Flat Fee MLS Blog

 Short Sale: An alternative to foreclosure for down-on-their luck homeowners. It’s a sale for less than the owner owes on their home, and is never easy. 

A short sale is not a simple process and it requires the lender’s approval at every stage. If an offer is made, the bank needs to decide if it is within the range they will accept. If they do accept it, the owners need to find out for sure if their remaining debt will be absolved. Some lenders will do this but others may force the seller to pay their remaining debt by selling off their other assets.

Foreclosures mark one’s credit rating for seven years and the impacts of foreclosure are far reaching and negative. The chance of being absolved of debt is very appealing to down-on-their-luck home-owners, considering the alternative is to foreclose. However, even though a short sale shows up differently on your credit report it can still have a negative impact. 

Most banks prefer to accept a short sale than to foreclose, as they must pay taxes on every property in their possession. Taking a small cut in the sale of the home may still save them the money and hassle involved in foreclosing. So short sales are a better option, but they can end up taking months longer than conventional home sales.

A short sale is a serious thing, and won’t be accepted by the lender without proof that the market drop has created a situation wherein the homeowner will absolutely not be able to sell the home for what they owe. Also, a short sale usually can’t happen until the homeowner is in default, or is about to go into default. The homeowner will probably be expected to show, in writing, why they are unable to make further payments or pay the remainder of their debt. Suitable reasons include a death or critical illness in the family, divorce, loss of a job or bankruptcy. Homeowners will also need to show the lender that they have little or no assets. Ultimately, it’s in the lenders hands whether or not a short sale is accepted.

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The “green” mortgage was born in 1979, when President Jimmy Carter signed an executive order directing federally sponsored secondary market institutions to offer consumers incentives for energy-efficient homes.

Green mortgages, or energy-efficient mortgages, allow homeowners to use their commitment to the environment to leverage bigger loans. The concept is based on the premise that a more energy-efficient home will have lower utility bills. That savings can be considered income, allowing a homebuyer to qualify for a bigger loan.

You have to provide a Home Energy Rating System report in order to apply for a green mortgage. HERS reports indicate that your house meets all engergy-efficiency guidelines. The builder can provide proof for a new home.

If you are a homeowner looking to upgrade your home’s energy-efficiency, you can commission a trained Energy Rater to issue a HERS report suggesting efficiency improvements. The Energy Rater can estimate the cost of those improvements, as well as the savings. Cost for the report is usually a few hundred dollars.

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                                                               Remember the old folk wisdom that said to place a brick in your toilet’s water tank? Well, that was partly correct, but placing a plastic bottle filled with water and a few pebbles is better. It’s an effortless way to save water-which is an increasingly scarce resource.

The average model uses three to seven gallons per flush and most will flush perfectly well with a little less H2O. You don’t have to turn hippie and call it ”mellow yellow” in order to save clean water….a bottle in the tank will displace enough water to save half a gallon to a gallon each use or up to about 10 gallons a day in a typical home.

What’s wrong with using the brick? They have been known to disintegrate in toilet water over time, leading to damaged plumbing. All you have to do is drop a little sand or some pebbles in a bottle, fill it with water, and put it in the tank, making sure not to disturb the the toilet’s working parts.

Easy enough?

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                                                                                                            If you really want to sell your home, you need to expand your pool of buyers to include those people who want to buy a home but can’t qualify for a standard mortgage at this time. This pool is actually much, much larger than the pool of buyers who can get a mortgage right now according to real estate expert Wendy Patton.

If you’re ready to get creative about financing to entice buyers, here are three major options:

1. See if your lender will allow a mortgage assumption.

2. Help a buyer build a down payment through a lease-to-own deal.

3. If you’ve got the equity, offer financing yourself.

If stressed-out sellers and hard-to-qualify buyers could just join forces they could both achieve their goals. The answer may lie in “creative financing.”

Here are 10 Unique Selling Tactics:

1. Hold an open house party

2. Take home staging to the extreme

3. Help serious buyers with financing

4. Have a little faith

5. Throw in some extravagant extras

6. Make your home a grand prize

7. Get Web savvy

8. Let your house do the talking

9. Put your house on the auction block

10. Let buyers sleep on it

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During previous decades,  “draft snakes” were regular accessories in many homes, particularly during the Great Depression and in other tight times, according to expert Brian Howard. But as current homeowners have gotten used to relatively cheap oil, these handy items have largely fallen out of favor. However reducing drafts in the home can cut down  on energy use 5 to 30%, according to the U. S. Dept. of Energy.

Place a rolled bath tower or custom-made “draft snake” across the bottom of leaky doors and windows. This will improve the efficiency of heating and cooling, which are typically the biggest energy uses in the home, as well as make your rooms more comfortable.

The best thing about a “draft snake” is that it is an extremely cheap and easy way to green up your living space.  You can buy premade ones, reuse an old towel or get crafty and make one out of scrap fabric, filled with sand or kitty litter for weight. Add humorous touches with googly eyes or felt tongues. Another idea: recycle old neckties into adorable “draft snakes.”

Here are 5 tips to tighten up your home’s envelope:

1. Seal your attic door

2. Install gaskets in outlets

3. Seal ductwork

4. Replace door gaskets

5. Repair window gaskets

Sealing against drafts will save you both energy and money.

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                                                                                                           If you are selling your home FSBO or listing on the MLS, you are likely to have some close encounters with first-time homebuyers while marketing your home. There are a number of terms that are unfamiliar to first-time homebuyers and the more informed and knowledgeable you are as a seller, the more helpful you are to your buyer.

Here are some terms that both buyers and sellers should be familiar with:

Closing costs: The expenses that buyers and sellers normally incur in a real estate transaction. Closing costs are in addition to the price of the house and usually add up to between 5% and 6% of the mortgage amount.

Conventional Loan: A mortgage that is not insured by the Federal Housing Administration or guaranteed by Veteran Affairs.

Origination Fee: The fee charged by a lender to prepare all documents associated with your mortgage.

Escrow: A special third-party account that is set up by the lender until all conditions of the purchase contract have been met.

Title Search: An examiniation of public records to ensure that you are purchasing the property from its legal owner and that there are no liens, overdue assessments or other claims that would affect the value or marketability of the property.

Deed: A legal document by which the ownership of property is transferred from one owner to another.

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       If you’re currently renting, consider the tax advantages of homeownership. Know what expenses you can deduct, and understand how new laws affect you.

Here are the top 10 tax tips for homeowners:

1. Deduct mortgage interest and real estate taxes-interest paid on home loans is deductible up to $1 million for a principal residence plus a second home. Property taxes on all real estate are fully deductible.

2. You can deduct any money paid toward points or origination fees if you bought a home this year. Closing costs are not deductible. Points paid on a new mortgage loan for the purchase or improvement of a principal residence are deductible for the year in which they were paid.

3. If you refinanced your mortgage this year or took out a loan to buy a second home or investment property, you can deduct any points you paid equally over the life of the loan.

4. Deduct private mortgage insurance (PMI)-taxpayers with adjusted gross income of $100,000 or less can fully deduct premiums for PMI. The deduction is allowable only for insurance on loans that were originated after 12/31/06 and before 01/01/11.

5. Deduct moving expenses if you moved 50 miles or more for a new job. If you relocated for a new full-time job at least 50 miles away from your previous home, you can deduct the cost of packing, transporting or storing your household goods.

6. If you sold your house this year, see if you’re subject to a capital gains tax-if the profit you received from the sale of your house is under $500,000 for married couples or $250,000 for single owners, you are exempt from the capital gains tax.

7. Home improvements and mortgage closing costs are not tax deductible, but when you sell your house, they can be used to offset your capital gains tax burden should you have one.

8. If you did a short sale this year, the debt forgiven by your lender can be excluded from your taxable income. Thanks to a new law, you can exclude debt up to $2 million if it was discharged by the lender in 2007, 2008 or 2009.

9. Take advantage of energy efficiency tax credits-going green is good for the environment and your wallet. You can quality for a tax credit with documentation of energy efficient updates to your home.

10. If your home was damaged from a sudden, unexpected event, such as a natural disaster, fire, vandalism or theft, deduct some of the loss. You may deduct all expenses not covered by your homeowner’s insurance, minus a $100. deductible and 10 percent of your adjusted gross income.

Some of the best perks of owning a home are the tax breaks. This may be the time to buy a home. Remember to consult your tax advisor.

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              Here are some eco-friendly suggestions for living greener, ranging from the simple to the more extreme:

 1. Replace incandescent light bulbs with compact fluorescents. Switching to compact fluorescent lighting could save you $30. a year in electrical costs, and the bulbs last 10 times longer than incandescent bulbs.

2. Turn off your tap while brushing your teeth. It will save you 10 gallons of water each time you brush.

3. Put your computer on sleep mode when you are not using it during the day. This can reduce the compter’s energy usage by 80 percent.

4. Buy groceries in bulk, not only to save costs, but also to reduce the amount of excess packaging you are throwing away.

5. Unplug appliances and other devices such as cell phone chargers, when not in use.

6. Skip the dry cycle on your dishwasher.

7. Start a backyard garden and produce as many of your own vegetables and fruits as you can.

8. Sell all but one car and use the bus-system to get around. If that isn’t possible, at least reduce the number of car trips your family makes. Carpool, walk or ride a bike.

9. Buy 120 watts of solar panels, LED lights and a solar refrigerator to reduce energy consumption.

10. Reduce your debt and consumption of resources and goods, even if it means living in a smaller house than you currently own.

11. Don’t isolate yourself from nature. Take time to enjoy the natural world and share the experience with others.

Think GREEN, people are realizing the environment is worth taking care of…be an optimist…there are big challenges, but we’re capable of dealing with them.

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Here’s an easy tip to save money and conserve energy:

Turn your dial to cold water-with most clothes, you really don’t need hot water to get a good cleaning. Ninety percent of the energy used by washing machines goes into heating the water. The higher the temperature of the water, the more electricity you’re running and the higher the cost in terms of both energy use and money.

Add in one of the earth-friendly laundry detergents available everywhere these days and chill out about any harm to your clothes or the environment.

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Tips for a Lush Lawn:       

1. Mow less frequently and cut the grass longer so the top growth protects the roots. To force the roots to go deeper, water less frequently-this keeps them cooler and less susceptible to dry spell damage.

2. Use cornmeal or diatomaceous earth for a good insecticide.

3. Pull weeds before they set seed.

4. Use a soil conditioner with good microorganisms and aerate to encourage soil health. Try LazyMan Liquid Soil Aerator or Soil Conditioner for an easy spray-on solution without backbreaking work, available at outsidepride.com

A lush lawn doesn’t have to break your back, your bank or your planet.

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