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.

The “S” Word is much less impacting than the “F” Word!

Posted by Michael Hughes

“The sclerotic process of short sales will become streamlined in the future. Streamlined meaning will take only 2-5 months.”

Are you late on your mortgage payement(s)? Do you have a hardship? Either medical, divorce, loss of job, family issues or any of the multiple others? Why do a Short Sale? That’s easy because it is 5-8 years less (credit) impacting than a foreclosure. Do you qualify? Call me;  in about 20 minutes I will know whether you have a great chance of qualifying or not. Regular Boulder real estate or Luxury Boulder real estate many are in danger of foreclosing because of financial and other hardship.Do you think this will impact the market for sellers and buyers?

A Short Sale as opposed to a Foreclosure is much more advantageous for the Seller. Credit reports typically show it as “settled.” Any tax implications to the seller/home owner should be reviewed by their independent real estate attorney or accountant. A 1099C may be issued for the short fall and is handled somewhat differently than a 1099. Pre-foreclosure or short sale involves the sale of the property by the borrower to a third party for less than the amount owed (short sale) to satisfy the delinquent mortgage, as agreed to by the lender, investor and the mortgage insurer. I underline investor as this is where most of the delay happens. While this is getting better all the time due to delegated authority to the lender. Short sales are getting faster and there is no reason to go into foreclosure. Together we can explore all options to foreclosure: Refinance, Financial Counseling, Modification, Short Sale, Deed in Lieu and lastly the “F” word Foreclosure.

If you or anyone you know are 30 days or more late on your/their mortgage payment call me or give them my name and number lets see if we’re a good fit.

If you have questions regarding this article or have any questions about Boulder, Boulder real estate or would like information about 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. 

Boulder Real Estate-Listing Agent

When choosing a listing agent you should choose the one that best meshes with your personality. Someone you like and trust.

1. How much? Ask potential agents how much they think they can sell your home for. If two agents say $700,000 and the third says $800,000, think hard. It’s likely the high bid is an exaggeration to attract your business. Also it may be someone new to the business. In the trade it’s known as buying a listing. In the end, you’ll be the one who pays because the high price will have you chasing the market not leading it. Also a great question. What is the Absorption Rate for my neighborhood. In other words how many months of inventory is on the market in my price range and how long will it take to be absorbed if it is priced properly. This will help you understand where the market is headed.
2. How will you market it? I have numerous ways in which to get the property into the collective consciousness of buyers wanting to buy in your neighborhood. I will also talk about what kinds of people are the most likely buyers and how I will reach out to those specific people. I will show you my marketing plan tailored to your property.
3. How has your business changed in the last five years? Can you say wired to the teeth. Smart phones, e-blasts, twitter, linked in, numerous syndicated websites. Exposure, exposure, exposure! At Sotheby’s International Realty-Boulder this has brought in numerous international buyers.
4. Tell me how your last two deals surprised you? I have great success stories and would love to tell you more about these.
5. How many people are you selling homes for right now and what are you doing for them? It may not be a bad thing that a high-powered agent is juggling 15 homes, but don’t expect him/her to give you personal service, although their assistant should be attentive, you may end up dealing with someone new each time. On the other hand, be wary of an agent with no other customers because they may lack experience and contacts.
6. What do you expect of me? A good agent will have expectations. They may want you to leave and take the dog when the house is shown, paint the garage, use their stager, move some furniture around and scrub the tile in the bathroom. It shows that they can think like a buyer and that’s a good thing.
7. What advice would you have for me if I get an offer from a buyer who wants to use an FHA loan? It wasn’t very long ago when the right answer might be run the other way, but these days government-guaranteed financing from the Federal Housing Administration, the Department of Veterans Affairs and state and locally managed loan assistance programs can be key to selling a property. Real estate agents shouldn’t be pushing buyers toward their favorite lenders, but they should be able to help them and you wade through complex financing issues.
8. What’s your fee?  My price of doing business.
9. Can I talk to one of your previous clients? I have a list of previous clients upon request.

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 this article 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.

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

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 10^th 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

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 2^nd, 3^rd or 4^th 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.

Home for sale Boulder;HAFA Starts April 5, 2010 (Short sale vs. Foreclosure)

Posted by Michael Hughes  February 19, 2010

Please leave a comment and link to my blog.

If you have a home for sale in Boulder, a short sale as it were the lender agrees to take less than the full amount the homeowner owes on the mortgage. The transaction is saying that the value of the house is lower than the amount due, sometimes significantly so.

These deals appeal to homeowners, not so much (yet) for banks. The homeowners’ credit score and ability to borrow will be damaged, but not as much as if the house goes into foreclosure.  And the IRS is not that forgiving on what is considered unearned income or deficiency judgement (the difference between what you owe and the distance between that and what is accepted by the bank). HAFA may remedy that.

The easiest short sale is one where there is only one lender. Easy being the operative but relative word. Short sales to this point have not been easy nor fast. When there are two or more lenders it is almost impossible to get them to come to agreement on which parties will receive how much.

If the banks would just enlighten up and start accepting these offers the log jam of short sales and foreclosures would soon be behind us. Short sales are definitely less costly than a full blown foreclosure and they are quicker.

Foreclosures still outnumber short sales but (short sales) are the only way we can get these inventories lower and to what the new “normal” as far as supply and demand (absorption) will be when the dust settles. The shell shocked confidence of Americans is playing into this big time.

The Treasury’s HAFA program will probably increase short sale activity significantly. Under HAFA, the lender settles on an approved price in advance. A lender must provide “Either a list price approved by the servicer or the acceptable sale proceeds, expressed as a net amount after subtracting allowable costs that the servicer will accept from the transaction.” This will help speed up the transaction and minimize short sale fraud.

Under HAFA, the servicer must “allow a portion of gross sale proceeds to be paid to subordinate lien holders in exchange for release and full satisfaction of their liens.” That helps with the 2nd lien problem and is great for the homeowner because there will be no deficiency judgment (also, upon closing, the first mortgage holder has to agree to release the borrower “from all liability for repayment of the first mortgage debt”). This is much better than “walking away”! Take action before it is too late and you are going in to foreclosure.  Call me today. You can avoid foreclosure. It is a matter of take the band aid off quick or remove it hair by hair. Which would you prefer?

HAFA starts on April 5, 2010 and is limited to homeowners with an unpaid principal balance less than or equal to $729,750.

If you NEED HELP WITH A SHORT SALE or have questions regarding this article or Boulder Real Estate please call me 303-359-6627 or e-mail Michael Hughes at Fuller Sotheby’s International Realty in Boulder, CO

Short Sale Better Than Foreclosure

Foreclosure vs. Short Sale
By Michael Hughes
Do you avoid pain whenever possible? Better the “S” word (ShortSale) than the “F” word (Foreclosure). Many folks are going in to foreclosure not even considering the less painful and less impacting financial option of a short sale. In desperation, many people try selling their home themselves to save on realtor’s commissions, pricing it just above market and what they owe, only to end up in foreclosure. It is a difficult choice but when given the facts the choice becomes much less painful and simple.
Homeowners can avoid foreclosure if they act quickly. I have helped many home owners avoid foreclosure by negotiating a short sale for them. Some people just don’t understand the long term effects of foreclosures, or are afraid of considering a short sale because they think it will cost them more money. That is simply not true. Here are the facts that show the benefits of a short sale compared to a foreclosure:
Short sales generally do not influence credit scores, late payments or default in payments can put downward pressure on credit by 50 to 150 points. A short sale is not a critical mark on your credit report, most credit bureaus mark it as a paid note. If there have been no late payments, some buyers can buy again immediately. If there have been late payments, two years is required to apply for a Fannie-Mae backed mortgage, or 3 years for an FHA loan. Short sales help the economy because the banks have less debt, the homes are kept by individual owners who take care of them, and the bank will pay the realtor’s commission who helped sell the home.
Foreclosures generally drop the FICO and other credit scores from 200 to 400 points. Foreclosure will remain a derogatory mark on credit reports for 7 to 10 years. Most cases must wait at least 7 years before buying again, if the home was a primary residence it may be shortened to 5 years. Foreclosed homes can ruin a neighborhood, causing even further deterioration in the market values surrounding the home. Some people strip the home of valuables and leave the home abandoned.

Ican help you. If you have questions about this article or houses in Boulder or Boulder Real Estate give me a call anytime. Michael Hughes-Fuller Sotheby’s International Realty 303-359-6627 or you can visit my website at www.BolderRealEstate.com