Category Archives: short sale

Short Sale Colorado

Short sales can be painful.  Add to that, the concern, that the bank may come after you years later, for a deficiency, a tax consequence or send you a 1099 or promissory note to payback the deficiency. All of these can be devastating to your finances,  often spinning short sellers into bankruptcy. A short sale takes about 3 years to overcome, a bankruptcy can double that, foreclosure can add more time. The title to the property may be clouded by a deficiency or a judgement which can also cause future issues.  If the short sale is not done properly and in a timely manner it can lead to foreclosure.

What would you think if all of the problems with a short sale could be negotiated away and done in a timely manner? No deficiency! No tax consequence! No 1099! No promissory note! Short sales are tough enough on the homeowner. They don’t need to complicate your life and make it worse and spin you in to bankruptcy.

We work with investors who utilize their own in house negotiators to negotiate all the guesswork out of short sales. We can negotiate away the tax consequence(s), the 1099, the promissory note, the deficiency. What this means to you is no further problems or issues to deal with in the future. It is a clean short sale. No future surprises.

We can help you. Call me today to see if you qualify for a short sale. We can help take the pain part out of the short sale process.

Michael grew up around Santa Fe and is a longtime resident of Boulder and has been with Sotheby’s International Realty since their inception in Boulder County and along the front range.  If you have questions regarding a clean short sale or would like information about Boulder real estate or Boulder Luxury Real Estate check out my website. You may also call or TEXT me 303-359-6627 or e-mail Michael Hughes is a Certified Negotiation Expert and full time Realtor at Fuller Sotheby’s International Realty in Boulder, CO.

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2011 Boulder Real Estate

Posted by Michael Hughes-Sotheby’s International Realty

2010 was a great year for me personally in Boulder real estate and I have much gratitude. I see many changes as I look into the future. 2011 is going to be better yet. Many possibilities and opportunities will come to pass in 2011.

  • Jobs– Improvement was seen in 2010 in the housing market.  The improvement won’t be dramatic until we see pervasive job growth.  Housing prices will remain stable in Boulder.
  • The “F” word or the “S” word – Foreclosures and Short Sales of course. Boulder has had a few of these, very few comparatively speaking. Short sales and foreclosures create excess supply, artificial low prices and provide downward pressure on pricing. There is very little “shadow market” in Boulder and this is great news.
  • Robust Rental Market-this is great news for potential tenants and will see a saturation of cool rental properties, much to the chagrin of landlords.
  • Interest Rates Will Increase– Interest rates are at nearly 50 year lows.  Rates will rise in the near future. If you don’t get a loan or refinance now, you will wonder why you didn’t take advantage of these rates a year from now and buy that Boulder luxury real estate.
  • Buyers Become Commuters – Many buyers that work in Boulder are willing to buy outside the city and take up the commute.
  • Housing Shortage – Population continues to increase. In Boulder County new housing starts are way down.  There is a continual rise in population in Boulder.  Something’s gotta give.  What this says to me is the builders will be caught with their pants down (except Markel who continues to build) and the shortfall of housing will result in fewer available housing choices on the market for buyers. This of course will happen over time.
  • Did you Know? — Did you know that in Boulder last year between November and January 39 homes over $750K sold?! That is one home every 40 hours. I professionally have had the best year ever! I nurture and care for my clients. Call me today if you need help selling or buying Boulder real estate.

If you have questions regarding this article, have any questions about Boulder or Boulder Luxury Real Estate check out my website. You may also call or TEXT me 303-359-6627 or e-mail Michael Hughes at Fuller Sotheby’s International Realty in Boulder, CO.

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Banks Resume Foreclosures…

  • B

I can help

Posted by Michael Hughes

It is important  in today’s Boulder real estate market that you know what a short sale is In order for these people to sell their house and move on they either have to come to the closing with money or negotiate with the bank who hold the mortgage to accept less than they owe (short sale).

The Basics: A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property’s loan (mortgage).  It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the borrower into foreclosure. A short sale is better for the borrower because it does not impact them as severely (or nearly as long) as a foreclosure does. Both parties (lender and the owner) consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers. This agreement, however, does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, known as the deficiency..

Owners View: These would be sellers are stuck.  They would like to (need to) sell their house in Boulder, but for any number of reasons (bought at the peak of the real estate market, or negative amortizing loans, or ARM’s, or second loans, or HELOC’s or, or,or) they cannot find a price a buyer will pay for the home and that will also pay off the existing loans and closing costs.  Convincing the lender is not an easy job to take less than they are owed.  First of all there must be a compelling hardship where the seller absolutely cannot keep up the payments nor come up with cash to close.
So they must have a proveable hardship (and write a letter in detail regarding what the hardship is). Once all of the documentation is complete a package including the sales contract signed by buyer and seller is sent to the bank for approval.   This is the tough part, it takes patience.  It can take up to 6 or 7 months but usually no fewer than 8 weeks to get an answer from the bank.  If the short sale is approved and  the sale goes through at a lower amount,  the sellers credit is hurt (although not as bad as a foreclosure) and the bank still has the right to claim and try to collect a deficiency.

Buyers Perspective: Short sales provide a unique value opportunity.  If you have the patience of Job. Many times banks approve a price which is a great deal for the buyer.  The main downside for a buyer is the uncertainty.  The bank has the right to accept other offers so even if you were the first offer in to the bank, by the time they get around to reviewing it there may be multiple offers.  It might take two or more months to figure out that the bank will not approve the list price of the house.  Buying a short sale is not for someone who has a certain date in mind or is not willing to be patient while the weeks tick by without any word.  There is no countdown, there are no numbers.  You hear when you hear and the news is not always what you had hoped for.  For the right buyer it is a good opportunity but it is certainly not for everyone.

If you have questions about this article or anything Boulder TEXT or give me, Michael Hughes a call at 303-359-6627 and you can also visit my website or the Boulder MLS. You can also facebook me.

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Banks Halt Foreclosures

Posted by Michael Hughes

Bank of America has recently announced a halt on all the foreclosures it is processing throughout all of the United States including some house in Boulder. They said that they were taking these measures in order to investigate a “few flaws” in the process that they might have found, according to a statement made by the banking giant.

Bank of America decided to freeze all foreclosures only 7 days after one of the biggest banks in America announced it was doing the same thing in 23 states that require a court approval in order to proceed with a foreclosure.

The foreclosure process will still continue on, however it will stop before it gets to a judgement ruling or a foreclosure sale. Somewhat like traffic on highway 36 going out of Boulder at 5 pm. To say that the pipeline is clogged would be putting it mildly. This was the process that was going to put our housing market back on track. When you have a fever you take ibuprofen or something to keep the fever down until your bodys’ natural defenses can kick in. In this case you work your way through all the foreclosures when you have an ailing housing sector until they are all but diminished to a natural level. The freeze is only supposed to last a few weeks. I guess we’ll see. The banks are having a tough time working through all these foreclosures. Does that mean that the short sales will take an indefinite detour or backseat? This is not a good thing for the housing community. We need to continue to work through these foreclosures and get them done as quickly as possible. JPMorgan Chase also halted foreclosures on 56,000 people who own homes in the U.S. they also said they would be reviewing how the approval process was working. Apparently some of the employees who review and approve the files were not following the guidelines. In the past few days most banks have followed suit. This is not only bad news for foreclosures but also for short sales of Boulder real estate in the county. Short sales were on the back burner and took a very long time, until this is sorted out  and untangled they will not be moving forward.

We have been very lucky with Boulder Real Estate. There are not a Tsunami of foreclosures like the sand states. What do I say? Get it done. Of course follow the proper procedures but pull the band aid off quickly and move along! Read the entire story.

If you have questions about this article or anything Boulder TEXT or give me, Michael Hughes a call at 303-359-6627 and you can also visit my website or the Boulder MLS. You can also facebook me.

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Aggresive Short Sale Strategies

By Michael Hughes

Strange times.  Gone are the days when you shopped for a house, found one you liked, and haggled politely with the seller, then moved in. Don’t get me wrong it does happen more often than not. But in today’s market, some buyers are making 3 to 12 offers AT A TIME. No fair, you say? Impossible! What’s the point? How can they do that?

The Boulder Real Estate (county)  market has an ample amount of distressed homes, not so much in the Boulder proper but definitely the outlying areas. Especially short sales. Combine that with aggressive, determined buyers and you’ve got an apocalyptic explosive extravaganza.  What’s that mean? Let’s look at the scenarios in play.

Consider an aggressive buyer:

This is a pre-approved or all cash buyer who is laser beam focused on the type, style, size, location, price, amenities, and anything else that they might want in a home.  They WILL buy a home some Boulder real estate in the  County.  They are determined, tenacious, relentless, tech savvy, unafraid, bold, organized, employed, and destined for success.  They have their iPhones out and are ready to rumble. Mix this with a Short Sale home for sale, where the outcome, terms, timing, conditions, price, and closing is extremely unpredictable.  Certainty and determination meets uncertainty, molasses in January slow response times and frustration.  Would you hitch only one wagon up to that star?  The aggressive buyer will answer – “not on your life.”

So what does this forceful buyer do in a market with a reasonable number of Short Sales?

Like an automatic shutter on a camera taking multiple frames per second.  Or a Gatling gun firing continuous rounds of bullets until it hits something.  Or a waistline challenged person with his buffet pants on in the buffet line. Get the idea?  The aggressive buyer takes control of the only thing he can – the offers he makes.  And waits to see what happens.  Which cork on the bottles of champagne is going to pop first?

Look at the other side of the coin:

Why in the world would a Boulder County home seller go along with this?  Well…One reason sellers work with buyers who are making other offers at the same time is because the Colorado Real Estate Commission approved form; Contract to Buy and Sell Real Estate,  has no line item to indicate how many other offers the buyer has made.  The buyer is not required to disclose the number of offers they’ve made. Currently. So the seller has no official way of knowing whether or not a buyer is firing off multiple offers.  Do some sellers ask?  Sure.  Do buyers always come clean? Maybe. Maybe not. Another reason seller’s work with buyers making other offers is that seller cannot submit a request for approval to proceed with a Short Sale WITHOUT an offer.  They usually take the first offer they receive and work with their agent to submit the Short Sale Package to get the ball rolling with their bank. Regardless of how many other offers that buyer has made.  It gets their process started.  By the time it comes down to the time for approval there are typically multiple offers on the house in boulder county. They may end up with an approved Short Sale and no real buyer, but the process has begun.

Bottom line…whether you are buying or selling in today’s wild west Boulder County real estate market, the more you know, the more prepared you’ll be to face whatever the market brings you.  And you can create your strategy accordingly.

If you have questions about this article or anything Boulder TEXT or give me a call anytime. Michael Hughes-Fuller Sothebys International Realty=303-359-6627 or you can visit my website at www.BolderRealEstate.com

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A Short Sale before you’re 103 years old

By Michael Hughes  October 5, 2010

A short sale can take forever.  Currently of the roughly 50 million households in the U.S. 2.5 million are in foreclosure and 7.3 are delinquent.  A related number which encompasses many of these households are the 11 million homeowners who owe more than what their home is worth (“upside down or underwater”).  In order for these people to sell their house and move on they either have to come to the closing with money or negotiate with the bank who hold the mortgage to accept less than they owe (short sale).

Basically what a Short Sale is: A short sale is a sale of  Boulder real estate in which the sale proceeds fall short of the balance owed on the property’s loan (mortgage).  It often occurs when a borrower cannot pay the mortgage loan on their house in Boulder county, but the lender decides that selling the property at a moderate loss is better than pressing the borrower into foreclosure. A short sale is better for the borrower because it does not impact them as severely (or nearly as long) as a foreclosure does. Both parties (lender and the owner) consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers. This agreement, however, does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, known as the deficiency..

Owners View: These would be sellers are stuck.  They would like to (need to) sell but for any number of reasons (bought at the peak of the Boulder real estate market, negative amortizing loans, ARM’s, second loans, HELOC’s) they can’t find a buyer who will pay a price for their home and that will also pay off the existing loans and closing costs.  Convincing the lender is not an easy job to take less than they are owed.  First of all there must be a compelling hardship where the seller absolutely cannot keep up the payments nor come up with cash to close.
So they must have a proveable hardship (and write a letter in detail regarding what the hardship is). Once all of the documentation is complete a package including the sales contract signed by buyer and seller is sent to the bank for approval.   Oh and there may be multiple contracts in play so roll those dice. You may be one of up to 10 or more offers in play. This is the tough part, it takes patience.  It can take up to 6 or 7 months but usually no fewer than 8 weeks to get an answer from the bank.  If the short sale is approved and  the sale goes through at a lower amount,  the sellers credit is hurt (although not as bad as a foreclosure) and the bank still has the right to claim and try to collect a deficiency.

Buyers Perspective: Short sales provide a unique value opportunity. If you have the patience Job. Many times banks approve a price which is a great deal for the buyer.  The main downside for a buyer is the uncertainty.  The bank has the right to accept other offers so even if you were the first offer in to the bank, by the time they get around to reviewing it there may be multiple offers.  It might take two or more months to figure out that the bank will not approve the list price of the house.  Buying a short sale is not for someone who has a certain date in mind or is not willing to be patient while the weeks tick by without any word.  You must have patience to the 10th power.  You hear when you hear and the news is not always what you had hoped for.  For the right buyer it is a good opportunity but it is certainly not for faint of heart or those wishing to move in a certain time period.

These are some simple yet effective tips to help you understand what a short sale is and to help you evaluate if this is a fit for you. When you are ready to start – ask your Realtor for help!

If you have questions about this article or anything Boulder TEXT or give me a call anytime. Michael Hughes-Fuller Sothebys International Realty=303-359-6627 or you can visit my website at www.BolderRealEstate.com

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The 3 Scariest Words in Boulder County Real Estate

Short Sale Time Line

Posted by Michael Hughes   September 17, 2010

When you hear the terms Approved Short Sale it’s like you think your dream came true. All is good in the world and the planets just aligned in Boulder County. Snap out of it!

What I know is this. At one time there was a buyer for the “Short Sale.” Many months later it was approved, for that specific buyer at that specific price at that specific point in time. It is only approved in the sense that it is an approval for a contract that is no longer valid. More than likely for one reason or another, the buyer walked on the offer. Evaporated.  Hasta la vista baby.

So now you as a buyer of the “Approved Short Sale” come along. You are prequalified for a bank loan, you have your down payment in line and completely documented. You think that the last buyer did all the work and now you will slide in to the “Approved Short Sale.”  Not so fast!

“Woohoo” Approved Short Sale, this is awesome. Think again. The previous offer was for then. The net sheet for the bank was done so many months ago. Before the grass died, before they didn’t pay the HOA for months and before what used to be a Koi pond is now a toxic waste dump. So the savvy Short Sale listing agent is now in scramble mode to re-market the house.  He remarkets it as “Approved Short Sale” hoping to bring in a similar buyer. After  months and months of dealing with the bank on a short sale, many buyers say “oh just shoot me now, put me out of my misery.

Here’s the scoop on Approved Short Sales. The bank or banks if there is a 2nd, 3rd or 4th lien holder will have to do a Re-Do. The bank will start from the beginning point and will proceed in the same way they did with the initial buyer.  There is an unknown, with the length of time of response and for the price, terms and conditions the bank will eventually get around to letting you know. So it’s back to square one and you will have to go through the entire process.

At least now you can decide if this is a game you wish to play and not put your fingers in your ears and say “lalalalalalalalala.” Just keeping it real in Boulder County.

Michael Hughes is a Realtor with Fuller Sotheby’s International Realty in Boulder Colorado. You may comment below. If you have a question you can call or text me at 303-359-6627 or you can view my website.

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