House Smarts
presented by Joe Heffley
Tips for selling your home – Part 1
Hey, owners of real estate! Who will tell you the truth about how to sell your most prized
asset—your home? The #1 lie being told “out there” may come in one of these versions: “ Find
the cheapest listing commission, and you will save thousands.” Or,” I will give you half of my
commission, and you will truly save a lot of money.” Or, “Hire the agent that thinks your home
will sell for the most.” …Who do you believe????
ANSWER — none of them. I have heard many agents, and family, friends, and guys on the
golf course express the above misinformed opinions. It will always be best for the seller to
interview a few agents– to pick their brain on how the agent will estimate the value of the
property.
A few good questions to ask:
- How long will it take to sell?
- What price do you suggest, to sell in the time frame you want the home to sell?
- What is your marketing plan?
- How long will the listing contract run?
- Do you think I need to do any repairs in order to sell?
- How many homes do you expect to sell from sign calls on my property?
- What is considered full service?
- Do you provide virtual tours?
- How many web sites do you advertise on?
- How many open houses will you hold per month?
- How soon will I get called back if I leave a message?
- How long have you been selling homes as a Realtor?
- Can I cancel the listing contract without any penalty?
- Have you sold any homes in my subdivision? etc, etc.
Get the idea? You need to know what agents will say to you and what it really means, or what
it could really mean to you.
We realtors/agents know what all these things mean and how agents try to get as many listings
as we can. The old saying since before I became a Realtor was, “You must list to last!!”
Nowadays it is: “You must do whatever will pay you some money.” I DO NOT AGREE!!! I
believe we agents have got to be much better at explaining what we do and how much we
really expect to get paid for it. For example: “I will only charge you X amount to sell your
home.” On a $300,000 home, you could save $ thousands, right??? Not even close. If you list
for $300,000 when it is worth only $275,000, how soon will it sell??? If it takes more than 30-
45 days, the buyers will think there is something wrong with the house and move on to other
properties. In the meantime, the listing agent will still get phone calls or e-mails asking to see
it, and if the listing agent is good with people, they will sell them your home (maybe) or sell
them some other property. How many times can the listing agent sell potential buyers other
properties??—over and over! Why would an agent do this???—to make many commissions,
not just one on your home! (In reality, your home becomes the agent’s best asset. He/she
doesn’t care that your home is overpriced—as long as it doesn’t sell, it keeps bringing the agent
buyers for other properties.) If your home is overpriced, will it sell?? or even appraise?? NO!
This is why you really need to know what it is worth. A high price will never sell. I used to tell
owners, “Do not ever list with the agent that thinks it is worth more than any other agent.”
Until I was the highest agent. Oops??? Not really; this area was Englewood, home to many
older properties built mostly 50-60 years ago. I grew up in Englewood and knew a lot of people
who live in Englewood. Still do. The agents recommending a lower sales price thought
Englewood was a tough sale due the older building styles, different electrical codes, and
materials, etc. I was right on the high price, and the agents that did not know Englewood
compared this Englewood home to their newer area that they preferred. It is Knowledge–
what we established agents call “Experience”.
Well, that covers a few beginning ideas that new sellers should consider before hooking your
wagon to an agent. The vast majority of agents are very good at what they do and are very
honest. But any seller should educate themselves on the process, so they can have a better
understanding of it and have more control over their sale.
Happy selling…..
Call Joe @ 303-598-3930
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Ways to Avoid Foreclosure
A homeowner in distress is not necessarily doomed to foreclosure. There are ways to avoid the devastation of foreclosure. Here are six methods of retaining ownership of a house in default or pre-foreclosure, which Stop Foreclosure Denver can assist with little or no cost to the owner:
- Refinance: The borrower pays off the existing mortgage loan with the proceeds from a new loan.
- Repayment Plan: The borrower is allowed to catch up on missed payments by paying more than one full payment per month until the account is brought current. This is very difficult if the financial problem that led to default is anything more than a temporary glitch.
- Forbearance Plan: The borrower is allowed to suspend all or part of a monthly payment for a specified time period based on Bank agreement. The missed payments may be rolled into the existing balance, or become part of a Repayment Plan or Modification.
- Loan Modification: Allows for changes to the original terms of a borrower’s promissory note, which may include any combination of the following: an adjustment to the interest rate; an extension of the term of the loan; or an increase in the loan amount by the amount past due.
- Short Refinance: Allows the forgiveness of a certain amount of principal balance, in conjunction with Forbearance and a Repayment Plan.
- Bankruptcy: A borrower’s loan may be changed from the original terms based on a Loan Modification as part of a court-approved reorganization plan.
When Keeping the House Is Not Possible
Unfortunately, when all other options fail, a distressed homeowner must face facts and accept the inevitability of losing the house. But foreclosure is still avoidable. There are still two options left.
- A Deed-in-Lieu of Foreclosure (DIL) allows for transfer of a property to the Bank without going through the full foreclosure process. This is usually the “last resort” option, following failed attempts to sell or refinance. The benefit to the Borrower is that this has slightly less of an impact on his or her credit rating than a foreclosure would. For the Bank, it shortens the process and therefore the costs associated with taking the house back and selling it to recoup debt. It also allows the Bank to avoid any entanglements if the Borrower should decide to file bankruptcy after the DIL is granted.A DIL is done outside of a court and is a settlement of the entire debt. The settlement amount is generally the fair market value of the property. A DIL is a voluntary action and must be initiated by the borrower – the Bank is unlikely to suggest it.A Bank may not allow a DIL if other liens on the home exist, since receiving a voluntary transfer by way of deed does not wipe out inferior liens the way a foreclosure does. However, there are some types of liens a Bank may accept with the DIL.A DIL may not be the optimum solution for a homeowner in distress as it remains a black mark on credit for up to seven years and usually doesn’t address other liens for which the homeowner might be pursued even after the home is lost.
- A Short Sale occurs when a Bank agrees to take less than what is owed to settle the mortgage in full (a discounted pay-off) and releases its lien on the house upon a sale of the property. Because the homeowner owes more than the property is worth on the open market, the Bank may approve a sale for less than the debt and agree to this sort of arrangement to avoid a costly foreclosure.Before a Bank will accept a short sale, two conditions usually must be met:A. There must be little or no equity in the property. Obviously, if there were enough equity in the house to sell on the open market and use the proceeds to pay the bank in full, this would already have been done, with “No harm, no foul” to either Bank or Borrower.B. The homeowner has a legitimate hardship, as defined by the Bank. The problem(s) that are causing the borrower to be unable to continue making the mortgage payments are not temporary (e.g. just behind a month because of overspending). Poor financial decisions are generally not considered hardship, and full financial disclosure will be required to determine if the borrower has assets that can be applied to the debt.
Stop Foreclosure Denver is extremely knowledgeable and well experienced in helping homeowners in determining which option best suites the homeowner. For more information on how Stop Foreclosure Denver can help you please sign up to get our FREE Report or Email Joe HERE or Call 303-598-3930