Posts Tagged How Can I avoid Foreclosure

Short Sale Fail – A Series on Questionable Things I Run Into With Short Sales: CDPE Disclosure

Short Sale Fail – A Series on Questionable Things I Run Into With Short Sales: CDPE Disclosure

When working with buyers I often run into listing agents forcing the use of forms that leave me wondering how many short sales they have completed and the level of service that they provide to their clients. For instance I was showing a house this past week and the agent included the below form as a document to be included in a contract. It is a CDPE form (Certified Distressed Property Expert – in my opinion little more than a “I paid $500 to get a designation for my business card club”). CDPE has their trained agents using the below form that has more than 1 questionable item on it. For this post I would like to focus on Item #2.

Item 2 States the following. “The seller will receive no cash from this transaction (unless it is a HAFA short sale). Any funds usually due to the seller will be paid to the lender.

This is inaccurate Click HERE  to look at at one of my more recent posts below. I have been able to obtain cash for sellers on more than just HAFA short sales and have the approval letters to reflect it. If your agent is using this form do they know that they MAY be able to negotiate a Seller Incentive paid to you upon closing?

As a Seller you need to know you have a competent agent working for you. You are not guaranteed to recover any money from a short sale as a seller but if you could why wouldn’t you want help with moving expenses, rent at your new place, etc.?

If you as a buyer see a form that has this specific wording on it included in your contract it may be an indicator of the possible rodeo you are about to be a part of. To me it suggests at least a lack of knowledge of the party bringing it to the table.

Call me if you are considering buying or selling a short sale . 208.830.6185

CDPE Form P

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Foreclosures Fall to Lowest Level in 3 Years

Sounds like good news right? The numbers are down in line with some of the seasonal trends we have seen in the last few years. While some folks may be saying this is the sign we have hit or are nearing bottom; folks are still getting going into default, banks are still foreclosing, there is shadow inventory that needs dealt with so we have still have plenty of snow available to keep that snowball growing or at least maintaining its size.Click here for the CNBC article.

In working with clients sometimes they are trying to decide if they should borrow money, go into debt, etc to hang onto the house. You may be considering the same in light of some of the less negative news in the press.

It isn’t unheard of for my clients to be 40-60% underwater on their properties. It makes sense to consider the big picture. I have found it beneficial to walk through the scneario with my clients to see what makes sense.

Lets say we have the following that is a typical scenario:

Value at peak 4 years ago (loan amount) – $250k

Current Value – $150k

Depreciation over 4 years – $100k

Average appreciation in a healthy market (for our area) @3%

The question is how many years in a healthy market will it take to recover the 40% loss?

A long time.

I am not suggesting that home owners should choose to default on their loan because they are under water. I won’t ever tell a home owner to stop paying their mortgage. But borrowing from credit cards, family, personal loans, etc. at some point seems to be throwing good money after bad.

 

 

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