Murfreesboro Information and Resources

The first thing you need to do is act quickly.  If you have already received a foreclosure notice from an attorney, time is likely running out.  There are several ways to get a foreclosure sale postponed or canceled. 
 
·        Ask the bank to postpone the foreclosure sale – you’d be surprised what you can accomplish by just getting on the phone with your bank.
·        Bring the loan current – if you have the necessary money available.
·        Work with the bank to set up a modification or forbearance agreement that lowers your monthly payment and allows you to stay in the home.
·        Sell the house before the foreclosure sale date (if you don’t have any equity in the house, you may have to do a short sale).
·        Convince the bank to accept a “deed-in-lieu of foreclosure”.
·        File bankruptcy.
 
Some or all of these options may be available to you, depending on how deep you currently are into the foreclosure process.  Even if you can use them to stop the foreclosure, each of these methods is not necessarily the best move for everyone.  Talk to a knowledgeable real estate professional that can help you figure out what options you do have.  No matter how late you are in the process, you probably still have things you can do to mitigate the situation.
 
We have set up the website HomeSaverGuys.com as a resource for Middle Tennessee families who are facing foreclosure.  There is a ton of information there about the foreclosure process and options available to people who are behind on their mortgages.

Taking out your own construction loan could be something to worry about, but it doesn’t have to be.  There are many reasons why a builder would want you to have the loan in your name.  It limits his risk and helps cash flow since it will limit his out-of-pocket expenses.  Additionally, the builder may not want to owe money on a house that is built on land you already own.  There are also builders who ask you to take out the loan because the bank will not give them one.
 
If you agree to put the construction loan in your name, make sure you first have in writing a firm understanding of how the builder will be paid.  Will you be paying for the expenses plus a flat fee?  Or will it be a set price regardless of the builder’s costs?  Whatever arrangement you agree upon, work with your banker to ensure the builder’s draw schedule is clearly defined and make sure you have final say before any money is released.  Once the project is in motion, don’t approve any draws until all agreed-upon work is completed, you’ve reviewed any pertinent paperwork, and all of your questions are answered (the bank should help you with this process). 
 
The perfect scenario is where you directly pay all subcontractors and vendors to ensure full payment and don’t pay the builder his fee until the home is completed to your satisfaction.  Of course this type of agreement is not always possible.  If you stay on top of things, having the construction loan in your own name can be an empowering thing that keeps you in control of the building process.

There are four different kinds of distressed property that you will typically find for sale in our marketplace.  Here is a quick rundown of each type:
 
·        Short Sales – In a short sale you are buying the house from an individual who is seeking the bank’s approval to sell the home for less than what is owed on the mortgage.  Even though the bank is heavily involved in the process, the homeowner is the person selling the house.

·        Foreclosure – A true foreclosure sale is an auction at the county courthouse where the bank sells the home to the highest bidder for cash.  The bank takes ownership of the house if no investor offers an acceptable bid.  Foreclosure is the bank’s ultimate legal remedy when the borrower gets behind on his mortgage.

·        Bank Owned – The bank’s Real Estate Owned (REO) Department sells those properties that the bank has gotten back through the foreclosure process.  This is what the average consumer means when talking about foreclosure properties.

·        HUD Foreclosure – These are homes that were originally purchased with a government-insured FHA loan.  After foreclosure, the US Dept of Housing and Urban Development (HUD) sells them to the public, offering purchase incentives to potential buyers who will be owner occupants.
 
There is the perception out there that all distressed properties are great deals.  The truth is that just like any other house, there are both great opportunities and potential money pits.  Figure out what you want in a home, examine the whole market, and choose the property that offers you the best value for your money.

The Home Affordable Foreclosure Alternatives (HAFA) Program is the latest government-sponsored initiative to help people facing foreclosure.  Overseen by the US Treasury Department and administered by Fannie Mae, HAFA assists eligible homeowners in avoiding foreclosure through short sales or deeds-in-lieu of foreclosure. A deed-in-lieu of foreclosure is when the homeowner voluntarily turns his home over to the lender to avoid foreclosure. 
 
HAFA offers financial incentives to lenders, borrowers, and junior lien holders that successful implement the program’s foreclosure alternatives.  Homeowners can receive up to $3,000 of relocation funds in a successful short sale.  HAFA was introduced in part with the intent to remove the stigma from short sales and help keep communities from being destroyed through massive foreclosures.
 
To qualify for the HAFA program, the following criteria must be met:
·        The property is the borrower's principal residence.
·        The mortgage loan is a first lien mortgage originated on or before January 1, 2009.
·        The mortgage is delinquent or default is reasonably foreseeable.
·        The current unpaid principal balance is equal to or less than $729,750.
·        The borrower's total monthly mortgage payment exceeds 31 percent of the borrower's gross income.
·        The mortgage is not owned or guaranteed by Fannie Mae or Freddie Mac.
 
Learn more about foreclosure, short sales and the HAFA program at TheHomeSaverGuys.com.

Several years ago when we were in a seller’s market, pricing a home was as simple as checking comparable sales in the neighborhood and then listing your house slightly above the highest comp.  That worked because there were many more buyers than sellers in the marketplace which created upward pressure on prices.
 
That way of pricing simply won’t work in our current buyer’s market.  There are many more sellers than buyers, which is creating downward pressure on prices.  In order to have a successful sale in this market, you need to use a method called “absorption rate pricing.”
 
With absorption rate pricing, you look at the entire market of homes that you could reasonably expect a potential buyer of your house to consider purchasing.  Then you examine the last 6-12 months to determine how many homes on average have sold each month.  This number is called the absorption rate.  Then based on the absorption rate of homes in your area, you look closely at the competition (other homes for sale) to figure out where your house needs to be positioned in order to reasonably expect that your home will be one of the available inventory absorbed by the market with an offer.
 
For example, if the market is absorbing four homes per month, your home needs to be positioned among the four most desirable listings in terms of price and value for the dollar.  Stray from the top four and you risk having your house ignored by potential buyers who know how to find the best value for their money.

On the surface, it might seem a little crazy for a bank to release a lien on a property for less than the total amount owed.  However, when you look at the whole picture, a short sale really makes a lot of sense for the lender as well as for the borrower.
 
When a house is worth less than what is owed and the homeowner can no longer afford his payments, the bank only has a few options.  Here are the most common:  work out some sort of modification on the loan (lower the interest rate, waive late fees, add back payments to the end of the loan, etc.) that brings the borrower current and makes his payment affordable; foreclose on the home; or work out a short sale.
 
Because the lack of income that originally got the homeowner into trouble, modifications are a realistic option for relatively few borrowers.  Foreclosure is an incredibly expensive process for the bank.  And when the foreclosure is over, the house is usually worth less money than it was before the foreclosure process began.  By working a short sale, the bank is able to avoid the expense of a foreclosure, eliminate carrying costs that come with owning the home, and sell the home for more money than it is likely to bring after the foreclosure. 
 
The bottom line is that short sales cost the bank less in time, money, and resources.  And banks are all about the bottom line.  If you would like to learn more about short sales, check out our website at HomeSaverGuys.com.

Allowing buyers to move in early seems like a nice gesture that maybe helps them out of a bind, but quite honestly there are too many potentially negative consequences for you to justify even considering it.  If the bad stuff happens, it could cost you a ton of time, money, and even the transaction itself.
 
Real estate deals disintegrate in the 11th hour everyday due to all sorts of factors.  If for example, the buyer’s financing falls apart the day before closing, how are you going to get the buyers out of your house?  At that point you would be required to go through the eviction process because they would now be considered tenants.  Even if you manage to get them out, what if they damage the house?  How will you make them pay for it?  Are you prepared to file a lawsuit?
 
Even if your deal stays together, you still are at risk.  If the buyer’s dog bites the paperboy while you still own the home, as the landlord you can be held financially liable for Fido’s actions.  If any issue or dispute arises in your transaction, the buyer has additional leverage in negotiations because they are in possession of the property.  If things get acrimonious, do you really want people upset with you living unsupervised in your house?
 
There is just not an upside worth the risk of allowing an early move-in.  In fact, the one good thing that could come from this decision—the closing happening as planned without incident—will almost surely happen just as readily without the early move-in.

This is a very difficult market – for people trying to sell their homes!  In reality, this is one of the best markets ever for buyers.  There are many more homes for sale than there are people to make offers on them, interest rates continue to hover near record lows, and many buyers qualify for government tax credits of up to $8,000 when they purchase a home.
 
But even in a Buyer’s Market, the best deals get snapped up quickly.  With many of the government incentives focused on first-time homebuyers, that segment of the market has been experiencing a lot of activity.  Sellers of what are traditionally considered starter homes have the opportunity to sell their house in weeks or even days if they get it in great shape and set a competitive price. 
 
There is a pool of buyers motivated to find a house quickly.  The two main driving forces behind this is that the tax credits are set to expire for those who don’t get a house under contract by the end of April and the recent news that Rural Development (one of the few sources of zero-down loans left in the marketplace) is expected to run out of loan funds by the end of March.  These buyers closely watch everything that comes on the market and immediately make an offer if they like the house.  This is why we’re seeing an unexpectedly high number of multiple offers.

How much below the asking price you paid for a house is a very poor barometer of whether or not you actually got a bargain price.  In our market right now, there are properties that have been sitting stagnant on the market for many months that are so significantly overpriced that even if you offered $30,000 below asking price, you would still be paying more than market value for the house.  On the other hand, there are homes that come on the market every week that are fantastic deals even if you were to pay full price for them.  Not surprisingly, these houses sell quickly for close to full price.
 
The question to ask is, “How many other homes on the market offer me a better value for my money than this house at this price?”  If the answer is, “Very few,” or “None,” then that price would likely be a good deal – even if you have to offer full-price to get it!  If you’re going to be a bargain shopper, just know that when you come across a house that offers more value for the money than any other listing on the market, if you don’t act quickly to put that home under contract, you can be sure that some other savvy buyer will.

By now most people know that the name “short sale” has absolutely nothing to do with the amount of time it takes to complete those types of transactions.  The “short” in short sale is there because it describes how the bank is willing to accept less than what is owed on the mortgage (a short payoff) in order to release the lien and allow the home to be sold.
 
Right now across the country, the average amount of time it takes to get a residential real estate transaction closed once an offer is accepted is 60 days.  Yet the typical short sale takes a minimum of 90 days and often more than 120 to get from accepted offer to the closing table. 
 
The single biggest factor contributing to this situation is that the system is completely overwhelmed.  Within 3-4 years many lenders have gone from having just one to three percent of their loans delinquent to as many as 25-30 percent or more in a distressed situation.  The banks simply did not have enough staff and resources available to handle the deluge.  Even now, most banks are still scrambling to get staff and systems in place to handle the crush of modification and short sale requests.
 
Another problem is that many real estate professionals have no real training in handling short sale transactions.  They do the best they can, but working a short sale with a bank is totally different than handling a normal real estate transaction.  It requires a completely different skill set.  As a result, some well-intentioned individuals in real estate are contributing to delays in the process by not getting the bank what they need, on the bank’s timeline, and formatted according to the bank’s requirements.
 
The mortgage industry has made strides over the past year and things are slowly getting better.  It just isn’t happening as quickly as we would like.