Short Sale question 8- Has the bank started all of the paperwork and is it in the correct department?

Posted on May 16, 2012 by Tom Sommers

Top 10 questions to ask before making an offer on a short sale | Real Estate buyer information

Question 8- Has the bank started all of the paperwork and is it in the proper department?

Sounds like an odd question, right?  Perhaps it is but the answer to this question is very important to help determine if this short sale is the right one for you.  What you are looking to get out of this question is where is the short sale in the process?  Does the bank have all of the information?  If they do, have they started to process it and are they aware that the seller wants to sell the home?  Some banks don’t get this and shove the sellers file into a modification program.  Nothing wrong with that but if it is part of the lenders process then you as a buyer hope that the bank has already determined the seller is not a fit for modification and has their file in the actual short sale department.  If not add another six weeks to the waiting time if not longer.  May not sound like much but if each step that is missed adds that amount of time, before you know it there is four months of waiting before the bank even looks at your offer.

Some lenders call their departments platforms.  Have you ever heard the old saying about one hand doesn’t know what the other hand is doing?  This applies sometimes with the banks and short sales.  It is critical that the listing agent has already determined through speaking with representatives at the bank that the file is in the proper department.  You would be amazed how many times this step is misses along with the guidelines on an FHA loan which can set back the sale by months.

To take a look at any of the other questions just click on the links below-

1) How Many banks are involved?

2) Has there been a Sheriff’s sale?

3) What documentation has been provided to the bank so far?

4) Is the current loan on the home FHA or conventional?

5) Will the seller if asked be able to pay some money to the bank?

6) Is this an investment home or a primary residence?

7) How did the listing agent determine the value?

8 ) Has the bank started all of the paperwork and is it in the correct department?

9) What is the agents personal experience with short sales?

10) Who is negotiating the short sale?

Look for my detailed blogs and videos that will cover each one of these questions in depth.

 

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Home buying question | What is Earnest Money?

Posted on April 26, 2012 by Tom Sommers

There are so many parts to a purchase agreement and so many that sound so familiar it is really easy as a home buyer to get confused.  Earnest money is on the top of the list for misunderstood terms so I thought I would go over it for you.  Earnest money plays the same role in a transaction no matter if you are buying a regular residential home, short sale or foreclosure.

The role that the earnest money plays in a transaction is something of value given with the offer to show intent or your interest to buy the home.  The larger the earnest money the more serious you look to many sellers.  This is especially true when writing an offer on a foreclosure. What most buyers don’t realize is this money is not a gift to the seller.  It is a credit to you as the buyer at closing.  Proper protocol is that if your offer is accepted the  money stays with the listing broker in the brokers trust account.  The seller doesn’t just get the money to spend.  It is protected and the only way as a buyer you would forfeit it is if you didn’t follow all of the contingencies agreed to in the purchase agreement.  So your money is safe.  If you were going to buy a home for $200,000 and you wrote out an earnest money check for 1% or $2000 that would be a credit to you on the day of closing.  If you were planning to put down 10% of the purchase price or $20,000 as a down payment at closing, you would have to bring $18,000 to closing because you will have that $2000 credit.

The whole idea behind this is to show the strength of your offer as a buyer and to show you are serious and really want to buy this home.  I have had several clients who have won out in multiple offers on a property simply because they put down higher earnest money with their offer.  Sometimes as little as $500 more that the other offer.  Banks really look at this as a sign of a strong buyer and so do traditional sellers.

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Home for sale in Eagan, MN 1281 Raspberry Lane

Posted on April 18, 2012 by Tom Sommers

Eagan, MN Home For Sale | Eagan Real Estate

The home is located at 1281 Raspberry Lane not far from Pilot Knob Road and Diffley Road.  New to the market is it a traditional sale, not a foreclosure or short sale.  It is a modified two story home will many updates and extras!  If you want to be in a quiet neighborhood located close to parks, schools and shopping then this could be a great home for you.  The location couldn’t be better with all that Eagan has to offer at your fingertips.  The exterior is Vinyl siding, Brick and some wood so it is pretty low maintenance.  The two car garage is attached and enters the home to a closet and half bath.

The foyer is large with places to walk so you won’t feel like your guests are tripping over each other as they enter the home.  The floor plan is really open and flows from room to room which makes this home great for entertaining and family get-together.  As you enter the home to the right there is a formal living room that steps up to the formal dining room which could be used as a home office.  The home has all new flooring as of 2011.  The kitchen has beautiful white cabinets, breakfast bar and lots of room to cook a huge meal.  It is open to the informal dining area and the main floor family room.  The sliding glass door leads to a spacious new deck that was built with composite material so you have not deck maintenance!  The main level family room looks out to the back yard and has a wood burning fireplace.  Down the hall off the family room are the stairs to the lower level, Laundry room, half bath and entrance to the garage.

The lower level holds all of the mechanicals along with two rooms.  Both have egress windows and can be used a s a fourth and fifth bedroom.  Currently one is being used as storage.  The dishwasher, stove/Oven, refrigerator, washer and dryer are only 4 years old and the water softener and water heater are only six years old. The sellers also added gutters in 2010.  This home has been well maintained!

The upper level has three bedrooms and a full bathroom that includes a sunken tub and shower.  The master bedroom is a suite complete with two closets and a private bathroom.

This incredible Eagan home is priced to sell and ready for you to move in!  Call me today to schedule a private showing of this fantastic property.

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Short Sale question- How did the listing agent determine the value?

Posted on April 11, 2012 by Tom Sommers

Top 10 questions to ask before making an offer on a short sale | Real Estate buyer information

Question 7- How did the listing agent determine the value?

The answer to this question can be the basis for your offer because the math has to make sense.  Meaning most banks will look at the appraisal or BPO (buyer’s price opinion) they order for the property.  After reviewing the information and determining a value they will set their bottom line dollar, anywhere from 80% to 85%.  Which is the most common percentage range.  Some banks will want more some will want less, every situation is different.  So when they add up all of the selling fees, unpaid taxes, pay off to the second loan and all other fees their bottom line will have to fall into that percentage range.  If it doesn’t then the bank may come back and ask for any one of these things- A higher sales price, money from the seller or quite possibly will just say no to the deal entirely.  This should not be confused with a foreclosure,  that is a completely different situation.

As a buyer you want the agent representing you to do several things.  First do a market analysis of the area and pull up all the comps that the appraiser will use to establish value.  Then work the numbers back wards to arrive at the percentage or bottom line.  If it falls in line with the list price and the listing agent has pulled the comps to establish the price of the home correctly, then you are in a great position.  The agents should be working together to get a solid offer put together that benefits both the buyer and the seller.

On the other hand if the listing agent simply puts the home on the market at a price that was really low for no other reason than to get an offer, you could have quite a battle on your hands.  The home value and sale price along with the bottom line has to all work together to end up with a successful short sale.  If the listing agent has not done the proper amount of work ahead of time, it could spell trouble.  They should have been gathering all the information from the lenders regarding the amount of debt along with all liens and the market analysis before the home is even put up for sale.   The short sale may not happen if this analysis has not been done ahead of time and correctly.  Be careful or you could end up locked into a contract to purchase a home that may not close.  You will lose your ability to buy another home during that time period and perhaps miss some really great deals.

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3 Level townhome for sale in the heart of Uptown Minneapolis

Posted on April 11, 2012 by Tom Sommers

Minneapolis Town home | Minneapolis Real Estate

If you are looking for an upper West side New York City feel in Uptown Minneapolis, this may be the perfect fit for you!  This homes is located on 36th and Hennepin Avenue.  The address is 3531 Hennepin Avenue S.  #3.  Only six blocks to the heart of Uptown and less than six blocks to Lake Calhoun.  You can bike anywhere in minutes and you are only 10 minutes from downtown Minneapolis.  This is the perfect location if you are looking for something in the city.

The home is 3 levels with 3 bedrooms and 3 bathrooms and a very open feel.  As you approach the building you see a large courtyard with all of the garages for the units.  This unit has a gated semi-private patio by the front entrance that overlooks the court yard.  As you enter the home you will see the beautiful hardwood floors that have just been re-done.  The floor plan is very open with the large kitchen open to the informal ding room and living room.

The upper level has a master suite with a private bathroom and a loft that can be used as a 2nd bedroom.  There is storage and a full bathroom on this level as well.  There is another set of stairs on this level that takes you to the rooftop and your own private patio that overlooks the neighborhood.  This is really a unique space that you don’t see very often.

The lower level has a family room that you could add a pool table to and is currently being used as the third bedroom.  The ceiling is exposed for that classic loft look.  The feel is very modern and very urban.  This level has a bathroom, storage and the laundry room.

The home was built in 2005 and has all of the extras.  You are minutes from the bus line, shopping, schools, parks and the lakes.  Take a moment to consider this amazing property, you won’t be disappointed.

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