Real Estate Update

Mark Walters asked:




Short Sales: Stacking the Deck in Your Favor

A short sale is a sale in which the lenders allows the sale of a property for an amount less than the existing loan balance. Short sales have the potential for large profits because you, as the real estate investor, are gaining control of the property for a better than expected price.

The properties and situations that will ultimately be approved for a short sale by the lender usually fit a certain profile. When you’re investigating properties and scouting for leads, keep these different factors in mind to improve your chances of getting permission for a short sale agreement. Likely short sale candidates fit a profile that includes factors about the property, the borrower and the lender.

Short Sale Positive Factors for Properties

First of all, certain properties end up being more attractive for the short sale option than others. This includes houses that were purchased or refinanced at a high comparative price, but have since dropped in value due to the real estate market or the condition of the house. This could also include houses that were refinanced at more than their market value based on a high appraisal. Sometimes economic conditions can cause the values of certain areas to spiral downward. Properties located in these affected areas may fit the profile for likely short sales.

Sometimes the property’s value drops below the loan balance for reasons not under control by the owner. Local or even national economic conditions can be at fault. In some cases, the owner’s failure to maintain the property causes it to deteriorate and dramatically lose value. If the lender judges that it’s not financially sound to put things right, they may be more willing to consider a short sale. If the price you propose in your short sale agreement is more than the lender believes they can net after the foreclosure auction, they may favorably consider your short sale proposal.

Short Sale Positive Factors for Borrowers

Lenders are going to take a long, hard look at the borrower and his financial condition before they approve any sort of short sale agreement. In particular, they will want to know if the borrower or someone in their immediate family has experienced a catastrophic illness that has reduced the household to near bankruptcy. The death of a spouse or a divorce could have similar financial consequences on the remaining partner. Forced relocation of the borrower by his employer may be viewed favorably by the lender in a short sale decision, especially if the owner is unable to rent or sell the property. Other significant changes in the borrower’s working situation, including permanent disability, active military service, unemployment or incarceration will also be considered.

Short Sale Positive Factors for Lenders

Finally, even the lender’s own situation may affect their willingness to approve a short sale application package. The lender’s general financial condition plus the status of other loans in their portfolio will bear on the decision making process. This also goes for any third party investor who may actually own the loan. If a government agency insures the loan, then their policies and procedures will need to be met.

To sum up, if the lender believes that the borrower is truly in a hardship situation, then it’s pretty much a comparison of the short sale price compared to what the lender believes they can net after the public foreclosure auction. By essentially “pre-qualifying” the homeowner, the market and the home itself, you can improve your chances of putting together a successful short sale agreement.

Kathleen Chester asked:




Many of us may be having properties which have been an enormous investment in terms of money. A property is also an investment both physically and emotionally. The price of a particular piece of property can fluctuate according to market conditions and it is a wise decision to employ a property management company to look after your property. Often fully furnished homes are rented out for those seeking homes on rent. If you are looking forward to rent your property here are a few things you should keep in mind:



Makeover for your home – you need to make your property look attractive so that people may be interested in booking it. It is recommended that it is done up in a way so that customers will find it different from the other properties and want to stay in it immediately. When you hire an agent or a company to represent you, also check out their profile and compare a few companies before you settle on one. It is important that the services be up to the mark so that they are able to bring in a steady flow of customers.



Vacating it – in case you already have tenants staying in your property, make sure you give them an early notice so that they are able to move out in time. You may also have to check that the plumbing, wiring, appliances, and furniture are in order and ready for use for the next set of tenants. It is important that every new tenant who comes to your property finds it in order so that he/she may not have any complaints about it.



Estimating a property price – your property management company will help you to freeze on a good price/ rent for your property depending on the current market conditions. You should have a list of rules regarding payment terms and conditions. These rules will include the deadline for payment, hikes in case of long term rental plans, and consequences for late payment or failure to pay.



Mortgage – if your property has been mortgaged then it is important that you seek permission of your mortgage provider before you rent out the property. You can lease/ rent out your property only after the mortgage provider has provided written permission.



When you are looking forward to selling off your property or rent it out, choosing a property management company is a wise decision. There are various companies which offer Temecula home rental services and would help you to market your property and find the right customer.