SHORT SALES-8 Reasons to
Posted in San Diego Real Estate on October 2nd, 2008
Free Report
Short Sales – 8 Reasons to stay away from them
go to brokerk.com
then go to free reports
![]("http://i261.photobucket.com/albums/ii61/jchoisser/HouseFront.jpg")
When there are more sellers out there than buyers, like it is today in San Diego and Southern California, properly preparing your home to sell is crucial, and can save you months of time and thousands of dollars. Coleen Choisser, owner of Anna Rode' Designs is one of the most active and respected interior designers in San Diego county. For a flat $300 fee (slightly more for large homes), she can help you sell your home faster and for more money. (Visit
Typically, buyers are given a list of homes to preview by their realtors. They must quickly prune the list down to the top three or four to visit again. To shorten the list, they start by looking for reasons to eliminate your home!
![]("http://i261.photobucket.com/albums/ii61/jchoisser/FrontSteps.jpg")
Not only do you want a second visit, you first need a first visit. Many homes have so little curb appeal that the car never stops moving. Good-bye, buyer!
But what should you do? Where do you start? Are the colors OK? Do I have too much furniture? Not enough? Won't the buyer see past the problems? NO! Can't I offer a little price discount so the buyer can fix it up himself? NO! Is the house empty? See our Staging page at
Today, home sellers have to spend money to make money. Ask any experienced realtor. Coleen helps dozens of them move houses quicker, and for more money. But which investments make sense? What if you can only afford a small amount?
At least spend $300 (larger homes are slightly more) to have Coleen come out and make recommendations to you. Then you can follow her guidance as far as your budget allows. Maybe you can at least take the paint numbers to Home Depot and buy some paint and a roller. She won't recommend anything that won't help sell your house sooner, and for more money. Remember, time on the market translates into money, too!
She will start at the curb and work her way around and through the house. Her checklist is made up of things large and small that will save you many times her fee. Then you go through the list and do what you can afford. You'll be glad you did.
![]("http://i261.photobucket.com/albums/ii61/jchoisser/Flowers.jpg")
After too long on the market, the bottom feeders and investors start showing up, and they won't offer anything near your asking price. From there it's all downhill.
Don't let that happen! Coleen will give you a list of chores to do, including details like paint colors, what to do about clutter (eliminate it), where cleaning and repairs are optional and where they are mandatory, and how to get the most bang for the bucks. Realize that your home is full of things you love and are accustomed to, so you can't be objective. Coleen can, and you would be wise to follow her advice. The stuffed grizzly bear you brought back from Alaska impressed your friends, but now it has to go. Get a head start on packing for your move to your new house.
If you can't or don't want to do the work yourself, Coleen will recommend handymen, craftsmen, and contractors that she has known and trusted for years. If you like their quotes, use them. Or compare their quotes against your own workers. Either way, you should get as much done as possible before you list your house.
If your house is already on the market, have Coleen come over ASAP. If it has gone too far, you might need to take it off the market temporarily, fix it up, and then start again. Your home is probably one of your biggest investments. So treat it that way!
![]("http://i261.photobucket.com/albums/ii61/jchoisser/bbbseal1.gif")
![]("http://i261.photobucket.com/albums/ii61/jchoisser/CardLogos.gif")
Services we offer: Interior design, interior decorating, new construction or remodels, room design, furniture selection and placement, accessory and art selection and placement, home staging, kitchen design, paint selection and color consulting, painting, faux painting, murals, floor coverings, tile, marble, travertine, wood floors, carpet, custom area rugs, lighting, window coverings, shades, blinds, curtains, custom draperies and valances, verticals, kitchen remodels, bath remodels, granite selection, stone and ceramic tile, exterior design, environmental design, brush and fire management, landscape design.
I Pay CASH for monthly payments you receive on private Mortgage/Trust Deed for property that you sold. Residential, Commercial, Mobile Homes and Land. Can close quickly and have your CASH in about two weeks! CALL NOW 1-888-593-QUIK (7845) or go to www.eandcnotespecialists.com for more information and to get a free quote!
Over the past 18 months, the mortgage market has changed more rapidly than in any comparable period since the Great Depression, a reality not lost on real estate salespeople. Two changes are of paramount importance. The first is an increase in day-to-day price volatility. The second is a tightening of underwriting requirements, with higher down payment requirements the centerpiece. Both affect Realtors.
Underwriting requirements are the rules lenders impose to assure that loans will be paid off, and the down payment has always been the most important of them. The down payment is the difference between the lower of the sale price or property appraisal and the amount of the mortgage loan secured by the property.
Getting Equity
One reason the down payment is so important is that it is the single most vital factor affecting loss to the lender. The down payment is a buffer against lender loss in the event of a foreclosure. For example, if foreclosure costs are 20 percent of value and property value does not change, a 20 percent down payment fully protects a foreclosing lender against loss, but a 10 percent down payment provides only partial protection.
Perhaps even more important, borrowers who get into payment difficulties but have equity in their properties usually will sell to avoid foreclosure. By selling, they realize the equity themselves, whereas if they allow the property to go to foreclosure the equity will be partially or wholly depleted by foreclosure costs. Their selling avoids the foreclosure.
Having Budgetary Discipline
There is still another reason why lenders attach so much importance to the down payment. Borrowers who have been able to save the funds for a down payment are less likely to get into payment troubles later on. Saving for a down payment requires budgetary discipline, repaying a mortgage also requires budgetary discipline, and the one carries over to the other. Of course, this assumes that the down payment is saved, not borrowed. Underwriters look for evidence that the funds committed to down payment are the borrower's own.
When a house is purchased, the owner's equity is the down payment, but as time passes the equity is affected by two other things. One is any change in the loan balance. If the mortgage is fully amortizing, then the mortgage payment includes a principal component which reduces the loan balance. If the required payment is interest-only, and the borrower does not add anything to the payment, the loan balance will not change. And if it is a negative amortization loan, the balance will increase rather than decrease, and homeowner equity will decline.
Homeowner equity is also affected by changes in house prices, which can be sizeable. During 2000-2006, house prices in some metropolitan areas rose by more than 20 percent a year. If a home buyer puts nothing down and there is a 20 percent appreciation in his home value over a year, he has as much equity in his property as a buyer who put 20 percent down in a stable market.
Zero-Down in the Go-Go Period
It is hardly surprising that house price inflation during the go-go period resulted in a drastic weakening of underwriting requirements in general—and down payment requirements in particular. Zero-down loans became increasingly common during this period.
When the market turned and home prices began to decline in late 2006 and 2007, down payment requirements had to be drastically revamped. Just as rising prices generate homeowner equity, falling prices destroy it. There are no zero-down loans anymore, except the VA loan for veterans. FHA loans remain available at 3 percent down, but conventional loans now generally require 10 percent down, and in some areas it is even higher. On top of this, lenders now want most borrowers to have really good credit scores and to fully document their incomes.
It easily could be worse, and without the federal agencies (FHA, Fannie Mae, and Freddie Mac), it surely would be. Nobody is forecasting a quick end of house price declines, so down payments of 3 percent to 10 percent don't look like a lot of protection against future losses. Any loan today that is untouched by one of the federal agencies will have a required down payment larger than 10 percent.
Feel free to give us a call if you need help either to modify your current mortgage or to buy or sell your home.
Michael Gauthier
Re/Max Associates
5005 Texas St. #400
San Diego, CA 92108
619-725-2645 – Office
619-299-9280 – Fax
michaelgauthierrealtor@hotmail.com
![]("http://img.vflyer.com/render/images/1755093/5.jpg"/)