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According to CoreLogic, cash home sales in the U.S. accounted for 31.8 percent of total home sales in October 2016, down 2.7 percentage points year over year from October 2015. The cash sales share peaked in January 2011 when cash transactions accounted for 46.6 percent of total home sales nationally. Prior to the housing crisis, the cash sales share of total home sales averaged approximately 25 percent. If the cash sales share continues to fall at the same rate it did in October 2016, the share should hit 25 percent by mid-2018.

Fast FAQS

  • The national cash sales share was 31.8 percent in October 2016
  • The national distressed sales share fell 2.9 percentage points year over year from October 2015
  • The national distressed sales share fell in all but eight states

Real estate owned (REO) sales had the largest cash sales share in October 2016 at 59.2 percent. Resales had the next highest cash sales share at 31.7 percent, followed by short sales at 30.2 percent and newly constructed homes at 15.9 percent. While the percentage of REO sales within the all-cash category remained high, REO transactions have declined since peaking in January 2011.

National distressed sales share of total home sales, of which REO sales made up 5 percent and short sales made up 2.6 percent in October 2016. The distressed sales share of 7.7 percent in October 2016 was the lowest distressed sales share for any month since October 2007. At its peak in January 2009, distressed sales totaled 32.4 percent of all sales with REO sales representing 27.9 percent of that share. The pre-crisis share of distressed sales was traditionally about 2 percent. If the current year-over-year decrease in the distressed sales share continues, it will reach that “normal” 2-percent mark in mid-2018.

All but eight states recorded lower distressed sales shares in October 2016 compared with a year earlier. Maryland had the largest share of distressed sales of any state at 18.6 percent in October 2016, followed by Connecticut (18.3 percent), Michigan (17 percent), New Jersey (15.8 percent) and Illinois (14.7 percent). North Dakota had the smallest distressed sales share at 2.7 percent. While some states stand out as having high distressed sales shares, only North Dakota and the District of Columbia are close to their pre-crisis levels (each within one percentage point).

Alabama had the largest cash sales share of any state at 47.5 percent, followed by New York (44.5 percent), Indiana (41.8 percent), Florida (41.5 percent) and Missouri (38.8 percent).

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from  http://www.worldpropertyjournal.com/   By Michael Gerrity
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Home buyers came off the sidelines in August 2013, but too few homeowners want to sell.

Home prices and home sales reached record levels in August 2013, fueled by buyers looking to get into the market while interest rates are low. In fact, August was the best month for home sales in more than six years, and the national median home price rose for the ninth month in a row, according to the NATIONAL ASSOCIATION OF REALTORS®.

However, the real estate market may have hit a temporary peak because of rising mortgage interest rates that pushed more buyers to close deals.

In the months ahead, “monthly sales are likely to be uneven because of several market frictions,” said NAR Chief Economist Lawrence Yun:
Tight inventory is limiting choices in many areas.
Higher mortgage interest rates mean affordability isn’t as favorable as it was.
Restrictive mortgage lending standards are keeping some otherwise qualified buyers from buying.

How Many Homes are Available for Sale?

Right now, there’s a 4.9-month supply of homes for sale, meaning sellers have the advantage in many local markets. “Limited inventory in some areas means multiple bidding remains a factor,” Yun said, adding that 17% of all homes sold above the asking price in August and 63% sold below list price.

The number of homes for sale were down in several regions of the country:
-23.5% in Naples, Fla.
-23.3% in Detroit
-20.7% in Boston

Rising Home Prices

Faced with more competition for homes, buyers offered higher prices. The national median existing-home price was $212,100 in August 2013, up 14.7% from August 2012. Those price increases could persuade more sellers to enter the market, said NAR President Gary Thomas.

In addition, homeowners’ equity continues to improve, which will encourage sellers who’d been sitting on the sidelines to list their home for sale, he said. “Most of those owners also will be buying another home, but higher levels of new-home construction going into 2014, combined with some reduction in demand from less favorable affordability conditions, will help to moderate price growth to more sustainable levels.”

A decline in the number of discounted foreclosures and short sales also helped buoy home prices. Only 12% of August home sales were distressed — compared with 23% in August of last year.

Here’s how median exisiting-home prices have change since August 2012:
Single-family: $212,200, up 14.4%
Condo: $211,700, up 17.7%
Northeast: $268,800, up 7.6%
Midwest: $166,100, up 10%
South: $181,000, up 14.6%
West: $287,500, up 18.8%

Read more: http://www.houselogic.com/news/home-thoughts/tight-inventory-pushes-august-home-sales-prices/#ixzz2fj5OcLSy
© Copyright 2013 NATIONAL ASSOCIATION OF REALTORS®

St Pete Beach, Florida

St Pete Beach, Florida

The median price of single family homes in the St Petersburg-St Pete Beach-Clearwater Florida area is the highest since 2008 with a 20.5% increase over last year at this time. Condos/townhomes prices have increased 13%. The inventory had been steadily dropping since January 2011 so there is only a 4.5 month’s supply of homes and a 5.3 month’s supply of condos/townhomes. Traditional sales (NOT short sales, bank owned or foreclosures) are up 36.8% and short sales have dropped 6.6% for homes. While condo traditional sales have increased by 35.5% and short sales have dropped by 35.2%. The market is slowly growing stronger, which is great because we do want a slow and steady improvement. The median sale price for homes is $162,500 and $113k for condos. The average sales price is $223, 545 for homes and $175k for condos. Sellers are receiving on average 91.9-94.5% of the asking price. Homes sales in the $150k-199,999 have increased 59.8% over last year, $200k-249,999 have increased 55.5%, $250k-299,999 have increased 72.7% but the largest increase has been in the $600k-999,999 price range with an increase of 91.3%. So things are looking much better in our area for a continuously healthier real estate market. Hooray!!

Perfect timing…just this morning I was trying to explain to one of my buyers the problems one may face when purchasing a foreclosure, REO (bank owned property) or a short sale. I found this article on the Florida Realtors’ website. It is definitely worth a few minutes that it takes to read it. Let me know about your experiences.

 

ST. LOUIS – June 7, 2013 – Back in 2011, Christina and Brian Jenkins decided to take up a sideline as landlords. Since then, they’ve acquired three rental houses in the St. Louis area. Two of them were foreclosures.

They have advice for those who want to pick up a foreclosed house on the cheap, and it comes from a fairy tale.

“You have to go through a lot of frogs before you find a prince,” Christina Jenkins said.

The frogs may have ripped-out plumbing, or a crumbling roof or an air conditioner that disappeared. The princes sit in nice neighborhoods and need some paint, carpeting and other minor fixes.

The princes and frogs have one thing in common. They’re usually cheap compared with houses of similar size in the neighborhood. That’s what attracts landlords as well as would-be homeowners.

To a buyer, a foreclosure is a mystery house. The old homeowner is long gone, so there’s no one to fill out disclosure forms listing problems with the house.

Homeowners facing foreclosure do little maintenance, and the process can drag on for more than a year. Even with the homeowner gone, the house can sit vacant for months before the bank puts it on the market – time for roofs to start leaking, thieves to rip out the copper pipes, basements to fill up with water and mold to climb the walls.

That’s why buyers should make purchase offers contingent on a professional building inspection. The banks and government agencies that own foreclosed homes generally won’t make repairs. But at least the buyers will know what they’re getting into.

In the Jenkinses’ last foreclosure purchase, the carpet smelled and the house needed “elbow grease,” Christina Jenkins said. But the hardwood floors were pretty and the Jenkinses thought renters would like it.

They found themselves in a bidding war.

“There were multiple offers. We went back and forth two or three times – once after we gave them our ‘best and highest’ offer,” she said.

Bidding wars are becoming more common on the best foreclosures, real estate agents say.

“Usually, they’re priced pretty reasonably,” said Dennis Norman, who has negotiated many foreclosure sales at MORE Realtors in Chesterfield, Mo. “The buyer has to get there immediately. People flock to them.”

The bidding process can put off buyers, Norman said. Instead of replying to an offer quickly, the bank may sit back and collect several, then they ask bidders for their best and final bid.

To sweeten the pot, the Jenkinses took a chance and waived the building inspection on their last house. By that time, the couple figured they knew what they were doing.

“We can look past the ugly,” said Christina Jenkins. Instead, she looks for structural soundness. “Is it eaten by termites? Is there a flood problem? Is there mold?”

Then they calculate how much it will take to make it attractive to a renter. “It’s not just the value. It’s what we’ll have to put into it. Is it in the right neighborhood?” Landlords check ads for rentals in the neighborhood to get an idea of what rent to charge.

The Jenkinses got the idea to become landlords while helping a relative shop for a rental home. They saw the rents landlords were getting; compared it to prices of homes and saw a profit to be made. How much? The long-term return of the stock market is 8 percent, notes Christina, who is an accountant. Anything over that is gravy for an investor with a long horizon, and she’s anticipating gravy.

Adam Roberts is a rehabber. He looks for foreclosed houses he can buy for $100,000 to $130,000, fix up, then sell for $170,000 to $200,000.

Competition is fierce, he said. His last purchase was in Sunset Hills, Mo., and it drew 12 offers the first day it was on the market. “Lowball offers are not going to work,” he said. “The price they’re listed for is what they go for.”

To get a leg up on other buyers on the best homes, he won’t demand a home inspection contingency, and sometimes offers all-cash. Banks will sometimes take an offer $10,000 to $20,000 lower than the competition for a buyer offering cash and no contingencies.

On the other hand, some foreclosed properties are so bad that the bank doesn’t try to sell them. “They release the deed,” said Roberts, who also works in St. Louis County’s housing rehabilitation program. In effect, the bank abandons the property. “They become a liability of the county or the municipality,” Roberts said.

Copyright © 2013 St. Louis Post-Dispatch. Distributed by MCT Information Services.

Late last night the U.S. House of Representatives voted 257-167 to pass the U.S. Senate’s plan to avert the ‘fiscal cliff.’ President Obama has said he will sign the bill into law. Congress agreed that current tax rates will stay the same for households that make less than $450,000 annually, and $400,000 annually for individual filers. This coupled with the fact that there will be no change to capital gains taxes, the National Association of REALTORS® (NAR) believes there will be no change financially for the vast majority of home buyers and sellers.

Here are few key issues that affect REALTORS®, home buyers and sellers.

  1. Congress excluded a capital gains tax increase for sale of a principle residence of up to $500,000 ($250,000 for individuals). The tax rate on capital gains would also remain the same, at 15 percent, for most households, but for those earning above the $400,000-$450,000 threshold, the rate would rise to 20 percent.
  2.  The Mortgage Forgiveness Debt Relief Act of 2007 was extended. This provides relief to troubled borrowers when some portion of mortgage debt is forgiven. This averts the crisis many short sales were facing with the New Year. The mortgage cancellation relief extension is for one year.
  3. Congress extended deductions for mortgage insurance premiums, state property taxes, and local property taxes. The limitation is that he write-off is available only to borrowers who have an adjusted gross income below $110,000.
  4. The mortgage interest deduction was left untouched, continuing tax relief for homeowners.
  5. Tax credits for energy-efficiency home improvements. This provides tax credits of $200 to $500 for owners who install energy-efficient windows, insulation and other upgrades designed to cut energy consumption in 2012 and 2013.
  6. Tax credits for new energy-efficient new houses. This allows builders and contractors to claim a $2,000 tax credit on new homes constructed in 2012 and 2013 that meet federally specified energy-conservation standards. The bill also extends credits for U.S.-based manufacturers of energy-efficient refrigerators, clothes washers and dishwashers. As with other energy-related tax provisions, this had expired last year and will now be continued through 2013.

Not all aspects of the fiscal cliff have been dealt with, and come February Congress will be required to re-engage the issue to deal with the national debt ceiling and required federal budget cuts.

All in all, it’s not too bad.

Real Estate Tax Talk   By Stephen Fishman Inman News®

Over the  past several years, millions of homeowners have had billions of dollars in  mortgage debt forgiven, either through foreclosure, refinancing or short sales.  It’s important for real estate professionals and homeowners to understand that  mortgage debt forgiveness has significant tax consequences.

Here are 10  things the Internal Revenue Service says you should know about mortgage debt  forgiveness:

1.  Normally, when a lender forgives a debt — that is, relieves the borrower from  having to pay it back — the amount of the debt is taxable income to the  borrower. Thus, a homeowner who had $100,000 in mortgage debt forgiven through  a short sale would have to pay income tax on that $100,000, as an example.

Fortunately,  under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to  exclude from your taxable income up to $2 million of debt forgiven on your  principal residence from 2007 through 2012. This means you don’t have to pay  income tax on the forgiven debt.

2. The  limit is $1 million for a married person filing a separate return.

3. You may  exclude from your taxable income debt reduced through mortgage restructuring,  as well as mortgage debt forgiven in a foreclosure.

4. To  qualify, the debt must have been used to buy, build or substantially improve  your principal residence and be secured by that residence.

5. The Mortgage Forgiveness Debt Relief Act applies to home improvement  mortgages you take out to substantially improve your principal residence — that  is, they also qualify for the exclusion.

6. Second  or third mortgages you used for purposes other than home improvement — for  example, to pay off credit card debt — do not qualify for the exclusion.

7. If you  qualify, claim the special exclusion by filling out Form 982: Reduction of  Tax Attributes Due to Discharge of Indebtedness ,  and attach it to your federal income tax return for the tax year in which the  debt was forgiven.

8. Debt  forgiven on second homes, rental property, business property, credit cards or  car loans does not qualify for the tax-relief provision. In some cases,  however, other tax-relief provisions — such as bankruptcy — may be  applicable. IRS Form 982 provides more details about these provisions.

9. If your  debt is reduced or eliminated, you normally will receive a year-end statement,  Form 1099-C: Cancellation of Debt, from your lender. By law, this form must  show the amount of debt forgiven and the fair market value of any property  foreclosed.

10. Examine  the Form 1099-C carefully. Notify the lender immediately if any of the  information shown is incorrect. You should pay particular attention to the  amount of debt forgiven in Box 2  as well as the value listed for your home in Box    7.

The IRS has  created a highly useful Interactive Tax Assistant on its website that you can use to  determine if your canceled debt is taxable. The tax assistant tool takes you  through a series of questions and provides you with responses to tax law  questions.

For more  information about the Mortgage Forgiveness Debt Relief Act of 2007, see IRS  Publication 4681: Canceled Debts, Foreclosures, Repossessions and Abandonments.  You can get it from the IRS website at irs.gov.

Stephen Fishman is a tax expert, attorney and author who has published 18 books, including “Working for Yourself: Law & Taxes for Contractors,  Freelancers and Consultants,” “Deduct  It,” “Working as an Independent Contractor,” and  “Working with Independent Contractors.” He  welcomes your questions for this weekly column

from Inman News

Affluent international buyers, attracted by fire-sale prices, are snapping up real estate in some U.S. markets.  In a report released March 23rd, 2012, Inman News identifies 10 markets where public records indicate foreign buyers make up the biggest share of overall buyers.

Most of the markets are located in sunny Florida, though areas in Nevada, Arizona, New York and Hawaii are also on the list. The report highlights the economic and personal factors that drive foreign buyers to buy; their preferred property types; top countries of origin; how they find the real estate professionals they work with;   why the selected markets appeal to them; and relevant demographic and housing-related characteristics for the markets, including share of foreign-born population, distressed property footprint, home-price trends, and vacancy rates.

Researched and written by Inman News reporter Andrea V. Brambila   to see full report: http://www.inman.com/news/2012/03/23/10-us-real-estate-markets-drawing-international-buyers

shutterstock_2520715-Saint-Petersburg-No-9 Photo via Shutterstock

Waterfront homes in the St. Petersburg, Fla., area. Photo via Shutterstock
 

 

 

 

 

#9 Tampa-St. Petersburg-Clearwater, Fla.

Total population (2010): 2,783,243
% of all homes sold that were purchased by buyers with a foreign mailing address in the public record (May ’11 – Jan. ’12) 2.9%
Median sales price for existing, single-family homes (Q4 ’11): $135,500
Median sales price % change (Q4 ’10-Q4 ’11): 3%
Median sales price for condominiums/co-ops (Q4 ’11): $63,700
Median sales price % change (Q4 ’10-Q4 ’11): -23.8%
Top 3 countries of origin for foreign buyers: Canada, United Kingdom, Israel
% of people who moved in the past year who were foreign-born and moved from abroad (2010) 2.1%
Walk Score: 48

The Tampa  metro area accounted for 11 percent of international sales in Florida in the 12 months through June 2011,  according to a National Association of Realtors report. Only the Miami and Orlando metro areas, also on this list,  surpassed the Tampa  area’s share of the state’s international sales.

A public records analysis by  DataQuick revealed that, of all homes sold in the Tampa metro area between May 2011 and January  2012, 2.9 percent were purchased by buyers with a foreign mailing address.

Of the four counties that make up  the Tampa area, Pinellas  County (which includes St Petersburg, St Pete Beach, and all the beaches to Clearwater) had the highest concentration  of buyers listing a non-U.S. home address, at 4.6 percent, followed by Hillsborough County at 2.2 percent.

Pinellas and Hillsborough make up  the areas surrounding Tampa   Bay. They also contain  all three of the metro area’s largest cities and account for most of the  metro’s population of nearly 2.8 million.

During the time period examined by  DataQuick, foreign buyers purchased resale condos at a higher rate than any  other property type in three out of the area’s four counties. Only in Pinellas County did foreign buyers purchase new  homes at a slightly higher rate (10.5 percent) than they purchased existing  condos (9.7 percent).

Almost three-quarters (72.3 percent)  of the area’s foreign buyers were Canadian. Israel  and the U.K.  each accounted for about 4 percent of the area’s foreign buyers.

Carl Stratton, broker and general  manager at Dennis Realty and Investment Corp in Lutz, Fla.,  said the overseas buyers who work with his firm hail from Canada, Israel  and South America.

“Canada  and Israel have not had  their housing markets fall like they have in America, so the timing is not as  good to buy in their countries. South Americans see owning property in Florida (as) a status  (symbol) in addition to it being a good investment,” he said.

“Also, regardless of America’s current housing crisis, our housing  market has always bounced back, and foreign investors are banking on Tampa’s real estate leading  the country in a housing market rebound.”

His international buyers are  typically buying and renting out investment homes with three to four bedrooms,  two bathrooms and a garage.

“(It’s) good timing to buy now in the U.S.  Tampa Bay  home prices are producing a better return on investment for the rental-home  buyers compared to the same type of homes bought in different cities around the  country,” Stratton  said.

The median sales price for existing  single-family homes in the fourth quarter was $135,500, up 3 percent from the  year before. Condos sold for a median $63,700, down nearly 24 percent on a  year-over-year basis. The condo median sales price was the third-lowest among  the 10 markets featured in this report. (Condos in that price range are not generally located on the beaches but within 20 minutes of them.)

“I think Tampa/Clearwater  is a desirable and well-known large metropolitan area and has surprisingly  low-priced real estate in comparison to South Florida.  Right now the foreign buyers are buying with cash,” Stratton said.

He added that foreign buyers are open to buying  foreclosures or short sales as long as the properties meet their requirements.

Nearly 17 percent of overall sales  in the Tampa metro area were foreclosure sales  in the last three months of 2011 — the lowest share among the Florida markets on this  list and below the national rate. Nevertheless, the Tampa area had an above-average foreclosure activity rate in fourth-quarter 2011, with 1 in 149 units receiving a foreclosure filing.

“North Tampa and  Central Pasco County  (have) many newer homes available for sale. These are particularly attractive  to investors,” Stratton said. “Since there is … an abundance of  these properties currently being foreclosed on and ‘short sold,’ there is a  unique opportunity for foreign and domestic investors alike to invest in these  properties.”

Money transfers and tax regulations  can be challenging when working with foreign investors, said Stratton.

“Depending on the country, it can be difficult having the money  transferred over for the closing, so special considerations  need to be made prior to closing,” he said.

“Foreign investors need to  consider all the rules of our (Internal Revenue Service) as well as the  investors’ home-country tax regulations where the funds are originating. If the  investor doesn’t follow the rules correctly, he could have penalties from one  or both countries that will negatively affect his return on his investment.  Most foreign investors will form  a corporation and (buy) the properties in the corporation.”

Tampa-St. Petersburg-Clearwater, Fla. Metro U.S.
% homes sold purchased by buyers with non-U.S. mailing address (May ’11-Jan. ’12) 2.9% 1.1%
Hernando County 1.8%
New homes 0%
Resale condos 11.1%
Resale houses 1.8%
Hillsborough County 2.2%
New homes 2.1%
Resale condos 6%
Resale houses 1%
Pasco County 1.5%
New homes 0.4%
Resale condos 6.5%
Resale houses 1.3%
Pinellas County 4.6%
New homes 10.5%
Resale condos 9.7%
–Resale houses 1.1%
Median sales price for existing, single-family homes (Q4 2011) $135,500 $163,500
Median sales price % change (Q4 ’10-Q4 ’11) 3% -4.2%
Median sales price for condos/co-ops (Q4 ’11) $63,700 $160,800
Median sales price % change (Q4 ’10-Q4 ’11) -23.8% -1.7%
Population (2010) 2,783,243
% of people who moved in the past year who were foreign-born and    moved from abroad (2010) 2.1% 2.3%
% population age 1 or above that is foreign-born (2010) 12.8% 13.1%
% foreclosure sales (Q4 ’11) 16.7% 23.7%
Foreclosure activity rate (Q4 ’11) 1 in 149 units 1 in 222 units
Vacancy rate (2010) 17.6% 13.1%
Top 3 countries of origin for foreign buyers (May ’11-Jan.    ’12) % of all foreign buyers in metro
Canada 72.3%
United Kingdom 4.7%
Israel 4.1%
Other 18.9%
Interesting little tidbit…
Daily Real Estate News  June 28,
2011  |  

‘Secret’ Short Sale Reward in Florida?

Two lending giants are reportedly offering
home owners who are behind on their mortgage a cash reward to agree to a short
sale in Florida

JPMorgan Chase & Co.
and Wells Fargo & Co. aren’t releasing many details about the short-sale
incentives, but defaulting home owners in Florida have confirmed that they’ve
received anywhere from $10,000 to $20,000 from the banks in order to agree to a
short sale.

To help home owners avoid
foreclosure, banks have offered a “cash for keys” program, offering money in
exchange for surrendering the home, but banks offering incentives for a short
sale would be new, industry insiders say. Usually a the perception is that banks
agree to do a short-sale transaction as almost a favor for home owners, experts
note.

The banks won’t say why only some
home owners are being chosen to receive the cash incentives, nor its criteria
for choosing who gets it, only saying it’s determined by “individual
circumstances,” according to the Florida Sun-Sentinel.

The short-sale incentives are a way for the two banks to write
off the bad loans as soon as possible and avoid the lengthy process of
foreclosure, experts say.

Wells Fargo
says they offers the cash incentives to home owners in Florida and other states
“where the foreclosure process is lengthening,” spokesman Tom Goyda told the
Florida Sun-Sentinel.

In the first three
months of 2011, the average foreclosure in Florida took 619 days, according to
RealtyTrac Inc.

Source: “Chase Borrowers Getting Cash to Complete
Short Sales,”
South Florida
Sun-Sentinel (June 27, 2011)

By Brien McMahon

RISMEDIA, January 14, 2011—In today’s complex housing market, real estate agents are handling an increasing volume of short sales. While many agents view short sales as a win-win for both homeowner and buyer, they can cause many complications if not properly understood and executed.

Since there is no provision in the mortgage agreement for a short sale, the primary lien holder—the mortgage servicer—must approve the homeowner’s request for one. Any additional parties with liens against the property, such as a second mortgage holder, must also approve the request before a short sale can commence. While each short sale scenario is unique and includes numerous variables, the primary benefit to the homeowner is simple—it lets them avoid foreclosure on their credit record at a time when a good credit history is critical for financial and personal reasons.

Homeowners rarely enter into this process on their own—instead they rely on real estate agents, attorneys and/or other vendors to communicate directly with the mortgage servicer. Since each servicer has their own guidelines and requirements, they play the lead role in approving or declining the terms of a short sale.

The Role of MIs in Short Sales
Generally, if the property was purchased with less than a 20% downpayment and required private mortgage insurance (MI), once the servicer determines the sale meets its requirements, they must request the mortgage insurer’s approval of the sale as well.

That’s because the MI company is not obligated to pay a claim until a clear property title is acquired via the foreclosure process, and must waive certain coverage requirements each time they approve a short sale to preserve the insured lender’s coverage.

MI companies generally consider short sale requests for two reasons: for loss mitigation purposes and to provide the homeowner with an alternative to a potential foreclosure. With each request, an in-depth review of the following is conducted:
-Purchase amount relative to property value and seller costs, such as real estate commission: To determine if they are reasonable.
-Loan purpose: To determine why the property was originally bought, i.e., as a primary/second home or an investment property.
-Default situation: To determine the reason why a short sale is being requested.
-Homeowner’s financial situation: To assess the homeowner’s employment status, credit report, income and assets, checking account statements and tax returns to make a decision on the short sale.

Homeowner Contribution and Pitfalls
While many short sales occur due to the homeowner’s obvious financial difficulties, some involve “questionable” hardship, where there does not appear to be financial difficulty so severe as to make a financial contribution impossible. Mortgage insurers strive to make their approval terms favorable so a short sale can be finalized, but it’s important that homeowners with questionable hardship—determined by the in-depth review of the homeowner’s personal and financial situation—realize they may be required to participate financially in the workout. This is typically accomplished via a cash contribution, or execution of an unsecured promissory note to repay a reasonable portion of the loss.

Making Short Sales Work
Despite obstacles that can arise, one of the keys to short sale success is the turnaround time it takes to process each short sale request.

As one of the nation’s largest mortgage insurers, Radian is leading the way in expediting this type of workout. The company estimates it will review more than 11,000 short sale requests in 2010, typically responding to each within two business days with an approval or feedback as to what is needed to obtain an approval.

When it comes to short sales, agents are dealing with homeowners and buyers who, quite simply, cannot afford to wait days—or even months—for an answer. As a behind-the-scenes ally, Radian has the experienced resources in place to move quickly, providing immediate feedback to servicers so they can consider and issue their final approval in the fastest time possible. This ensures a win-win for homeowners, buyers, servicers and agents alike.

Brien McMahon is chief franchise officer of Radian Guaranty Inc. More information may be found at http://www.radian.biz.

Annalisa Weller, Realtor®, Certified International Property Specialist

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