Jeff Cook Real Estate BlogRecently posted or modified blog posts by tag - Financeshttps://www.jeffcookrealestate.com/blog/Copyright JeffCookRealEstate.com2023-08-30T11:43:58-07:00tag:jeffcookrealestate.com,2012-09-20:15075New Years Resolution: Home EditionThe holiday season is already here and soon, you’ll be facing a New Year. This is a time to look forward to the future — but that can be hard to do with so many uncompleted home improvement projects still needing attention. Don’t let those pending tasks rob your holiday joy. Set some New Year’s resolutions to make 2023 the year of home improvement for you.
Here, Jeff Cook Real Estate shares some possible projects you can tackle this coming year to raise your property value and overall satisfaction. And, some suggestions for helping you complete your chosen changes by this time next year.
Popular Homeowner Projects
Being a homeowner is no small responsibility. There are constant needs for upkeep, renovation, replacing worn items, or adding more space. And sometimes, it’s just time for a change in color, decor, or layout. Here are some popular tasks that homeowners often take on, with a few suggestions here and there.
Garage Clean-up/Reorganization — Isn’t it amazing how much can accumulate in a short time! Extra space always seems to fill up. Get brutal and begin throwing out anything you haven’t used in the last year; chances are, you won’t need it again. This can be a great weekend project that can provide fodder for charitable donations or a yard sale for extra cash.
Landscaping — <a href="https://www.jeffcookrealestate.com/blog/these-landscaping-tips-can-increase-your-home-value/">Redoing your landscaping</a> can transform your property. Start by cleaning out existing areas and adding some trees. Flowers, shrubs, edging, and efficient lighting can make your yard the envy of the neighborhood.
Outdoor Patio — Extending your living space into the outdoors is a great way to enjoy natural light and fresh air. Even a small outdoor patio can add value and a new escape for sunrise cups of coffee and silence.
Backyard Entertaining Area — Entertaining at home is a blast with the proper setup. A backyard entertaining area complete with seating, cooking and grilling center, a bar, and a cozy firepit is just the project to add excitement to your home lifestyle.
Minor Bathroom Remodel — Small changes to your bathrooms can make everything seem new. Replace the shower door or install a new tub cover, add new hardware to cabinets and drawers, and consider new faucets or a new mirror.
Minor Kitchen Remodel — Similar <a href="https://www.jeffcookrealestate.com/blog/budget-friendly-kitchen-upgrades-to-help-sell-your-house/">upgrades to your kitchen</a> can add a sense of newness, color, light, and a fresh attitude toward cooking and entertaining. New cabinet hardware, backsplash, faucets, and lighting can make a world of difference.
Smart Technology — New <a href="https://www.jeffcookrealestate.com/blog/smart-home-features-to-add-to-your-home/">smart helps</a> can add safety and convenience to your home, like plugs, detectors, and other home assistant devices. Smart appliances are also available, like refrigerators that can even create and email you a grocery list!
Major Bathroom Renovation — For those needing a whole new look, consider adding new tile, shower or tub combinations, fixtures, and more storage space to completely renovate your bathroom. Serious changes may require knocking out a wall or moving some plumbing, both major undertakings that will need a professional.
Major Kitchen Remodel — The simplest major kitchen remodel is replacing all your appliances with smart or other modern models. New cabinetry, flooring, and paint can also make things new. While you’re at it, how about adding an island or serving area?
Pool Addition — What South Carolina home is complete without a swimming pool? Your kids and neighbors will love you, and relaxing in your own backyard pool can become a wonderful pastime. Get ready for massive changes when you decide to make this new addition.
Accomplishing My Home To-Do List: One Bite at a Time
Making a list of needs and wants for your home is the easy part. But what about accomplishing all those projects? Here are some suggestions to help you get started and keep going until you are satisfied with the results.
Prioritize — While no one wants to eat an elephant, there is wisdom in the method for doing it: one bite at a time. Organize your tasks according to importance, size, and cost. Do small chores first that can be accomplished in a single afternoon or day. Take care of small expenses first. Make a plan for when and how the larger projects will be accomplished. Schedule time to dedicate to each one. Keep your list in a public place like the refrigerator to remind you of your goals and the necessary steps.
Budget — <a href="https://www.jeffcookrealestate.com/blog/budgeting-for-home-improvement-projects/">Setting a budget</a> and funding it are two vital aspects of completing your projects. Research your project costs and determine how much you need to save, then make a plan for saving it. As you reach your funding goals for each project, complete it. Remember to include permits, insurance, professional assistance, and materials.
Know Your Limits — You may be surprised at what you can accomplish yourself on your list, but don’t push yourself too far. Many small tasks can be DIY for a weekend, but know when you need to call in the professionals. You will never regret money spent wisely here.
Choose Wisely — Research the professionals you will need for your home projects. Get quotes and review online comments and recommendations from other clients. Talk to your family and neighbors about home improvement professionals they have used and their recommendations. Here again, time invested in this process will save you considerable headaches and money.
Whatever your home project New Year’s resolutions, we hope our suggestions have given you some direction and purpose to begin with determination and complete each one to your satisfaction! 2022-12-02T09:47:19-07:002022-12-02T10:02:10-07:00Patricia Utseytag:jeffcookrealestate.com,2012-09-20:13863Buying and Selling a House at the Same TimeIf multitasking is your forte, you may view buying and selling a house at the same time as a normal everyday occurrence. For most people, however, it can be quite a challenge. The fears are real — if you buy a new house before selling your existing home, you could end up with multiple mortgage payments and upkeep expenses; if you sell your existing home before buying another, you could be homeless for a while and have to crash at a family member’s house.
Buying and selling a house at the same time in South Carolina is possible, even feasible, with the right Realtor®. Jeff Cook Real Estate is rated as <a href="https://www.expertise.com/SC/charleston/real-estate-agents">Best Real Estate Agents in Charleston for 2022</a> by Expertise.com. Over 3,000 reviews on Zillow, Facebook, and Google have rated us at 5/5. This is for one primary reason: we help our clients buy and sell their homes. Period.
Our clients average only 27 days on the market, and receive 99.7% of their original asking price. We have the knowledge and expertise to help you, even when buying and selling a house at the same time. In fact, it happens more frequently than you may imagine.
Get Ready to Sell
Begin where you are and <a href="https://www.jeffcookrealestate.com/sellers/preparing-your-home-for-the-market/">get your existing home ready to sell</a>. This means making recommended repairs and upgrades that make your home more attractive to potential buyers. The key is <a href="https://www.jeffcookrealestate.com/blog/budget-friendly-kitchen-upgrades-to-help-sell-your-house/">knowing what to repair or upgrade</a> that will raise buyer interest and overall home value without too much investment.
Cleaning and decluttering from top to bottom is another key component in making your home attractive to potential buyers. They want to see the spaces available when viewing your home in photos online or in person, so remove all your stuff but the basics of furniture and some basic decor.
After deep cleaning and decluttering, it’s time to take good quality photos and videos for use online when you’re ready to list. Your agent from Jeff Cook Real Estate can help with this, as well as providing time-tested recommendations for repairs, upgrades, and more to get your home ready to sell.
Get Ready to Buy
The number one priority in <a href="https://www.jeffcookrealestate.com/buyers/step-by-step-buying-guide/">getting ready to buy</a> is to have your personal financial picture in order. This includes being up-to-date on your current mortgage payments and other financial obligations, eliminating any debt possible (especially credit cards), and generally making sure your credit score is as high as possible, with no ambiguities or problems.
Two important aspects of the financial process to purchase a home are your overall credit score and your <a href="https://www.consumerfinance.gov/ask-cfpb/what-is-a-debt-to-income-ratio-why-is-the-43-debt-to-income-ratio-important-en-1791/">debt-to-income ratio</a>. Even with a good credit score, your debt-to-income ratio can be too high, making lenders nervous about providing you with mortgage credit. Of course, it will help that you are eliminating one mortgage to obtain another. But the mechanics of this can be tricky.
All this is key to making it through the <a href="https://www.jeffcookrealestate.com/buyers/mortgage-pre-approval/">preapproval process</a>, so you can begin house shopping in earnest. It also helps to have a downpayment in addition to any profit you expect to make from the sale of your existing home. Selling your home is not a sure thing; cash on hand is a solid credit in your favor.
Focus on the Timing
The real challenge comes with obtaining your financing, locating a home you wish to buy, and finding the right buyer for your existing home. Timing all these is critical to not leave you or the other involved parties waiting too long, or leaving you balancing too much expense. A seasoned agent from Jeff Cool Real Estate can work with you to coordinate house showings, negotiations, paperwork, and other necessary factors.
Remember, this will include home inspections, back-and-forth negotiations about the home you wish to purchase and with the home you wish to sell, any repairs needed to make the deal, requests you have for the sellers, and coordinating closings on both transactions. And don’t forget packing, loading, and moving from one location to another.
Get Seasoned Help from Jeff Cook Real Estate
Buying and selling a house at the same time is much easier with a talented agent from Jeff Cook Real Estate by your side. We deal with these issues every day and know how to help streamline the process at every turn, while providing superior service and guidance for every situation.
<a href="https://www.jeffcookrealestate.com/">Contact Jeff Cook Real Estate today</a> if you need to sell your home and purchase another at the same time. We have the knowledge and experience to make that happen smoothly while getting you the best deals in both transactions.
<br /><br />2022-06-26T04:20:00-07:002022-06-21T04:12:04-07:00Lee Willeytag:jeffcookrealestate.com,2012-09-20:11398Imagine If You Never Had to Worry About Management Problems or Chasing Rent?<img src="https://assets.site-static.com/userfiles/1451/image/CasualBusinessPeople_jco.jpg" width="2950" height="1969" alt="Business People" />
Are you worn down from managing tenants or the maintenance of properties?
Is cash flow difficult, or does your property have little to no equity?
Have you undergone a catastrophe?
Do you own too many units or have properties that fall outside your realm of expertise?
Did you inherit a property?
If You Answered Yes to Any of These...
The solutions provided through Jeff Cook Offers (JCO) may be right for you! We offer numerous programs that accommodate a wide range of situations, but the Take Over Payments program is the most relevant for these circumstances.
Take Over Payments
This program allows us to purchase your property “as is”. We will work to renovate and resell the property. A helpful way to think about this program is to compare it to taking over a car payment. This same principle applies to properties! The <a href="https://www.jeffcookrealestate.com/jeff-cook-offers/take-over-payments/">Take Over Payments</a> program provides you with the peace of mind you have been looking for.
The Take Over Payments program benefits you with a quick, hassle-free transaction and a fair price. You will have the potential to save or improve your credit, you are able to move on your timeline, and there are no commissions to be paid by the seller. Other benefits include that there would be no buyers tracking through your house and that JCO pays most of the closing costs.
This Program Empowers You!
You can eliminate property management frustrations and save time from constantly chasing down rent. You can move forward with your life and gain freedom from mortgage stress and financial pressure.
If your property situation has created a unique need, <a href="https://www.jeffcookrealestate.com/blog/list-your-home-traditionally-or-sell-the-jco-way/">JCO has options</a> for you. This program is only one of many creative solutions provided by this innovative team.
Are You Ready?
No matter what situation you're facing as a home-owner, with JCO, you're less than a week away from your solution. Call 843-501-0519 now for a consultation!
Coming soon to our blog: Get an offer from a home buying specialist who can quote you a purchase price, then choose your closing date!2021-08-31T10:00:00-07:002021-09-30T08:13:09-07:00Lee Willeytag:jeffcookrealestate.com,2012-09-20:10659What to Keep for Taxes after Buying a Home<img src="https://assets.site-static.com/userfiles/1451/image/Homeowner_Taxes.png" width="2674" height="1783" alt="Taxes for Homebuyers" />
Buying your very first house is an incredibly large step, plausibly an overwhelming decision to make as a part of one's life. It is, however, a good investment and could signify the results of your fruitfulness and years of hard work. Financially speaking, being a real estate owner entails a more complicated taxation process than when you do not own a property. This does not mean it is all complex and stressful. Having your own home could also give you tax advantages, making you save more money than you anticipated. Here is everything you need to know about what is recommended when doing your taxes after purchasing a home, including the benefits of being a homeowner when it comes to taxes.
Tax Breaks
Homeownership offers numerous perks and introduces a new world of tax breaks. Before owning a house, the standard deduction is what you most likely have been claiming, but upon possessing a home you can opt to itemize deductions on your tax returns. Once you begin the process of itemizing, the things you usually pay can now earn you tax-saving deductions. Enumerated below are some of the tax breaks that will come to your attention after entering the world of real estate.
Interest on your mortgage
The <a href="https://www.jeffcookrealestate.com/blog/mortgage-payment-structure-explained/">mortgage</a> interest deduction is one of the largest tax breaks for most homeowners. You can withhold your investment's mortgage interest, with a few situational exemptions, like a yearly cap, for instance. The odds of this happening are low, nevertheless. A tax year usually ends in January, and afterward, you will have to expect your lender to point out the IRS form particularizing your annual interest paid. You have to ensure that you will also include further interest you funded since this is essential to your closing balance. These should be written on your settlement sheet for the house purchase. Lenders will also send the first months' interest of your loan. You may seek assistance from the person or institute who lent you the money to specify this to you. However, you have to add this to the sum of your interest when you do your taxes in case it is not included in your 1098.
Taxes on the properties
The cash you fund in local charges can be put under deductibles. If you have your taxes sorted out through a moneylender <a href="https://gofirstnations.com/what-is-an-escrow-account/">escrow</a> account, you will discover the sum on the form you submitted. Personal records through checks and transfers, among others, are what you will be having if you go directly to the tax authorities in your area. Furthermore, plausibly discoverable on the settlement sheet are the off chances that you repaid the vendor for any land charges they paid ahead of time while you claimed the home. Note that you also have to incorporate those installments.
Points to pay
Upon <a href="https://www.jeffcookrealestate.com/blog/process-of-buying-a-home/">purchasing</a> a home, you may need to pay "points." This charge is normally communicated as a level of the advance sum. If the credit is received by your home and the measure of points you pay is in accordance with your space, the points are deductible as "interest" so long as the money you paid at your closing through your down payment can be equated to the points.
The world of homeownership
Now that you are equipped with this knowledge, buying a house and immersing yourself in paying taxes, mortgages and loans is less "taxing" now, right? Sure, purchasing your first home can be quite an overwhelming decision initially, but through a guided mindset and a decent knowledge about the workings of taxation in the field of real estate, homeownership can go by like a piece of cake.
2021-05-10T08:00:00-07:002023-08-29T08:11:18-07:00Lee Willeytag:jeffcookrealestate.com,2012-09-20:10552What is Equity and How Do I Cash Out?<img src="https://assets.site-static.com/userfiles/1451/image/Home_Equity_JeffCook.jpg" width="4288" height="2848" alt="Home Equity" />
Equity is one of those terms that gets thrown around a lot, however, it can be confusing what it means in the world of real estate. We will walk you through all you need to know about equity and how you can cash out on your equity.
What Is Equity?
In simple terms equity refers to your assets minus your liabilities. So, In terms of home equity, this refers to you subtracting any mortgage as well as any other debt such as encumbrance tied to the home, from the value of your home. In this case, the home is the asset whiles the <a href="https://www.jeffcookrealestate.com/blog/budget-tips-to-relieve-the-stress-of-high-house-payments/" target="_blank">mortgage</a> with any other debt is the liability.
So, for example, if your house costs $152,000 and you paid for it with no mortgages or encumbrance or liens, then you own 100% equity of your home, which means you have $152,000 of home equity in your name. However, if your home costs $152,000 and you own a $52,000 mortgage with no other additional debt, then you have $100,000 in home equity.
What Are The Benefits Of Home Equity?
Owning home equity or paying off some of your mortgages comes with a lot of benefits, some of which include:
1. Appreciation
The value of your home tends to increase over time, so the higher your home equity, the more profit you can make off the home.
2. Leverage
The more your home equity, the higher the amount of money you can borrow against that equity. And as you will learn in the next section, having home equity gives exposes you to some loan opportunities.
3. It Alleviates Your Financial Burden
The more home equity you have, the more financial freedom you have. This is because having home equity saves you from certain financial obligations such as mortgage interest as well as property tax, which can save you some cash.
<br /><br />
How Do I Cash Out On My Home Equity?
If you won some equity in your home, you do not necessarily have to sell your home to gain access to your cash. There are various ways you can leverage the equity of your home, however, two of the most popular options include:
<br /><br />
Home Equity Line Of Credit (HELOC):
With a HELOC, you can borrow against the equity of your home. How this works is that you are given a line of credit of a <a href="https://www.banksc.com/calculator/credit-line" target="_blank">maximum limit</a> which you can borrow, however, you have the flexibility of borrowing how much you like and whenever you like given that it doesn't exceed the maximum limit.
When the loan is set up, you can borrow money for the next 10 years, and when the 10 years period expires, you will be required to pay off the loan together with the interest accrued within 15 years. However, the maturity period can vary from bank to bank.
Mostly, Home Equity Line Of Credit loans tends to have a loan-to-equity value of 80%, which means the lender will give you 80% of the value of your home equity. So, assuming you have home equity of $150,000, most banks will give you a line of credit of $120,000, and you can take out any amount from the $120,000 for the next 10 years.
Also, HELOCs have a floating interest rate, what this means is that it isn't fixed since it moves up and down with the market.
<br /><br />
Cashout Refinance/ Home Equity Loan:
This lets you take a large lump sum of money upfront and you will be required to pay this loan within a given period, however, with this, you will be required to pay a fixed monthly payment. Unlike the HELOC, the interest rate of a <a href="https://www.jeffcookrealestate.com/blog/what-you-need-to-know-before-applying-for-a-home-loan/" target="_blank">home equity loan</a> depends on how much money you borrowed, and it stays the same till the end of the loan. So, a cashout refinance is like a second mortgage. 2021-04-21T11:38:00-07:002021-08-30T12:07:59-07:00Lee Willeytag:jeffcookrealestate.com,2012-09-20:10480Home Insurance: What is it and Why do I Need it?<img src="https://assets.site-static.com/userfiles/1451/image/Untitled_design_26.png" width="2000" height="1333" alt="Home Insurance" />
New homeowners often hear about home insurance but don't have enough information about what it actually means, what it covers, and if they should even get one. So, let's start from the beginning.
What is Home Insurance?
Home insurance, also known as <a href="https://weinsuregroup.com/insurance/property/home">homeowners insurance</a>, or HOI, is a type of property insurance that can cover these four kinds of incidents:
Exterior damage,
Interior damage,
Liability
Loss or damage of personal possessions.
As you can see, all aspects of your home and/or your possessions can be covered by a policy. You are also covered against legal liability when a person not living with you is hurt while on your premises. When for example, slipping on your driveway.
Home insurance can be sold as a single policy or multiple-line policy. A standard policy usually insures the home itself along with the belongings inside of it.
Why do I Need Home Insurance?
Although no law requires you to take out a home insurance policy when applying for a <a href="https://www.jeffcookrealestate.com/blog/mortgage-payment-structure-explained/" target="_blank">mortgage</a> to buy real estate, mortgage lenders do require you to get it before they agree to finance your purchase. Their investment is therefore protected if the home is damaged, or destroyed by a natural disaster.
Apart from that requirement, it is a good thing to have one for exactly the reason listed above. The basic policy usually covers perils such as fire, lightning, explosion, smoke, windstorm/hail, vehicle collision, riot, and vandalism. The perils covered (and those not covered) will be listed in your home insurance policy.
Homeowner's insurance coverage can pay to fix or rebuild your residence and possibly other buildings on your property, such as a detached garage or a storage shed. If your possessions like furniture, TV, or even expensive china get damaged, the HOI can help pay to replace your assets.
How do Home Insurance Claims Work?
First of all, you should call your insurer helpline as soon as possible. If you for example make a claim for interior fire damage in your home and the claims adjuster estimates the cost to $5,000 to bring the property back to habitable conditions, you will be informed about your deductible cost which can be, say $1,500 according to the policy agreement. You will then get a payment of the excess cost, in this case, $3,500.
The higher the deductible, the lower the monthly or annual premium on the insurance policy.
What Happens if I Don't Have Home Insurance?
Not having home insurance <a href="https://www.jeffcookrealestate.com/blog/mortgage-payment-structure-explained/">can cost home buyers their mortgage</a> before they even get one. Aside from getting a mortgage, once you are an actual homeowner not having a policy can prove to be costly. Not being covered against natural disasters, of which some are happening more often than ever, can literally cost you the roof over your head.
<a target="_blank" href="https://www.insurancejournal.com/news/national/2013/05/14/291804.htm" class="editor-rtfLink">Surveys</a> about homeowners insurance coverage often reveal that first-time buyers but also existing homeowners are confused by what is and what isn't covered by their policy. Always make sure that you are aware of what is listed in your policy papers.
Home insurance is not something where you should pinch pennies. Inquire with your insurer about a homeowners policy sooner than later. 2021-04-12T09:30:00-07:002021-11-28T18:12:00-07:00Hunter Cooktag:jeffcookrealestate.com,2012-09-20:10361Mortgage Payment Structure Explained<img src="https://assets.site-static.com/userfiles/1451/image/Untitled_design_23.png" width="800" height="524" alt="Mortgage Payment Structure" />
If you're like many new homeowners, you most likely write a new check every month for your mortgage without understanding how mortgage payments work. Mortgages <a href="https://www.jeffcookrealestate.com/blog/budget-tips-to-relieve-the-stress-of-high-house-payments/" target="_blank">can be stressful</a>, and many property owners have no idea how much interest rate or what they owe on the mortgage balance.
They spend a lot of their time attempting to acquire favorable loan terms, only to forget all about it once they buy their dream house. All homeowners need to at least have basic knowledge about their mortgage payments
So, what is a mortgage?
This is a long-term loan that is purposely designed to help home buyers purchase a house. Besides reimbursing the principal amount, it is also required that you pay the lender interest. The house, along with the land surrounding it, is collateral. However, if you want to own a home, you need to have more than this basic knowledge.
The four parts of your mortgage
1. Principal
The principal is the original amount given by the lender. This is the part of the reimbursements utilized to reduce the amount you owe. The bigger the balance, the higher the mortgage repayment.
If you chose the fixed-rate alternative, your principal reimbursement would be constant until you finish paying off the loan. There are plenty of details about your repayment on your amortization schedule. It is an analysis of each <a href="https://www.jeffcookrealestate.com/blog/here-are-the-types-of-mortgages-explained/" target="_blank">type of available payment</a>. Usually, a significant portion of the principal is reimbursed on the back half of your mortgage.
2. Interest
This is a percentage added to the loan balance as reimbursement to the creditor. Banks do not lend people funds expecting nothing in return. Typically, interest is the amount the banks charge on the principal amount.
3. Tax
As a home buyer, you must be prepared to make house payments in the form of property tax and mortgage repayments. Typically, the municipal taxes are arrived at depending on your house's value.
4. Insurance
Mortgages also include the buyer's insurance, which lenders need to cover any damage to the house, which is seen as collateral, together with everything inside it. Additionally, it covers particular mortgage insurance, which is a requirement if the buyer makes a down payment of less than 20% of the house's buying price. Generally, insurance is engineered to shield the creditor if the borrower is unable to pay back the mortgage.
Conclusion
Whether you're purchasing a home for the first time or utilizing customary funds to invest, it is vital to comprehend every factor of your mortgage. Begin by familiarizing yourself with the mortgage components and make sure any questions you might have, have been answered exhaustively. More knowledge about your mortgage repayment translates to <a href="https://www.jeffcookrealestate.com/sellers/jeff-cook-offers/" target="_blank">better decisions</a>.
2021-03-29T06:00:00-07:002021-05-27T07:23:28-07:00Hunter Cooktag:jeffcookrealestate.com,2012-09-20:10205Why Should I Refinance?<img src="https://assets.site-static.com/userfiles/1451/image/Untitled_design_22.png" width="2750" height="1833" alt="Why Refinance?" />
Owning a house is most people’s dream. Though, a mortgage is not accessible to everyone, which makes owning a home quite a hassle. Many people don't even know the <a href="https://www.jeffcookrealestate.com/blog/5-important-things-to-know-about-your-home-mortgage/" target="_blank">important factors</a> that go into your mortgage. When you get a mortgage, you always have the option to refinance your mortgage after some time. Most of the time, refinancing turns out to bring more good than bad. Unfortunately, most people don’t understand the importance of refinancing a mortgage. Most importantly, they don’t know how refinancing a mortgage works. In that case, this article will explore the benefits of refinancing and touch base on how the whole process works.
The process of refinancing is less complicated than purchasing a home. Here is a snippet of the process;
1. Applying
You must present recent paystubs and prove that your credit score qualifies. Your lender will also look at your assets, debts, and bank statements
2. Lock in your interest rate
After approval, you have the choice to lock your settled interest rate before the loan closes. This might take a minimum of 15 days to a maximum of 60 days. You also can float your rate, which allows you to get lower rates and puts you at risk of getting higher rates.
3. Underwriting
At this level, your lender begins to verify your information to make sure everything is accurate. They also verify your appraisal to determine the value of your home. This determines the options available for you.
4. Home appraisal
This is when your lender uses an appraiser to estimate the value of your home. For better preparation, it would help if you keep your home at its best. You can also put a list of the upgrades you’ve made since you purchased your home. If your home value turns out to be the same or higher than the refinance amount, then your underwriting is complete.
5. Closing your loan
Once the underwriting and home appraisal are set, you can confidently close your loan. Your lender will then send you a closing disclosure that contains all the figures for your loan. Usually, this process is faster than closing for a house purchase. People on the loan and title plus a representative from your lender must attend the closing. After going through all the documents, you have to pay the closing costs, which are not part of your loan.
So, why should I refinance?
As a homeowner, it is an excellent idea to refinance your mortgage for one good reason – to help you improve your finances. For example, refinancing could help lower your mortgage interest rates, which, in turn, may reduce your borrowing costs. In simple terms, refinancing allows you to lower your monthly mortgage payments and create more flexibility on your monthly spending.
The Benefits of Refinancing Your Mortgage.
1. Reduces your interest rate.
A higher interest rate means you have to pay more on your monthly mortgage payments. Refinancing your mortgage can bring these rates down, which puts more money on your savings. Furthermore, a reduction in mortgage rates reduces your total interest costs.
When you bring your mortgage rates down, it is possible to qualify for another mortgage at a lower rate than your current payments. There are factors such as improved credit score that may help you be eligible for lower mortgage rates. Before refinancing, it would be best to shop around to get the best mortgage rate from a suitable lender.
2. You can alternate your payoff timeline when you refinance.
In the real estate industry, refinancing a mortgage can reduce your loan payment duration. For example, if you have 18 years left to repay your mortgage. In that case, if you land better, lower interest rates, you could reduce the repayment to 15 years. A shorter repayment period, however, may increase your monthly payment. To understand the relationship between the interest rate and your monthly payments, you can use the mortgage calculator to get the real-time values.
3. Refinancing can Change the type of loan you have.
When you refinance your mortgage, you have the flexibility to go back and forth between adjustable-rate mortgages and fixed-rate loans. With a fixed-rate loan, you stay worry-free from future increased rates. Alternatively, suppose you have an <a href="https://interlincmortgage.com/fha" target="_blank">FHA loan</a> that requires you to pay insurance premiums. In that case, you can choose a conventional loan that allows you to eliminate insurance costs.
4. Refinancing allows you to tap into your home equity.
If you own a significant portion of your home, you can direct that money on other expenditures. A good example is to use the money on home improvement, educational purposes, or paying off debt. Still, you have the flexibility to spend the money anywhere however you want.
Wrap Up.
To learn more about your options when it comes to refinancing on your house payments, visit our <a href="https://www.jeffcookrealestate.com/buyers/refinancing/" title="Refinancing" target="_blank">Refinancing</a> webpage.
Refinancing your mortgage is the best option you can use to save more by paying lower interest rates. Always feel free to consult a professional to get a better understanding of how the whole process works. Still, this information can help you understand the importance of refinancing your home loan.2021-03-19T10:00:00-07:002023-08-30T11:43:58-07:00Hunter Cooktag:jeffcookrealestate.com,2012-09-20:9662Forbearance: What Is It And What Do You Need to Know?<img src="https://assets.site-static.com/userfiles/1451/image/What_to_Know_About_Forbearance.png" width="1200" height="800" alt="What Is Forebearance" />
The Covid pandemic has left many people in financial havoc, wondering how they are going to make their mortgage payments on time. Luckily, there is a solution that can help you during these challenging times. A mortgage forbearance enables you to stop making payments on your mortgage in the event of financial hardship. Most lenders will allow you to request a forbearance agreement if you have recently been let go from your job or your income has been drastically reduced. If you are having difficulties paying your mortgage during the pandemic, know that you are not alone. The pandemic has caused mass layoffs, pay cuts, and reduced hours for many. As a direct result, the <a href="https://www.consumerfinance.gov/coronavirus/mortgage-and-housing-assistance/mortgage-relief/">federal government </a>and lenders are now offering various mortgage forbearance options to allow people to stay in their homes.
Mortgage forbearance is a service in which a <a href="https://www.jeffcookrealestate.com/blog/how-to-shop-for-a-mortgage-company/">mortgage servicer or lender</a> allows you to briefly pause your payments or even make late payments. This is done to help prevent the home from going into foreclosure. It is important to keep in mind that this is not a forgiveness of the loan. Instead, the missed payment must be made at a later date or the loan will go into default. You will want to avoid going into default at all costs as it can result in you losing your home. The forbearance is designed to help homeowners throughout any sort of hardship that is out of their control. As of this time, the government is extending forbearance periods of up to a year to qualified borrowers.
If you are deemed to be eligible for a forbearance, your lender will provide you with a contract that outlines all of the terms that you will need to agree to. It will typically include helpful information regarding how your payment history will be reported to credit bureaus, how the forbearance term works, and how the payments that were skipped will be expected to be repaid upon the forbearance period expiring. The actual process for applying for a forbearance will differ depending upon the <a href="https://www.jeffcookrealestate.com/blog/here-are-the-types-of-mortgages-explained/">type of loan </a>held, the servicer, and even the investor requirements placed onto the loan. It is also crucial to keep in mind that there is not a standard schedule for repayment for those who are in forbearance. It is ultimately up to the discretion of the lender and how they choose to go about things. Some are completely fine with a lump sum payment being made upon the forbearance term expiring, whereas will add the total of the missed payment to the backend of the loan.
If you are considering a mortgage forbearance, you should reach out to <a href="https://www.jeffcookrealestate.com/sellers/jeff-cook-offers/">Jeff Cook Offers</a>. They will be more than happy to set up a consultation for you at no charge. This consultation is the perfect time to discuss options that are available to you to ensure that you can keep your real estate. These solutions make it less likely that you will go into foreclosure and that is a cause for celebration. Feel free to get in touch at your earliest convenience to learn more regarding the forbearance process.
2020-12-29T14:45:00-07:002021-02-05T07:49:08-07:00Matt Serratotag:jeffcookrealestate.com,2012-09-20:9359Budgeting for Home Improvement Projects<img src="https://assets.site-static.com/userfiles/1451/image/Home_Improvement_Budgeting_and_Planning.png" width="1200" height="800" alt="Home Improvement Budgeting and Planning" />
Very few of us like sticking to a budget, but setting a budget is key when you are planning to take on a big home improvement project. Whether we are talking about a $20,000 home energy makeover or a $3,000 <a href="https://www.jeffcookrealestate.com/blog/how-to-renovate-your-attic-on-a-budget/">attic renovation project</a>, it’s important to make a financial plan and stick to it. Without a proper budget, you will eventually pay much more than you initially planned.
Determine Your Goals
Before you set a budget, you need to be clear on why you want to renovate. Drill down to the specifics. You need to pin down decisions and select finishings and the materials before you start the actual project.
Before you start tearing up floorboards, do some research. One of the most important things you need to do is figure out whether you need <a href="https://www.theguardian.com/money/2014/sep/20/home-improvements--essential-guide-planning-permission">planning permission</a> for your home improvement project. You may need a permit to install a new fence, replace a water heater, etc. A building permit for a larger project can cost anywhere from $500 to $2,000. Definitely consider these costs when determining your budget.
Get a Hard Quote
If you want to formulate an even more accurate budget, put together a list of exactly what you want and provide it to a contractor. Keep in mind, it takes time to formulate a proper quote. Home contractors are usually too busy to give free quotes. They may give you a free estimate, but it may not be as accurate as you would like.
If you want to receive the timeline for the job as well as a detailed outline of all the costs, it is worth paying for a hard quote. Regardless, there will likely be some hidden expenses. When tearing down walls, you may find mold or asbestos hiding behind the plaster. For this reason, it's a good idea to allocate 10% to 15% of your budget for surprise costs.
Factor in Home Insurance
Your project may affect your home insurance. If some damages occur during the project, you wouldn’t want to pay for them out of pocket. Your insurer may not cover the work being done or may require you to pay an extra premium. In some cases, it could help to take out specialist renovation insurance or consult a property management accountant.
Keep Track of Improvements
Setting a home improvement budget is one thing, sticking to it is completely different. To minimize surprise expenses, you should record everything step-by-step. It can be easy to lose track of the side projects being done simultaneously.
You need to divide everything into <a href="https://www.jeffcookrealestate.com/blog/5-diy-projects-to-tackle-this-weekend/">smaller projects</a>, and then closely track the progress. For instance, if you hire an electrician to do some wiring, you will want to track their work as it happens while taking note of what the plumber or carpenter is doing.
Use Spreadsheets
Keeping track of all the work going on in your home is easier said than done. Spreadsheets can be a lifesaver. You don’t need to be an Excel genius to do this. Thanks to apps like Google Sheets, you can create spreadsheets easily and free-of-charge. A spreadsheet could help you track progress, budget, and prioritize the projects that need to be done first.
Financing
You can do the work in stages or take out a loan in order to complete everything in one go. Obtaining a home equity line of credit is a popular way of financing big home improvements. In this case, the equity in your home serves as collateral and you can borrow money on an as-needed basis.
Another option is to apply for a home equity loan which typically offers fixed rates. If you want to get a home equity loan, know that many lenders won’t give you one for less than $25,000. Unless you plan on doing a huge kitchen remodel or add a new room to your home, a HELOC may be a better option.
Wrriten by: Kevin jefferson
Kevin has gone through an extensive home renovation with his son, which he has both thoroughly enjoyed, and dreaded every morning. He is now the proud owner of half his dream house (the other half is waiting for spring). You can read more of Kevin’s work on <a href="https://plainhelp.com/author/kevin/">PlainHelp</a>.
2020-11-09T09:00:00-07:002022-02-17T07:40:23-07:00Matt Serratotag:jeffcookrealestate.com,2012-09-20:9234How to Shop For A Mortgage Company<img src="https://assets.site-static.com/userfiles/1451/image/Shopping_For_A_Mortgage_Company.png" width="1200" height="800" alt="Shopping For A Mortgage Company" />
For most people—especially first time home buyers—taking out a mortgage can be a scary thing. If you do your research and weigh your options, though, there's no need to fear! The fact you're on this page at all means you're headed in the right direction. Below, we'll take an in-depth look at how to shop for mortgage lenders.
Evaluate Your Credit Score
Mortgages are a loan like any other: interest rates will be higher if you have a poor credit rating. If you do have a poor credit rating, it's better to <a href="https://www.jeffcookrealestate.com/blog/how-to-improve-your-credit-score/">improve it</a> before applying for a mortgage, since you’ll want the lowest rate possible for these long-term loans.
Know About the Types of Mortgage Lenders
It's important to note that your bank is not always the best option for your mortgage - they may offer you low-interest rates if you're a long-time member, but don't just assume they're the best choice. Shop around!
Mortgage brokers are companies that shop for lenders on your behalf. They require you to pay a percentage of your mortgage - normally 1-2 %. This usually isn't worth it. With time and patience, you can find a great lender on your own.
Credit unions are funded by members, using deposits to make loans. If you're a member of a credit union, consider looking for mortgages through them as you might get lower interest rates.
Correspondent lenders fund their own loans but then sell them to a larger mortgage company, like a bank. Correspondent lenders may be able to negotiate with those larger lenders to get you a better deal.
Remember that which type you choose really depends on your individual needs.
Learn About the Types of Mortgages
There are two main <a href="https://www.jeffcookrealestate.com/blog/here-are-the-types-of-mortgages-explained/">types of mortgages</a>: fixed-rate and adjustable-rate.
Fixed-rate mortgages have fixed interest rates that never fluctuate over the life-span of the loan. These mortgages are better for people who think they’ll be in their home for a long-time or the full length of the mortgage.
Adjustable-rate mortgages have a fixed rate for a certain period of time but fluctuate after that period of time. These are a good option for people who think they'll sell the house after a few years, so they can get lower initial interest rates and save money.
Select A Few Lenders to Evaluate
Ask friends, family members, or your realtor for recommendations. The <a href="https://www.consumerfinance.gov/">Consumer Financial Protection Bureau</a> recommends contacting at least three separate lenders. By getting separate quotes from different lenders, you may be able to negotiate with one or the other as they lower interest rates to "win" your business.
Get Pre-Approved
Pre-approval means that a lender has evaluated your financial situation and determined you're a good fit for taking out a mortgage. This means that your offer may be viewed as more competitive. To <a href="https://www.jeffcookrealestate.com/blog/how-do-i-get-pre-approved-for-a-home-loan/">get pre-approved</a>, you'll need to provide the lender with your social security number, financial history, and salary info.
Wrapping Up
We hope these tips provide the help you need to take to secure your first mortgage. Take your time, do your research, and before you know it, you'll feel confident in shopping for a mortgage!2020-10-28T08:00:00-07:002020-10-27T13:49:01-07:00Matt Serratotag:jeffcookrealestate.com,2012-09-20:8421Going Through a Foreclosure? Here's Everything You Need to Know About Facing Foreclosure<img style="display: block; float: right; margin-bottom: 30px; margin-left: 15px; width: 475px;" src="https://assets.site-static.com/userfiles/1451/image/what-is-home-foreclosure.jpg" alt="Going Through Foreclosure? What You Need to Know" width="475" />Foreclosure is a legal process in which the lender takes control of a property due to a homeowner's inability to make the agreed upon mortgage payments. While the foreclosure process varies by state, the process has similarities in all locations.
Foreclosure is generally the result of financial difficulty, as homeowners go into foreclosure when they face financial hardships such as job loss, a wage earner dies, or when their home loses value and they become unable to sell.
Knowing what foreclosure is, what the foreclosure process is, and what can be done to <a href="https://www.jeffcookrealestate.com/blog/how-to-stop-foreclosure/">stop a foreclosure</a> is important for a homeowner experiencing financial hardship. The more the homeowner knows about foreclosure and how it can be prevented, the easier it will be for the homeowner to try and keep their house.
What's most important to understand is that foreclosure is a legal process and requires deadlines, forms and regulation. Banks are required to follow the same rules that homeowners are required to follow; therefore, understanding the rules the banks are required to follow can help the homeowner ensure the process is following the law, and if it is not, then the homeowner may be able to take action to prevent the foreclosure from occuring.
Pre-Foreclosure Process
Foreclosure begins when the homeowner fails to make a payment, and a process is triggered within the bank. The early stages of repossession of a home begins when the lender files a default notice on the property. At this point, the homeowner can either pay their unpaid debt or sell the home. If the homeowner does not do one of these two things, the foreclosure process will proceed. Pre-foreclosure begins when the homeonwer is at least three months late on their mortgage payments.
Special Considerations
When a pre-foreclosed home is sold, this is known as a short sale. While the sale can be a private transaction between the homeowner and buyer, the bank must approve the buyer's offer. If the bank does not approve the short sale, then the short sale cannot take place.
The short sale process can be challenging for a homeowner who has never experienced the process before. Therefore, it's important for the homeowner to work with an experienced real estate professional, as they know how short sales proceed and can advise the homeowner on the following steps:
The homeowner applies for a short sale by filling out an application and submitting a short sale package to the lender.
A buyer or buyers makes offers on the home, and those offers are presented to the lender for consideration.
The lender accepts, rejects, counters or ignores the offers.
Once an offer has been accepted by the lender, the sale proceeds like other home sales, with the buyer completing an inspection and appraisal.
Pros and Cons of Selling During Pre-Foreclosure
Unless the homeowner is able to catch up on payments, selling the house is generally seen as the best option for all parties involved. For the homeowner, a <a href="https://www.jeffcookrealestate.com/blog/short-sale-vs-foreclosure/">short sale is a good way to avoid foreclosure</a> and the damage that foreclosure can do to the homeowner's credit. Short sales enable the homeowner to remain in control of the process, whereas a foreclosure is a process that the homeowner cannot control.
For the lender, the short sale is better than foreclosure because it is less costly, faster, and the lender is able to find a buyer who is able to make the payments.
For the buyer, the short sale is a way to purchase a home below market value or a home they might not otherwise be able to afford, either in a neighborhood that is normally out of their budget, or a home that is larger than they would otherwise be able to purchase.
However, there are some downsides to selling during pre-foreclosure, with the first being that short sales can take a very long time. Additionally, in South and North Carolina, home buyers who make an offer on a home and have their offer accepted by the seller may not get the home if the lender decides to accept an offer from another buyer.
Sometimes, lenders refuse to respond to offers from home buyers, and the home buyer is left waiting to hear back until they walk away, which can be a frustrating experience for the home seller as well as the buyer.
Judicial and Non-Judicial Foreclosure
In some cases, the homeowner has a choice between a judicial versus a non-judicial foreclosure. A judicial foreclosure is a foreclosure that is handled in the courts, and a non-judicial foreclosure proceeds with the help of a neutral third-party trustee. In some states, judicial foreclosure is the only option, but in others, non-judicial foreclosure is available to homeowners who choose this route.
Before choosing the route that's right for them, homeowners should seek help from a housing counselor approved by the U.S. Department of Housing and Urban Development (HUD), or from an experienced housing attorney.
Judicial Foreclosure
A judicial foreclosure occurs when the lender goes to court to receive a judgement. Judicial foreclosure is a long and involved process, and it proceeds in a pre-determined way that has been established for the courts with very little exception.
Some homeowners choose judicial foreclosure because they want the assurance of knowing the foreclosure process will take a long time. Judicial foreclosure is known to be exceptionally slow, which is why some lenders prefer judicial foreclosure for the same reasons. If there is a complex issue to work through, relating to the title of the house for example, then the lender may want that additional time to complete the paperwork and resolve the issue for the foreclosure's conclusion.
Non-Judicial Foreclosure
Non-judicial foreclosure grants the homeowner and the bank more leeway. With a non-judicial foreclosure, lenders may sometimes enable homeowners to set up a payment plan, catch up with payments, or reach a settlement the lender can agree to. However, this flexibility can also make foreclosure more problematic for homeowners. For example, lenders may speed through the non-judicial foreclosure process, leaving homeowners without a home faster than if they had chosen judicial foreclosure instead. To give homeowners some perspective on how fast a non-judicial foreclosure can be, it can take just a few months while judicial foreclosure can take more than a year.
Homeowners who aren't sure which process is right for them should work with an expert.
The Foreclosure Process Is Different in Each State
Each state has its own laws for the foreclosure process. A homeowner who is familiar with the foreclosure process in one state may not be familiar with the process in another state. Some of the differences that vary between states include the notices a lender must post publicly, the homeowner's options for avoiding foreclosure, and the amount of time to sell the property.
In 22 states in the United States, judicial foreclosure is the default form of foreclosure while in the other states, non-judicial foreclosure is the default. With either option, homeowners must communicate with their bank and take a proactive stance in order to avoid foreclosure.
North and South Carolina Foreclosure Process
The foreclosure process is different in North and South Carolina. If a homeowner is experiencing foreclosure in one of these states, the following information can help.
North Carolina
North Carolina is a non-judicial foreclosure state. Unless the homeowner sues the lender, the process is likely to proceed outside of court. By law, the lender is generally required to wait until the homeowner is 120 days late on their payments before the lender can begin pre-foreclosure proceedings, which gives the homeowner time to catch up on their payments, if possible.
The next step is a pre-foreclosure notice, which must be sent to the homeowner at least 45 days before the notice of hearing in foreclosure proceedings. The information on the pre-foreclosure notice includes the amount due and information for a housing counselor who can help the homeowner through the foreclosure process.
After the pre-foreclosure notice, the lender must send a notice of default and notice of hearing. The notice of sale must be sent to the homeowner in addition to being posted somewhere public.
South Carolina
South Carolina is a judicial foreclosure state. The first proceedings begin when the mortgage is 120 days delinquent. Homeowners in South Carolina have access to foreclosure intervention, and lenders must serve homeowners with a notice that alerts them they have access to this.
The homeowner has 30 days to respond; if they do not, then the foreclosure can proceed. If the homeowner chooses to take advantage of foreclosure intervention, then they may discover a way to prevent the foreclosure from takng place. If the intervention doesn't work, however, the process moves to hearing and judgement; once this is completed, the lender may sell the property.
While foreclosure in North and South Carolina can be very different, the most important action is for the homeowner to seek a means for help through a housing counselor. By working with an expert, the homeowner is more likely to find a way to prevent the process from moving forward.
Phases of Foreclosure
Regardless of what state the homeowner lives in, there are generally six phases of foreclosure. The earlier the homeowner chooses to contact the lender and start exploring options to stay in their home, the more likely it is that the homeowner will be able to avoid foreclosure. The six phases of foreclosure include:
Payment Default
Notice of Default
Notice of a Trustee's Sale
Trustee's Sale
Real Estate Owned
Eviction
If a homeowner has begun the proceedings of foreclosure, it's important for them to track each phase to strategize for the future.
Phase 1: Payment Default
Payment default occurs after the homeowner misses their first payment. Homeowners cannot miss a single mortgage payment without this clock beginning. At this stage, lenders usually want to find a solution to keep the homeowner in the home. Often, lenders will work with homeowners to help the homeowner catch up on payments.
In some cases, if payment default occurs because of a widespread problem, such as a natural disaster, then the homeowner will have <a href="https://www.nerdwallet.com/blog/mortgages/mortgage-forbearance/" target="_blank">access to forebearance</a> and other options. Homeowners who believe they may have a hard time making their payments should contact their lender before missing a payment.
Phase 2: Notice of Default
A Notice of Default (NOD) is a notice sent to a homeowner 90 to 180 days after they have defaulted on their mortgage. Once the notice of default is sent, the homeowner will often have a specific period to catch up on their payments, or the foreclosure process will proceed. The Notice of Default is the lender's first action in the foreclosure process.
Phase 3: Notice of Sale
The Notice of Sale is the next step if the homeowner is unable to catch up with payments in the specified period of time. If the homeowner is able to catch up with the payments, then the process stops before the notice of sale can ever occur. A notice of trustee sale is recorded in the county where the homeowner lives and is generally published in the local newspaper. The notice of sale alerts other homeowners in the area that home may soon go up for sale. The name of the owner and a description of the property is included in the notice of sale.
Phase 4: Trustee's Sale
Homeowners are able to catch up with payments right until the very end of the foreclosure process. If the homeowner is unable to catch up with payments, then the trustee sale will go through. Trustee sale occurs in a public auction; as soon as the <a href="https://www.jeffcookrealestate.com/blog/what-is-foreclosure/">sale of the foreclosure</a> is complete, the new owner may take possession of the house immediately.
Phase 5: Real Estate Owned
If the foreclosed home doesn't sell, then the home may become owned by the bank, or "real estate owned." The bank may remove liens to make the home more attractive to buyers. Many banks sell their home through a real estate broker that helps manage the sale.
Phase 6: Eviction
Generally speaking, the homeowner can stay in the home until it is sold, when they will recieve an eviction notice alerting them to move out. Some states allow homeowners to either buy back their home or live in their home for free for a period after foreclosure, which provides time for the homeowner to start saving money, paying bills and rebuilding their credit. Once the home has been sold and the eviction period begins, this will also take some time. Eviction varies by state, with some states taking longer to complete than others.
Work With an Expert
If you're a homeowner who is facing foreclosure, work with an expert who understands the process. Receiving advice from a professional can help make the situation less stressful. In some cases, homeowners may even be able to receive help that can reverse the foreclosure process.
Working with an expert makes the foreclosure process better overall. For more information about foreclosure, contact an expert today.2020-06-17T08:21:00-07:002021-08-30T12:12:16-07:00Thomas "Jeff" Cooktag:jeffcookrealestate.com,2012-09-20:8422What Is a Short Sale? Understanding the Short Sale & the Short Sale Process<img style="display: block; float: right; margin-bottom: 30px; margin-left: 15px; width: 475px;" src="https://assets.site-static.com/userfiles/1451/image/what-is-home-short-sale.jpg" alt="All About Short Sales: Information for Home Buyers and Sellers" width="475" />A short sale is a home that is available for a purchase price that is less than the amount owed by the current owner. Short sales can occur for different reasons, and experts usually can't agree whether short sales purchased are a good deal or not. However, short sales are a potential option for sellers to avoid foreclosure. While it remains to be seen whether the short sale is a good deal for the home buyer, it's usually a good deal for a homeowner who would like to avoid foreclosure.
If you're a homeowner in financial distress, or if you're a home buyer seeking a potentially good deal, you have much to learn about short sales. Knowing what a short sale is, how the process works, what long-term consequences can come from buying or selling a short sale, and advantages and disadvantages of short sales can help you decide whether a short sale is right for you. Whether you're a home buyer or a homeowner in the right circumstances for a short sale, here's what you need to know.
How Does a Short Sale Work?
To be considered a short sale, the house must worth less than the amount currently owed on the mortgage. This is a condition known as being "under water." Often, homeowners who pursue a short sale are also behind on their mortgage payments. These homeowners pursue the <a href="https://www.jeffcookrealestate.com/blog/short-sale-vs-foreclosure/">short sale as a way of avoiding foreclosure</a>.
Sometimes, homeowners pursue a short sale simply because they want to move and cannot afford to pay the difference between their mortgage and the market value of the home. Short sales are usually initiated after the home drops by as much as 20% in value, thus eliminating any equity the homeowner had in the house.
In order to sell the home as a short sale, the homeowner must first prove that their home qualifies. To do this, they must find out their lender's qualifications, then gather information about their house to present as a package to the lender. The information the seller must include is a:
Preliminary net sheet. This is a document that shows the value of the home is lower than the amount owed on the mortgage.
Hardship letter. The homeowner must make a case to the lender to prove that the short sale is justified.
Financial information. In addition to the letter of hardship, the homeowner must present the financial information that proves they cannot pay for the difference between the amount owed on the mortgage and the value of the home.
Comparative market analysis. This document proves the value of the house by comparing the house to the other homes in the area.
Once there is an offer on the home, the home seller must also send the offer (or offers) to the lender. If the lender would like to proceed with the short sale, the lender may then choose an offer to counter. Other buyers who have made offers may wait for a long time without ever hearing from the bank.
Steps to a Short Sale
The steps to a short sale can seem rather simple, but in reality, short sales can be complex, long processes.
Determine the value of the home to ensure that the amount owed on the mortgage is more than the value of the home.
Write a hardship letter to make the case to the lender that the home should be <a href="https://www.jeffcookrealestate.com/blog/how-to-sell-a-short-sale/">sold as a short sale</a>.
Get a short sale application from the lender; fill it out and return it.
Send offers from buyers.
Create a package (including the financial statements, hardship letter and so on).
Negotiate with the lender to come to an agreement.
Each step can take weeks in between, so a short sale can take several months.
Get a Property Valuation Analysis
A property valuation analysis is a report, often drafted by a real estate professional, that shows the value of the home. This document proves the value of the property by analyzing similar properties in the area. The real estate agent can prepare the comparative market analysis, but a broker also needs to provide a broker's price opinion.
The property valuation analysis must be produced at the beginning of the short sale process as a part of the supporting documentation that shows the short sale is justified. A good property valuation analysis helps the lender come to a price agreement when the offer on the home is made, as it will help the lender determine which offers are closest to the actual value of the home.
Get a Hardship Letter
Short sale hardship letters provide justification for the short sale. The lender will expect to see a hardship letter that outlines the reasons that the homeowner is experiencing financial hardship and can no longer make monthly mortgage payments. A well-written hardship letter can help the short sale approval process, but a poorly written hardship letter can prevent approval. Some tips for homeowners trying to write a hardship letter include:
Keep the letter short and to the point.
Describe the reasons for the hardship.
Do not tell the lender that there is hope for the situation to improve.
Do not tell the lender that the financial hardship is the result of poor personal choices (lost money gambling, etc).
Do not mention ability to borrow money or get relief from outside financial resources.
The more hopeless the situation, the more likely it is the lender will approve the short sale. Still, a long and drawn-out letter is not the best way to tell the lender about the problem. Homeowners who are not sure if their hardship letter will be approved by their lender can work with their real estate professional to write a letter that is more likely to be approved.
Contact Lender for Short Sale Application
Lenders provide homeowners with short sale applications that must be filled out fully in order for the short sale to go through. Usually, these applications are distributed by a special department dedicated exclusively to short sales. Sometimes, finding the right department within the lender is difficult. Lenders are reluctant to approve short sales, and thus do not make finding the right contacts easy.
Short sale applications usually include a request for various documents, including financial statements, letter of hardship, etc. The homeowner must follow the application completely in order to help ensure success. Banks are not happy to approve short sales, so failure to fill out the application properly or completely could lead to the rejection of the application.
Prepare the Short Sale Package
The short sale package is the complete compilation of documentation, including the short sale application, hardship letter, valuation report, comparative analysis, and financial supporting documentation. The complete short sale package should have everything in it that the lender needs to determine whether a short sale is justified.
Homeowners may have their real estate professional review the short sale package. The more thorough the short sale package, the better.
Short Sale Package is Reviewed by a Loss Mitigator
Once the short sale package has been assembled and sent to the bank, the package is reviewed by a loss mitigator at the bank. The loss mitigator will evaluate the reports, supporting documentation, hardship letter, comparative analysis and the status of the mortgage to ensure that the short sale is the best option.
Although banks are reluctant to approve short sale packages overall, they are inclined to approve them if they think the short sale package is the best option. The short sale package should prove to the lender that foreclosure is the alternative. Foreclosure is a longer and more drawn-out process, and banks are often persuaded to allow a short sale to proceed if the homeowner can put together a convincing package.
The review of the short sale package can take weeks or even months. During that time, homeowners must wait. Each step of the short sale process takes longer than a standard home sale because of the additional steps required to coordinate with the bank. Homeowners who want to sell their home as a short sale should be patient. Homeowners who can continue to make mortgage payments during the short sale process may avoid additional damage to their credit, so budgeting during the drawn-out short sale process is important.
Negotiate Short Sale Closing
Once the homeowner starts to show the home to buyers, the homeowner may sign an approval for an offer. However, the final approval for the <a href="https://www.jeffcookrealestate.com/blog/how-to-buy-a-short-sale/">short sale purchase</a> must go through the bank. The homeowner must send the signed home purchase contract to the bank and wait for a response. Banks may either approve the sale of the home at the agreed-upon price, or the offer might be rejected. The lender may also choose to do nothing at all or negotiate the offer.
Even after a signed offer is sent to the lender for approval, the homeowner may still choose to send along new offers for the home. This may continue until the lender has approved one of the offers sent. Even if the homeowner has signed a home purchase agreement with a potential buyer, the lender may choose a different offer if they get one that is better.
This is one of the risks that home buyers take on when they decide to make an offer for a short sale home. In fact, this is one of the reasons that short sales sell for less than market value: the risk of the deal falling through is high, and short sale purchases take a long time to be approved.
How Does a Short Sale Affect Your Credit?
Short sales stay on a credit report seven years from the date of the first delinquent payments or seven years from the date the home purchase was reported settled or paid. The higher the credit score is before the short sale occurs, the lower it may fall when the short sale occurs.
Homeowners who continue to make payments on their mortgage will see less of a hit than homeowners who do not. Short sales can affect credit by as much as 300 points, or even more, if they are very late on the mortgage payments. A homeowner who manages to continue to make mortgage payments, even if they are behind, may better control the impact on their credit.
Contact Your Real Estate Professional
Short sales in North and South Carolina are complex. For homeowners who have little experience with short sales, it's important to get help from someone who knows how to navigate the complexities of the system.
If you're a homeowner who believes that you may soon be faced with a financial problem that could result in a short sale, contact a real estate professional who has experience in short sales. Working with an experienced real estate professional can make the complex process of selling a home as a short sale easier and less of a burden. Your real estate professional can help ensure that your short sale will go through as quickly as possible. Contact a capable and experienced real estate professional today.2020-06-16T08:29:00-07:002021-08-30T12:13:40-07:00Thomas "Jeff" Cooktag:jeffcookrealestate.com,2012-09-20:8423How to Sell Your Home as a Short Sale: Everything You Need to Know<img style="display: block; float: right; margin-bottom: 30px; margin-left: 15px; width: 475px;" src="https://assets.site-static.com/userfiles/1451/image/how-to-sell-a-short-sale.jpg" alt="All About Home Short Sales: Information for Sellers" width="475" />Short sales were common in the recession a decade ago, but they still happen today. A <a href="https://www.jeffcookrealestate.com/blog/what-is-a-short-sale/">short sale</a> is a type of home sale that occurs when the homeowner owes more to the bank than the home is worth. Short sales can occur in places where homes have been suddenly devalued. Often, a short sale is what the homeowner must go through if they want to move or cannot afford payments on the house anymore.
There are many steps involved in selling a home as a short sale. Working with experienced professionals and preparing your documents are only the first steps in the process. Being prepared for the short sale can make the experience better and can help ensure that your short sale will be a success. Knowing what's coming during the short sale process can help as well. Here's what you need to know to get started with the sale of your home.
Before a Short Sale
Because the lender stands to lose money during the short sale, the lender must agree to allow the short sale to take place. Not all lenders will accept short sales from mortgage borrowers, and not all properties <a href="https://www.jeffcookrealestate.com/blog/how-to-sell-a-short-sale/">qualify to be sold as short sales</a>. Before a homeowner can proceed with a short sale, they must first gather some information about their house, including:
How much they owe
How much their home is worth
State restrictions and laws around short sales
Whether their home qualifies for a short sale
There are many ways to find out this information, but the primary way that many homeowners find out whether they're likely to be successful selling their home as a short sale is by consulting with a real estate professional.
The best real estate professionals will already be familiar with the state laws around short sales and will be able to give the homeowner an estimate on the value of their home. A good real estate professional may also have a sense of how a particular bank will react to a short sale—if they have worked with other homeowners trying to do the same thing with that particular bank in the fairly recent past.
How to Complete a Successful Short Sale
Short sales, much more than standard home sales, are complicated. Whereas a standard home sale can take about 6 weeks to complete, a <a href="https://www.jeffcookrealestate.com/blog/how-long-does-a-short-sale-take/">short sale can take many months</a> and may involve a great deal of back and forth with the bank. Short sales usually involve selling a house for below market price because home buyers must have incentive to go through the many rounds of paperwork and steps required to buy the house from a bank. Below are some of the most common steps homeowners must take on when they sell their home as a short sale.
Call the Lender and Engage with Professionals
Most banks and lenders have a specific department to deal with short sales. Before the homeowner can sell their home as a short sale, they should first coordinate with the bank's professionals to find out which department (and perhaps who in that department) they will be in contact with throughout the process. Most banks have specific requirements that must be met before the short sale can be approved. To ensure that pursuing a short sale is not a waste of time, the homeowner must first ensure that their home meets their bank's requirements.
Some real estate professionals will complete this step for their clients. Homeowners who are considering a short sale should begin by contacting a real estate professional who has worked with short sales in the past. Some real estate professionals even specialize in this. Homeowners should begin their search for a real estate professional by asking whether the real estate professional has experience with short sales. The real estate agent they select should be able to provide information about how they have handled these types of transactions in the past.
Submit a Letter of Authorization
Many lenders will not do business with the homeowner's real estate professional unless the homeowner first submits a letter of authorization. This letter is a permission slip that authorizes the bank to share personal information about the homeowner's loan with that real estate professional. The letter of authorization should state information like the address of the property, effective time period, loan number, the name of the real estate professional and the contact information for the homeowner.
Once the letter of authorization is on file, working with the bank becomes easier because the real estate professional can be more directly involved in the short sale process. Usually, the real estate professional takes over coordination with the bank at this point.
Preliminary Net Sheet
The preliminary net sheet is a document that projects the possible financial outcomes of the short sale. The preliminary net sheet has information on it like how much the house is expected to collect at the time of sale, what the unpaid loan balance is, how much unpaid late fees will come out to and other information. The preliminary net sheet shows whether the house is expected to bring in profit at the time of sale. If the net sheet shows a profit on the sale of the house, then the house is not a short sale, and the homeowner can proceed without getting permission from the bank.
The preliminary net sheet must be drawn up by a real estate professional or a lawyer. Homeowners who are intending to sell their home as a short sale should work with their real estate professional to determine who will write up this important document.
Proof of Income and Assets/Copies of Bank Statements
Most banks do not want to grant permission to a homeowner to proceed with a short sale unless they can determine for themselves that the homeowner has little choice. Banks do not want to lose money on a home loan, but also do not want to allow a home to go into foreclosure (which can be even more time-consuming and expensive than a short sale).
Therefore, homeowners who want to sell their home as a short sale should start by providing proof of income, information about their assets and copies of bank statements to their lender. This paints a full picture for the lender and gives the lender the information they need in order to decide whether a short sale is the right course of action.
Unusual check activity, large deposits or withdrawals could be called into question. Homeowners can prevent delays in the process by documenting reasons for unusual financial behavior and sending it along with the bank statements. The more information the bank has up front, the faster they may be with their approval.
A real estate professional can help homeowners decide which statements and financial documents will help the bank make its decision. It is the job of the homeowner to gather this information and provide everything they can to the bank.
Comparative Market Analysis
The comparative market analysis is a document that shows the lender how much the home is worth. The comparative market analysis is a complex document that evaluates all the comparable homes that have come onto the market in the area in the last 6 months. By evaluating homes that are for sale now, homes that have sold, transactions that have ben canceled and transactions that are pending, the real estate professional can paint a full picture of the true value of the home. This document is a supporting piece of information for any homeowner who is trying to make the argument for a short sale approval to their bank.
When comparing the home to other homes in the area, the real estate professional must look at homes of a similar size, age, construction and with similar features. The real estate professional will look at the number of bedrooms and features like whether the home has a pool. The closer the real estate professional can come to finding comparable homes in the area, the easier it is for the real estate professional to pinpoint the true value of the home.
Purchase Agreement and Listing Agreement
The purchase agreement and listing agreement is the documentation showing the contract between the seller and the buyer. The bank will ask to see this documentation in order to assess whether the short sale should proceed. It's very common for the lender to attempt to renegotiate the fees and other agreed-upon details.
The renegotation of the purchase agreement and other steps of the short sale process can take months. Some banks never really respond to inquiries about short sales. Sometimes during the waiting period, the buyer chooses to walk away from the purchase. This is one of the risks of trying to sell the home as a short sale. Once the renegotation is complete, the purchase can proceed more normally.
Short Sale Closing and Post Closing
During the escrow process, once the negotiation has been completed and an offer is on the table, it is up to the buyer to perform inspections and go through the motions that would occur during a more typical home closing. The closing occurs on or before the date required by the lender in the approval letter.
Closing costs relating to the mortgage loan are paid largely by the buyer, and fees relating to the agent are paid largely by the seller (in this case, the lender). It is rare for banks and lenders to allow buyers to negotiate closing costs.
Contact Your Real Estate Professional Today
If you're a homeowner who would like to sell your home as a short sale, contact a real estate professional today. Short sales are time-consuming, but working with a real estate professional throughout the process can help the home seller rest assured that they are on the right track.2020-06-15T08:31:00-07:002021-08-30T12:12:57-07:00Thomas "Jeff" Cooktag:jeffcookrealestate.com,2012-09-20:8424How Long Does a Short Sale Take? Anticipating the Short Sale Timeline<img style="display: block; float: right; margin-bottom: 30px; margin-left: 15px; width: 475px;" src="https://assets.site-static.com/userfiles/1451/image/how-long-to-sell-a-short-sale.jpg" alt="Everything to Know About How Long Short Sales Take" width="475" />A <a href="https://www.jeffcookrealestate.com/blog/what-is-a-short-sale/">short sale</a> is a sale that occurs when a homeowner owes more money on their mortgage than the market value of their home. How long a short sale will take is based on different factors. Does the homeowner have more than one loan for their home? Do they have mortgage insurance? What type of loan(s) do homeowners have for their home?
The bottom line is that short sales do take a long time to complete for both the selling and buying process, and an exact timeline is hard to determine. Homeowners who are contemplating a short sale as an option should be prepared for the process to be lengthy. Homeowners who can continue to pay their mortgage while the short sale is taking place may be able to avoid the worst credit impacts, meaning that anyone who is trying to sell their home as a short sale should budget, plan and be prepared.
Home buyers who are contemplating purchasing a short sale may also have a long wait ahead of them. During the short sale process, some banks take weeks to respond to offers, while others never respond at all. Patience is key to purchasing a short sale home.
The following information can help buyers and sellers prepare for the short sale process.
Short Sale Process Timeline: Sellers
The timeline for <a href="https://www.jeffcookrealestate.com/blog/how-to-sell-a-short-sale/">selling a home as a short sale</a> varies by state and depends on the actions of the homeowner, the actions of the bank, the various internal processes within the bank, what the difference is between the mortgage value and the value of the home, and other factors.
To sell the home as a short sale, the homeowner begins the process by submitting a package, as required by the bank, including information about the homeowner's finances, information about the market value of the house and the particular hardship the homeowner is experiencing that would make the short sale a necessity.
After turning in the application, the homeowner may also give the bank any offers on the home. Because banks may choose their own timeline to respond to these offers, short sales processes can require a long waiting period.
Approval Timeline
The short sale process involves extensive paperwork sent back and forth between the bank and the homeowner.
Collection of Documentation: 1 - 3 Weeks
Homeowners must prove they <a href="https://www.jeffcookrealestate.com/blog/qualify-for-short-sale/">qualify for a short sale</a>. In order to do this, they must turn in various documents to show hardship and to prove the value of the home. The process of collecting documents begins when the homeowner calls the bank to find out what they expect to receive from the homeowner. Because this includes writing a letter and collecting supporting documentation like pay stubs, this process can take between 1 and 3 weeks.
Property Valuation: 1 - 3 Weeks
The lender will request a property valuation, either from a real estate professional or from an appraiser. This process can take up to 3 weeks, depending on when the bank schedules an official appraiser.
Negotiations: 1 - 3 Weeks
Once the homeowner begins turning in offers to the lender, the lender may take several weeks to respond to the home buyer with a counter offer. If the home buyer and lender go through several rounds, this may take even longer.
Escrow and Close: Up to 6 Weeks
In a standard home sale, the escrow process generally takes about four weeks. In a short sale, however, the <a href="https://www.investopedia.com/mortgage/escrow-process-requirements/" target="_blank">escrow process</a> can take longer. Therefore, homeowners and home buyers must be prepared for a wait.
Exceptions to the Timeline
Some factors can complicate the short sale process, causing it to take longer than it would otherwise. Examples of these exceptions to the timeline include the following.
Multiple Lien Holders
When the homeowner has multiple mortgages on the home, lien holders must get in line to collect money on the balance owed. If all lien holders cannot mutually agree to a settlement, then the deal may fall apart.
Lost Buyer
Sometimes, buyers lose patience waiting to hear back from the bank. If the bank does not respond to an inquiry from a buyer within a certain period, the buyer can walk away. Some home buyers will wait until they hear from the lender, while other buyers will move on. When a buyer is lost, the homeowner must start the process over, which can extend the home selling process by weeks or even months, depending on how long it takes to find another buyer.
Inaccurate BPO or Appraisal
If the broker price opinion (BPO) or appraisal for the property is inaccurate, then the representatives at the bank may develop an unrealistic expectation for how much they can get by selling the home. This can extend the selling process by weeks or months as the lender waits for an unrealistic offer that may not come.
Short Sale Rejection
If the lender rejects an offer from a home buyer, then the buyer must make an additional offer, or the homeowner must wait for a new offer from a new buyer, which can add more time.
Short Sale Process Timeline: Buyers
Buyers and sellers are subjected to a similar timeline throughout the short sale process. From the buyer's perspective, however, the short sale process may look different. For a buyer, the short sale process consists of a long waiting period for the lender to acknowledge and respond to documents.
Although standard home sale processes also include similar steps, short sales do require more time. At every milestone of the process, the home buyer must wait for the lender to respond. One of the reasons that many homeowners drop out of the short sale process is because there is no guarantee that lenders will respond to the offers that buyers make. Without the promise of a response, many home buyers eventually lose patience and interest.
Approval Timeline
The process for buying a short sale follows the steps below.
Mortgage Approval: 1-2 Months
Receiving a mortgage approval takes most home buyers a couple of months, starting with a pre-qualification and ending with the closing of escrow and the signing of the mortgage documents. Most home buyers who want to be considered a strong candidate to purchase a home should get pre-approved before making an offer on a home.
Identify a Home to Buy: 1 Week
It takes most potential buyers at least one week to look at online listings, and view a home they would like to buy. Once they've seen the house, the home buyer may come back a second time before making an offer, or may make an offer immediately following their first visit.
Make an Offer: 1-2 Weeks
Making an offer to a homeowner takes a couple of weeks, as the home buyer and homeowner may negotiate before they can agree on a final price. Once the offer is signed by both parties, the offer must go to the lender for final approval.
Get Short Sale Approved by Lender: Up to 12 Months
A lender can take as long as 12 months to process a short sale package, including an offer from a viable buyer. In that time, the buyer must wait for approval from the lender. If no response is received from the lender, then it may be time for the interested buyer to move on to a different home.
Altogether, the purchase of a short sale home can take as long as a year or more. Home buyers who are interested in purchasing a short sale home must be prepared to wait.
Can the Short Sale Process Be Accelerated?
Although there's no sure way to accelerate a short sale, some home buyers and homeowners can help speed up the process by doing the following.
Work with an Experienced Real Estate Professional
Real estate professionals who have experience with short sales often find it easier to navigate the complex process of selling or purchasing a short sale. Furthermore, a real estate professional who has experience with this kind of work will know how to correctly structure the offering price and the offer itself so the lender will be inclined to accept the offer.
Correctly Structure Your Offering Price
Lenders want to recover as much money from the sale of the house as possible. An offer that is too far below the market value of the home is unlikely to be accepted by the lender. Home buyers who are serious about making a purchase and homeowners who are serious about making a sale should make an effort to present offers to the lender that are reasonable and fair.
Make Offer as Free of Contingencies as Possible
Home purchase contingencies can be a road block to having an offer accepted. Buyers who make an offer with as few contingencies as possible are more likely to get a faster acceptance from the lender.
Patience Is Key
Patience is key when buying or selling a short sale. However, buyers and sellers can work with an experienced real estate professional to make the short sale process easier overall. For more information about purchasing or selling a short sale home, contact an experienced real estate professional in your area.2020-06-12T08:33:00-07:002021-08-30T12:14:56-07:00Thomas "Jeff" Cooktag:jeffcookrealestate.com,2012-09-20:8425Buying a Home After a Short Sale or Foreclosure: Is Recovery Possible?<img style="display: block; float: right; margin-bottom: 30px; margin-left: 15px; width: 475px;" src="https://assets.site-static.com/userfiles/1451/image/buying-a-home-after-short-sale-foreclosure.jpg" alt="What You Need to Know About Home Buying After Foreclosure" width="475" />A short sale or foreclosure can have a negative effect on your credit history. If you've sold your home as a short sale or have experienced a foreclosure in the past, you may have questions about whether you'll be able to buy a home again. Lender requirements vary, so whether you're able to get a mortgage again will depend on how long it's been since your <a href="https://www.jeffcookrealestate.com/blog/buy-home-after-short-sale-foreclosure/">short sale or foreclosure</a> and what kind of loan you're applying for. Your decisions and behaviors after the short sale or foreclosure will also impact whether (and when) you're able to buy a house again. If you would like to buy a home, it's important for you to restore your credit history. Here's what you need to know.
Home Loans After a Short Sale
It's never good for a potential home buyer to have a short sale on their record, but there are things that can be done to lessen the impact when applying for a new mortgage. The circumstances of the sale and what kind of loan the buyer is applying for can have an impact on whether the lender will approve the loan.
A short sale appears as "settled for less than the full balance" on the homeowner's credit history and can cause a 50-point drop in a homeowner's credit score. The drop may be even more (as much as 200 points) if the homeowner fails to make a mortgage payment before the short sale closes. This massive credit score dip can have an impact on the buyer's ability to qualify for a home loan, so it's very important for homeowners who anticipate selling their home as a short sale to continue making mortgage payments.
A home buyer trying to get a conventional loan may be able to do so if they meet the qualifications to get the type of loan that they want. Fannie Mae loans, for example, require the homeowner to wait four years after the short sale before the loan can be approved. Freddie Mac loans may be approved if the loan is for a primary residence with a maximum loan-to-value of 90%. A home buyer trying to get an FHA loan may be able to do so after a three-year wait period.
What to Do After a Short Sale
After a short sale, anyone who would like to eventually buy a home again must take steps to rebuild their credit. Whether the dip in credit they experienced was 50 points or 200 points, the higher their credit is when they apply for a mortgage again, the better the deal they'll get.
Track Your Credit
Credit monitoring apps make tracking credit easy. Most apps will give regular reports about credit score, credit tugs, how many accounts are open and whether unusual activity is detected on any accounts. Tracking credit can be satisfying for people who have experienced a credit dip if their credit goes up over time.
Rebuild Your Credit
Credit rebuilding takes time. To do this, potential home buyers must pay their bills on time, avoid carrying large balances from one month to the next, and limit the number of accounts they apply for. Rebuilding credit can take years after the <a href="https://www.jeffcookrealestate.com/blog/what-is-a-short-sale/">short sale</a> goes through.
Understand Your Credit Score
People who would like to buy a home should understand their credit score, and they should understand what is a good credit score versus a poor credit score. A score over 700 is best for someone who is trying to buy a home, though people with lower scores may be able to qualify for a mortgage with a higher interest rate. Keeping records of credit history makes it easier to track progress and catch credit-related errors.
Potential Obstacles
Aside from a failure to make mortgage payments before the short sale took place, the biggest potential obstacles are errors on the credit report. A person who would like to purchase a home after a short sale should read through their credit history carefully to ensure that their short sale was not listed a foreclosure.
The potential home buyer should also compare the short sale date on their credit when the title was transferred to the buyer. The date is important, as some loans require the homeowner to wait for a certain period of time before they can qualify. If the date is inaccurate, this could negatively impact the home buyer's ability to get a mortgage when they need one.
Other potential obstacles to getting a mortgage after a short sale include:
Home buyer does not qualify for the home loan for unrelated reasons.
Home buyer's lender has qualifications that restrict anyone with a short sale on their record from obtaining a home.
It's important for home buyers to remember that lenders may impose their own restrictions on the loans they administer. Shopping around for the right lender can be helpful.
Home Loans After a Foreclosure
A foreclosure can cause a homeowner's credit score to drop by one hundred points or more. This loss of credit can impact the home buyer's ability to get a home loan. In addition, there is also a waiting period between the period of time when <a href="https://www.jeffcookrealestate.com/blog/what-is-foreclosure/">the home is foreclosed upon</a> and the time when the buyer can get another loan. The waiting period can depend on the cause of the foreclosure. The standard waiting period to qualify for a loan after a foreclosure is below:
USDA loans: 3 years
Fannie Mae and Freddie Mac: 7 years
FHA loans: 3 years
VA loans: 2 years
These standard waiting periods apply if the foreclosure occurred because of circumstances that the homeowner had some ability to control.
Extenuating Circumstances Let You Buy Sooner
Many people who would have been able to make their house payments lost their home during the recession because of circumstances that were outside their control. Because of this, there is a different waiting period for homeowners who have "extenuating circumstances." Home buyers can make their claim to their lender, and if the lender determines that extenuating circumstances did apply, the lender may relax the waiting period for the home buyer.
Below are the waiting periods for home buyers who have a foreclosure in their history and who had "<a href="https://iloanhomemortgage.com/what-are-extenuating-circumstances/" target="_blank">extenuating circumstances</a>":
USDA: 1 year
Fannie Mae and Freddie Mac: 3 years with at least 10% down
VA home loans: 1 year
FHA loans: 1 year
One thing that home buyers ask when trying to decide whether they qualify for the shorter waiting period is: what qualifies as extenuating circumstances? Loosely defined, extenuating circumstances are circumstances that homeowners could not have predicted or prepared for, and which they had no ability to control. Loss of a job may qualify as an extenuating circumstance, especially if the homeowner did nothing to make the job loss occur. Death of a wage-earning spouse or onset of a debilitating medical condition also counts.
Overwhelming debt and inability to sell the property are unlikely to qualify as extenuating circumstances. Divorce is unlikely to count as an extenuating circumstance, and injuries caused by risky behavior is also unlikely to qualify.
What to Do After a Foreclosure
After a foreclosure, people who want to own a house once again must take control of their financial situation. Poor credit can be an obstacle to getting a mortgage. Repairing credit and developing good financial habits is important.
Pay Down Debt
Many people who have their house foreclosed upon are faced with complex financial troubles. Excessive debt often comes with these troubles. Paying down that debt is one way to repair credit. Homeowners should start by focusing on high-interest debts.
Pay Bills On Time
Paying bills on time is another way to improve credit. Potential buyers who want as much credit as they can for paying their bills on time should ask utility providers to report monthly payments to the credit bureaus. This is one way to get credit for being a responsible bill payer, and can help boost a home buyer's credit score more quickly.
Avoid Taking Out New Loans
Loans can have an impact on a potential home buyer's ability to qualify for a loan. Anyone who would like to get a mortgage should avoid taking out new loans.
Monitor Your Credit Score
It's important for potential home buyers to monitor their credit score to ensure that their foreclosure is accurately recorded on their credit history and to ensure that they are not being dragged down by inaccuracies on their credit history. Anyone who would like to check their credit history for inaccuracies can request a free credit report from the credit tracking companies. These companies have set up a centralized website where consumers can check their credit report once annually.
Future Homeownership Is Possible
If you have gone through a short sale or a foreclosure in the past, you may be able to buy a house again. Don't give up! Your actions throughout your short sale or foreclosure—and your actions after—will have an impact on whether you can qualify, and how long it will take you to qualify. Once you know the next steps after a short sale or foreclosure, you can begin doing what you need to do in order to qualify for a home loan again.
To get started with your home-buying process, begin by speaking with a HUD-approved housing counselor or real estate agent. Your real estate professional can answer your questions and provide guidance as you look for new homes, apply for mortgages and take the next steps to own a home once again.2020-06-11T08:36:00-07:002021-08-30T12:17:48-07:00Thomas "Jeff" Cooktag:jeffcookrealestate.com,2012-09-20:8426How to Qualify for a Short Sale: Maximize Your Success With These Guidelines<img style="display: block; float: right; margin-bottom: 30px; margin-left: 15px; width: 475px;" src="https://assets.site-static.com/userfiles/1451/image/qualify-for-a-short-sale.jpg" alt="Short Sale Application was Recently Rejected? What To Do" width="475" />Short sales are an important option for homeowners in financial distress. For homeowners who are underwater on their mortgage and who can no longer afford to make mortgage payments, the short sale process is a way to avoid foreclosure and stay in control of the home sale process.
Not all short sales are approved. A homeowner must meet certain requirements in order for the lender to agree to a short sale. If you're a homeowner who would like to sell your home as a short sale, it's important to understand what qualifies you for a short sale and what you need to do in order to be approved. By submitting the proper short sale package and describing your financial situation to your bank as thoroughly as possible, the application may be accepted. It's also important to work with a capable real estate professional. Getting professional help from someone with knowledge can help make the transaction easier overall.
Qualifying for a Short Sale
Short sales occur when the homeowner owes more money toward their mortgage than the market value of their home. Homeowners who can't afford to pay off the difference between the mortgage and the amount the house sells for must get special permission from the lender to sell the home.
<a href="https://www.jeffcookrealestate.com/blog/what-is-a-short-sale/">Short sales</a> are an alternative to foreclosure, and many banks prefer a short sale to a foreclosure. However, most banks will not approve a short sale unless they can be convinced that the short sale is a necessary step to avoid foreclosure. In order for this to happen, the homeowner must meet the bank's qualifications.
The Home's Market Value Has Dropped
Most of the time, home values go up (not down). However, there are many factors that can cause the market value of the home to drop. Some examples of factors that can affect the market value of a home are listed below.
Economy
When the economy in a community takes a dramatic downturn, this can cause home prices to drop. As people in the community become unemployed or under employed, wages begin to drop, and the measure of what is an "affordable" home begins to change. To accommodate this change, home prices get lower and lower so homes may continue to sell.
Environment
Sometimes, a natural disaster, like a wildfire, can cause the environment around the house to change, which can in turn affect the home's value. Environmental hazards, like a poisoning of local water, can have this same effect.
Maintenance
If the homeowner stops taking care of their house, the resulting structural or cosmetic damage can reduce the home's value. This often happens when the homeowner goes into financial distress.
Surrounding Foreclosures and Short Sales
<a href="https://www.jeffcookrealestate.com/blog/short-sale-vs-foreclosure/">Foreclosures and short sales</a> in the neighborhood can lead to a decline in home values because home buyers are reluctant to purchase in a neighborhood where residents have financial instability. Instability in the neighborhood leads to uncertainty, which can deter buyers.
Amenities
If many businesses in the area suddenly go out of business or leave, home prices may fall. This is because home buyers want to buy in locations that are accessible to services and jobs.
The value of the home is proved with documentation known as the comparative market analysis, wherein a real estate agent compares the value of the home to other homes in the area. The comparative market analysis is a standard report that most lenders expect to see when a home buyer is asking for short sale approval.
The Mortgage is In or Near Default Status
Homeowners must maintain their home in order to be in good standing with their mortgage company. There are many ways that a homeowner can default, including:
Failure to pay property taxes
Failure to pay homeowners insurance
Failure to pay the mortgage itself
If the homeowner fails to make payments to the mortgage, the lender is more likely to allow the home to be <a href="https://www.jeffcookrealestate.com/blog/how-to-sell-a-short-sale/">sold as a short sale</a>. However, defaulting on the mortgage can have a significant impact on the homeowner's credit. Homeowners who can be approved for a short sale without defaulting on their mortgage should do so.
When turning in a short sale application, the homeowner should submit any documentation that shows that they have defaulted on the mortgage, even if they believe the lender has this information on hand already.
Seller Has Fallen on Hard Times
Financial hardship because of an involuntary reduction of income or an unavoidable increase in expenses can be a qualifying factor that would enable a short sale to be approved by a lender. Financial hardship must be outlined in the hardship letter that is sent to the lender. Generally speaking, the most convincing financial hardship is hardship that the home buyer had no control over. For example, loss of a job due to widespread layoffs is a much more sympathetic situation than being fired for failure to show up on time.
The following tips can help the homeowner write a hardship letter:
Keep the hardship letter short and simple.
Do not include information that could make the lender believe that the homeowner's hardship is due to the homeowner's own fault.
Do not mention if the situation is likely to improve.
The Seller Has No Assets
Lack of financial assets helps prove the homeowner is unable to pull themselves out of their financial situation. The lender will expect to see proof of financial assets (or lack thereof), including savings accounts, IRAs, and other real estate. Some assets may not completely prevent a homeowner from being able to sell their home, but the type of assets they have and how much they have will be taken into consideration.
What If Your Short Sale is Denied?
Denial of an application to sell a home as a short sale does not mean that the homeowner can't apply again. Sometimes short sales are denied because the homeowner doesn't present enough information or make their case as thoroughly as possible to the mortgage lender. Working with their real estate professional, the homeowner can build a stronger case before trying again.
This is why it's important to keep a copy of all documentation submitted to the bank. Having a copy of what was submitted to the bank makes it easier to review the documents and make changes or additions as needed. Homeowners who already have a signed contract with a home buyer must ensure that the contract is canceled.
Most home purchase contracts for short sales include a requirement that the contract must also be accepted by the lender, and if it is not accepted in a certain period, the contract is canceled. Homeowners can work with the title company to ensure that the contract is indeed canceled. Below are some of the many reasons that a short sale application may be denied by the lender.
The Buyer Offer is Too Low
Although banks may prefer short sales to losing money in a foreclosure, banks do not want to accept offers that are just too low for the value of the house. The homeowner should take into consideration the market value of the home when trying to decide which offer to accept. Working with an experienced real estate professional can help.
A real estate professional who has helped homeowners with many short sales in the past will be able to help the homeowner decide which deals are most likely to be accepted by the lender.
Although it may be tempting to accept the first home purchase offer that comes through, it's better to wait for an offer that is likely to be accepted by the bank. The higher, the better. Homeowners should consider the comparative market analysis for the house when trying to make this determination.
Excessive Cash/Promissory Note Demands from the Lender
Sometimes the lender asks the homeowner to contribute cash toward the mortgage, even if the homeowner feels they have no cash to contribute. Sometimes lenders do this when they believe that the homeowner has assets that can be contributed toward the value of the loan, while other times lenders do this if the homeowner is unable to make a strong case about their financial hardship.
Usually, real estate professionals can help homeowners negotiate with their lender, either to have the cash request reduced or to have the cash request fully eliminated.
The Buyer Walks Away
Buyers must display a lot of patience throughout the <a href="https://www.jeffcookrealestate.com/blog/how-long-does-a-short-sale-take/">long short sale purchase process</a>. Banks can take weeks or even months to respond to a homebuyer's offer, and some banks do not respond at all.
Homeowners who want to keep the process moving may send along subsequent offers to the lender, even if the first offer has not been accepted or denied by the lender. Homeowners may forward subsequent offers to the lender even if the homeowner has already signed an agreement with the first home buyer. If the buyer does walk away, the lender will have other offers to consider.
One of the ways to avoid a situation wherein a buyer walks away is to submit a thorough package to the lender. The stronger the case the homebuyer makes to sell the home as a short sale, the more likely it is that the lender will accept the offer. It's also important for the homeowner to send along a strong offer, if a strong offer is available.
Multiple Lien Holders Won't Settle on Common Terms
Often, people who are trying to sell their home as a short sale are in enough financial distress that there are one or more <a href="https://www.investopedia.com/articles/credit-loans-mortgages/090816/it-bad-have-lien-your-house.asp" target="_blank">liens on their home</a>. All lien holders must agree to a settlement in order for the short sale to proceed. If the lien holders won't settle or cooperate to reach an agreement, then the short sale cannot be approved.
Working with an experienced real estate professional can help. By presenting a strong short sale application, sometimes all lien holders can be brought together in one agreement.
Hire a New Agent
Working with an experience real estate professional is so important that if the homeowner chooses the wrong professional, sometimes the only way to get past the problem is to hire a new agent and start again. When looking for a real estate professional, the homeowner should ask questions such as:
How many homeowners have you helped with short sales in the past?
What advice would you give to a homeowner who is trying to sell their home as a short sale?
What can you do to help the sale of this home go through?
By taking new pictures and re-listing the home, the homeowner can also bring in fresh buyers, which could in turn make the short sale a success in the future.
Review and Revise Your Hardship Letter
Sometimes it is the hardship letter that does not make a good case for the short sale. Reviewing and revising the hardship letter to include more examples of hardship and more supporting documentation can help. Writing a hardship letter is an art, and not all homeowners are comfortable writing their own letters of hardship.
Some homeowners are tempted to present a hopeful picture that makes it sound like their financial situation could improve. Other homeowners simply don't make their case in the clearest way. A good real estate professional can help the homeowner make their case by reviewing the hardship letter and making suggestions. This is another reason to work with an experienced real estate agent.
Resubmit
After reviewing and revising the application to make a stronger case for a short sale, and after finding a new home buyer (hopefully one who is able to make a better offer), the homeowner may resubmit their application to the lender. Again, it's important to work with an experienced real estate professional before resubmitting the application.
A good real estate professional will know what the lenders are looking for, and will be able to catch errors and problems more easily. The stronger the application is when it is submitted, the more likely it is that the lender will accept the application.
Contact an Experienced Real Estate Professional Today
Even if a short sale application isn't accepted the first time, it may always be accepted the next time around. Making a stronger case, working with a capable real estate agent, and learning from the mistakes of the past can help. If you're a homeowner who would like to sell your home as a short sale and you're not sure where to get started, or if you're a homeowner who has recently had your application for a short sale rejected, contact a reputable real estate professional today.2020-06-10T08:38:00-07:002021-08-30T12:20:05-07:00Thomas "Jeff" Cooktag:jeffcookrealestate.com,2012-09-20:8427How to Stop a Foreclosure: Get Back on Track & Keep Your Home<img style="display: block; float: right; margin-bottom: 30px; margin-left: 15px; width: 475px;" src="https://assets.site-static.com/userfiles/1451/image/how-to-stop-foreclosure.jpg" alt="Everything You Need to Know About Stopping Foreclosure" width="475" />Foreclosure is what occurs when a homeowner defaults on their mortgage payments and the bank begins proceedings to evict them and gain control of the property. Foreclosures can be devastating for a variety of reasons; for any homeowner who experiences the foreclosure process, it can take years to recover financially and in other ways, as foreclosure can cause a homeowner's credit to drop significantly. Fortunately, foreclosures can take months or even years from start to finish, and during that time, the homeowner has the possibility to stop the foreclosure from occurring.
A homeowner who is able to catch up on their payments, refinance their mortgage or reach an agreement with their lender may be able to stop the foreclosure process; therefore, it is important for homeowners to take action immediately. If homeowners know in advance they will not be able to make an upcoming payment, then they must contact their lender. Most lenders are wiling to work with homeowners to help them with an action plan to catch up on their payments.
If an agreement is not reached with the lender, however, there are other steps homeowners can take to avoid foreclosure.
Foreclosure Do's and Don'ts
While experiencing the foreclosure process, it is important for homeowners to remain focused on the tasks at hand that can prevent foreclosure from occurring, as it is easy for homeowners who are uninformed of their options to make mistakes. Generally speaking, the best course of action is for homeowners to maintain open lines of communication with their lender and to take the advice of knowledgeable professionals.
Foreclosure will not disappear if the homeowner ignores the phone calls and inquiries from the lender. Homeowners who are proactive and explore all the possibilities are more likely to come to an agreement with their lender.
Do's
Below are some options homeowners may have to prevent a foreclosure from occurring. Homeowners must follow these suggestions from the first late payment, or even before if they believe they may be in danger of missing a payment.
Contact Lender Right Away
Lenders work with homeowners who contact them from the first moment the homeowner is in financial distress. Sometimes, lenders provide payment relief programs homeowners can take advantage of, which can help them get back on their feet before their situation gets worse.
Understand the Foreclosure Process
The foreclosure process is long and complex and involves many steps; therefore, homeowners who want to protect themselves from foreclosure should first understand <a href="https://www.jeffcookrealestate.com/blog/what-is-foreclosure/">how foreclosure works</a>. By becoming knowledgeable of the process, homeowners can anticipate the next steps and identify ways to stop foreclosure from occuring. The more the homeowner knows, the easier it will be for them to navigate the process.
Contact a HUD-Approved Housing Counselor for Assistance
A HUD-approved housing counselor can give advice to the homeowner, which can help them take early action and prevent a foreclosure. Potential topics that a HUD-approved housing counselor can discuss include loan modification and short sale options.
Avoid Foreclosure Rescue Scams
Homeowners in financial distress sometimes fall victim to foreclosure rescue scams. In general, if something sounds too good to be true, it probably is. Homeowners who believe they've found financial help from an unknown organization should investigate and research that organization before proceeding.
Document Communications with Servicer
Foreclosure can be so complicated that many homeowners can easily become lost in the process, forgetting deadlines and next steps. Therefore, they should write everything down to make it easy to remember these deadlines and document all conversations with their lender, including the name of who they spoke with and what they learned in the conversation.
Don'ts
Below are some mistakes homeowners can make in the foreclosure process.
Don't Ignore Phone Calls or Notices
Lenders remain open to communication and will work with homeowners who communicate with them about their troubles. If the lender cannot reach the homeowner, then the homeowner is likely to miss opportunities to stop or slow the foreclosure process.
Don't Wait Until the Foreclosure Is Almost Over to Take Action
Foreclosures are much easier to manage during the early stages. In the later stages, after fees and penalties have been incurred, many homeowners are unable to prevent the foreclosure from taking place. Homeowners who want to stop foreclosure often can only do so by working with their lender from the beginning.
Don't Move Out Early
Most assistance programs require the homeowner to be living in the home to qualify for help. If possible, homeowners should remain in the home until they are required to move out.
Don't Assume the Servicer is Always Correct
Loan servicers make mistakes throughout the foreclosure process, which is why working with a HUD-approved housing counselor can help. The HUD-approved housing counselor will understand the foreclosure process and can help the homeowner catch errors to ensure the homeowner is following the correct procedures during the foreclosure process.
Don't Pay Upfront Fees
Foreclosure rescue companies are often prohibited from asking for a large upfront fee without preventing the foreclosure from taking place. Homeowners should not pay a large upfront fee if it is not necessary. If the rescue company the homeowner is thinking about hiring asks for a large upfront fee, then it is wise for the homeowner to keep exploring other options.
Alternatives to Foreclosure
For homeowners in financial distress, foreclosure is not the only available option. Knowing what alternatives exist can help homeowners explore their options.
Deed in Lieu of Foreclosure
The deed in lieu of foreclosure, also known as a quit claim, is a document that transfers the title of the house to the lender. The document is signed by the lender and notarized. This alternative to foreclosure is generally seen as a simple process compared to foreclosure itself, as it is less expensive for the bank and results in a less direct hit to the homeowner's credit.
Under the right circumstances, many banks will be inclined to accept a deed in lieu of foreclosure. Unfortunately, the circumstances are not always right for this kind of process, including:
There is a judgement or lien against the house that will follow the deed after it is transferred to the mortgage lender.
The terms put forth by the lender are not acceptable to the borrower.
Homeowners who are thinking about pursuing a deed in lieu of foreclosure should ensure that the paperwork releases them from the obligation to pay for any loan deficiency. Sometimes, lenders try to get homeowners to pay for the difference owed between the value of the property and the value of the loan. However, many banks will negotiate this point. Homeowners who cannot afford to pay this amount can work with their lender to prevent this from happening.
Additionally, a deed in lieu of foreclosure can prevent homeowners from purchasing another home for several years after the deed goes into effect.
Partial Claim
Borrowers with FHA loans must pay an <a href="https://www.bankrate.com/mortgage/fha-mortgage-insurance-guide/" target="_blank">annual mortgage insurance premium</a> for their mortgage, equal to about one percent of the loan amount. Most of the time, borrowers must make monthly payments toward the premium, and the money is pooled in an account. Lenders affected by defaulting borrowers can file a partial claim to bring the loan current. The partial claim may be used to pay the legal fees associated with foreclosure, but cannot be used to pay late fees.
Homeowners who want to use the partial claim option must eventually pay that money back. To ensure the money is paid back, HUD files a lien on the home, which will stay until the amount is repaid or until the house sells.
To make a partial claim on a delinquent loan, the homeowner must notify their lender of their hardship. The lender must then analyze the claim to ensure the homeowner does not qualify for the HUD special forbearance program that can give the homeowner temporary mortgage relief.
In order to qualify for a partial claim, the homeowner must demonstrate ability to begin repaying the mortgage. Additionally, the homeowner must have missed no fewer than four mortgage payments and no more than 12.
Forbearance
Mortgage forebearance allows a lender to temporarily reduce or suspend a homeowner's payments on their mortgage for a specified period of time. Forebearance is designed to allow the homeowner time to get their finances situated until they can start making payments once again, and it may be an option for people who are behind on their mortgage payments or about to miss an upcoming payment. Forebearance can be a good option because it allows homeowners to stabilize their financial situation while doing less damage to their credit score.
Additionally, forebearance allows homeowners to stay in their home. Once the forebearance period has ended, the homeowner will need to repay the amount they would have paid during the forebearance period. To repay the amount owed, the homeowner will either have to make a one-time payment, pay an increased mortgage until the amount has been repayed (known as a repayment plan) or make a modification to reduce the past-due amount.
Homeowners who want to apply for a forebearance on their mortgage should gather their financial information to share with their mortgage company, including pay stubs, mortgage statements and monthly debt payments and should be prepared to explain what they are going through, including why they are having a hard time making their mortgage payment and how they will be able to repay after the forebearance ends.
Permanent Hardship
Permanent hardship is a type of repayment program for homeowners who are going through a difficult life situation. During a permanent hardship program, regular payments are made, but the lender may reduce interest to make payments less.
Permanent hardship programs are handled on a case by case basis and usually begin when the homeowner writes a letter to the lender to explain their problem. In the letter to the lender, the homeowner must explain they would like to continue to make regular payments as well as include their request, whether that is a reduction in interest rates or a reduction in payment amounts. In some cases, permanent hardship accomodations involve refinancing the loan.
Either way, permanent hardship programs are designed to help homeowners who want to continue making payments and who do not want to default. It is important for the homeowner to explain they do not want to default on their payment, and the requested accommodations are the best way to ensure the homeowner is able to avoid that.
Short Sale
A short sale is a sale performed even though the home is being sold for less money than is owed on the mortgage. Short sales are a helpful tool for homeowners who are "under water" on their mortgage, meaning they owe more money to the lender than the true value of the home.
In order for a short sale to go through successfully, the homeowner must first apply for their short sale to be approved by the bank. This can be a long process, as banks can take weeks or even months to respond to a short sale application and may take even longer to respond to an offer on the home.
<a href="https://www.jeffcookrealestate.com/blog/short-sale-vs-foreclosure/">Short sales are considered a better alternative to foreclosure</a> because they can have less of an impact on the homeowner's credit. However, for a homeowner seeking a faster solution to their financial problems, short sales may not be the best option.
South Carolina and North Carolina Foreclosure Intervention
South Carolina's foreclosure intervention process is designed to ensure that homeowners have options when they are facing a potential foreclosure. In order to take advantage of these foreclosure interventions, homeowners must submit an application to the lender, and it is up to the lender to determine whether the borrower qualifies for any of the potential foreclosure alternatives.
Homeowners who choose to participate in foreclosure intervention must be allowed to do so, and the servicer must put aside foreclosure action until the intervention process is complete. Foreclosure cannot take place until:
Notice of foreclosure intervention has been sent.
The lender has reviewed the documents from the homeowner to determine whether the borrower qualifies for foreclosure.
A determination is made that the homeowner does not qualify for foreclosure alternatives and the borrower and lender are unable to reach a settlement.
The notice showing that the homeowner does not qualify for the foreclosure alternative has been mailed and the homeowner has had a specific amount of time to respond.
Additionally, courts may require the homeowner and lender to go through mediation to prevent foreclosure. This mediation process brings the homeowner and the lender together to discuss their problem and reach a resolution that is not foreclosure. For a homeowner in financial distress, foreclosure intervention in South Carolina the best possible opportunity to avoid foreclosure.
In North Carolina, homeowners may have access to counseling and legal aid during their foreclosure proceedings. Homeowners in North Carolina who are in danger of foreclosure should work with their HUD-approved housing counselor to explore the possibilities.
Last-Minute Strategies to Stop Foreclosure
While it is always encouraged that homeowners are proactive from the beginning to stop their foreclosure, sometimes even homeowners who wait until the last minute are able to take advantage of the strategies and services available that can prevent foreclosure. The following strategies may still be able to help.
File for Bankruptcy to Stop Foreclosure
Filing for bankruptcy creates an automatic stay of all debt collection, including collection calls, letters and foreclosure. This happens the minute the homeowner submits the paperwork to file for bankruptcy.
Often, homeowners wait until the very last minute to file for bankruptcy when their home is facing foreclosure, a strategy popular because homeowners are often reluctant to take drastic measures to file for bankruptcy. Additionally, waiting until the last minute makes it possible for the homeowner to extend foreclosure and thus the amount of time they may spend in their house.
Homeowners who file for chapter 13 bankruptcy must go on a payment plan and continue paying their mortgage in order to complete the bankruptcy process.
While filing for bankruptcy to stop foreclosure may sound drastic, many homeowners use this tool to keep their house, get caught up on payments and work out other debts. Most important to remember is that the bankruptcy must be filed before the <a href="https://www.jeffcookrealestate.com/blog/how-to-buy-a-foreclosure/">foreclosure is bought</a> at auction, or the foreclosure cannot be stopped. Homeowners who choose to file chapter 13 bankruptcy will be able to keep their house as long as they can keep up with the payment plan.
Apply for Loan Modification
Loan modification is an alternative to foreclosure that enables the homeowner to reduce their payments and make owning their home more affordable. During the recession, many homeowners applied for loan modification, and their bank continued foreclosure proceedings even while processing their modification application. Whichever process was completed first, whether that was modification or foreclosure, was the ultimate conclusion of the matter and known as dual tracking.
Often, it was the foreclosure process that completed first. Homeowners who believed they were in the process of having their loan modified were shocked when their home was foreclosed. Today, federal law prohibits dual tracking in many cases. In North and South Carolina, homeowners have foreclosure intervention strategies to help them avoid foreclosure. Additionally, laws are structured to prevent homeowners from being foreclosed upon without having access to these intervention strategies.
File a Lawsuit to Stop the Foreclosure
In the event the foreclosing party fails to follow foreclosure laws, the homeowner may sue the lender. It is up to the homeowner to prove the foreclosing party did not follow the proper laws, and working with a lawyer can help them through this process. In states like North and South Carolina, where laws are designed to help homeowners protect themselves from foreclosure, the lawsuit may not be an option.
Homeowners Should Contact Their Lender
Homeowners in financial distress who would like to avoid foreclosure should know their rights, work with a lawyer, know the foreclosure process in their state and work with their bank from the very beginning to discuss potential options that can help them avoid foreclosure.
Not all options to avoid foreclosure are palatable to homeowners. However, by working with a financial counselor and by maintaining good communication with their lender and lawyer, they increase the possibility of saving their home.2020-06-09T08:39:00-07:002021-08-30T12:20:42-07:00Thomas "Jeff" Cooktag:jeffcookrealestate.com,2012-09-20:8428How to Buy a Foreclosure: Getting Ahead By Purchasing a Foreclosed Property<img style="display: block; float: right; margin-bottom: 30px; margin-left: 15px; width: 475px;" src="https://assets.site-static.com/userfiles/1451/image/how-to-buy-a-foreclosure.jpg" alt="Everything to Know About Buying a Foreclosure" width="475" />Buying a <a href="https://www.jeffcookrealestate.com/blog/what-is-foreclosure/">foreclosed home</a> is different than the usual home buying process. Homeowners on a budget, concerned with monthly mortgage payments, or want a home outside their budget may find the right solution in buying a foreclosed home, as they are offered at lower prices through a bank or lender. Purchasing a foreclosed home gives buyers the opportunity to purchase a home that would otherwise be more expensive.
Although a few extra steps are involved, these tips can help home buyers decide whether buying a foreclosed home is the right option. Before they get started, homeowners should be prepared to research and put in more effort in the purchase of a foreclosed property. Additionally, they should work with a real estate professional along with other experts throughout the process to make the experience better overall.
Where Can Buyers Find Foreclosed Homes?
In addition to being more difficult to purchase than standard homes, foreclosed homes can be more difficult to find. Home buyers should work with their real estate professional to locate foreclosed homes in the area where they would like to purchase, as real estate professionals have access to listings and directories of foreclosures that may not be accessible to the public. There are other ways to find foreclosed homes as well, including:
Public records. Check the public records in your local county or municipal offices; look for homes that are listed under notice of default and notice of sale.
Standard listings. Many foreclosed homes are eventually listed on the standard listings websites; home buyers can check on real estate listings just like they can look for standard homes as well.
Local newspapers. Local newspapers are a good resource for home buyers, as they have access to the same public records that everyone else can access and will publish foreclosed homes for everyone to see.
Attorneys and real estate wholesalers. These professionals have inside knowledge of foreclosures and will sometimes release this information to people who they know.
Getting Pre-Approved for a Mortgage
The first step to buying a foreclosure property is for buyers to get pre-approved for a mortgage. A mortgage pre-approval is different than a mortgage pre-qualification, as mortgage pre-qualification is the first step in the mortgage approval process. To get pre-qualified, home buyers must contact a lender and answer questions about their financial status.
After completing the pre-qualification process, the lender will determine how much money the buyer will be able to borrow if the answers the home buyer gave to the lender are accurate. Since pre-qualification is based on the answers the buyer gives and not the facts, a pre-qualified buyer is not necessarily a sure thing.
The pre-approval process requires the home buyer to submit documentation that supports the answers to the questions in the pre-qualification process. Pre-approved buyers are more likely to be approved for their mortgage, so pre-approval is the proper first step to buying a foreclosure.
To become pre-approved, the home buyer must contact a lender and start the mortgage approval process well before the date they hope to buy a foreclosed home.
How to Buy Different Types of Foreclosed Homes
Foreclosure occurs in stages; foreclosed homes can be bought during these different stages, with the purchase process depending on the stage of foreclosure the home is in. Therefore, undestanding the different stages can help home buyers determine what they will have to do in order to purchase a foreclosed home. Additionally, understanding the different processes can help home buyers decide what type of pre-foreclosed homes they would like to purchase.
Pre-Foreclosure
Pre-foreclosed homes can be sold in a process known as a short sale. <a href="https://www.jeffcookrealestate.com/blog/short-sale-vs-foreclosure/">Short sales are not technically foreclosed homes</a> because the foreclosure process has not been completed. Pre-foreclosed homes are sold by homeowners with the permission of their lender. Often, homeowners who sell their home as a short sale are in financial distress, and they are seeking to sell their home to <a href="https://www.jeffcookrealestate.com/blog/how-to-stop-foreclosure/">stop the foreclosure process</a>.
Pre-foreclosed homes take longer to sell than standard homes, as they are often sold for below market value. Home buyers who wish to purchase a pre-foreclosed home must display patience, as sometimes purchasing pre-foreclosed homes can take months. Benefits of pre-foreclosed homes include:
Pre-foreclosed homes are a good deal.
Homes sold in pre-foreclosure are sometimes in better condition than fully foreclosed homes.
However, there are many disadvantages of purchasing a pre-foreclosed home.
Even after the home purchase offer is accepted by the homeowner, the lender may reject the contract.
Pre-foreclosed homes can take many months to purchase.
Sometimes, lenders simply ignore purchase offers from home buyers.
In order to purchase a pre-foreclosed home, it is important for home buyers to work with an experienced real estate professional.
The short sale process proceeds like this:
The homeowner turns in an application to the lender requesting for the home to be sold as a short sale.
The buyer makes an offer and the homeowner accepts it.
The homeowner submits the accepted offer to the bank.
The bank accepts, ignores, rejects or counters the offer.
When there is an offer accepted, the sale of the home proceeds much like any other home sale.
Short sales generally occur because the home is worth less than the value of the mortgage, a condition known as being "under water." The reason the homeowner must get permission to sell the home as a short sale is because the homeowner can sell the home in a standard sale if the home was worth more than the mortgage. As long as the home is worth less than the mortgage, the lender must take a loss.
Auction
Homes that are foreclosed upon are typically sold at auction, which are public and sometimes very large events. Foreclosed homes are often sold at a heavy discount. The process for <a href="https://www.auction.com/blog/buying-foreclosures-at-auction-the-basics/" target="_blank">purchasing a home at auction</a> is below.
Find Auctions
Auctions are listed in local papers and are also posted on websites dedicated to foreclosure home purchases. The home buyer can find auctions for homes they're interested in purchasing.
Do Research
Before making a purchase, the home buyer must do research to find out the condition of the home, whether there are any liens on the home, and how much the current homeowner owes on their mortgage. Having this information is important—especially information regarding any liens—because the new home buyer may have to pay the liens themselves.
Often, it is difficult or impossible to find out much about the condition of the home. Buyers interested in purchasing a foreclosed home can find out a little information by driving by the home. However, these homes are often still occupied by their owner, and there is no way for the interested buyer to go inside.
Prepare Financing
Home buyers must know how they plan to purchase the home. This can be done by cash or with a mortgage unless otherwise noted as cash only. Many states require the winner of the auction to produce the money for the house as soon as the purchase is made; therefore, all financing must be ready before the home is purchased.
Attend the Auction
Foreclosed home auctions are often cancelled or postponed, as events take place behind the scenes relating to the foreclosure. Home buyers who would like to purchase a foreclosed home should confirm on the day of the auction to ensure it is still taking place.
At the auction, the home buyer who wins will get a certficate of sale and eventually, a certificate of title. During that time, the original homeowner may take some action to get their home back, which is why it is important for the home buyer to avoid making any changes to the home until they have the title.
REO
If a foreclosed home does not sell at auction, then it becomes real estate owned, or REO, meaning the property is owned by the bank. Real estate owned properties are often listed on the MLS website and are sometimes listed on the bank's website as well. Banks often have an entire section dedicated to the sale of REO properties.
REO properties are not often sold at a major discount; sometimes, REO properties have been standing vacant for a long time. Even if they look fine on the outside and did not have major damage when the house went vacant, time without maintenance and occupancy can have a detrimental effect on a home. Home buyers who are considering an REO property should get an appraisal and a home inspection before making an offer.
Most REO properties are sold "as-is," meaning they come with no warranty and banks will not make any repairs. Therefore, home buyers interested in REO properties must be prepared to make major repairs, upgrades or renovations when they move into the house. Sometimes, this makes an REO property ideal for a home flipper or someone who has strong DIY skills.
Banks that will not negotiate on price may negotiate on the terms of the loan, if the home buyer applies for a loan through the same bank that owns the property. Additionally, some banks may allow the buyer to finance the entire price of the home or more, if extensive repairs are necessary.
Home buyers should run a title search before making an offer. Most of the time, banks will clear the title before listing the house for sale, but it is important to check either way. Sometimes, home buyers have difficulty purchasing an REO property with loans such as VA loans and FHA loans, as these loans require the property to be "turn key." This gives more reason to apply for the loan through the lender that owns the home, as the flexibility on the loan could become important.
Additionally, it is important for buyers to work with a real estate professional who has experience with REO properties, as they can help the home buyer negotiate the terms of the home. REO properties are similar to short sales in that they can take a long time to be approved; therefore, buyers must exhibit patience when negotiating the purchase.
Government-Owned
When a homeowner defaults on a government loan, or when a homeowner fails to pay property or income taxes, the government may foreclose on the house. Buying a government-owned home is not much different from buying any other foreclosed home. Government-owned homes are available for sale on government sites where they are listed together with information about their auction day, the value of the home and pictures of the interior.
Government-owned homes are often in relatively good condition because the government will often make repairs for the home and sell the home for a competitive price. There is some misconception that government-owned homes are available at a discount. Typically, this is not the case, unless there is something wrong with the home.
Additionally, government-owned homes are sold through auction, just like standard foreclosed homes. Homeowners who bid on a government-owned home can secure financing after the auction.
An experienced real estate professional can help the home buyer determine what would be a fair price for the house. Having this kind of direction before attending the auction can help the home buyer decide what the limit is on what they are willing to spend. Purchasing a government-owned home is different from purchasing other types of homes, which is why a real estate professional can give the home buyer advice and answer their questions, walk them through the process, and make the home purchase process easier and less stressful overall.
Government-owned homes are different from standard foreclosures in some ways. For example, in the first round of auctions for government-owned homes, the only people who are allowed to bid are people who plan to use the home as their primary residence. People who wish to flip the home or rent it out will not be able to bid in the first auction. Having this information and other information like it can help make the process of buying a government-owned foreclosure easier overall.
Do Your Research, Work With the Experts
If you're a home buyer thinking about purchasing a foreclosed or pre-foreclosure home, work with the experts throughout the process. By contacting a reputable lender and working with a real estate professional who has experience these these kinds of purchases, home buyers will find that purchasing a foreclosed home can be worthwhile.
Home buyers should do their research before getting started and should know what kind of home they would like to purchase and what they will need to do. The more home buyers know in advance of making a purchase, the better.2020-06-08T08:42:00-07:002021-08-30T12:21:23-07:00Thomas "Jeff" Cooktag:jeffcookrealestate.com,2012-09-20:8429Buying a Home as a Short Sale: What To Know<img style="display: block; float: right; margin-bottom: 30px; margin-left: 15px; width: 475px;" src="https://assets.site-static.com/userfiles/1451/image/how-to-buy-a-short-sale.jpg" alt="Buying a Home as a Short Sale: What To Know" width="475" />A <a href="https://www.jeffcookrealestate.com/blog/what-is-a-short-sale/">short sale</a> is a type of sale that occurs when a lender is willing to allow the homeowner to sell their home for a lower amount than what is owed on the existing mortgage. Short sales typically occur when a home has been devalued and the mortgage is larger than the actual market value of the home. Short sales were very common during the recession, though they can still occur today. Because short sales are not like standard sales, it's important to understand what's involved if you're thinking about buying a short sale home.
If you're a home buyer on a budget, a short sale may be a good deal. Short sales tend to be distressed properties, and buying a short sale can take a long time. If you have the patience to purchase a short sale and you understand what it means to buy a short sale property, then you may be ready to make this kind of commitment. Here's what you need to know.
What to Consider Before Buying a Short Sale
Short sales are typically sold for a price that is below market value. They're sold at a low price to compensate for the time and trouble the home buyer must go through to acquire the home. Short sales take much longer than standard sales because banks add a level of bureaucracy and lack of transparency that can slow the process by weeks or even months.
Sometimes, the discounted price is in line with the market value and not below it. The buyer must choose the price they offer carefully. If they make an offer that is too low, the bank is unlikely to agree to allow a short sale to go through.
Hire an Experienced Agent
Short sales are complicated processes. Throughout the short sale, there may be deadlines to meet and forms to fill out. In addition, each bank handles short sales slightly differently. The best real estate agent to hire when trying to buy a short sale is an agent who has experience with short sales. Working with an experienced real estate professional can help make the process simpler and less stressful. Working with an experienced real estate professional also helps ensure the process will be successful.
When seeking an experienced real estate professional, the home buyer should ask directly about the real estate agent's experience with short sales. Have they helped other buyers purchase short sales? Have they helped homeowners <a href="https://www.jeffcookrealestate.com/blog/how-to-sell-a-short-sale/">sell short sales</a>? How often? A real estate agent who has helped home buyers purchase many short sales in the past is the best person to hire for this kind of real estate transaction.
Check Public Records
Sometimes, short sales cannot go through because the bank has already filed a motion to <a href="https://www.jeffcookrealestate.com/blog/what-is-foreclosure/">foreclose on the house</a>. The best way to find out whether this has happened is to run a public records request.
A public records request will also reveal how much money is still owed on the mortgage. Knowing this amount can help the buyer gauge what the lender would expect to receive during a short sale. If there is a second mortgage on the house, this is also critical information. If there are two loans on the house, the second lender will expect to receive some money or the short sale may not go through.
This is another reason why it's very important to work with an experienced real estate professional. A good real estate professional can help the home buyer make the best offer possible. The amount offered to purchase a short sale home is a balancing act. Buyers must make an offer the lender (or lenders) will accept, while also avoiding overpaying for the property.
Qualify the Property and Seller for a Short Sale
Not all properties <a href="https://www.jeffcookrealestate.com/blog/qualify-for-short-sale/">qualify for a short sale</a>. Buyers who would like to make an offer on a short sale should start by ensuring that the property qualifies for a potential short sale situation. The following must be true in order for the seller to qualify for a short sale:
The seller must have no equity in the home.
The seller must be unable to repay the difference between the sales price and the existing loan(s).
The market value of the home must be below the amount owed on the house.
Sellers usually prove that they qualify to sell a home as a short sale by providing a hardship letter to the lender and a net sheet that lays out the homeowner's financial situation, as well as the justification for the short sale.
The home buyer can help ensure that the home qualifies for a short sale by requesting copies of documentation submitted to the bank. The buyer should also familiarize themselves with the bank's requirements to sell a home as a short sale. It's very helpful if the buyer and seller are both working with real estate professionals who are experienced with short sales. With two experienced real estate professionals working the case, it becomes much more likely the process will proceed successfully.
Submit Documentation and Purchase Offer
When the home buyer has decided that the home does qualify, it's time to submit an offer to the lender. The lender will want everything that a normal homeowner would expect to see from a potential buyer, including a sizable earnest money deposit and proof of funds. Being pre-approved is better than being pre-qualified.
Working with a bank can be difficult. Banks naturally take a long time to respond to most home purchase offers, so buyers should do everything they can to ensure their offer is strong. If they don't make a strong offer, it could be weeks before they find out they must make a better offer in order to be accepted. Buyers who are not sure what they need to do in order to make a good offer to a bank should work with their real estate professional. A real estate professional who specializes in short sales will be able to give the home buyer information they need in order to ensure they are making the best offer possible.
Be Patient
One of the most challenging things about buying a home as a short sale is the length of time it takes to <a href="https://www.thebalance.com/what-is-escrow-315826" target="_blank">reach the close of escrow</a>. Banks are notoriously slow at responding to short sale offers. A person who has decided to buy a home as a short sale should be aware that banks can take days, weeks or even months to respond to offers made.
Reserve the Right to Conduct an Inspection
Inspections are important when buying a short sale. Short sale homes are often in a state of deterioration when they go on the market, because financially distressed homeowners are often unable to keep up with maintenance. Conducting an inspection serves several purposes:
Helps the home buyer go into the purchase with open eyes
Serves as leverage when asking for a price reduction or repair concessions on the house
Helps the home buyer decide whether they're ready to buy the house at all
Some home buyers choose to do the inspection before making the purchase offer, to help them decide if they want to make the offer at all. Others wait till after. Either way, home buyers must cooperate with the current home occupant to coordinate the home inspection.
Short Sale Contract
Under normal circumstances, home buyers can be reasonably confident that the contract will not be canceled at unexpected times throughout the home buying process. This is not the case with the short sale contract. Sellers can cancel the contract for several reasons, including:
The house is foreclosed upon
They decided not to sell
The lender accepts a higher offer
The homeowner files for bankruptcy
Sellers may continue to accept offers beyond the point at which the initial buyer has made an offer. Lenders can choose the most appealing offer.
Pros and Cons of Buying a Short Sale
Short sales have their pros and cons, so anyone who is thinking about buying a home as a short sale should take this into consideration.
Pros
Homes sold as short sales are often sold for less than the market value (they're a good deal!).
Short sales often have less competition than other homes.
Cons
The process is complicated and can be canceled at various times throughout.
Short sales take a long time.
Short sale homes are usually distressed and sold "as is."
Essentially, short sales are a great way for the home buyer to save money on the purchase of a home, but it's important to work with a real estate professional. Working with an experienced professional can help alleviate the other problems that can come with buying a short sale house.
How to Buy a Short Sale in North and South Carolina
Below are some common questions that people purchasing a home in North and South Carolina often ask.
Q: <a href="https://www.jeffcookrealestate.com/blog/how-long-does-a-short-sale-take/">How long can I expect a short sale to take</a>?
A: Short sales take, on average, about four months. However, individual experiences may vary.
Q: At what point should I get the home inspection?
A: You can get the home inspection either before or after making an offer. Getting the home inspection before can help you make an informed decision before making the offer, but getting the inspection after the offer is accepted ensures that you're spending money on an inspection for a house you're likely to buy. Do not give up your right to inspection during the process.
Q: The seller has accepted my offer, but the lender has not. Is it true the seller may continue to send offers to the lender until lender has accepted one?
A: Yes, even after the seller has signed the offer from one buyer, if additional offers continue to come in, the seller may forward those offers to the lender until the lender accepts one. This is another reason why it's important to work with a real estate professional, as a good and experienced real estate agent can help make an offer that a lender is likely to accept.
Buying a short sale is a long, complex process. It can be hard to decide if buying a short sale is worth the extra time and effort because it depends on so many factors. Work with an experienced real estate professional to help make your home buying experience a success.2020-06-05T08:43:00-07:002021-08-30T12:22:19-07:00Thomas "Jeff" Cooktag:jeffcookrealestate.com,2012-09-20:8430Short Sale vs. Foreclosure: Understanding the Difference & Discovering Which One is Right for You<img style="display: block; float: right; margin-bottom: 30px; margin-left: 15px; width: 475px;" src="https://assets.site-static.com/userfiles/1451/image/short-sale-vs-foreclosure.jpg" alt="What Is a Short Sale? What Is a Foreclosure? Differences" width="475" />Short sales and foreclosures can happen under similar circumstances, but the actual processes are very different. Most important to know is that a short sale is a voluntary event, initiated by the homeowner and requiring the approval of the lender. A foreclosure is an involuntary process wherein the lender takes legal action and eventually assumes control of the house.
During a short sale, the homeowner is allowed to sell the house for an amount that is less than what is owed on the mortgage. During a foreclosure, the homeowner is required to leave the house, and the bank can sell the home at an auction.
Short sales and foreclosures were very common events during the recession. Homeowners who had lost all equity in their home and were left with toxic loans were forced to either sell their house as a short sale or be foreclosed upon. This happened all over the country and in neighborhoods of all kinds. Although short sales and foreclosures may happen less today, they do still occur. If you're a homeowner in financial distress, you may be faced with a short sale or foreclosure sometime in the future. Knowing the difference between these two processes can help you decide what is the best path for you.
Short Sale
A <a href="https://www.jeffcookrealestate.com/blog/what-is-a-short-sale/">short sale</a> is an option for many sellers when the home has lost so much value that the amount owed on the loan is far more than the market value of the home. Homeowners who owe more than they're able to sell the home for are faced with a difficult choice: either seek permission to sell the home for less than the loan, or sell the house and pay back the difference to the mortgage company. Many homeowners, faced with the impossibility of paying back large sums of money to their mortgage lender, often eventually decide to seek permission to hold a short sale.
The lender must grant the homeowner permission before the short sale begins. Before permission can be granted, the homeowner must fill out documentation that proves that the short sale is justified. This documentation includes the letter of hardship, financial statements, preliminary marketing analysis and a net sheet that shows the amount the home would sell for is less than the amount owed on the loan.
After analyzing all of this information, the bank will decide whether the home buyer will be allowed to sell the home as a short sale. If the bank grants permission, the homeowner may present the bank with one or more offers to buy the house.
Benefits
There are benefits of selling a house as a short sale. For a homeowner who is <a href="https://www.moneyunder30.com/mortgage-underwater-options" target="_blank">underwater on their property</a>, a short sale represents a way to sell the house and start anew with a new property, although many loans require homeowners to <a href="https://www.jeffcookrealestate.com/blog/how-long-does-a-short-sale-take/">wait a certain period of time after a short sale</a> before they can qualify for a mortgage again.
There are other benefits as well.
Homeowner is in Control
Although the bank must give permission to the homeowner to sell the home as a short sale, the homeowner remains in control of the home sale process. The homeowner decides to initiate the short sale and can also decide to cancel the short sale if they choose.
Short Sale Homes Attract Buyers Seeking Low Prices
Short sale homes have some disadvantages, but the primary advantage for home buyers is that short sales are generally sold as a discount. Short sale homes are sold for less than their market value to make up for their disadvantages, which are listed below. For a home buyer on a budget or a home buyer who is open to making DIY home improvements, short sales are an excellent opportunity to get a home for a good deal.
Short sales are also an excellent opportunity for home buyers to purchase a home that they might otherwise not be able to afford. For home buyers who have big dreams but a small budget, short sales can be the perfect opportunity. It's important for the home buyer to work with a real estate professional who can help them achieve their home-buying goals. Without help from a real estate professional, it becomes much more difficult for home buyers to get what they need.
Less Competition
Many home buyers want their home purchase process to be as simple as possible. Home buyers shy away from home sales that are likely to be complex and drawn-out. As a result, short sales are likely to have less competition than many other home sales even in a hot real estate market. For a home buyer who is willing to put the time and effort into a short sale, the process could be very fruitful.
Disadvantages
Short sales do have their downsides. For many home buyers, the biggest disadvantage of a short sale is how much time it can take to purchase a short sale. In North and South Carolina, short sales can take an average of about four months to complete. Short sales take a long time because most banks are reluctant to approve the transaction.
Banks draw out the process because they have limited resources to dedicate to managing short sales, and because they hope to attract higher offers. The longer the short sale process takes, the more likely it is the bank will attract a higher offer from an interested buyer. Another reason short sales take so long is because banks have many levels of bureaucracy. Even if the bank were an enthusiastic seller, the short sale process would probably still take a long time. In addition to this one obvious downside (the length of time a short sale can take), there are others.
Lender Could Counter
Once the homeowner accepts an offer from a home buyer, they must send the offer to the bank. Even after the homeowner has accepted the offer, it is the bank that ultimately gets to decide whether an offer will go through. The counter from the lender could be a much higher purchase price suggested by the buyer. The bank may even reject the offer or refuse to respond. The home buyer could be waiting for a long time only to realize that the bank will not respond at all.
Property is Sold "As-Is"
There is very little negotiating with a bank. Short sale properties are bought "as is," which means that any damage from deferred or poor maintenance will be the responsibility of the home buyer once they've purchased the house. Homeowners selling their house as a short sale are in financial distress and often do not keep up with maintenance. Therefore, short sale homes are frequently in poor condition.
Properties that are sold as is often do not meet the standards of home loans that require properties to be "turn key" upon purchase. This limits the home buyer's mortgage options, and also exposes the buyer to the risk that the home they purchase will require thousands of dollars in repairs after they move in.
Seller May Not Be Approved
Sometimes, homeowners put their home up for sale believing that they qualify for a short sale, only to realize later that they do not. It's important for the seller to get an approval before putting their home up for a short sale. Buyers must be careful to ensure they work with a real estate professional who knows how to identify when a short sale is proceeding as it should.
Lender May Accept Another Offer
Even after the home seller accepts the offer, the seller may continue to send the lender other offers, and the lender may pick any of those offers they want. This means that the buyer may believe that they have gotten very close to purchasing the house only to discover this was not the case.
Foreclosure
Foreclosure is generally the bank's last resort to reclaim a property when a homeowner falls behind on their payments. Foreclosure laws can vary by state and can occur when a homeowner abandons their home; other times, foreclosures occur when the homeowner is living in the house. Foreclosure in South Carolina can take between 150 and 180 days, and in that time, the homeowner often does not care for the house. In fact, many homeowners who go into foreclosure stop caring for their home long before default occurs.
As a result, <a href="https://www.jeffcookrealestate.com/blog/what-is-foreclosure/">homes that are foreclosed upon</a> are often cosmetically and structurally damaged. These homes sometimes need months of maintenance and repair after they're purchased to be brought up to their potential. The foreclosure process generally goes like this:
Buyer defaults on payments
Lender sends a notice of default to homeowner
Lender creates a notice of trustee's sale
The house is sold at auction
The homeowner is evicted
Benefits
For homeowners and home buyers, there are advantages to foreclosure. For the homeowner, the main advantage of going into foreclosure is the length of time that the foreclosure takes. Homeowners who are in financial distress have months to work with their bank to try to get out of foreclosure. For those homeowners who don't want to save their house, foreclosure is often easier and less work than a short sale.
There are many reasons that home buyers seek to purchase foreclosed homes at auction, but the primary reason is because they're often sold for well below their market value. For a variety of reasons, banks are not motivated to sell foreclosed homes for a high price. Banks do not want to make repairs, nor do they want to fix the home up (staging and so on) to make the home selling process more profitable. Lenders who foreclose upon homes will often sell the home at auction, allowing buyers at the auction to determine how much the home will sell for.
The fact that the lender does not have to make repairs and the buyer can get a home for a good deal makes foreclosed homes relatively easy for all parties involved. Although foreclosure is a long process while the homeowner is still living in the home, once the foreclosure goes through, the purchase process (at auction) is easy.
Disadvantages
Unfortunately, foreclosures can also be a painful process for the homeowner who is being foreclosed upon. Foreclosure is involuntary. Often, foreclosures occur when a homeowner accidentally falls behind on payments, after falling into financial distress. The homeowner who goes through the foreclosure does not get to control whether, when or how the bank chooses to foreclose on the homeowner. For a homeowner who is trying to save their own house, trying to get caught up on payments can be stressful.
The foreclosure process is established by law, and the bank must follow that process. This generally involves forms and notices sent to the homeowner on a schedule. Although the process may be stalled by certain actions, most of the time, the homeowner can only stop the foreclosure process by catching up on payments. In addition, there are disadvantages for home buyers as well.
High Competition
Foreclosed homes are sold at auction, often with many buyers present. Because foreclosed homes can be very low cost, competition for foreclosed homes can be fierce. High competition means that home buyers who are trying to get a foreclosed home may need to go through the home buying process at auction several times before they're able to get a home that's right for them.
Home is Often Distressed
Foreclosed homes are sold "as is." Buyers who purchase foreclosed homes generally need to be prepared to make significant repairs to any home they would like to buy. This can require a major investment on the part of the home buyer. Since home buyers who purchase foreclosed homes are often looking for a deal, this can mean that the buyer may not benefit financially as much as they wanted.
What's the Better Option?
Deciding between buying a short sale and a foreclosure, or deciding between starting either process, can be a challenge. Home buyers and homeowners alike should consult with the experts in order to make the right choice for them. They must start by consulting with a professional.
If you're a homeowner who believes that a foreclosure or a short sale may be in your future, talk to your real estate professional. A real estate professional can help you get started with the short sale process. If you're a home buyer, talk to a real estate professional and a lawyer to get the right legal and tax advice. Working with a real estate agent and a lawyer throughout the process, regardless of which process you choose, can help you decide which one is right for you.
It's also important to communicate with your lender. If you're a homeowner in financial distress, you may be able to avoid a short sale or a foreclosure by communicating with your lender as soon as your financial troubles begin. By maintaining open lines of communication throughout the process, you can help ensure your real estate transaction will go well.2020-06-04T08:44:00-07:002021-08-30T12:23:40-07:00Thomas "Jeff" Cooktag:jeffcookrealestate.com,2012-09-20:71955 Reasons Why Real Estate is Still the Best Investment You Can Make<img src="https://assets.site-static.com/userfiles/1451/image/5ReasonsWhyRealEstateisStilltheBestInvestment.jpg" alt="5 Reasons Why Real Estate Is Still The Best Investment" width="450" height="300" />
Guest Blogger: Mike Johnston
Real estate has always been one of the most stable investments in the world, providing novice investors a stable way to enter the industry and kick-start their career, and experienced investors to secure their assets and continue diversifying their portfolio. But that’s just the beginning, as real estate brings many more benefits to the table, especially for the investors who are working with an experienced buyer’s agent.
Investors who stay on top of the latest industry trends can seize lucrative opportunities in emerging residential and commercial areas, particularly in those that boast a high demand due to limited expansion and urbanization space. Having all of that in mind, let’s delve deeper into the reasons why real estate should be your primary investment option, and how it can make you rich.
Ideal for novice investors to ensure a high ROI
As an aspiring investor, your primary goal is to create a stable investment. In other words, your investment needs to be a successful one, even if the returns are not exactly what you have hoped for. It’s fine to land below your projected profit margin so long as you can break even in the end, but the good thing about real estate is that provides a unique opportunity to generate a high ROI from the get-go.
Due to the rapid urbanization taking place around the world and the increasing demand for residential and commercial properties, novice investors can find and flip properties quickly. This will allow you to sell the property faster as well, but also attract long-term tenants if you’re looking to establish a continuous income stream. Either way, real estate makes for the best first investment.
It’s a tangible asset with long-term value
Unlike other investment assets such as the stock market, forex, or God forbid, cryptocurrency, real estate is a tangible asset that will always be able to produce revenue. Sure, the socio-economic trends that prevail in your country and region will greatly determine the value of the property and the land you own, but you will nonetheless always be able to capitalize on your real estate assets one way or another.
Quite simply, even if you sell your home, you can retain ownership of the land underneath. Even if you lose the property due to an environmental catastrophe, the land you own will always bear tangible value – you can exploit it for its natural resources, for farming and production, and future construction projects. Unlike virtual assets, real estate is yours to control and mold into an affluent future.
The learning curve and barrier to entry are low
One of the greatest benefits of real estate for aspiring investors is that you can get a fair grasp of the industry quickly, and enter the marketplace without encountering any cumbersome roadblocks. Even though real estate is often touted as one of the most expensive investment assets, the reality is that barriers to entry can be pretty low if you’re experienced and smart enough not to invest your own livelihood.
With the help of in-depth <a href="http://thinkmoney.com.au/property-seminars/">property investment seminars</a> and a whole lot of networking, you can easily obtain the knowledge necessary to make your first investment a success. Complement your knowledge with a substantial loan you can pay off in a reasonable timeframe, and you have yourself everything you need to buy a property, flip it, and sell it for a significant profit. On the other hand, you can decide to rent the property and enjoy a steady influx of cash on a monthly basis.
Diversify your portfolio and secure your assets
If there is a vital lesson you need to learn from the very beginning, it’s that you need to diversify your portfolio over time in order to scatter your assets across a sector of industries and capitalize on multiple fronts. Whether you’re looking to start your portfolio-building with a stable investment, or if you’re a seasoned investor looking to secure their finances in a stable asset, real estate is the right way to go.
This is an excellent way to mitigate the risk that comes with making investments in highly volatile assets, such as cryptocurrency, and snag a lucrative property at half the cost if you look in the right place at the right time. All of this creates a closed investment loop in which your assets are not only protected but are also generating high returns.
Capitalize on substantial tax benefits
Depending on the country and region you’re investing in, you might be eligible for substantial tax write-offs. In the US, for example, you’re <a href="https://passiveincomemd.com/7-great-tax-benefits-of-investing-in-real-estate/">eligible for many tax deductions</a>, the likes of mortgage interest, cash flow from investment properties, operating expenses and costs, property taxes, insurance, and depreciation. You simply need to learn how the system works in your region, research the legislature, and work with an experienced lawyer to maximize the potential of your investment and save as much money as possible.
Final thoughts
Without a doubt, real estate is the most lucrative investment nowadays, and for a number of compelling reasons. Whether you’re just venturing into the market, or if you’re a seasoned real estate investor, your best bet is to put your financial assets towards commercial and residential properties.2019-12-05T07:17:00-07:002022-09-27T05:20:09-07:00Thomas "Jeff" Cooktag:jeffcookrealestate.com,2012-09-20:71895 Important Things to Know About Your Home Mortgage<img src="https://assets.site-static.com/userfiles/1451/image/5ImportantThingstoKnowAboutYourHomeMortgage.jpg" width="450" height="300" alt="5 Important Things to Know About Your Home Mortgage" />
Owning a home is a big deal that requires proper and adequate preparation. You need enough finances but you also need the right knowledge about mortgages. You should learn about all the processes involved to have a smooth transition and own your home. Most people usually find solace in taking mortgages but sometimes that relief turns to grief especially if they take the mortgage without doing enough research. Here are some mortgage tips to make your home buying process simpler.
Credit
Although you don't need to have a perfect credit score, you still need a good enough credit. This is because the financial institution that will be giving you the loan will be taking a big risk by giving you the money. They need some sort of reassurance that you'll hold up your end of the deal. This is shown through previous proof of payments you've made. It is, therefore, a good idea to start by building your credit score before applying for a home loan. You don't have to perfect the score, you just need to make it good enough. Check out our helpful tips on <a href="https://www.jeffcookrealestate.com/blog/how-to-improve-your-credit-score/">How To Improve Your Credit Score</a>!
Special Mortgages
If you're a first time home buyer, you may have some trouble finding a good lender to give you a loan. Most first time buyers are young and therefore don't have a reputation when it comes to loan payments or a good background in terms of mortgages. First time home buyers can turn to special mortgages such as VA Home Loans for veterans and their families or Rural Housing Mortgages. These are mortgages that don't require the 20% down payment that some lenders implement as a mandatory part of the process. This means that you can own a home even if you don't have enough money as capital. Check your eligibility for a VA Home Loan <a href="https://www.veteransunited.com/v3/lp/?src=adw&adg=genhmtg&desc=eligibility&matchtype=p&gclid=EAIaIQobChMIhrv1tKjp6wIVBrLICh3dXgXBEAAYBCAAEgI5SfD_BwE">here</a>.
Refinancing
Mortgage rates usually change and that means that you can get a better deal. You just need to be careful about why you're refinancing. If done for the wrong reasons you can reap a lot of benefits. Only refinance your home if the mortgage rates are better or if you have improved your credit score. Second mortgages are also a good choice to consider if you have a good home value. Just make sure you weigh all the advantages and disadvantages before making your decision.
Closing costs
Buying a home involves paying for various costs that can take a financial toll on you. However, these closing costs may seem like small amounts but when you add them up they become too expensive. The best move is to ask whoever is selling the home to cater for those costs. They may include escrow fees, inspection costs, appraisal services, and insurance fees,
Mortgage testing
You don't have to delve into getting a mortgage straight away. You can opt for the option of <a href="https://www.jeffcookrealestate.com/blog/how-do-i-get-pre-approved-for-a-home-loan/">getting a pre-approved home loan</a>. Ask the lender if this option is available for you and make sure you get all the details such as the cost and eligibility factors. You should also find out whether you can borrow more and pay less.
Before getting a loan from any lender, make sure you find out important aspects such as the interest rates. This will help you prepare properly and as such, help you make the payments smoothly. 2019-12-04T10:33:00-07:002021-01-22T13:12:14-07:00Thomas "Jeff" Cooktag:jeffcookrealestate.com,2012-09-20:7188What You Need to Know Before Applying for a Home Loan<img src="https://assets.site-static.com/userfiles/1451/image/NeedToKnowBeforeApplyingforaLoan.jpg" width="450" height="253" alt="What You Need to Know Before Applying for a Home Loan" />
Whether you're taking out a loan to purchase a new home, or you're applying for a home equity loan (taking out a loan with your home as collateral), there are some important things you should be aware of ahead of time and keep in mind. Being well informed will help you make it through the process successfully, and also have more confidence.
It's important to do your research before applying for a home loan. There are a number of online resources with helpful information and advice, such as Zing! by Quicken Loans, or millionacres by Motley Fool. If you'd like professional help from experts, Jeff Cook Real Estate is a great company that can help you make the best decisions. Here we'll give you five important tips to get you started.
Raise and Maintain Your Credit Rating
This is something you'll want to be aware of well ahead of applying for a loan since it takes time to raise your credit score if it's gotten low. Your credit score is one of the key factors a lender will consider when determining whether or not to extend a loan and what interest rate you will pay. Many services and companies provide credit ratings, and you can find it online.
Once you know what your score is, you can determine whether you need to raise it. There are a number of <a href="https://www.jeffcookrealestate.com/blog/how-to-improve-your-credit-score/">ways to increase your credit rating</a>. A good first step is to look over your credit report and make sure there are no mistakes or inaccuracies. If there's anything on there that doesn't look right and it may be adversely impacting your credit, you should look into it. If you have a substantial credit card balance that you can afford to pay off, that will usually help your credit. It's hard to do a lot with short notice, but not opening new accounts or taking out other loans is very important if you're concerned about your loan application.
Avoid Changes in Employment
Having steady, reliable employment is a crucial consideration in the loan approval process. If possible, avoid making any major job changes prior to applying for a loan or during the process. They want to see that you have a job that you have and will stick with and that you'll have regular income to make payments from.
Create a Budget
Before you apply, it's important to have a good idea of what you can afford as far as monthly payments. You don't want to overextend yourself, and your application likely won't be approved if it doesn't look financially feasible. It's a good idea to put together a budget of all your income and expenses. Be sure to include everything, within reason; remember, it all adds up. Doing this is extremely important for determining how big of a loan you can afford to take out, and what type of house you'll be able to buy.
Prep for What You’ll Need
When making a loan application, financial institutions will ask you for quite a bit of <a href="https://www.bankofamerica.com/mortgage/learn/how-to-apply-for-a-mortgage/">information to aid in the review and decision</a>. This may include pay stubs, financial account statements, and tax filings. It's important that your taxes have been filed and that everything is in order. It relieves a lot of stress and hassle if you have what you need ready for when they ask.
Do Your Research & Choose Carefully
It's important to do thorough research so you know what you're getting into. As mentioned earlier, there's a wealth of helpful information online. Talking to a professional can be a good idea to get personalized assistance. You'll want to research the current housing market and be aware of current interest rates, which will help you know the best time to apply for a loan. You should also look around at different lending institutions to determine which ones have the best offerings and will provide the best service. Entering into a financial agreement with an institution of people you feel you can trust is really important, so take time to talk to folks.
The process can be a little intimidating, but if you do your research ahead of time, you'll find it's really not bad because you'll know what to expect. At the end of the day, this process is incredibly rewarding, especially when you are preparing to <a href="https://www.jeffcookrealestate.com/blog/why-are-people-moving-to-south-carolina/">move to South Carolina</a>!2019-12-04T10:26:00-07:002021-01-22T13:07:21-07:00Thomas "Jeff" Cooktag:jeffcookrealestate.com,2012-09-20:6071Should I Fix or Sell: Benefits to Selling a House As-IsGuest Blogger: Talia Spero
When you have decided to move on – whether you are upsizing or downsizing, accepting a spectacular job in a different city, or are craving a fresh start – think about what you really need to do to get your home market-ready. Although you may be tempted to go into renovation mode, you might be better off selling your house as-is. This decision is even easier to make when you follow our tips on <a href="https://www.jeffcookrealestate.com/blog/scrambling-to-sell/">simplifying your home selling process</a>.
Anything that affects the home’s operation such as a leaky roof, a broken furnace, plumbing, and electrical fixes, needs to be repaired. These are all things sellers are legally obligated to disclose.
Here are some things to consider before making a decision.
Renovation ROI may not be there
Most home renovations don’t pay off instantly. Complete kitchen and bathroom renovations add the most value to your home but also can be very expensive and cause the most disruption. If these renovations haven’t been done already, don’t start now. Focus on making sure your existing selling features of the home are in great shape.
Clean is more important than new
There’s nothing more cringe-worthy than the sight of someone else’s dirt or evidence of hard usage. Smudged walls, torn carpet, ratty towels, and appliances with handprints all over are small things that unpleasantly remind potential buyers that other people use this home. This is why <a href="https://www.hgtv.com/lifestyle/real-estate/the-ultimate-staging-guide-checklist">cleaning and staging your home</a> can be so beneficial. You want buyers to be able to picture themselves living in your home.
Keep up with the Joneses, but don’t be the Joneses
While it may be your dream to own a home with a pool or hot tub, it may not be someone else’s. The same goes for other “over the top” features/rooms. Those renovations may have no appeal to a family with an opposite lifestyle from yours. Don’t be the house that is too expensive for the neighborhood. This may cause your house to be overpriced compared to the other houses in the neighborhood. You could end up taking a huge loss as a result.
Curb appeal starts on the outside, not the inside
All the energy you spend on your interior renovations will be pointless if you forget about the exterior of your home. Now is the time to get rid of all the bikes your kids have outgrown, re-seed those patches of lawn where the grass is dead, and create a welcoming image. Check out our <a href="https://www.jeffcookrealestate.com/blog/4-things-to-do-to-freshen-up-your-curb-appeal/">4 tips on how to freshen up your curb appeal</a>!
Living in a renovation zone is stressful
If you’re fortunate enough to own a large home with a spare bedroom and multiple bathrooms, renovating may not be quite as challenging as it is for those in smaller spaces. Living in a home with a major kitchen or bathroom renovations can be hectic, loud, and messy, especially when you won’t be the one benefiting in the end. Before you put in thousands of dollars on a brand new kitchen transformation, consider painting or replacing cabinets.
2019-10-24T06:20:00-07:002021-01-22T12:14:50-07:00Cory Towlertag:jeffcookrealestate.com,2012-09-20:6115Process of Buying a Home<img src="https://assets.site-static.com/userfiles/1451/image/Signing_form.png" width="2344" height="1562" />
Guest Blogger: Inan Sikel
The process of buying a home can be overwhelming, especially for those looking to purchase their first property ever. And with no prior experience whatsoever, it can become an especially daunting task. To help make this process a little less vague, below is a general timeline for the process of buying a home. Although it is subject to change based on your situations and experiences, we believe that this guideline can help you build an expectation of what your process may be like.
Aside from learning <a href="https://www.jeffcookrealestate.com/blog/why-are-people-moving-to-south-carolina/">why people are moving to South Carolina</a>, it is important to start your home buying journey by reviewing your finances to prevent yourself from over-reaching. This includes checking and/or <a href="https://www.jeffcookrealestate.com/blog/how-to-improve-your-credit-score/">improving your credit score</a>, how much cash you have available, determining your potential down payment, and getting an understanding of how much is realistically affordable for you. This will often differ between buyers based on their preferences and circumstances. Once an understanding of finances is reached, it is time to move forward and research both the mortgage industry and listings in your preferred areas of choice. This in-depth research will be important, as it will serve as your foundational familiarity and re-consideration of your commitment to the designated areas. A common example would be for those who commute to work to see if the area is near accessible public transportation. All in all, getting an understanding of the area is important in deciding if the location is truly in your best interest and even for understanding why a listed home is priced the way it is.
After you decide what areas suit your needs, the next step would be to create a list of features that you would like your home to have to help narrow down options when searching. It is important to understand that these features should also be separated by those that are necessary compared to those are simply wants. This distinction may help buyers in the untimely position of having to compromise when deciding between homes. Often or not, most people will hire a real estate agent to help when home searching becomes too much, but can also prove to be a wise decision considering their experience and knowledge of the area of interest.
Once the search commences, it is recommended to have home inspections completed to learn more about the home and get information about the neighborhood from those who live there and neighbors. When the decision is finally made, it's time to make the offer based on your planned budget. During this time, it is vital to stay active during the bidding process and stay on top of any paperwork that comes your way.
When winning, complete a final walkthrough and follow-up any requirements before closing day. Congratulations! Prepare to pop open the celebratory champagne bottles because you have just bought your very own property!
Check out some of these <a href="https://www.hgtv.com/lifestyle/clean-and-organize/10-best-kept-secrets-for-buying-a-home">best-kept secrets for home-buying </a>for more guidance during this overwhelming but worthwhile process.2019-10-21T06:37:00-07:002021-04-30T11:50:31-07:00Lee Willeytag:jeffcookrealestate.com,2012-09-20:58995 Tips for First Time Home BuyersGuest Blogger: Talia Spero
Congratulations! After months – maybe even years - of preparation and excitement, you are finally purchasing your first home. But, it is important to not let the anticipation of being a first time home buyer to get in the way of making crucial decisions in the <a href="https://www.jeffcookrealestate.com/blog/process-of-buying-a-home/">home buying process</a>. By checking these to-dos off your checklist, the task of purchasing your first home will be less daunting and all the more exciting, especially when you see <a href="https://www.jeffcookrealestate.com/blog/why-are-people-moving-to-south-carolina/">why people are moving to South Carolina</a>!
1. Determine your budget
The very first thing a new homeowner should do is determine what they can or cannot afford. This will make your house-hunting significantly more effective. When <a href="https://www.daveramsey.com/blog/how-to-budget-for-new-home">calculating your personal budget</a>, including all additional costs, such as homeowner’s insurance, property taxes, etc. Once you have determined your budget, you will know which homes are within your reach.
2. Consider cost-saving moves
A first time home buyer is most likely looking to get as much bang for their buck. There are several potentially cost-saving moves you may be interested in; such as properties in foreclosure, or shop in neighborhoods with a high number of properties for sale to get the highest value for your dollar.
3. Determine where you stand with vendors
To make the buying process much easier, know where you stand with lenders. Being aware of how low or high your credit score is can allow you to shop around for the appropriate loan. Either way, there are still promising options available, but having a low credit score may increase your budget.
4. Determine your requirements
For most first time home buyers, an idea of what you are looking for is already planted in your mind. But, be sure to separate your needs from your wants. This will narrow down your search for a quicker home buying process.
5. Consider your potential down payment
Hopefully, you have some funds set aside to <a href="https://blog.hireahelper.com/the-home-buying-101-guide-for-millennials/" target="_blank">make a down payment for your dream home</a>. It is recommended to have at least 20% of the purchase price available, but be sure to look into many loan and mortgage companies that can help you make a down payment for significantly less.
Although there are many other tips to consider when buying your first home, these first five should be extremely helpful to you and your search. Go find your dream home! 2019-09-30T10:23:00-07:002021-03-09T12:57:50-07:00Cory Towlertag:jeffcookrealestate.com,2012-09-20:5943August 2019 Charleston Real Estate Market UpdateIn general, the trends that we have seen so far this year are continuing, which means that there are fewer homes for sale and the prices are inching up. The lack of available homes is particularly evident in the lower price range, where there are most of the buyers who are looking to get into the market. Interest rates are low which is good but the lack of affordable housing is starting to impact the market.
Here is a brief summary of the numbers from the August Charleston Market: and what they mean for anyone thinking of buying or selling.
New Listings - 2,184 (down 0.9%% from 8/18)
Rending Sales - 1,893 (up 25% from 8/18)
Closed Sales - 1,800 (down 4.6% from 8/18)
Days On Market - 54 (up 17.4% from 8/18)
Median Sales Price - $285,000 (up 9.4% from 8/18)
Percent of Asking Price Received -96.2% (- 0.6% from 8/18)
Months Supply of Inventory -3.5 (down 12.5%% from 8/18)
The number of new listings in the Charleston area has remained almost constant in August, and the inventory of available homes has dropped to 3.5 months. This is, of course, not great news for buyers. The number of pending sales is up 25% from last year at this time, which again could be a benefit of the drop in interest rates. Along with this good absorption rate, the slow down in the rate of new listings coming on to the market will keep us in a seller’s market. The median sales price has gone up and the percentage of asking price received has stayed been hovering at around 96%. The month's supply of inventory has been edging downward, which means that it is a good time to sell your home. The home type that is most in-demand in our area is a 4 bedroom home priced between $200,000 and $300,000. For more information on key indicators of a healthy housing market, click <a href="https://www.jeffcookrealestate.com/blog/key-indicators-of-a-healthy-housing-market/">here</a>.
Here at Jeff Cook Real Estate, we have many more eager buyers wanting to purchase. If you are thinking of <a href="https://www.jeffcookrealestate.com/blog/scrambling-to-sell/">selling your home</a>, now is a great time to give us a call to list your home. Call-855-HEY-JEFF today.
Stay up-to-date and check out the <a href="https://www.rate.com/research/charleston-sc">most current Charleston market updates</a>!2019-09-23T11:15:00-07:002021-01-22T11:01:16-07:00Cory Towlertag:jeffcookrealestate.com,2012-09-20:5942August 2019 Rock Hill Real Estate Market UpdateAs we head into fall, opposing factors and trends continue to influence the direction of the Real Estate market. The interest rate reduction from earlier this summer has not spiked sales the way one would have thought that it might have. Prices have risen and the supply of houses has dropped. In particular, the supply of affordable houses has dropped and there are not enough homes that first-time home buyers, who want to buy, can afford. The Rock Hill area, in general, is more affordable than other areas in greater Charlotte, which makes it very attractive to buyers.
Here are the numbers for August 2019, Rock Hill/Charlotte Region:
New Listings - 5,621 (down -1.4%)
Rending Sales - 5,096 (up 18.6%
Closed Sales - 4735 (down 2.9%)
Days On Market - 38 ( same 0%)
Median Sales Price - $257,850 (up 5.2%)
Percent of Asking Price Received 96.9% (up 0.1%)
Months Supply of Inventory 2.3 (down -17.9%)
Demand is strong and there are more buyers in the market than houses on the market. New listings are down, prices are higher and houses are selling quickly. As you can see, the supply of Inventory is very low, making it firmly a seller’s market. If you are a seller looking to sell your home, this is a great market in which to do that. For more information on key indicators of a healthy housing market, click <a href="https://www.jeffcookrealestate.com/blog/key-indicators-of-a-healthy-housing-market/">here</a>.
Give us a call at <a href="https://www.jeffcookrealestate.com/blog/who-is-jeff-cook-and-why-is-he-in-rock-hill/">Jeff Cook Real Estate-Rock Hill</a> for an accurate estimate of your house’s value in this market. If you are looking to buy, reach out to us for help finding a house. We can give you referrals for financing to purchase and are experts at negotiating. Call us today at 855-Hey-Jeff.
Stay up-to-date and check out the <a href="https://www.rate.com/research-old/rock_hill-sc-29730">most current Rock Hill market updates</a>!2019-09-23T11:12:00-07:002021-01-22T11:00:07-07:00Cory Towlertag:jeffcookrealestate.com,2012-09-20:5946Here Are The Types of Mortgages ExplainedThe easiest step when buying a home is learning <a href="https://www.jeffcookrealestate.com/blog/why-are-people-moving-to-south-carolina/">why people are moving to South Carolina</a>! On the other hand, homebuyers face an overwhelming decision when considering what type of mortgage loan is right for them. In this scenario, a single decision is enough to affect a buyer’s finances, and in the case of a rash decision, one that can negatively plague them indefinitely. If you’re in the process of deciding which mortgage loan is right for you, it is important to know the basic types of mortgage loans available. The following are popular mortgage loans to help you get a grasp on the information to help you decide which financing option is the one for you.
To start off, it is important for a borrower to decide if they want a <a href="https://www.investopedia.com/mortgage/mortgage-rates/fixed-versus-adjustable-rate/">fixed-rate or adjustable-rate mortgage</a>. A fixed-rate mortgage loan keeps the same interest rate throughout its term entirely, which means that monthly payments are predictable and will never change. On the contrary, an adjustable-rate mortgage loan will have an interest rate that will adjust over time, resulting in either increases or decreases in payments based on the adjusted interest rate. It is also important to note that there are also hybrid loan options, which start as loans that start off with fixed-rates for a period of time and then adjust from thereafter.
Furthermore, borrowers can decide between more conventional loan options or those insured by the government. A conventional home loan is a loan that is not insured or guaranteed by the federal government as opposed to <a href="https://www.usa.gov/mortgages">government-secured mortgages</a>, such as FHA, VA, and USDA/RHS mortgage loans, which are. One of two popular types of conventional loans includes conforming loans that fall within limits set by government agencies that back most U.S. mortgages, such as Fannie Mae or Freddie Mac.
The other types of conventional loans are non-conforming loans, which don’t meet the standards mentioned previously. For example, jumbo loans are one of those loans that don’t meet the standards of either mortgage agencies. Rather, these loans are much riskier for the lender as they are larger in size, which is why they have larger interest rates and resulting in bigger monthly payments. Borrowers must meet certain requirements, such as good credit and having a larger down payment, for jumbo loans to be appropriate.
Deciding on a type of mortgage is only one step in <a href="https://www.jeffcookrealestate.com/blog/how-to-apply-for-a-home-loan/">the home loan application process</a>, but it is so important to do your research on what options are available to you and what will best suit you. With a preface to mortgage loans available, consider all your financial planning budgets and homeowner needs to ultimately help you determine what mortgage loan is best for you. 2019-09-19T11:23:00-07:002021-01-22T10:58:08-07:00Cory Towlertag:jeffcookrealestate.com,2012-09-20:5948The Top Reasons to Invest in South Carolina Real EstateGuest Blogger: Austin Winder
Historically, land has been a safe long term investment. While stocks can fall and companies can close, land is an investment that will eventually bounce back from any downturns in the market. With interest rates currently low and the housing market booming, that is as true now as it has ever been.
Cities such as Charleston are particularly appealing to investors. Strong job growth, a growing population, and low taxes have all made owning in this vibrant city a smart bet for both seasoned investors and those looking to dip their toes in the water.
Companies are Investing in South Carolina
For buyers looking for property, prices are forecast to continue to climb. In 2019 alone, the Charleston real estate market should see an increase of 5%, a number that highlights the robustness of the current market. With new factories having recently been opened by Mercedes Benz and Volvo, and strong hiring from more established businesses such as Boeing and Bosch, that growth isn't likely to slow down any time soon.
That makes buying a starter home in or near the city an appealing prospect, as when it comes time to move or upgrade, that initial investment will pay off with a nice nest egg that can be put towards the next home purchase, or just into a savings account. Selling isn't likely to be difficult, either, in a state with a growing number of retirees looking to downsize while growing families are upsizing.
No Real Estate License Required
Investment buyers have even more to celebrate. With <a data-cke-saved-href="https://www.allied.com/moving-resources/relocation-guides/regional-guide-southeast" href="https://www.allied.com/moving-resources/relocation-guides/regional-guide-southeast" rel="nofollow">median home prices of $160,738</a> and average rental prices of about 1,100, a buyer with 20% down and a good credit history can find a home whose mortgage will be fully covered by their renters year one. Nor does the state require a license to become a landlord. Additionally, a large local military and student population means that there is no shortage of high quality renters looking for stable homes to live in during their time in the city. Over the course of a 20 or 30 year fixed rate loan, rent will only continue to rise while the mortgage payment will stay steady, slowly resulting in ever larger monthly gains. Best of all, down the line, when it comes time to sell, it will have been the renters who paid off that mortgage.
Tourism is Growing
Tourism is also up, which trickles down into the real estate market. The historic walking tours, foodie reputation, and the <a href="https://www.jeffcookrealestate.com/blog/south-carolina-monthly-focus-charlestons-great-outdoors/">great outdoor adventures</a> to be had in Charleston draw millions of tourists each year. Those tourists pump billions into the city's economy.<a data-cke-saved-href="https://chstoday.6amcity.com/the-economic-impact-of-tourism-in-the-greater-charleston-s-c-area/" href="https://chstoday.6amcity.com/the-economic-impact-of-tourism-in-the-greater-charleston-s-c-area/" rel="nofollow"> Visitors spent over 7 billion in 2017</a>, almost double the 2016 number, just in the greater Charleston area alone, and that number keeps growing.
Savvy buyers who have the time and inclination can translate those numbers into a business opportunity by renting out rooms or entire homes on AirBnB or other similar sites. Beach rentals can be particularly profitable through this strategy. This can mean even homeowners who are living in their investment property themselves can use visitors to pay their mortgage. While running an AirBnB is more work than managing a long term rental, it can also result in much higher profits, especially in the busy season.
All this goes to say that there has never been a better time to invest in real estate in South Carolina. South Carolina prices are about 30,000 below the national average. Combined with low unemployment rates and booming business, this sweet Southern state is increasingly becoming <a href="https://www.jeffcookrealestate.com/blog/why-are-people-moving-to-south-carolina/">a haven for homebuyers</a> looking for somewhere to settle down. Whether in the city of Charleston or in one of the surrounding counties, great deals abound. It just needs the right buyers to take advantage of them.2019-09-12T11:36:00-07:002021-01-22T10:52:05-07:00Cory Towlertag:jeffcookrealestate.com,2012-09-20:59903 Steps Everyone Should Take if They Want to Own Real Estate by Age 30The term “adulting” typically describes the time in life when people assume more responsibility, and find it time to start making grown-up decisions. This time may include becoming steady in one’s career or relationship, paying bills you didn’t realize existed, and even considering purchasing your first real estate property! As scary as it may sound, and as many doubts as you may have about affording it, yes it is possible to own real estate by the age of 30! In order to do so smartly, it is crucial to do research and educate yourself.
If you are someone under 30 looking to purchase real estate, amidst the high priced real estate market, and potential student loans from college, you can still buy your first home or rental property! However, it is important to follow these three vital steps when starting <a href="https://www.jeffcookrealestate.com/blog/process-of-buying-a-home/">the home-buying process</a>. First things first, create a goal for your property. Next, quantify what your down payment will need to be. And lastly, make sure you do ample research on the real estate market.
Establishing your property goal price is important because it will allow you to determine what you can currently comfortably afford and what should be left for your dream house goals in the future. It’s important to decide if you’re looking for a residential property or a commercial property, and establishing whether it will be a place you reside or an income property. <a href="https://www.jeffcookrealestate.com/blog/why-are-people-moving-to-south-carolina/">Location</a> is also an important aspect of your property goal. Currently, the median value for a home in the United States is $226,800, according to <a data-cke-saved-href="https://www.zillow.com/home-values/" href="https://www.zillow.com/home-values/" rel="nofollow">Zillow</a>, but that can vary greatly based on location and the size of the property you are looking to purchase. Decide how much space you need, and how much you’re looking for before searching for a property. It is also imperative to consider the costs of utilities that may be associated with your property if you plan to live in it. Heating and cooling a smaller home is much cheaper and more efficient than heating and cooling one that has more space than you need!
Figuring out what your down payment will be is the next crucial step in the process. If you quantify how much money you are looking to put down, based on your established price goal, you will be able to <a href="https://www.daveramsey.com/blog/save-down-payment-while-renting">calculate how much you need to save</a>. If you know exactly what age you’d like to purchase a property by, decide how much money you will need to save each month before then to efficiently accumulate your down payment goal. This process of saving can occur much quicker if you are purchasing the property with another owner’s assistance!
The last step is to do your research on the real estate market itself in your desired area. This is imperative when purchasing a property. For example, researching the school district for the town you’re looking to move into can be vital to your search. Although a better school district may mean higher taxes, this may be something important to consider if you plan on starting a family or eventually reselling your home. Taking note of fixer-uppers on the market is also an important step in purchasing a property. Buying a fixer-upper is often overlooked, but it can be a great way to save money when purchasing your first property. If you’re deciding to go down the route of a fixer-upper, make sure you create a budget that incorporates both the price of the home and the renovations. Overall, these are three steps that young aspiring property owners should take to ensure that they can achieve their goal by the age of 30. With the proper planning and knowledge, your dream property by 30 is definitely attainable!
Ready to get start your process? Click <a data-cke-saved-href="https://www.jeffcookrealestate.com/c/Get-Pre-Approved/" href="https://www.jeffcookrealestate.com/contact/" rel="nofollow">here</a> to get pre-approved for a mortgage loan!2019-08-29T06:41:00-07:002022-10-20T21:19:34-07:00Cory Towlertag:jeffcookrealestate.com,2012-09-20:5992Save Money on Your Summer Energy Bill with These HVAC Tips and Tricks As the spring season transitions into the hot, grueling days of summer, there’s no better feeling in the world than to escape the heat and stay cool inside your home. With the kind of summer heat that people have to deal with these days, it’s hard to let a day pass without running the AC system at full blast. However, that also means you have to brace yourself for the huge energy bill waiting to greet you at the end of the month.
While saving money on energy bills may not be the first thing on your mind as the temperatures soar, you don’t have to break the bank to keep yourself comfortable. Your home AC unit may be a power-devouring machine, but there are still ways to cut down energy consumption amidst sweltering summer heat, starting with a scheduled <a data-cke-saved-href="https://www.fountainhillsair.com/air-conditioning-repair/" href="https://www.yelp.com/search?cflt=hvac&find_loc=Charleston%2C+SC" rel="nofollow">AC repair</a> and maintenance.
Try these HVAC tips and tricks for more energy savings this summer that can even help <a href="https://www.jeffcookrealestate.com/blog/a-sellers-guide-how-to-attract-a-millennial-home-buyer/">increase your home's curb appeal for millenial home buyers</a>.
Give your air conditioning system an upgrade
Taking energy-saving seriously may mean going for a system upgrade. Since heating and cooling your home makes up for almost half of your energy consumption, investing in a more energy-efficient HVAC system is a wise move that’s bound to result in more significant savings in the long run.
When upgrading your air conditioner, make sure to look for Energy Star certified units that have high EER (Energy Efficiency Ratio) and SEER (Seasonal Energy Efficiency Ratio) ratings as they are 15% more efficient than the other models in the market. While you’re at it, you might want to consider switching the rest of your appliances to Energy Star certified device.
Fit your home with a programmable thermostat
Programmable thermostats have become a trend among smart homeowners for several reasons. The device allows you to set a specific temperature for different times of the day.
In the summer, you can schedule a higher thermostat for the hours when you're at work, and the children are in school. And then, you can program it to start cooling down when it's almost time for your family to get home. This trick lowers down your AC's energy use when you're out of the house, so you're saving money without sacrificing comfort.
Installing a programmable thermostat is something that you can do on your own, but you can also call in a qualified HVAC professional if you aren’t comfortable with mounting the device yourself.
Just a reminder: When installing the thermostat, make sure it’s not anywhere near lamps, household appliances, or areas exposed to direct sunlight. Thermostats are heat sensitive, and these factors might cause the AC system to run longer than necessary.
Regulate your home’s day time and night time temperatures
Even without a smart thermostat, you can still control your home’s temperature and cut down energy costs.
At night or whenever you’re at home, keep your air conditioning at 72 degrees as this is the ideal temperature both for comfort and energy savings. As you leave the house during the day, don’t forget to set the thermostat to around 75 degrees. The trick is not to go beyond 3 to 5 degrees of your home’s normal temperature so your system won’t have to use more energy to cool down space again.
Clean your HVAC system at least once a year
Clogged and dirty filters can affect the performance and energy efficiency of your HVAC system. Changing them every three to four months helps ensure that they function as intended.
Aside from cleaning and changing the air filters regularly, it's also essential to schedule a professional AC maintenance service at least once, or if possible, twice a year.
Many homeowners try to skip these maintenance calls in an attempt to save money, only to find themselves faced with more expensive consequences in the future. Keep in mind that the slightest inefficiencies in your system can cause a spike in your electric bill.
Professional maintenance will help you detect issues in your HVAC before they turn into bigger problems. Think of it as an investment that’s guaranteed to yield positive returns many times over.
Make gravity work to your advantage
During the hot summer months, heat rises to the ceiling or the higher areas of your home. When there’s too much hot air, your air conditioner may take longer to cool the space, thus using more energy in the process.
So, how do you displace hot air faster? Fans.
Ceiling fans move the air around the room and help keep an even temperature, so your HVAC doesn't have to work too hard during hotter days. The rest of the time, flipping on the fan will allow you to raise the thermostat a few degrees higher without feeling a slight change in the room's temperature. Fans may seem old-fashioned, but they come in handy when your HVAC system needs a little break.
Keep your windows covered
What some people fail to realize is that sunlight, whether direct or indirect, can make it harder for your AC system to cool your home. Thus, one of the easiest ways to ensure energy savings this summer is closing your window blinds, especially during the day time.
If your entire family spends most of their time in school or at work, consider leaving the blinds closed all day. For homes with large windows, investing in highly reflective shades can help reduce heat gain by almost 40%. Double-glazed windows are another excellent way to insulate your home and <a href="https://www.jeffcookrealestate.com/blog/increase-the-value-of-your-property-with-these-design-ideas/">increase your property value</a>.
Use the right size air conditioner
Many households don’t pay that much attention to whether or not their AC suits the size of their home, which is actually one of the reasons why they end up paying more for electricity.
If your system is too small, then it’ll have to take more time before reaching and maintaining your desired room temperature. If it’s too big, it will reach that temperature faster and then shut off, which is a problem because it won’t be running long enough to dehumidify the air properly. Installing the right air conditioner size is the balance you need to stay comfortable while saving energy.2019-08-26T06:58:00-07:002021-01-22T10:17:40-07:00Cory Towlertag:jeffcookrealestate.com,2012-09-20:5290Is Getting a Home Mortgage Still Too Difficult?<img src="https://assets.site-static.com/userfiles/1451/image/getting-a-home-mortgage.jpg" alt="Is Getting a Home Mortgage Still Too Difficult?" title="Is Getting a Home Mortgage Still Too Difficult?" height="410" width="750" />
Potential homebuyers are always cautioned to be aware of mortgage lending standards and the difficulty they might face when trying to obtain a mortgage. Credit availability is expanding, making it easier to get a mortgage now than it was a year ago. The market is still tight however, and homebuyers should be prepared to shop around until they find a lender who is offering something that will meet the needs of their family.
Mortgage lending companies have high standards so it is important to make sure you and anyone else who will be included on the mortgage have their credit in check. <a href="https://www.jeffcookrealestate.com/blog/here-are-the-types-of-mortgages-explained/">The mortgage market</a> is strict because lenders do not want to be put in a situation where they are forced to repurchase loans that are not paid on. They also do not want to end up in a litigation situation due to loan issues.
What Has Happened to the Number of Mortgages?
Due to the strict nature and requirements of the lending companies, the number of mortgages given out has significantly dropped. A report by the Housing Financial Policy Center at the Urban Institute showed that about 6.3 million fewer mortgages were given out between 2009 and 2015. The reasons behind this statistic are strict regulations and policies. These mortgages would have been granted if the lending standards where more reasonable.
Mortgage companies rely on calculations to determine if a home buyer will become delinquent on their payment. They will not give you a loan if you are too much of a risk for them. Credit history has a huge impact on this decision since lenders can see how often you pay back your debts. The history they receive is extensive. This view into your financial past causes lenders to take less risk when lending to you for your mortgage.
The Effect on the Economy
<a href="https://wallethub.com/edu/hl/mortgages-and-the-economy/117/#:~:text=When%20the%20economy%20is%20strong,lead%20to%20an%20economic%20boom.">Mortgages and the economy are highly connected</a>. The housing market is recovering at a slower pace than it should since less potential homebuyers are being offered loans. While the market is still recovering with positive trends, fewer buyers can create a strain on other economic factors like home goods or construction jobs.
Bottom Line
After the housing market boom and bust, mortgage lenders became stricter in their lending standards. It is not impossible to get a mortgage loan, but it can still be difficult for potential home buyers. Stay on top of your credit and make sure you and anyone else who is applying are in a good financial position so you can be approved for a loan. It is important to research different companies and their requirements to ensure success in getting a mortgage. <a href="https://www.jeffcookrealestate.com/blog/why-are-people-moving-to-south-carolina/">Move to South Carolina</a> and let the expert Jeff Cook Real Estate Team help you throughout the entire process!!2019-07-18T11:32:00-07:002021-01-21T13:51:50-07:00Cory Towlertag:jeffcookrealestate.com,2012-09-20:5288Will Increasing Mortgage Rates Impact Home Prices? <img src="https://assets.site-static.com/userfiles/1451/image/mortgage-rate-projections.jpg" alt="Will Increasing Mortgage Rates Impact Home Prices? " height="410" width="750" />
There has been some discussion recently on<a href="https://wallethub.com/edu/hl/mortgages-and-the-economy/117/#:~:text=When%20the%20economy%20is%20strong,lead%20to%20an%20economic%20boom."> home prices in relation to mortgage rates</a>. Some believe if there is a rapid rise of mortgage rates, home prices should decrease. Logically it makes the most sense for the price of the house to drop when interest rates are rising, but this is not always the case.
This theory of home prices decreasing is typically discussed by future home buyers. As a buyer you would like to think if you are paying higher rates on <a href="https://www.jeffcookrealestate.com/blog/here-are-the-types-of-mortgages-explained/">your mortgage</a>, you should be able to see a decrease in cost somewhere else. Unfortunately, these rates are rising because the economy is in better shape. As the economy succeeds, incomes rise, rates go up, as well as the price of the home.
A recent study by the John Burns Real Estate Consulting found mortgage rates have very little impact on the cost of the home. The housing market and price increases are affected by things like job growth in the area and rising wages. Coincidentally, these same factors are causing the rise in mortgage rates since people can afford to take out more.
Bottom Line
As the economy progresses and strengthens, mortgage rates and home prices will fluctuate. It is a misconception as rates increase, home prices will decrease. Advances in the economy have shown that rates and home prices are more likely to increase together. <a href="https://www.jeffcookrealestate.com/blog/why-are-people-moving-to-south-carolina/">Make the move to South Carolina</a> and our team of experts will help you every step of the way to navigate the housing market.2019-07-18T11:26:00-07:002021-01-21T13:28:35-07:00Cory Towlertag:jeffcookrealestate.com,2012-09-20:5970Buying A Home vs. Building A HomeDeciding to move is a big step that can lead to many choices. The abundance of choices that you become faced with when moving can range from big to small, but each is important in achieving your dream home. A major decision to make once you’ve decided you want to move is whether you’d like to buy a home or build a home. Both of these options have both pros and cons associated with them, so it is important you weigh all of the elements before making a choice!
Buying A Home
Buying a home is more of the traditional option, as it can be a quicker and easier. If you go this route, you’ll find yourself viewing an abundance of homes throughout your desired locations. When viewing homes it is important to assess every aspect of the home, to look for damage and to see what you may or may not like about the home. After doing so, you can assess how much money you may need to put into the home before it becomes your perfect dream home. It is also important that you have a building inspector check the home before you settle on it, to see if there are any major areas you may need the seller to fix. These can create for any additional costs, so it is important to be wary of the inspector’s report.
Once you find a home that you love, and the logistics are settled with the inspector’s findings, you can make an offer on the home. How much you offer can be based on the seller’s asking price and your assessment of how much work needs to be done in the home. If the home is completely move-in ready and renovated, chances are the sellers will stick to their asking price, as they know it can be achieved. However, if the home needs to be renovated once you move in, it is more likely that a seller would accept a lower offer to sell the house quicker. This process can be slowed down if there are other parties interested in the home. It can create for a bit of a competitive time for the bidders and the sellers. If the seller approves your offer you will have to coordinate the logistics of the closing costs and paperwork, and then you’ll be on your way to moving into your new home!
A benefit associated with buying a home is that it can be done in a timely manner, much quicker than building a home. However, if your home needs fixing up, you can still be faced with a wait to move in. Buying a home also ensures an upfront cost. You are able to determine exactly how much you’re purchasing the home for, and then can anticipate for an additional improvement costs that need to be made. The convenience of buying a home, ensures that you know exactly how the home will look before buying it. Some cons associated with buying a home is the lack of personal touch it will have. When you buy a home, you are buying someone else’s construction, which although not a bad thing, might not be your exact taste in design. Buying a home can also create for difficulty as the process working with the seller may be tedious and take a while for them to settle.
Building A Home
Building a home can be a large task to take on, and a less traditional route. When you build a home, you first need to find the perfect location with land for sale. Once you are approved of your offer on the land, you’ll need to find a building company that can create your dream home. After you and the builder have developed the plans for your new home, the building process can begin.
Some pros associated with building your own home is that you are able to design, from scratch your perfect home. You are the one selecting every element that is put into the home from the roofing to the flooring, to the cabinetry, the home is composed of completely of your own flair. The home is completely constructed based on your wants and needs! Since the home will be built new, you can ensure that it is built efficiently with a new HVAC system and energy-saving options. It can also be a healthier alternative, as you can be sure that the new construction is completely free of any toxic materials, an old home may have, such as asbestos. The home will also generally have a higher resale value as it is newer and more recently updated than an older home you may buy. A huge con that goes along with building your own home is time and money. It is very difficult to set a specific budget and timeline for building your own home, as there can be many scenarios of the home’s construction taking longer and costing more than originally anticipated. In many cases, those who build their own home end up spending more money than if they have bought an originally built home, so this is something to consider if money is a strict factor in your decision.
Overall, buying and building a home are both great options, but they are very different. It is important to know what you should anticipate with either route, but it is also important to note that through either buying or building, you can still have your dream home. At the end of the day, the decision you make needs to be one that is best for you and your family, and once you make that choice, you’ll be able to start the journey of finding the perfect dream home for you!2019-01-31T14:15:00-07:002021-08-09T05:49:08-07:00Megan Garrelltag:jeffcookrealestate.com,2012-09-20:6006What is a Mortgage?To a<a href="https://www.jeffcookrealestate.com/blog/5-tips-for-first-time-home-buyers/"> first time home buyer</a>, the world of mortgages is intimidating, confusing, and downright overwhelming. In fact, even experienced home buyers dread the word “mortgage.” Borrowing thousands of dollars and committing to pay for the long haul is a naturally overwhelming step, but with a little research, anyone can become more comfortable and prepared for their<a href="https://www.forbes.com/sites/trulia/2016/10/25/mortgage-101-breaking-down-the-basics/?sh=e3781b841c7b"> first mortgage</a>. Pro tip: A good credit score will help lower your monthly payments and/or your interest rate. See how you can<a href="https://www.jeffcookrealestate.com/blog/how-to-improve-your-credit-score/"> improve your credit score </a>before applying for your mortgage.
What is a mortgage?
A mortgage is a loan that will enable the buyer to pay for a home. Most mortgages cover 80% of the cost of the home. The loan can be paid back in 15- 30 years. There are a surprising <a href="https://www.jeffcookrealestate.com/blog/here-are-the-types-of-mortgages-explained/">number of mortgage types</a> out there, so shopping for a mortgage lender is an important first step in the home buying process. Getting “pre-approval” for a mortgage will show you what amount of money you can comfortably afford to borrow and repay. This will help you narrow your home search to properties within your budget.
Where can I get a mortgage?
Mortgages can be obtained from several different sources. Banks and Credit Unions and easy places to start if you already have a bank with which you work comfortably. This will give you some interest rates to compare and will provide an idea of a typical monthly payment in your price range.
Nonbank lenders such as Quicken Loans are also places to check for your home loans as well. They are often willing to work with borrowers that may have a less than perfect financial history and maybe a great place for a first-time borrower.
Mortgage brokers are financial experts who can help you find loans quickly because they work with many various lenders and basically do the “shopping around” for you. Once you have found a lender, you will be expected to put down a downpayment to show that you are committed to this investment. Many lenders require 20% of the purchase price to be paid upfront, but you can find others that will require less than that if you shop around. After your down payment, the rest of the money that you borrow is called the principal, and the extra money that you are charged for the privilege of borrowing is called the interest. (The interest rate is calculated as a percentage of the amount that you borrow.) Interest can be called a fixed interest rate which remains the same for the life or the loan or an adjustable interest rate which starts lower and then adjust upward during the life of the loan to reflect the current lending rates. Adjustable interest rates can be risky because your loan payment can increase to a point that may not keep you within your budget.
Once you are armed with some knowledge about what mortgages are, what type of lenders are available, and what amount of money you can be pre-approved to borrow, you are well on your way to buying your first home! Your realtor can also be very helpful in pointing you to a great loan advisor and in suggesting lending options with which you may not be familiar. Realtors are excellent coaches in the homebuying process, so be sure to take advantage of their experience and expertise as you embark on the adventure of a lifetime!
Happy Home Buying!2018-06-26T07:22:00-07:002021-08-30T12:31:38-07:00Thomas "Jeff" Cooktag:jeffcookrealestate.com,2012-09-20:6032Fast Cash for Your Home! The reason for a homeowner wanting to sell their home is typically one of three things: (1) They are moving out of the area, (2) they are upsizing because their family is growing, or (3) they are downsizing their empty nest for retirement.
Occasionally there is an extreme circumstance where a homeowner needs to <a href="https://www.jeffcookrealestate.com/blog/scrambling-to-sell/">sell their home fast</a>. He or she might be behind on payments but trying to <a href="https://www.hud.gov/topics/avoiding_foreclosure">avoid foreclosure</a> to save their credit or might already be in foreclosure. The homeowner might be relocating because of a job or PCSing to another military base. Or perhaps they just inherited the house through an estate but don’t live in the area or want to offload the house.
Whatever the reason, selling a house in these conditions can be a headache or a hassle in more ways than one. You have to worry about possible repairs, keep your house clean for showings, and deal with a long wait till closing while the buyer goes through financing, along with an inspection and appraisal. The process can be even more difficult if you are trying to buy another home at the same time or are trying to sell the house from afar. This is where our <a href="https://www.jeffcookrealestate.com/sellers/jeff-cook-offers/">immediate buyout program</a> comes into play.
We have a sister company called <a href="https://www.jeffcookrealestate.com/sellers/jeff-cook-offers/">Jeff Cook Offers </a>that specializes in being the solution for homeowners who need to sell their house fast. Jeff Cook Offers can buy homes as-is for cash and with a quick closing. Are you in need of an immediate buyout? Get the service you deserve from the people you can trust. Call us today at 855-HEY-JEFF.2018-01-08T09:19:00-07:002021-08-30T12:34:42-07:00Thomas "Jeff" Cooktag:jeffcookrealestate.com,2012-09-20:6040We Can Get Your Home Sold Fast And For Top Dollar!Our bottom line has always been that we will <a href="https://www.jeffcookrealestate.com/blog/scrambling-to-sell/">sell your house fast</a> and for top dollar. That’s the truth and we have the statistics to prove it! According to data accumulated from the Charleston Trident MLS, we sell homes, on average, for 98% of the asking price and within 30 days or less! In August alone, the average days on market for the Tri-County was 51, while ours was 26. Because we sell homes 30 days faster than the average agent, our clients make one less mortgage payment. Plus, while the <a href="https://www.charlestonrealtors.com/marketreports/">Tri-County</a> sells homes for an average of 96.5% of the asking price, we are able to get our sellers 98.3% of the asking price. This means you could walk away with an extra <a href="https://assets.site-static.com/userfiles/1451/file/download_3.jpeg">$3,000 in your pocket</a> when you list with us versus the other guys. If the statistics aren’t enough for you, we’ve compiled a few stories from our most successful listing agents.
A home seller on Thomaston Avenue listed his home with another company and had it under contract for $192,000 but walked away from the closing table due to dissatisfaction. He then met with Brad Williams out of our Mount Pleasant office who listed the home for $202,900. Within TWO DAYS the home was in a multiple offer situation and went under contract for $205,000. Our seller got to closing in 27 days and left with $13,000 more in his pocket than he would have if he stayed with his previous agent!
A Bridges of Summerville home seller had their home on the market with another agency for 142 days. Unhappy, they decided to make the switch to Jeff Cook Real Estate and met with Jessica Lloyd in our Oakbrook office. Jessica listed their home and got a contract on it within 3 weeks of the new listing being on the market, for full asking price thanks to the Jeff Cook Marketing System!
A home in Carillon at The Ponds was listed for 10 months with two different agencies before coming to Jeff Cook Real Estate. Holly Carder, Sales Manager at our Downtown Summerville office, met with the homeowner and listed his house at $10,000 more than it was previously listed for. The home was under contract within 12 days with a CASH buyer and closed 16 days later. The entire transaction from listing to closing lasted 28 days, after 288 days listed with other companies. Not only that, the seller left with $5,000 more in his pocket than he would have with those other companies!
Listing manager Mike McDonagh, of the West Ashley office, listed a home on Iron Road last month and found himself in a multiple offer situation the very same day! The house was under contract the next morning for $5,000 over asking price!
If the stats can’t sway you, we hope our agents’ testimonies will! If you need more encouragement, check out some of our<a href="https://www.jeffcookrealestate.com/blog/jeff-cook-real-estate-your-neighborhood-expert/"> past client testimonies</a> too. If you’re considering selling your home, let us get top dollar for your home in the fastest amount of time! Call 855-HEY-JEFF today!2017-09-25T10:32:00-07:002021-01-20T13:33:12-07:00Cory Towlertag:jeffcookrealestate.com,2012-09-20:6043The Home Buying Process<img src="https://assets.site-static.com/userfiles/1451/image/Buying_A_Home.png" width="1200" height="800" alt="How to Buy A Home" />
<a href="https://www.hgtv.com/lifestyle/clean-and-organize/10-best-kept-secrets-for-buying-a-home">Buying a home</a>, especially a <a href="https://www.jeffcookrealestate.com/blog/why-are-people-moving-to-south-carolina/">first home in South Carolina</a>, is such an exciting time in your life. However, it can also be a nerve-wracking experience. A home will most likely be the biggest purchase you will ever make, therefore, no decision can be taken lightly. Are you ready for it?
As much as we would like to assist you in a home purchase, we want to make sure owning a home is the best thing for you. So how do you know if you should buy or rent? Buying a home starts an investment where you can build equity. You are no longer throwing away money on rising rent, that can often be more expensive than a mortgage. However, now you are responsible for home maintenance. If the HVAC unit goes down, that’s on you to fix. But if you’re renting, your landlord incurs all costs and their property management company oversees the repair process. Plus, if you don’t know where you’ll be in the next few years, renting can be more convenient. Now that you’ve thought that through, are you ready to go? If so, let’s follow the steps of the home buying process.
Step 1: Pre-Qualify
To begin the home buying process, you need to get connected with a buyer agent and a loan officer. We work closely with Tabor Mortgage to provide the best mortgage services to our clients. Tabor will get you pre-qualified for a loan that best fits your budget/price range. The loan officers will gather tax returns and any other loan/credit card payments to determine your debt-to-income (DTI) ratio. It is best that your DTI ratio is no more than 43%. With preapproval in hand, you are ready to start home shopping!
Step 2: Find Your New Home
Now that you know your price range, you need to decide on your parameters. What area of town would you like to live in? Are you looking for a starter home or would you like to find something that can fit a future growing family? Does the home need to be located in a specific school district? Do you need one story or two? How many bedrooms and bathrooms do you need? It may be overwhelming with how many options are out there. Make sure to lean on us for advice on what’s going on in the market so you can get the most home for your money.
Step 3: Make An Offer
Once you’ve found your dream home, it’s time to put in the offer! We are here to research the comparable homes in the area to make sure the listing price of the home is a fair one and write up your offer to submit to the listing agent.
Step 4: Escrow Period
<a href="https://www.jeffcookrealestate.com/blog/explaining-escrow/">Once under contract</a>, it’s time for our closing team to step up to bat. Our closing coordinators are the liaisons between the 52 people involved in the contract to close process! They will assist you in getting an appraisal and home inspection scheduled. If any red flags show up on either report, your Jeff Cook agent will negotiate any changes in price, repairs, and closing costs. Then we’re headed for a clear to close. Your lender will also be in constant communication with you, continuing to request updated documents from you for the clear to close. It is crucial that you do not anything to affect your credit and loan approval during the ratified period as the lender will pull credit again during closing. This means do not open any new credit cards, finance big purchases, buy a car, or change jobs.
Step 5: Closing Day
The closing day is upon us! It is extremely important to do a final walk through the day of your closing. Make sure anything you negotiated to have left in the house is still there. Flip the light switches, turn on the water, run the appliances, and flush the toilets. Make sure there are no new issues before you sign your name on the dotted line. Don’t forget to bring a cashier’s check for any closing costs including title search fees, attorneys’ fees, and taxes, and homeowner’s insurance payments for escrow. Once all closing documents are signed by all parties, copies will be made and the keys will be turned over to you! Now it’s time to celebrate!2017-08-16T10:42:00-07:002020-12-10T14:22:31-07:00Cory Towlertag:jeffcookrealestate.com,2012-09-20:6047Can You Really Trust the Zestimate?<img src="https://assets.site-static.com/userfiles/1451/image/Can_You_Trust_A_Zestimate.png" width="1200" height="800" alt="Can You Trust The Zestimate" />
When you’re thinking about selling your home, the first step is often pulling up Zillow and request your free home value. More often than not, the estimate that Zillow will give you, also called a Zestimate, will be a lowball. Occasionally it will also deceive you, giving you an estimate far above what your home is really worth. Regardless of the way the Zestimate falls, either price could be detrimental to the sale of your home.
The <a href="https://www.investopedia.com/articles/personal-finance/111115/zillow-estimates-not-accurate-you-think.asp#:~:text=According%20to%20Zillow%2C%20most%20Zestimates,the%20Zestimate%20will%20be%20off.">discrepancy in Zestimate accuracy</a> is occurring across America! There is currently a homeowner in Illinois, Barbara Anderson, who has filed a lawsuit against Zillow for low balling her home’s worth and creating issues with the sale of her home. She has been trying to sell her home for $626,000 but Zillow has published a Zestimate of her house for $562,000. Now anyone looking at her home on Zillow will submit a lowball offer to buy the home at the Zestimate price instead of the actual value of her home or assume the list price her home is outrageous and will pass it up, when in fact, other homes around here are selling for up to $726,000.
On the other end of the spectrum, one of my employees recently had an appraisal done on their home by a licensed appraiser. The report came back that the home was worth around $180,000. She tested out the free home value option from Zillow and received a Zestimate of $200,000. Had she not already been familiar with the inconsistencies of the Zestimate, she may have struggled to find an agent who would be willing to list the home at the price of the Zestimate, or she may have found an agent to agree only to run into trouble when offers start rolling in. A buyer would request an official appraisal from a licensed appraiser who would reveal that the home is listed much higher than the value of the home. In most circumstances, the buyer will back out of the deal, not wanting to pay more than the house is worth.
What does that mean for you? Remember, a Zestimate is only an ESTIMATE (not an appraisal) and does not take into account any improvements to your home and may even have some features of your home listed incorrectly. Let us help you fight the Zestimate accuracy discrepancies. We will come out to your home to give you a free home value consultation based on true, comparable homes. Then we can help you update the details of your home on Zillow so the Zestimate matches our evaluation.
Call us today at 843.501.0505 for your free home value consultation! And don’t forget, because we are the #1 real estate team in Charleston, we have the most technology and resources available and spend the highest amount of money on marketing that creates the highest demand for your home. This gets you the most amount of money in your pocket in the fastest time. At Jeff Cook Realt Estate, <a href="https://www.jeffcookrealestate.com/blog/how-do-we-get-the-right-price-for-your-home/">we can get you the right price for your home</a>. Don't rely on Zillow, get your <a href="https://www.jeffcookrealestate.com/blog/jeffstimate-a-home-selling-strategy-tool-thats-accurate-and-local/">Jeffstimate</a> today!2017-05-26T10:51:00-07:002021-08-30T12:42:02-07:00Thomas "Jeff" Cook