1312 Lenore Avenue, Lansing, Michigan 48910 |
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About Me
- MacIntyre & Cowen - RE/MAX Real Estate Professionals - Grand River. Lansing MI
- I am confident that you will find the service and expertise you require in my team and me as your representation. Our track record of buying and selling homes is a testimony of my team’s success in navigating through many of the most difficult circumstances in the real estate industry. You need someone who can guarantee you results and who understands both the real estate market and the financing programs that are available in our market. I think of my team as “Solution Specialists” and we are known as experts in identifying different options and getting results. With today’s economy, you need an expert to buy or sell a home and that is what the MacIntyre & Cowen Team offers: service, knowledge, and experience. http://www.pmachomes.com 517.999.2675
February 15, 2013
1312 LENORE AVE, LANSING MI, Homes for Sale Lansing MI
February 8, 2013
WHAT EXACTLY IS A SHORT SALE?
A short sale is
when a bank agrees to accept less than the total amount owed on a mortgage to
avoid having to foreclose on the property. This is not a new practice; banks
have been doing short sales for years. Only recently, due to the current state
of the housing market and economy, has this process become a part of the public
consciousness.
To be eligible
for a short sale you first have to qualify!
To qualify for
a short sale:
- Your house must be worth less than you owe on it.
- You must be able to prove that you are the victim of a true financial hardship, such as a decrease in wages, job loss, or medical condition that has altered your ability to make the same income as when the loan was originated. Divorce, estate situations, etc… also qualify. There are some exceptions to hardship now, but for the most part the bank or investor will need to verify some type of hardship.
Now that you
have a basic understanding of what a short sale is, there are some huge
misconceptions when it comes to a short sale vs. a foreclosure. We take the
most common myths surrounding both short sales and foreclosures and give a
brief explanation. LET’S BUST SOME MYTHS!!
1.) If you let
your home go to foreclosure you are done with the situation and you can walk
away with a clean slate.
The reality is that this couldn’t be any farther from the truth in most
situations. You could end up with an IRS tax liability and still owing the bank
money. Let me explain. Please keep in mind that if your property does go into
foreclosure you may be liable for the difference of what is owed on the
property versus what is sells for at auction, in the form of a deficiency
balance! Please note this is state specific and in most states you will be
liable for the shortfall, but in some states the bank may not always be able to
pursue the debt. Check your state law as it varies widely from state to state.
Here is an
example of how a deficiency balance works:
If you owe
$200,000 on the property and it sells at auction for $150,000, you could be
liable for the $50,000 difference if your state law allows it.
Not only could
you be liable for the difference to the bank, but in some situations you could
also be liable to the IRS! Although there are exemptions (mostly for principle
residences) under the Mortgage Debt Forgiveness Act, there are times when you
could be taxed on both a short sale and a foreclosure, even in a principle
residence situation. Since the tax code on this is a little complicated and I
am not a CPA, I advise always talking to a CPA when in this situation as you
are weighing your options. Banks and the IRS can go as far as attaching your
wages. Not to mention if you let your home go to foreclosure you will have that
on your credit, as well.
Guess What? A
short sale can alleviate your liability to the bank, in most situations. There
are also exceptions to this, but in most cases banks are releasing homeowners
from the deficiency balance on a short sale.
2.) There are
no options to avoid foreclosure. Now
more than ever, there are options to avoid foreclosure. Besides a short sale,
loan modifications along with deed in lieu are also examples of the many
options. In most cases (but not all) a short sale is the best option. Either
way, there are more options today than there have ever been to avoid
foreclosure.
3.) Banks do
not want to participate in a short sale, or, it is too hard to qualify for a
short sale. Banks
would rather perform a short sale than a foreclosure any day. A foreclosure
takes a long time and creates a huge expense for the banks; a short sale saves
both time and money. In working with some of the biggest lenders and servicers
in the country they have told me that on average they net 17-25% more on a
short sale than on a foreclosure. A testament to this is the financial
incentives now being offered by banks, and how much the entire process has
recently changed to try and streamline the process for all parties. Banks more
than ever welcome short sales. Qualifying for a short sale is easier than you
think, you need to have a true financial hardship, or a change in your finances
and your house has to be worth less than what you owe on it. Not only do
consumers, but banks also now have government incentives to participate in
short sales.
4.) Short sales
are not that common. At
this present time, short sales range from 10-50 % of sales in various markets
and it is predicted that in 2013 we will have more short sales than any other
year, to date. One of the biggest reasons is that MHA(Making Home Affordable
expires December 2013). Many of the Government incentives like HAFA, will
expire the end of this year. Due to economic changes in the last few years,
this is something that is affecting millions of Americans. Short sales are in
every market, and are not just limited to any particular income class. This has
affected everyone from all facets of life. A short sale should be looked at as
a helpful tool, not a negative stigma. That is why the government is offering
programs that actually pay consumers to participate in short sales. It is not
just affecting one community; it is affecting communities and consumers across
the nation.
5.) The short
sale process is too difficult and they often get denied. Though the short sale process is
time consuming; it is not as difficult as the media would have you believe. The
problem is that most short sales are denied because of a misunderstanding of
the process. It is true that if the short sale process is not followed
correctly there is a good chance of getting denied. An experienced agent knows
how to avoid this. Short sales require a lot of experience, and a special skill
set. If you are looking to go the option of a short sale make sure your agent
is skilled and experienced in this area.
6.) Short sales
will cost me money out of pocket. A
short sale should not cost you any out of pocket money. In fact, you could get
between $3000-up to $30,000 to participate in a short sale. In many ways, a
short sale may put you in a better financial position than prior to the short
sale. Almost every short sale program now has some type of financial incentive
for the home owner, as long as it is a principle residence, and we are even
seeing relocation money being paid on some investment/second homes. As a seller
of a property you should never have to pay for any short sale cost upfront to
any professional service. Realtors charge a commission that is paid for by the
bank. In most communities there are also non-profits and HUD counselors who can
help you with foreclosure prevention options for free. The only potential cost
you could incur is if the bank would not release you from a deficiency balance
in the short sale, which is happening less and less now.
7.) If I am
behind on my payments, I can perform a short sale any time. The farther you get behind on your
payments, the harder it is to get a short sale approved. The closer a property
gets to a foreclosure the harder it is to convince the bank to perform a short
sale. As they get closer to a foreclosure sale more money is spent, thus
deterring them from doing a short sale. If you think you need to perform a
short sale, time is of the essence; the sooner you start the process, the
better. Waiting too long can trigger the ramifications of a foreclosure, losing
the ability to do a short sale as a viable option.
8.) I have
already been sent a foreclosure notice so I can’t perform a short sale. For the most part just because you
received a foreclosure notice or notice of default it does not mean that you do
not have time to perform a short sale. The timeline and specifics do vary from
state to state, but having done short sales all over the country, I have seen
banks postpone a foreclosure to work a short sale option as close as 30 days
prior to the scheduled foreclosure auction, but the longer you wait the less
chance you have. If you have received a legal foreclosure notice, please reach
out to a professional right away. The longer you wait, and the closer you get
to foreclosure, the fewer options you have. If you have received a notice to
foreclose this means the bank is filing paperwork and starting the process to
take legal action to repossess the house. You still have time at this point to
prevent foreclosure, but do not hesitate! The closer you get to the foreclosure
date the harder it becomes to negotiate with the bank for whichever option you
choose.
9.) I was
denied for a loan modification, so I know I will get denied for a short sale. Short sales and loan modifications
are handled by two separate departments at the bank. These processes are
totally different in approval and denial. If you got denied for a modification
you can still apply for a short sale; in some cases you can get a short sale
approved faster than a loan modification, as some loan modifications are denied
because they cannot reduce the loan low enough based on the consumers income.
10.) If I go
through a short sale I cannot buy another house for a long time. The time to buy another house
depends on your entire credit picture and can vary from 2-3 years. Fannie and
Freddie just came out November first and said a homeowner may be eligible two
years after a short sale to repurchase. There are even a few FHA programs that
allow for a purchase sooner than that, but the guidelines are fairly strict.
Some regional and local banks will finance 16-18 months after a short sale, but
the interest rate will more than likely be higher than one of the national
chains, and this is based on their specific under writing guidelines.
These are just
a few of the common myths surrounding short sales and foreclosure. With the
options available today, no homeowner should ever have to go through
foreclosure, and hopefully this information can help a few more homeowners
think twice before walking away from their home not realizing the possible long
term ramifications a foreclosure can have.
Written by and courtesy of Brandon Brittingham on February 6, 2013, KCM Blog
February 1, 2013
SHORT SALE PRE APPROVED PRICE! GREAT 3 BR CONDO MINUITES FROM MSU
Great 3 BR condo located on the Scenic Corridor of Forest Road. Just minutes from Michigan State University, Downtown Lansing and all major highways. Short sale pre approved price by first lender. All offers are subject to lien holder approval and are considered on 1st come, 1st served basis. Please call the office at 517.999.2675 for details.
MacIntyre & Cowen, Short Sale Specialists, RE/MAX Real Estate Professionals Grand River, can help you navigate this process and get your home sold. With the extension of the Mortgage Debt Relief Act until the end of 2013, now is the time to act if you are underwater in your home. We would gladly provide a complimentary Over-the-Net Home Evaluation or email alerts to Hot Buys / Foreclosed / Liquidation & Luxury Distressed Properties in the Mid Michigan areas including Greater Lansing, Haslett, Okemos, East Lansing, Grand Ledge, Holt, Williamston, Mason, Eaton Rapids, Dimondale, Dewitt areas and more. Feel free to contact us at 517.999.2675 or visit us at www.pmachomes.com today!
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