This is a “BIG DEAL!” Most Buyer’s and Seller’s are absolutely scared to death right now of a Short Sale agreement. Rightfully so in my opinion. These Banks and Servicing Institutions have got to get it together. I have been fortunate enough to have been apart of many Short Sale transactions that were closed in a relatively acceptable amount of time.  However on the other hand, I have had the misfortune of being party to several that have not only been an embarrassment to all parties involved, but nothing more than total aggravation and frustration. Let me give you just one example and you decide for yourself.

I currently have a Short Sale contract where I am representing the Buyer for a Cabin for Sale in Blue Ridge, GA. The contract was entered into on July 24, 2009.  The list price of the Cabin For Sale was $340,000. An agreement was reached by both parties of $300,000. After many months of sitting and waiting to hear something, anything from the Bank, we finally received a notice that they would not accept the Short Sale on the contracted price, but counter offered to use in the amount of $350,000. They highly encouraged a counter offer, of any kind from my client. So, after speaking with my client, we decided that we would counter offer $305,000 to show the Bank our good faith in the transaction. Another couple of months passed and we again finally received word from the Bank that they had yet another counter offer at a price of $389,000. I was in disbelief. Not only was this last counter offer higher than their first counter, but it was more than what was owed on the home to begin with. As a result of the ridiculous manner in which this Bank had handled this transaction, the Seller to my understanding is now filing for Bankruptcy, and will eventually lose the home through Foreclosure. I am currently searching for another property for my client.

Am I to feel sorry for these Banks? Do you?

Not sure what a Short Sale is? Click Here for a simple explanation.

I certainly hope that I haven’t ruined your day…..go out and Make it an AWESOME day!

Sometimes, headlines for housing can be misleading and this week gave us a terrific example.

On Wednesday, the Commerce Department released its Housing Starts data for January 2010. The data showed starts at a 6-month high.

A “Housing Start” is a privately-owned home on which construction has started.

Headlines on the Housing Starts story included:

* U.S. Housing Starts Hit 6-Month High (Reuters)

* U.S. Economy Receives Home Building Boost (Shepparton)

* Housing Starts Post Sharp Rebound (ABC)

Based to the headlines, the housing market looks poised for rapid growth through the Spring Market.

The real story, though, is that although Housing Starts increased by close to 3 percent last month, the growth is mostly attributed to buildings with 5 or more units.  This includes apartments and condominiums — a sector of the housing market that’s notoriously volatile.

If we isolate Housing Starts for single-family homes only, we see that starts grew by just 7,000 units last month and have failed to break a range since June 2009.  January’s tally is slightly below the 8-month average.

Perhaps more interesting than the Housing Starts, though, is the Commerce Department’s accompanying data for Housing Permits. After a 5-month plateau that ended in November, Housing Permits posted multi-year highs for the second straight month.

According to the Census Bureau, 82% of homes start construction within 60 days of permit-issuance.

One reason permits are up is that home builders want to capitalize on the federal homebuyer tax credit’s dwindling time frame.  Sales are expected to spike in March and April and more homes will come online to deal with that demand. Home buyers in Blue Ridge should shop carefully, but with an eye on the clock.

As the tax credit’s April 30, 2010 deadline approaches, competition for homes may be fierce.

Mortgage markets reeled Wednesday after the Federal Reserve released the minutes from its January 26-27, 2010 meeting. Mortgage rates in Georgia are now at their highest levels since the start of the year.

The Fed Minutes is a follow-up document, delivered 3 weeks after an official FOMC meeting. It’s a companion piece to the post-meeting press release, detailing the debates and discussions that shaped our central bankers’ policy decisions.

The Minutes is a terrific look into the Fed’s collective mind and, yesterday, Wall Street didn’t like what it saw.  Specifically, the report disclosed that:

1. The Fed plans to break support for mortgage markets after March 31, 2010
2. Raising the Fed Funds Rate will be a key part of the Fed’s strategy to tighten monetary policy
3. The fundamentals behind consumer spending strengthened modestly

Furthermore, the Fed Minutes said that there is a growing risk of “higher medium-term inflation”. Inflation, of course, is awful for mortgage rates.

Overall, the Fed’s economic optimism appeared stronger after its January meeting as compared to its December one.  A stronger economy should lead to better job growth and higher home prices throughout 2010.

Mortgage rates were up yesterday but they remain historically low. And many analysts think that after March 31, 2010, rates will rise even more.  Therefore, if you’re buying a home in the near-term, or know you’ll need a new mortgage, consider moving up your time frame.

Every 1/8 percent makes a difference in your household budget.

As you can imagine, 2009 presented many obstacles for those of us in the Real Estate and Mortgage Industry. It was a tough and challenging year no doubt, but presented some hope for the future. Although 2010 has not started with record breaking numbers, many are still predicting that this could be the year we finally see “The Bottom.”

My broker Robert Rogers, really does a great job leading our agents and guiding us to success. He is a numbers guy, and he stays on top of the market and keeps all of us at Blairsville Realty informed as to exactly what is going on in the Real Estate Market in the Blairsville, GA., and all of the North Georgia Mountains.

I too wanted to congratulate my associates at Blairsville Realty for being #1 in number of units SOLD in all of the Northeast Georgia Board of Realtors(R) MLS, and #1 in number of units SOLD and Sales Volume in Union County. I am very fortunate and proud to work with such a great group of professionals, but more importantly friends that I consider to be family.

Consumer Sentiment has been on the rise since last February and it’s something to which Blairsville Home Buyers should pay attention.

The affordability of your next home may hinge on consumer confidence.

As the economy recovers from a near-the-brink recession, many of the elements of a full recovery are in place.  Business investment is returning, household spending is expanding, and financial systems are gaining strength.

Consumer confidence is at a 2-year high.

What’s missing from the recovery, though, is jobs growth.  Another net 20,000 jobs were lost in January. Data like that hinders economic growth.

That said, twenty-thousand jobs lost is a much better figure than the several hundred thousand that were shed per month throughout early-2009, but it’s still a net negative number.  Not only does household income drop when Americans lose jobs but so does the average American’s confidence in his or her own economic future.

This is one reason why jobs growth is so closely watched by Wall Street — jobs are linked to higher confidence levels which, in turn, is believed to spur consumer spending.

Consumer spending represents 70% of the U.S. economy.

As confidence rises, it could be good news for the economy, but bad news for home buyers. More spending expands the economy and, all things equal, that leads mortgage rates higher.

Same for home prices. More confidence means more buyers which, in turn, squeezes the supply-and-demand curve in favor of sellers.

Later this morning, the University of Michigan will release its February Consumer Sentiment survey. If the reading is higher-than-expected, prepare for mortgage rates to rise and home affordability to worsen.

Sometimes, price tags just don’t want to unstick. No matter how hard you scrub and scrape, tacky residence stays behind. Turns out, getting “the stick” off your stickers isn’t so hard when you have the right tools.

In this 2-minute video from eHow.com, you’ll learn how to remove stickers and adhesive-based price tags from common household items including:

• Wooden furniture
• Glass vases and other glassware
• Plastic pieces
• Cardboard boxes

The best part? All the supplies you’ll need are already in your home.

A “Short Sale” is when a home seller sells his home for a lesser amount than what is owed on his mortgage, and the mortgage lender agrees to accept the lesser amount in lieu of a full payoff.

By way of example, a Short Sale may be appropriate for someone Selling a Home in Blairsville whose mortgage balance is $250,000 but whose home wouldn’t sell for more than $220,000.  Rather than pay the $30,000 difference to the lender at the time of sale, the seller enters into an agreement with the lender by which all sale proceeds are paid to the bank and the deficient balance is forgiven.

Short Sales are a preferable alternative to foreclosure but the process still harms both parties. For one, the seller is penalized with a derogatory tradeline on credit for not fulfilling a mortgage obligation. And, two, the lender is forced to take a loss on a mortgage loan.  Versus an executed foreclosure, however, Short Sale damages are relatively limited on both sides.

For this reason, Short Sales are sometimes considered “the economical alternative” to default.

The process of getting a Short Sale approved varies from lender-to-lender and can be time-intensive. Home sellers should not go at it alone — speaking with a real estate agent about the proper protocol is usually the best place to start.  And sellers should be aware of how a Short Sale on their credit can impact future borrowing.

Current Fannie Mae guidelines prevent short-selling homeowners from obtaining new mortgage financing for a period of 2 years.

Click Here to see a Home For Sale in Blairsville that I currently have listed as a Short Sale. If you are facing a hardship such as your home’s value being less than what you owe on your mortgage, or if you are possibly facing Foreclosure, I may be able to help, but you need to call me at 706.994.8686 before it is too late.

But for as much as the foreclosure filing statistics can be astounding — over 300,000 homes were served last month alone — the prevalence of foreclosures depends on where you live.

As reported by RealtyTrac, just 4 states accounted for more than half of the country’s foreclosure-related activity last month.

1. California : 22.7 percent of all activity

2. Florida : 14.9 percent of all activity

3. Arizona : 6.7 percent of all activity

4. Illinois : 5.7 percent of all activity

The other 46 states (and Washington D.C.) claimed the remaining 49.9%.

However, just because foreclosures are concentrated geographically, that doesn’t make them less important to home buyers in Ellijay, cabin buyers in Blue Ridge,  and other places around the country.  There’s been more than 1.4 million foreclosure filings in the last 12 months and that’s a figure that can’t be ignored.

Distressed properties now play a role in one-third of all home resales.

Therefore, if you’re in the market for a foreclosed home, here’s a few things to keep in mind.

1. Properties are most always sold “as-is” and may not be up to living standards. Be sure to physically inspect the home before buying it.

2. Buying a home from a bank is rarely as streamlined as buying from an individual homeowner. Be prepared for delays and long closings.

3. Foreclosures aren’t always listed for sale publicly. Contact Me for access  to our complete foreclosure inventory here in the North Georgia Mountains.

In order to use the federal home buyer tax credit, you must be under contract for a home by April 30, 2010 and closed by June 30, 2010.  That doesn’t leave much time to find a bank-owned home and make it to closing.  If you’re serious about buying foreclosures, it’s probably best to start your search soon.

The mortgage lending landscape changes a lot.  Rates and guidelines are in constant flux, and it creates preparedness challenges for buyers in the North Georgia Mountains that aren’t paying in cash.

The loan you get today won’t always be the loan you get tomorrow.

Because of how frequently bank rules are changing, it can be hard for laypersons to distinguish between mortgage fact and fiction of “what’s coming next”.

Recently, we saw this with respect to FHA home loans.

January 20, 2010, the FHA issued a press release with new lending guidelines.  Specifically, it announced 3 changes that will be effective starting April 5, 2010:

1. Upfront mortgage insurance premiums increase from 1.75% to 2.25%

2. Allowable seller concession reduced from 6% to 3%

3. FICO scores of 580 or lower are subject to a minimum 10% downpayment

But, also in its official statement, the FHA announced it would ask Congress for permission to raise monthly mortgage insurance premiums.  This is where the rumors started.

Nestled on page 348 of the Budget of the United States Government, Fiscal Year 2011, in a section titled Special Topics, there is a 1-paragraph notation that details the FHA’s petition.

1. Raise monthly premiums by roughly 0.30%, or $25 per $100,000 borrowed per month

2. Lower upfront mortgage insurance premiums by 1.25%, or $1,250 per $100,000 borrowed at closing

For now, the request is neither approved nor acknowledged by Congress. It’s merely a request. And in the event that Congress does approves it, that doesn’t mean that FHA has to stand by its initial projections.

Truth is, about the only thing we know about the future of FHA lending is that, come April 5, 2010, borrowing money is going to be tougher, and more expensive. These are the facts as we know them today.

Home buyers should plan accordingly.