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Is a Short Sale Right for You? Read and then Decide!

Owen McGab Enaohwo — Tue, 27 Jul 2010 21:17:48 +0000

Real Estate is totally different today than it was just ten years ago, especially because of the “Great Recession”. One thing that has changed is that, more than ever, the term “Short Sale” is now a hot topic that almost anyone paying attention to the news media must have heard. Many sellers who have determined that they can’t sell their home for the amount they owe are now considering doing a short sale instead of allowing the lender to foreclose. But is it always a good thing? How can you tell whether a short sale is right for you? Let’s take a look at some guidelines that will help you decide.

What a Short Sale?

Nowadays, a lender will agree to accept a lesser amount for the sale of a home than the amount which is due. This is considered a short sale. For instance, perhaps the home mortage is $150,000, but the home is worth only $120,000. This means you are $30,000 short. This is not even considering closing costs, recording fees, real estate commissions, or title charges.

Why will a lender approve a short sale?

The lender who agrees to the short sale does so to avoid going through foreclosure and incurring the costs associated with it. When the lender approves a short sale, they are basically allowing the buyer to purchase the home for an amount less than the mortgage balance.

Here is an example of a short sale, in five steps:

The seller and real estate agent sign a listing agreement; the home is listed for sale on the Multiple Listing Service (MLS) as a short sale pending the approval of a third party (your lender).
The agent finds a buyer who makes an offer that is less than the mortgage amount (an amount that reflects the current market value).
The seller accepts the offer.
The short sale negotiation with the lender starts once the agent submits the short sale packet (the offer contract from the buyer and other required documents from the seller).
The lender accepts the purchase offer.
The buyer presents funds, the lien is released, and the seller signs the deed to the buyer at closing.

It’s a great solution, as long as you’re a good candidate for the short sale.

What are the qualifications that indicate that the short sale is right for you?

Your home’s market value should have dropped. Furthermore, you need to be able to substantiate that the home is now worth less than the balance that is still owed on it.
The mortgage should be near or in default status. At one time, lenders wouldn’t even consider a short sale when payments were current. That’s changed because lenders are now considering Strategic Short Sales as well. Many lenders now, understanding that other factors might contribute to a possible default, want to head off future problems. Therefore, they are open to consider a short sale.
The seller should have fallen on hard times. This means that you, the seller, should expect to demonstrate to the lender why you’re not able to keep making payments on your mortgage. As in you need to show the true reason for your financial hardship which should include why you have or will soon stop making monthly payments.

So what constitutes hardship? Any of the following usually qualify:

Unemployment
Death
Bankruptcy
Medical Emergency
Divorce
Lack of Assets by the Seller

On the other hand, the following usually are not accepted as financial hardships:

Problems with the Neighbors
Plans to Buy Another Home
Bad Spending Decisions
Pregnancy
Plans to Move to an Apartment

Keep in mind that usually, the lender will ask for a copy of your tax returns or other financial statement. The lender might not grant the short sale if he discovers that you, as the seller, have significant assets. They’ll feel—probably correctly—that with those assets, you should be able to pay the balance. This doesn’t mean that sellers with assets are never granted a short sale. But when they are, they are frequently asked to repay part of the short-fall.

In conclusion

Finally, remember that being granted a short sale will depend on if there is a buyer who makes an offer to purchase and the experience of the real estate agent negotiating the short sale. Without such an offer, you won’t qualify and without a seasoned agent working on your short sale, it will not get approved by your lender. It also will depend on whether or not the lender agrees to accept the buyer’s offer. The short sale will not take place of the lender rejects that offer.

Bottom line: The short sale is not a miracle pill that will solve all problems for the person who is behind on their mortgage payments. However, it can be a life-saver for the person who meets all of the qualifications. If you are a Maryland (MD) homeowner in needs of an agent with proven short sale experience? Check out one of my successful, approved short sales and then feel free to contact me. I will be glad to answer all your questions!

Questions for you

At what point would you think that a short sale is the only option left for you?
What would keep you from considering it? Tell me your thoughts.

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How to Leverage your Self Directed IRA funds in Real Estate – The rules of the game.

Owen McGab Enaohwo — Tue, 13 Jul 2010 05:34:32 +0000

The Employment Retirement Income Securities Act (ERISA) made you responsible for your retirement savings, plain and simple! How you invest your funds that you have set aside for retirement is at your discretion. The law excludes only two types of investments under the ERISA and IRS Codes. These investments are: 1. Collectibles and 2. Life Insurance Contracts

The rules of the IRA investment game are so simple it’s stupid – in a good way!

Essentially, you are prohibited from engaging in “self-dealing” transactions. Simply stated, you should invest your Individual Retirement Account (IRA) funds to increase the amount in your IRA, not to spend your IRA on yourself or those related to you. Each transaction you make should solely be for the benefit of the IRA itself. You are allowed to invest your IRA funds, such that the investment makes your IRA grow, meaning all profits from the transaction that your IRA funds are used in goes back to your IRA.

Investing your IRA funds so that the return on your investment makes your IRA funds grow will allow you to grow your retirement funds at a pace that is comfortable for you on terms that you can understand. The ERISA law has been in effect since 1975, yet only less than 5% of all IRA holders are aware of this.

Most IRA holders entrust their IRA funds to fund managers who manage the funds for them, investing their funds on stuff that are hard to comprehend. With the crash of the economy and the credibility of Wall Street being “nothing to write home about”, many IRA fund owners are looking into Self Directed IRA Investments.

The total amount of IRA funds in the hands of employees is estimated to reach $2 Trillion. With only 4% of these invested on Self Directed IRA Investments, those of you who have not yet done so are relying on old fashioned investment methods that have brought the same results over the years – investment growth that is just a little better than a bank deposit, and a tad more riskier than a slot machine in Vegas, leaving many IRA holders out in the cold when the market crashed more than 18 months ago.

The current real estate market and the opportunities therein

The real estate market is at the bottom now. Whether we like it or not, people will be looking for homes to live in. That is the American Dream, and no one is giving up on this dream anytime soon. With so many houses up for sale, it has essentially become a buyer’s market and there are hot deals to be had. The real estate property value have fallen due to several distressed properties on the market at the same time, which makes now the right time to invest in properties; as in you can buy them at discount prices. That said you still need to make sure that you only invest in the right types of properties or work with real estate investor who have the experience and understanding of how to invest in this market. I am sure you will agree with me when I say Warren Buffet is indeed a savvy investor; one of my favorite quotes from him is “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.” What this means to me and should mean to you is that even though most uninformed people including the news media says investing in real estate in this market is too risky, you should realize that the more people running scared, the more you can cherry pick the best deals to invest in using your IRA.

So how can you invest in real estate using your Self Directed IRA?

That is a good question, one that I answered in a previous blog post titled “Now is the time to set up your passive income strategy through Real Estate Investment.” Check it out and let me know what you think

Questions for you:

Does investing in the stock market seem like a wise move these days? Do you feel the need to fully control what you use your retirement funds to invest in?

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A True Foreclosure Story – Note: the tale you are about to read might be yours!

Owen McGab Enaohwo — Thu, 24 Jun 2010 16:04:14 +0000

Painting the picture – You are a homeowner experiencing a financial hardship, you have lost your job and can’t keep up with your mortgage payments. You desperately need to find a solution to the problem because it’s weighing down heavily on you. You can barely function or think properly because it feels like your whole world is crumbling and you need to get you life back on track.

The credit police – You are tired of creditors, especially your mortgage lender hounding you or worse not even responding to your inquiries for help. You really do not want to sell your home if you can help it but realize that not only has the home lost its value, even if you could get your lender to reduce your monthly mortgage payments, you still will have tons of negative equity and your reduced monthly payment would hardly do anything to reduce the underlying principal balance that you owe. What you really will prefer is for your lender to reduce the principal balance and the monthly payment at the same time so that you can keep the home but heck that isn’t going to happen and you know it. To make matter worse, you just watched a report on the news that stated that most Loan Modifications don’t work and the borrowers eventually end up defaulting again.

A friend indeed – You have started talking to your friend about your situation and as true friends they sympathize with you. The solutions they suggest to you only serve to confuse you; it’s not really their fault because you know that they might have gotten their information from the wrong source. Then you realize that you need to talk to a professional who can give you sound advice on how to avoid foreclosure.

The mailbox overflows – Everyday your mailbox gets a new dose of letters, postcards and all sorts, you are sure now that even the mailman knows your situation and are afraid your nosy neighbors might be in on it too. Not only do you have to put up with constant calls from your creditors and so on, now it seems everyone from your lenders to others offering “scam-like” help in exchange for upfront payments are now waging a war on your mailbox. Something has to be done about this, enough is enough!

Seeking Professional Help – Your online research for a solution to your problem is finally paying off. You have been proactively seeking a way to avoid foreclosure that you now know the term “Short Sale”. At first you thought it meant the property will sell quickly but then you find out that it means that the lender accepts a “short payoff” – a lesser amount at the sale of the property instead of what is actually owed to them since the property has lost its value. You call your mortgage lender demanding a short sale and they tell you that you first need to get a Real Estate Agent to list your property, find a buyer, negotiate the short sale, and get it sold. They also tell you all the list of documents you need to put in place, the estimated length of time the negotiation might take, all the steps involved and so on it begins to seem so mind boggling and you wonder why it’s not called a “Long Sale”. You almost give up but persevere and decide to find a real estate agent who specializes in short sales.

Get the door, help has arrived – You finally found a real estate agent with a proven experience and track record getting short sales approved and sold. The agent even insisted on showing you video testimonials from past and recent clients who vouched for their ability to provide the short sale solution that you desperately need. The agent walked you through the entire process, explained any new laws, guidelines and processes that will affect the outcome of the short sale and answered all your questions; now you feel like you can begin to breathe again. The agent signs the necessary listing paperwork with you and puts the property on the “Multiple Listing Service” (MLS) at the right price to bring in a flood of buyers looking for a great deal. You finally receive an offer and the agent puts together all the necessary contract paperwork from the buyer and collects all the documents that your lender requires from you in order to submit the complete short sale packet.

A favorable ending & new beginnings – After couple of weeks that seemed shorter than you had previously expected, your agent was not only able to get the short sale approved, he was able to work efficiently and effectively with all parties involved in the transaction in order to get to closing the sale. Now today you are at the closing with the buyer. You can’t help but smile because you know that you are about to sign the closing documents which means you are about to take the first step toward a better future; you can now begin to see this entire nightmare from the rearview mirror as you drive away to your bright future!

Your call To action – I have taken the time to go through the pain and suffering that millions of homeowners are currently going through. The sad reality is that most of them are not proactive and do not seek a solution to their problem; many show signs of the “ostrich syndrome” and stick their heads in the sand, do nothing and hope that their problem will disappear by means of a miracle or some magic “Genie”. Many of such people end up in foreclosure which in itself is not something you should have to endure or have on your record especially when it can be avoided altogether. I am happy now because I know that you are not the type of person to do nothing; I know now that you are proactive because you have read this blog post all the way to the end, so congrats! What you need to do now is call up your local Real Estate Agent, interview them and get a sense of their experience negotiating short sales. Once you find the right fit, have them list your property and begin the short sale process. If you just so happen to be a proactive homeowner in Maryland in need of a short sale then allow me to provide you with the solution that you need and the peace of mind you deserve! You can contact me simply by clicking on this above and entering in your details. Note I will treat your information with the utmost care and will respect your privacy. Cheers! Smile because your solution provider awaits you!

Question for you:

Do you think homeowner’s experiencing financial hardship should sell their properties as a short sale or keep it? Please explain your answer.

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Townhouse For Sale Bowie Maryland Short Sale 11201 Westport Dr Home

Owen McGab Enaohwo — Thu, 29 Apr 2010 23:15:59 +0000

This is an announcement for a Townhouse I have listed For Sale in Bowie MD 20720 – Short Sale:

Submit AS IS offers for this Well maintained end unit townhouse, 3 Br / 2 Ba on main level. Its a beautiful home, Hard wood floors, and finished basement with wall to wall carpet and additional rooms.

For complete information of this property directly from the MLS; Call 301-841-7593 for more information OR go to

http://budurl.com/11201WestportDrBowie

Watch the video walkthrough of this home and leave you comments on my blog

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Now is the time to set up your passive income strategy through Real Estate Investment.

Owen McGab Enaohwo — Mon, 08 Feb 2010 08:56:46 +0000

News reports say that the real estate industry is at its lowest point now. The news is bad and seems to look bad for the next year and a half. This is how the news sums up the real estate industry:

Property values have gone down.
Housing inventory has gone up and there seems to be no takers.
Banks and other financial institutions have limited their exposure to property investment initiatives.

The three points paint a very grim picture which is discouraging and very depressing. But there are two sides to the news. Many people see the bad side which is obvious to all, and get overwhelmed by fear and then go into depression. The smarter few strive to find a silver lining in the bad news, and step up to the challenge to rise above the discouraging situation.

The silver lining in the bad news allows smart and tough real estate investors to set up a passive earning strategy for the long term. This strategy is rooted on the fact that hard economic times don’t last forever. Those who understand this fact have the determination to see things through, and will take a long term investment position for future profits and benefits.

What is the silver lining in the bad news and what are these long term investment positions?

Buying property is more affordable than ever because property values have gone down. This means that setting up real estate investment requires lower capitalization. So now is the right time to invest in real estate and stock up on housing inventory you can sell later to others for a modest return.
Housing inventory has gone up, and this means that there very many houses for sale and very few takers. This is a buyers market. Real Estate Investors can purchase a house at a more affordable rate than ever before. The good side of this is – there are many houses to choose from. So you can take your pick on available houses and get them for a much better price.
Because banks and other financial institutions have limited their exposure to property investment initiatives, there is a need for other sources of funds so real estate development can continue. Real Estate Investors see opportunity in the low real estate values. The slowdown in housing construction and rehabs has also lowered the cost of materials. The economic downturn has lowered real estate development costs. For tough, smart and determined investors, now is the time to develop new real estate projects or rehab existing real estate projects. The scarcity of conventional financing from banks has opened opportunities for private individuals with excess capital to step into the space left vacant by banks and other financial institutions. This has created the opportunity for you to play the role of the bank, earn high interest rate of return on your money which is secured by real estate that is both at very conservative Loan to Values (LTV). Since investors are desperately looking for funds to finance their projects, you can expect a higher return on your investment now. The key is to find an investor whose investment strategy is in line with your overall investment goals to make your money work for you passively.

The banks aren't lending - You can become the bank

Opportunities in real estate investment are plenty even during these hard economic times. Determination, information and knowledge are needed to rise up from these challenges. Your mindset determines how you view the news and see opportunities in crisis.

Video

MP3 Audio

So what do you think? Do you share the same view point or not?

Take time to share you views with me. Let’s compare notes and work together through these challenging times so we reach our goals.

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Single Family Home For Sale Bowie Maryland Short Sale 3416 Inverwood Ln Houses

Owen McGab Enaohwo — Fri, 15 Jan 2010 07:16:22 +0000

This is an announcement for a Single Family Residence I have listed For Sale in Bowie MD 20721 – Short Sale:

SHORT SALE deal. Submit AS IS offers for this Well maintained Single Family Home (Colonial) with 3Br/3Ba. Its a beautiful home with ceramic tiles in the kitchen & foyer. Totally updated from top to bottom, finished basement, Wood floors, storage shed, large backyard and more.

For complete information of this property directly from the MLS; Call 301-841-7593 for more information OR go to

http://www.budurl.com/3416InverwoodLn

Watch the video walkthrough of this home and leave you comments on my blog

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Condo Home For Sale Beltsville Maryland Short Sale Houses 10402 46th Ave Unit 202

Owen McGab Enaohwo — Fri, 15 Jan 2010 06:42:22 +0000

This is an announcement for a Condo I have listed For Sale in Beltsville MD 20705 – Short Sale:

SHORT SALE deal. Submit AS IS offers for this Well maintained Condo with 2Br/1Ba on main level. Its a beautiful home with ceramic tiles in the kitchen & foyer. The community has a playground and an outdoor pool. All utilities are included in condo fee. Close to shopping, Univ of Maryland College Park & transportation.

For complete information of this property directly from the MLS. Call 301-841-7593 OR go to

http://BudUrl.com/1040246thAve202

Watch the video walkthrough of this home and leave you comments on my blog

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Short Sale Single Family Home For Sale Severn Maryland 8157 TELEGRAPH RD Houses

Owen McGab Enaohwo — Thu, 17 Dec 2009 21:11:37 +0000

This is an announcement for a Single Family Residence I have listed For Sale in Severn MD 21144 – Short Sale:

HOME SOLD AS IS. TOTALLY UPDATED FROM TOP TO BOTTOM IN 2005. CROWN MOULDING,DECK AND TOTALLY FINISHED BASEMENT WITH FAM RM,1/2 BATH AND 3RD BR. WOOD FLOORS ON MAIN LEVEL. MBR WOOD FL.WALK IN CLOSET&SUPER BATH. YOU MUST GO INSIDE IT IS BEAUTIFUL.PRICED WELL BELOW NEIGHBORHOOD.

For complete information of this property directly from the MLS; Call 301-841-7593 for more information OR go to

www.budurl.com/3Br2BShortSaleSevern

Watch the video walkthrough of this home and leave you comments on my blog

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Short Sale Rancher For Sale Randallstown Maryland 3616 Rusty Rock Rd Homes Houses

Owen McGab Enaohwo — Thu, 17 Dec 2009 20:41:21 +0000

This is an announcement for a Rancher I have listed For Sale in Randallstown MD 21133 – Short Sale:

Submit AS IS offers for this Well maintained Rancher, 3 Br / 2 Ba on main level. Its a beautiful home, Hard wood flrs throughout main level, and fully finished basement with wall to wall carpet and additional rooms. Huge back yard with cement patio and shed. One bathroom on main floor needs little work.

For complete information of this property directly from the MLS; Call 301-841-7593 for more information OR go to

www.budurl.com/3br2baRandallstown

Watch the video walkthrough of this home and leave you comments on my blog

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Short Sale Condo For Sale Bowie Maryland 4807 River Valley Way Homes Houses

Owen McGab Enaohwo — Thu, 17 Dec 2009 20:18:11 +0000

This is an announcement for a Condo I have listed For Sale in Bowie MD 20720 – Short Sale:

Home will be sold AS IS, bring offers! This beautiful condo in Glensford is perfect for those wanting stress-free living!Just come home to this 2 huge bedrooms, 2 full baths, separate living and dining rooms with beautiful cathedral ceilings, living room w/fireplace, an updated eat-in kitchen, deck, Fabulous!

For complete information of this property directly from the MLS. Call 301-841-7593 OR go to

www.budurl.com/2br2baCondoBowie

Watch the video walkthrough of this home and leave you comments on my blog