As with anything in life, when you have the proper expectations, you are better able to cope with the challenges that may arise.  Here are some things to keep in mind with a Short Sale:

1.  In your initial offer, ask for your due diligence period to begin after the Short Sale has been approved.

Why pay for inspections and appraisals only to find out that the Short Sale Bank is not going to approve the purchase price or other terms of your contract?  Request in your initial offer that your due diligence period (which is the time for you to have your inspections and appraisal done) begin after the Short Sale approval has been issued.

2. After receiving an executed contract by the Homeowner/Seller, expect the approval for a non-approved short sale to take any where from 2 months to 6 months depending on who the Short Sale bank is and how experienced the listing agent is.

For some of the banks that are using Equator (or a similar system) and have streamlined their processes in the last year or so, you can expect your turn-around time to be on the shorter end of that scale (2-4 months).  In some cases, even despite the bank’s short sale system, if you have an experienced or just aggressive & responsive listing agent (who is staying in contact with the Short Sale bank at least weekly and sometimes every other day), then you can also be hopefully to receive an approval back quicker.

While you are waiting for the Short Sale to be approved, keep looking at what else is on the market.  If something happens where the Short Sale is not approved, if you have kept looking and made other offers, the time lost is minimized.

3.  After receiving the approval from the Short Sale bank, expect to be required to close in 30 days.

I know this seems insane that you may have just waited 4 months to get an approval but now you only have 30 days to close (and in some fortunate instances you are given 45-60 days to close) but this is the reality in many cases that you should expect.  If you are paying cash, then this is not much of a challenge but if you are getting a loan it is vital to get your lender on board with this timeframe really when you first sign the contract to purchase the home.  This way if there are any special documentations needed (i.e. a gift letter if you are receiving a down-payment gift from parents, student loan deferment information, credit inquiries, etc.), your lender can already have that information gathered as to not cause a delay.  Unfortunately, many times the Short Sale approval is issued just 30 - 60 days before the home is schedule to foreclose so time is truly of the essence for you to get to the closing table.

4.  Prepare to pay for repairs required to close.

With most Short Sales, the Seller is not in the financial position to make any repairs and the Short Sale Bank may not be willing to make any either.  However, especially if you are getting a loan, their may be repairs required for you to take title of the home.  If possible, have a mental budget of what you are willing to spend when making an offer on a home in case their are any required repairs once your inspections and appraisal are completed.  By having a mental budget, the shock value will not be as great if repairs are required.

If you do not have additional money to pay out of pocket for repairs, consider if the repairs can be made using a renovation loan (such as the 203k Rehab Loan, etc.).  Ask your lender about the possibilities of this while you are making the offer so that you can set your expectations properly, especially if the home has obvious repair needs.

5.  Ask for more but expect the Short Sale bank to pay only 0 to 1% of the purchase price towards your closing costs.

I highly recommend in your offer requesting the total amount of closing costs customarily paid in your area for closing cost (in Metro Atlanta 3- 6% of the purchase price is standard), however, remember this blog entry is about helping you set proper expectations.  Therefore, although you have asked for the maximum allowable amount, recognize that the Short Sale bank may only give you 1% (and 0 in really bad instances).   Plan for this and even change your initial offer amount if need be so this while not cause you to lose your fantastic real estate find.

**Buyer beware - if Bank of America is the Short Sale Bank, they are know to only concede 1% in many instances so try to determine what is standard for the Short Sale bank you are working with while you are presenting your offer.

6.  Prepare for the Seller to need a few days after closing to move out of the home.

For many Sellers, the Short Sale process is so disenchanting that they have lost hope that their home will ever sell.  So imagine their surprise when not only have they gotten the Short Sale approval, but the buyer has actually hung around to the end and is ready to close.  In some cases, the Seller may be scrambling to move so ideally advise your intentions of still closing once you have completed your due diligence period.

7.  If the Homeowner/Seller is present at the closing, expect this to be bitter-sweet.

Sadly, you know that your great deal is predicated upon someone’s loss, who may be sitting directly in front of you at the closing table.  But know that you have helped the Seller avoid foreclosure and start a new chapter in his/her/their life with one less burden.

For more information on purchasing a short sale, feel free to contact places2love@gmail.com with questions.  Happy house hunting!

This article can also be found at my website SandySpringsNow.com

This article can also be found at my website SandySpringsNow.com

REAL Tips to Succeed as a Rookie Investor

About The REAL Houses of Atlanta

The American dream - traditionally it has included home-ownership.  But far too many of us experienced with the real estate bust a rude-awakening from the dreams of grandeur.  Real estate, however, is not our enemy but how we obtain and dispose of it needs to be based in the now-present reality.  This is a journal of purchasing, selling and renting REAL houses in metro Atlanta - no fluff, no props, no makeup just real houses in a real city.

Welcome to The REAL Houses of Atlanta!

This article can also be found at my website SandySpringsNow.com

FILE FOR HOMESTEAD EXEMPTION

Homestead exemption - ahhhh one of Georgia’s remaining tax perks despite threats to remove it.  Homestead exemption allows real estate owner occupants the ability to receive a reduction in their property taxes.  Here’s the caveat - most counties in Georgia require that you file for homestead exemption between January and March of the New Year in order to receive this benefit.  It is not automatic and if you miss the deadline, you have to wait until next year so do not delay.  Email places2love@gmail.com for specific deadlines in each Georgia county.

APPEAL YOUR PROPERTY TAXES

I know at closing you probably gasped at how much the taxes were assessed at despite you paying a fraction of that assessment for the real estate purchase.  For the New Year, contact your county’s tax assessor office (most have websites and online forms) and complete the form to appeal your taxes so that the assessed value reflects your purchase price and ideally you can pay less in property taxes.  Moreover, I recommend (and I do this personally) appealing your taxes any and every year that you notice homes in your neighborhood are still being foreclosed so that you can attempt to get a price reduction.  The good thing about this is you do not have to wait for the county to make a reduction, you can request one.

STORE YOUR TITLE DEED

Within 6-8 weeks after your closing, you should have a copy of the recorded deed for your new property.  With all the hoopla of the holiday season, you may not have received it but take some time to search for it.  If you did not receive it, then contact your closing attorney and notify them to see if they can track it down and even have a new one issued.  One you have the recorded title deed, be sure to store it, along with all of your other documents from your closing like your title insurance, in a secure place like a safe deposit box, etc.  This is more of a long-term savings but savings nonetheless.

This article can also be found at my website SandySpringsNow.com

For current buyers, you can obtain comprehensive counseling and access NACA’s mortgage with no down payment, no closing costs, no fees, no perfect credit required and everyone receives the below market fixed interest rate (3.5% 30 fixed as of 12/21/11).  Although this may seem to good to be true, NACA really does offer this but for many buyers in the past it has been difficult to complete the required steps.  But now, NACA’s AMERICAN DREAM CONVENTION will make this a reality for many - so if you have been frustrated with the process in the past, try this convention.  Moreover, member’s who are currently in the process are welcome to attend to complete their files. As you can imagine, there will be limited face-to-face counseling appointments so sign-up now (click here to make an appointment).

For current homeowners with an unaffordable mortgage, you can meet with a Home Save Counselor to determine an affordable mortgage payment. Then meet face-to-face with your lender, with a NACA Negotiator, to obtain an affordable solution. Many homeowners will leave with a same day solution reducing their mortgage payment by over $500 a month and some by over $1,000 with interest rates permanently reduced to as low as 2% and more and more homeowners obtaining principal reductions (click here to register and review the items needed). Pre-registration allows your lender to review your file in advance to be better prepared in providing an onsite solution.

Happy House Hunting!

This article can also be found at my website SandySpringsNow.com

As of August 15, 2011, buyers that make offers and are awarded a contract on condos owned by Freddie Mac’s HomeSteps will be eligible to receive up to $1500 to pay the standard HOA dues through the HomeSteps Condo Cash program.  The condo units must have been on the market for at least 120 days and the buyer must close on the home by December 30th as this program has not (yet) been extended to 2012.

To learn more information about the HomeSteps Condo Cash program and the eligible properties in Metro Atlanta (including Sandy Springs, Vinings, Dunwoody, etc.), contact places2love@gmail.com.

Happy House Hunting!

This article can also be found at my website SandySpringsNow.com

The Dream Makers Grant is a great new benefit for those serving our country.  To qualify, this can be you first home purchase or if this is not your first home purchase, you should not have owned a home in the last 3 years.  However, if you have lost your home in the last 3 years due to a disaster or because of divorce, you may also qualify for this program.  Although the Dream Makers Grant is sponsored by the Pentagon Federal Credit Union, you do not have to be a member of this credit union nor do you have to finance your mortgage through this lender.

To learn the other requirements of this program, please visit the Dream Makers Grant website here.  And for more information on finding a great home to use the Dream Makers Grant with, please contact places2love@gmail.com.

Happy House Hunting!

This article can also be found at my website SandySpringsNow.com

As a homeowner paying for home insurance (even if you are a condo owner), contact your insurance company today if you do not have guaranteed replacement cost coverage, which will help you have a home rebuilt similar to what you had.  Many of us who purchased homes during the boom, may have opted for the home value-based coverage (which will allow us to have a home rebuilt comparable to the VALUE of the current home - ugh!), because values of homes were steadily increasing a decade ago.  As most of us are personally aware in attempts to sale or re-finance, values are not stable and not something we want a replacement home to be based off.

If you do not know what type of coverage you have, please do yourself a huge favor and call your insurance company today to determine your current coverage and how to switch if need be (ask them to email or fax you a copy so that you have it in writing).

This article can also be found at my website SandySpringsNow.com

On Friday, June 17th from 11:00 a.m. - 7:30 p.m. and Saturday, June 18th from 9:00 a.m. - 3:00 p.m. at the Georgia International Convention Center, you can attend the HELP FOR HOMEOWNERS COMMUNITY EVENT and have an opportunity to meet one-on-one with your mortgage lender or a HUD-approved housing counselor.  So if you have been getting the run-around by the staff at your mortgage company, you will now have the chance to see them face-to-face but be sure to get there early.

Currently, the HELP FOR HOMEOWNERS COMMUNITY EVENT will have representation from:

• AHMSI
• Aurora Loan Services
• Bank of America
• Chase
• Citi
• GMAC
• HSBC
• LBPS
• Litton
• Ocwen
• OneWest (IndyMac)
• PNC
• Saxon Mortgage
• SPS
• State Home Mortgage
• SunTrust
• US Bank
• Wells Fargo (Wachovia)
• Fannie Mae
• Freddie Mac
• Making Home Affordable
• HUD
• Atlanta Volunteer Lawyer Foundation
• And More!

In preparation for the event, please gather and bring your financials (i.e. monthly mortgage statement, 2 most recent paystubs or 2 years tax returns if self-employed, documentation of income you receive from other sources, 2 most recent bank statements, utility bill showing homeowner name and property address, unemployment insurance letter, etc.)

These details are subject to change so feel free to contact Rep. Scott’s office for further details and let them know Lee from Re/Max sent you.

This article can also be found at my website SandySpringsNow.com

With FHP, qualified Georgia buyers can receive a 4-to-1 match as long as the minimum contribution of $1000 is made.  This means that if you invest $1875 in your home purchase, then you will receive a remarkable $7500 through the FHP.  The FHLBank FHP is on a first-come, first-served basis and because the funds do typically run out the closer we get to the end of the year, be sure to inquire now if you are even contemplating purchasing a home this year.  At the start of any given year, the FHP funds are usually replenished around March and typically run out near November but this can fluctuate from year-to-year, especially depending on demand.

For 2011, the FHLBank FHP has received its funding and is now available for qualified first-time homebuyers.  For details on the qualification process, including the types of real estate permissible, please contact places2love@gmail.com or 404.444.5777.  Happy House Hunting!

This article can also be found at my website SandySpringsNow.com