton County – Sent out the end of April

Gwinnett County – Sent out April 15th

Hall County – Sent out the end of April

Once you receive your notice, review it for accuracy. Professional appraisers find inaccurate information all the time on previous Tax Assessments so be relentless in your review. Even so, it may be difficult to ascertain exactly what your home is worth today. Your best defense during the appeal process is to collect accurate and valid data to support your case. You may need to obtain recent sales data for your neighborhood – or – more importantly, hire the services of a Certified Real Estate appraiser. This information can and should be sent along with your appeal for review.

You only have 45 days to file a written appeal with your counties Board of Tax Assessors so don’t delay! It could take up to 180 days for a decision to be made. If you’re not satisfied with the results of your request, there are several options to pursue including an appeal process through the Board of Equalization or an Arbitration hearing so don’t give up.

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Why all the fuss? I just opened my new Home Owners policy statement this morning and came very close to falling off my chair. By my calculations, my policy premium increased 49% since last year!

After taking some time to collect my thoughts, certainly there had to be a mistake? Unfortunately, a quick call to my insurance agent didn’t help. It was true. His explanation? A higher than normal occurrence of wind and hail damage in the area as well as the on-going reduction in revenues due to foreclosures etc. had forced the insurance company to raise rates to compensate. Seriously?

I’m a businessman and I certainly understand that sometimes situations dictate that the cost of doing business necessitates a raise in prices for services and must be passed on to the consumer – But 49%?, forty-nine percent ! That’s just consumer gouging at its very worst – or company greed at its finest. Unlike other consumer products/services, we don’t really have a choice to carry homeowner’s coverage. Subsequently as well, a few hours of “shopping” other insurance companies didn’t shed a happy ending on the story either. Basically, we’re screwed.

I’m trying to keep a level head. So I thought – we don’t live in a Hurricane Zone, not much chance of a devastating Earthquake hitting the area, mud-slides – wild fires, not likely. Tornadoes – yes, but even then, spread out over a large area with isolated pockets of damage, I can’t imagine that having too devastating of an effect on a company’s bottom line.Ěý This is the 2^ndĚýinsurance issue I’ve had in the past year, the first was with my Auto coverage (not the same company and not something I want to re-hash), and please don’t get me started on health insurance for the self employed unless you really want an earful.

Something is wrong with a business’s pricing model or ethics for that matter when they have to raise rates 49% over the course of several years, let alone, one year. Somewhere we’ve lost the very idea of what insurance is supposed to be. I thought we were partners in rolling the dice together? I give you lots of my money in hopes that I never need to use your services. You (The insurance company) get to keep my money, invest it wisely, keep lots and lots of profits and agree to bail me out and protect me if/when I need it?

Right now, my perception is that it’s become no more than an involuntary tax on homeowners with not much option to avoid. I may be over simplifying the problem and I’m sure I’ll be flamed by some of my insurance agent colleagues but my gut say’s no. So, since this raises the overall cost of home ownership and adds one more layer of complexity to helping fix the housing market, let me focus my efforts on exactly what CAN be done to lower your costs?

• First, if you haven’t already done so, get on the phone with your agent and go over your policy with a fine tooth comb. Leave no stone unturned.Ěý I’ve found that many companies have cut way back on things that were covered automatically before (like wind and hail damage for instance). Consider yourself warned.

• Look at the value of your coverage. With home values down considerably over the past few years, many families are still paying for coverage for what their home were worth at the height of the market, not what they’re worth today. This gets a little tricky since home values don’t always match the cost to rebuild.

• ĚýLook at your deductable. How likely are you to file a claim against your home? Probably not likely at all so perhaps now especially, it’s time to raise your deductable if it will help. In other cases, consumers are being forced to deal with raised deductibles

• If you haven’t already done so, look to see if combining home and auto coverage will make a considerable difference. In most cases it should, in fact, many insurance companies will ONLY cover you now if you combine both. (this forced requirement is something that doesn’t sit well with me either)

• Shop – Shop and Shop some more.

• Most important of all – File a complaint or forward your thoughts to the Georgia Insurance Commissioner’s office. Most times, consumer apathy is our worst enemy. Ěý See:Ěý

I’m generally interested in hearing some feedback on this subject so I look forward to hearing back from you all.

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Lately, it’s become increasingly common for home appraisals initiated by the buyers lender to come in lower than expected, subsequently delaying the closing or worse yet, blowing up the negotiated contract all together.ĚýThere are many reasons, some more justified than others, but as Lenders have been forced to use an ever growing pool of inexperienced appraisers, sellers have an option to fight back.

One of the best ways of insuring against this problem is hiring an experienced “Certified” appraiser to conduct aĚýConsultation AppraisalĚýprior to listing their home for sale.ĚýThere are many advantages:

– Allows you to obtain an unbiased, informed opinion of the current value of your home. Many agents are now requiring this and know that a properly priced home will sell 50% faster.

– The appraisal can be used as a selling tool to help justify the lowering of property taxes.

– Identify any repair issues which would adversely effect the value of the home.

– Help your negotiating position with potential Buyers & Agents.

– Alleviate the restless time between contract and closing worrying if the home will appraise. If there is a discrepancy, the firm you hired should be in a position to argue any conflicting results and negotiate with the lender to adjust its own findings.

Sellers should consider taking full advantage of this critical service. The cost isĚývery reasonable,Ěýit provides a host ofĚýadvantages,ĚýĚýand most importantly, itĚýprovides a significant return on your investment.

The post Why Getting a Consultation Appraisal Before Selling Makes Sense appeared first on şÚÁĎÉç Living.

For me, as well as most, our home is our private sanctuary; hopefully filled with wonderful memories, a place to relax and unwind, to be with family and to entertain friends. Unlike any other possession, our home gives us the unique ability to express ourselves and to customize our surroundings with those things that make us most comfortable and happy. That’s the fun part and it’s no wonder we’re all so drawn to watch others spend money, to realize dreams and to stay optimistic even in the toughest of economic times.

Unfortunately, all things Real Estate can be very confusing and intimidating as well. Whether you’ve bought and sold homes several times or you’re a first timer, the fact is, times have changed and there’s a confusing amount of information (sometimes gross misinformation) that we’re bombarded with every day.

To combat that, my intention is to provide a reliable and informative place to keep you up to date with all things Real Estate here in the Atlanta Metro area that effect you, Ěýgood or bad, fun or otherwise. ĚýSince it’s our specialty and niche, the subject matter will lean towards the local Atlanta Luxury market and communities that we know so well, but I’ll also be providing information that is intended to be helpful and insightful regardless of your current purchasing power or budget. ĚýI highly encourage you to visit often and welcome your ideas and feedback as we highlight Luxury Living and Real Estate in Atlanta Georgia.

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