What is a Short Sale?

What is a Short Sale?
A short sale is a short sale is a property that sells for less than the balance owing on its mortgage. A short sale can be an underwater home, an apartment building or even vacant land. If there is a mortgage balance that is greater than the market value of the home, that property is a short sale.

Not every property qualifies as a potential short sale in a bank's eyes. A bank must agree to grant a short sale. Banks are under no obligation to approve a short sale. Banks will grant a short sale if the bank feels it is in the bank's best interest to approve the short sale. It is in the bank's best interest to approve the short sale if the bank will make more money through the short sale than to foreclose. It is estimated that banks might save 25% to 30% on foreclosure costs to grant a short sale over a foreclosure, but some investor guidelines make it more profitable for the bank to foreclose.

What is Necessary for a Short Sale? 
Most short sale transactions are handled by real estate agents who specialize in short sales.
There are 4 essential ingredients to a short sale; however, strategic short sales, those without a hardship, are also possible.

What makes a short sale work are the following:

• An underwater home 
• A willing short sale bank 
• A seller with a hardship 
• A buyer willing to purchase the home

What Role Do Real Estate Agents Play in a Short Sale? 
Some real estate agents throw homes on the market that will never close as a short sale. That's because the agents do not always qualify the short sale sellers. Some agents place unrealistic price tags on the short sale, which the bank will never accept.

It is wise to choose an experienced short sale agent who has closed at least 100 short sales.

Here is what an agent does in a short sale:

• Determines the type of short sale. There are many types of short sales, from Fannie Mae HAFAs to regular, non-GSE HAFAs to a traditional short sale, and a few more in between. 
• Gathers the required paperwork and submits the short sale package to the bank. Sometimes agents outsource this part of the process or they might hire a third-party to negotiate the short sale. 
• Helps the seller to price the short sale home. The price needs to be attractive enough to entice a buyer to wait for short sale approval but high enough to satisfy the bank's BPO. 
• Puts the home on the market. The agent must submit all offers received to the seller. Some offers will be lowball offers because buyers don't know any better. 
• Negotiates the short sale. Sometimes sellers will hire a lawyer to do the short sale, but often it's the agent who negotiates with the bank on behalf of the seller. 
• Submits the short sale approval letter to the seller. Most sellers want a release of liability and no deficiency to do a short sale. State laws tend to govern the terms in the approval letters. 

Sellers should always get legal and tax advice before completing a short sale.

What does an Appraiser Look for in Your House?

What does an Appraiser Look for in Your House?
The appraiser looks at sq. footage, basic amenities, and then finds comparable's in your neighborhood.


Ideally they are looking for a house just like yours within a few blocks that has sold within the last month. Now the odds of that are slim unless you live in a HUD development. But in general you want to replace items in your home that are older than the typical life expectancies, windows, furnace, water heater, A/C, roof, siding, other appliances, cabinets, counter tops, plumbing fixtures, older than 15-20 years. Carpet, flooring, paint, ceiling texture older than 10 years. Landscaping should be fresh and well maintained. These should all be pointed out to the appraiser. 

The biggest things you can do is add finished Sq. footage, finish the basement, add on, add a bathroom, add a gas fireplace, add garage space 3 stalls is ideal, (increase the amenities). As a former home flipper, you want to buy the ugliest house on the neighborhood and turn it into the 2nd-4th best in the neighborhood. Not first best because the other homes bring your value down, but above average so yours will sell fast. 


As most realtors will tell you neighborhood need curb appeal. Buyers should want to look at the inside, not be turned off from the street. Additionally I would look at your market area, house prices in general are on the decline, now is the time to make improvements because contractors are looking for work and giving deals. You want to be fairly confident you live in an area where the housing market will recover. Will the job market recover? Is a long commute necessary? Gas prices are bringing buyers back to the city/inner suburbs.

What is Zillow.com?

What is Zillow.com? 
If you are a real estate professional you probably know about the website Zillow.com. But for the benefit of those who don’t know what Zillow is, it is a real-estate website which is dedicated to giving its hundreds of users tons of information about almost any property in the United States. 


It helps realtors, buyers and sellers educate themselves and be aware of as many details as possible that have to deal with buying a potential home, or in selling a home. It is for this reason that Zillow is the most popular real estate website and why many people make use of it. 


There are hundreds of real estate sites on the internet. Another site is Realtor.com – a great website that lists homes for sale by realtors from all over the United States. 

This is where Zillow.com comes in because it does a good job in completing or filling in the information holes that Realtor.com leaves. Some states have better Zillow coverage than others. 


Currently in the state of Tennessee, Zillow.com brags of its 80-100% coverage. There is about 67 million homes across the United States that Zillow.com covers. 


The best thing about Zillow.com is it’s Zestimate. Zillow uses data that has been combed from public records to determine the square foot of a home, how many rooms it has and then integrates all of this information with the selling prices of recently sold homes within the area in order to determine the Zestimate of your home. 


But what Zillow cannot do here is to determine the added value of extra features of the home like a recently added jacuzzi or upgraded siding and windows. Zestimate is a little controversial because many realtors feel that the estimate they get is not accurate and may give potential home sellers biased expectations when it comes to the value of their home. 


Another thing about Zillow is you don’t need to register to use Zestimate but if you need to update the profile of your home you do have to register. Once you’re signed in you can edit your home’s profile anytime. Any details you can add about your home will allow Zillow to make the Zestimate more accurate. 

Zillow is always adding features to make their website a lot better and useful for everyone. Are you trying to sell your house? Zillow allows its users to list their home for free on the website. And there is also the “Make Me Move” feature which lets you put the amount or budget you need to pack up and move then wait for the offers. 


If you want to know how desirable your home is you can use this feature. There are many reasons why people like Zillow too. Because it starts conversations, it increases awareness and it allows the consumer to get a jumping off point before they set out on their buying or selling venture. 


So Zillow is an especially handy tool for buyers, sellers and realtors right? Not only is Zillow a resource to help market your homes or properties to an even wider audience but it also gives you a better chance of a sales success.


Source:  http://www.openingdoorsllc.com/

Do I need an Appraisal to Sell my House?

One of the most common questions people ask is, "do I need an appraisal to sell my house?" An appraisal is a professional assessment of the home's worth. It is performed by a licensed appraiser, who takes into account the property features, the market conditions, and the data on sales of similar properties. The appraiser then uses a formula to calculate the most likely worth of the home. Home sellers generally ask "do I need an appraisal to sell my house" because they believe that the appraisal will help them to determine how much to list the home for.

The answer to the question of "do I need an appraisal to sell my house" is technically NO. It is possible to price a home and list it for sale without the home being formally appraised. In order to determine how much you should ask for the home without an appraisal, you can do some basic research yourself on the Internet to find out what similar homes have sold for. Remember, when doing your own research on the Internet, the other homes that appear comparable to yours may actually have different features or be in a different condition, so any estimates you make on your home's value from this type of research should be considered estimates and not facts.

You can also ask your real estate agent what he believes the house will sell for. Real estate agents look at many properties, and seller's agents are often responsible for listing multiple properties within a given market. As a result, agents begin to learn the value of properties and are able to discern what buyers are looking for. Your real estate agent can thus help you determine the appropriate price to list your home for, without the need for you to hire a professional appraiser.

However, although you do not need to have your home appraised to sell your house, the answer to the question of "do I need an appraisal to sell my house" can be more complicated than a simple no.

While sellers do not need to have the home appraised, buyers often do. Generally, a bank will not authorize a loan until the home is appraised by an approved appraiser of the lender's choosing. The buyer pays for this appraisal, and it may be done after an offer is already made on the home. Still, since the bank will generally not provide a mortgage to the buyer if the home is found to be worth less than expected in the appraisal, technically the answer to the question of "do I need an appraisal to sell my house" can in fact be yes- you do because the buyer may be unable to make the purchase unless the appraisal goes OK.

Do I need a Real Estate Agent?

Though the Internet has made it easier to sell your home without an agent, about 93 percent of home sales are still done with some type of real estate agent.  An agent can work independently or for a company that acts as the broker. The broker signs the agreement with the seller. Agents usually get 30 percent to 40 percent of the commission.

There are many reasons why hiring an agent can be helpful:

• Education and experience - A good realtor understands the complex procedure and paperwork involved in selling a home. He or she has hopefully also gone through a licensing program.
• Saves time and energy - You won’t have to spend time scheduling and conducting tours of your home, which cut into your work and weekends.
• Gauging offers - An agent can help discern serious buyers from those who are simply looking.
• The market - A good realtor knows the market and understand trends, which can help your bottom line.
• Negotiation - An agent has the negotiating skills to help you get a good price.
• Professional contacts - Your agent’s contacts with other realtors and with contractors, inspectors, landscapers and the like can help you find a solution for any problem you may encounter.
• Sale price - In some cases, buyers will offer less money to someone who’s not using an agent, believing the seller is trying to save money by not paying commission.
• "Caravans" - Agents sometimes conduct open houses just for buyer agents where buyer agents arrive in groups ("caravans") and check out the house. This is usually a quick process, is more convenient than a traditional open house and allows buyer agents in the area to tell their clients about your home. 

A key tool for real estate agents is the Multiple Listing Service (MLS), a massive online database, which 900,000 agents subscribe to, that contains listings of 90 percent of properties for sale across the United States.  Buyers can access the service for free at realtor.com.  Usually, only subscribing agents can list properties, though in some cases home sellers can pay a fee to list their property.

With all of the benefits that come with using an agent, there are some drawbacks.  Most importantly, it’s very expensive.  Commissions can run up to 6 percent of the house’s sale price, though many agents are willing to negotiate commission, especially in a good housing market.  Working with an agent also requires a certain degree of trust, a willingness to place your most valuable possession in a stranger’s hands and say, “Please help me.” But that, along with letting go of any sentimental attachments you may have to your house, is part of the sale process.

If you’re considering hiring a real estate agent to help you sell your house, you have a choice between a full service agent and a discount service.  A full service agent does it all -- prepares your home, conducts open houses, uses the MLS, produces slick marketing materials and a nice sign for your yard and in some cases, hires a professional photographer to take pictures of your house.

A discount service provides less, though what you get depends on the company. Certainly you will pay less: discount brokers usually charge 2 percent to 4.5 percent commission.  Some discount services pre-screen for qualified buyers, and they should list your house on the MLS. You will have to conduct tours, however, and buyers agents may be more reluctant to show your house because of the lower commission involved (buyer and seller agents generally split commission on a sale). But the service may be worth it if you think you can save money and still get a good price on your house.