Tag Archives: Kansas City Short Sales

Johnson County KS Short Sale Sellers Can Start Repairing Their Credit Score As Soon As The Short Sale Is Completed

Posted on by

The Jason Brown Group

We’ve helped a lot of Johnson County Kansas homeowners with selling their homes in a Short Sale. A question we often get asked at the end of the process is, how long will it take before they can buy a home again? It had been two years in many cases, including FHA and VA loans, but recently FHA pushed the wait to 3 years. Guidelines are constantly changing and with so many mortgage options today, potential home buyers can call us and we’ll let you know what we’re seeing today’s market. We’re connected to many of the best mortgage lenders in the business and can quickly assess your financial situation and ability to buy a home. 

TmpThe biggest factor in being able to buy a home ASAP is to start improving your credit score as soon as the Short Sale has been completed. The #1 way to do this is to start paying all of your bills on time going forward. Your payment history makes up 35% of your Credit Score and you’ll need to show creditors that you are willing and able to pay all of your monthly bills on time. Until you can pay all of your credit card bills, department store credit bills and any/all other installment loans on time, you will continue to fight a battle with your credit score.

Credit scores range from 300 to 850 range and you’ll want to work to get your credit score up into the 700’s for creditors to start viewing you as a low credit risk. The lower your credit risk, the more willing a lender will be to give you a loan and the better the terms will be (i.e. lower interest rates). As for the rest of puzzle that makes up your credit score, 30% is how much debt you currently owe compared against the maximum amount of debt you could possibly have based on your current credit limits. This considers factors such as how much you owe on a credit card compared to the credit cards max limit, how much you currently owe on your mortgage compared to your beginning balance, etc.

The length of your credit history accounts for 15% of your credit score and considers how long you’ve had a credit card, how long you’ve had a mortgage, etc. If you heard of a great new credit card that you can’t pass up, you still will want to think twice about closing out your old credit card, because old credit is generally the best credit as far as credit scores go.  Accounting for 10% of your credit score is your credit mix, which looks at the different types of credit you use. Also, rather than getting two new credit cards at the same time, avoid a big shakeup of your credit by getting one new card, show a history of making payments on that card on time, and then add the second credit card. The last portion is how much new credit you have and this accounts for 10% of your credit score. Too much new combined credit, such as new mortgage loans, new credit cards, new car loans, new installment loans, etc. over a short a period of time will harm your credit score, temporarily at least.

 

Start Your Home Search!

Posted by Jason Brown

 

Johnson County Kansas Homeowners Facing Foreclosure Should Consider A Short Sale

Posted on by

The Pulse Of The Kansas City Real Estate Market

Do you know someone facing foreclosure on the their home in Kansas City, Johnson County KS, Overland Park, Olathe, Leawood, Shawnee, Lenexa or in the surrounding area?  Have them contact us to discuss getting their home sold in a Short Sale! A Short Sale means working to get the homeowner’s lender to accept selling the home at a price SHORT of the amount needed to pay off the mortgage loan balance.

Photo 1463
Why should a Short Sale be considered?  It can help the owner avoid a dreaded foreclosure… It can reduce the damage to the owner’s credit history… It may allow for buying another home within 1 to 2 years… It can offer the peace of mind of settling the mortgage debt… The homeowner doesn’t pay the real estate commission… The homeowner doesn’t pay for any home inspection repairs… The owner lives in the home during the process…  Kansas “redemption” laws allow 90 days AFTER a foreclosure sale takes place to continue working to complete a Short Sale.

At no cost to the homeowner, The Jason Brown Group can assess the viability of moving forward with a Short Sale. Most lenders want to AVOID taking on another foreclosure, so there’s EVERY reason to attempt to sell a home in a Short Sale when foreclosure is the alternative!  Click here to learn more about the Short Sale process and how we go to work to help homeowners avoid foreclosure.


Posted by Jason Brown

10% Of Kansas City Metro Area Homes For Sale Are Short Sale Listings

Posted on by

Checking The Pulse Of The Kansas City Real Estate Market

If you are upside down on your home or needing to sell and teetering on a break-even, it can be a very stressful time. If this is you, you’re not alone because around 10% of the homes for sale in Kansas City, Johnson County Kansas and the surrounding areas are Short Sales. We get calls all the time from people needing help in determining if they’ll be able to sell in a traditional sale or if they’re going to need to get short sale approval from their lender.

Seller’s who are upside and in a situation they need to sell, can bring the cash to closing to make the sale happen. This happens more than you may realize and is a way to save your credit and make the problem go away. But for the majority of seller’s who are upside down on their home, they don’t have the cash needed and they’ll need to get their lender on board with selling the home in a Short Sale. If you know someone who is facing losing their home in foreclosure, you can recommend they contact us to discuss the process and their situation. If we can achieve a successful short sale, the lender pays all the real estate commissions and many sellers are unaware of that important detail.

Anyone who needs to sell their home in a short sale will want to act quickly because the law that has allowed short sale sellers to avoid tax consequences is set to expire December of this year. If that happens, sellers could have tax consequences on the amount of the loan written off as a loss by the lender. I’m just a real estate agent so be sure to contact a tax adviser with all tax related questions. The average short sale is taking more than four months to complete, so if that tax law isn’t renewed, selling a home in a short sale next year will be less appealing than it is today.


Posted by Jason Brown

Add to DeliciousAdd to DiggAdd to FaceBookAdd to Google BookmarkAdd to RedditAdd to StumbleUponAdd to TechnoratiAdd to Twitter

Interested In Buying A Kansas City Or Johnson County Kansas Short Sale Listing?

Posted on by

Checking The Pulse Of The Kansas City Real Estate Market

In today’s market, many home buyers in Kansas City and Johnson County Kansas are looking for deals on Short Sales and foreclosures. For many, the term Short Sale is synonymous with bank foreclosure listings, yet that couldn’t be further from the truth. Bank foreclosures are listings that have already gone through the foreclosure process, the bank now has a clear title to sell the property and the bank is looking to get the properties off their books. But Short Sales are much different. In a Short Sale, the homeowner is upside down on their home but it has not (yet) been foreclosed on. In other words, the home seller is HOPING their lender will accept a Short Sale, so the home can be sold before it goes into the foreclosure process.


Short Sale means a short payoff of what is still owed on the home. In many cases, the seller’s lenders doesn’t even know what’s about to hit them. Though it can’t be a surprise generally speaking when a lender is notified a seller is requesting a Short Sale, the reality is that many sellers are not yet behind on their payments. So this could mean the first notification a seller’s lender gets that a loan is about to go bad is when a listing agent sends the lender a Short Sale package. A Short Sale package includes the real estate contract (with whatever buyer is trying to purchase the home) and a laundry list of other items (i.e. proof of job loss, etc) that the seller’s lender will demand if there’s any chance of the Short Sale getting through.

If you are planning to buy a home in Kansas City, Johnson County Kansas, Overland Park or the surrounding area, there’s certainly many complications that come with Short Sales that aren’t encountered when dealing with a typical re-sale transaction. There’s many additional hurdles to consider, including whether the listing agent assisting the seller knows how to properly handle a Short Sale. From my experience, most agents are not experienced in dealing with Short Sales. If they’re not, the chances of a successful Short Sale just shot down well below a coin flip. So it’s important that your Buyer’s Agent politely quiz the listing agent on their expertise with the Short Sale process.

Short Sales can take 60, 90, 120, 150 days or more to get the closing table (many never do close), so you MUST have patience AND time on your side or Short Sales are not for you. You’ll be asking a lender to accept less than what the seller owes on the home and they’ll need to study the offer, do a detailed market analysis and come to a conclusion on either accepting your Short Sale offer or choosing to take the home back by way of foreclosure.

Click here if you are a homeowner considering selling your Kansas City area home in a Short Sale.

Posted by Jason Brown

Add to DeliciousAdd to DiggAdd to FaceBookAdd to Google BookmarkAdd to RedditAdd to StumbleUponAdd to TechnoratiAdd to Twitter

Deciding Whether Selling Your Overland Park Home In A Short Sale Makes Sense?

Posted on by

Checking The Pulse Of The Kansas City Real Estate Market

If you’re behind on your mortgage or thinking you’re about to get behind on your mortgage payments, now is the time to sit down with an Overland Park Realtor and discuss your options. But don’t sit down with just any agent, make sure you sit down with an agent who understands the Short Sale process. Most agents don’t have a complete grasp on the complicated process and getting hooked up with the right agent can easily double or triple your chances of success.

We go through a checklist of questions to help determine whether we think a homeowner has a good chance at achieving a successful Short Sale. A Short Sale can be more or less complicated depending on whether there’s just one lender involved or whether a second loan has been taken out on the home. Finding out who all has an ownership interest in the property is critical in devising an out plan for each party involved. We need to know if a seller has received a Notice of Default from their lender because time is of the essence more than ever when dealing with a Short Sale.

We always want to be sure a homeowner has exhausted any possibilities to stay in the home, such as refinancing or asking their lender whether a loan modification is possible. Every homeowner’s situation and goals will lead to different questions being asked. We are constantly working to get a complete picture of what we’re up against. So that we can see all lien’s that have been placed against a property, we get our home sellers a free preliminary title report so we can see exactly what it’s going to take to achieve a successful Short Sale.

There’s a lot of work to be done to get a lender to even CONSIDER a Short Sale, much less accept one. From pin-pointing the hardships that have occurred to cause the situation to helping clients explain these hardships to their lender, we’re there every step of the way. If you’re in a distressed situation with your home and think a Short Sale may be a possibility for you, we’re happy to discuss your situation.

Posted by Jason Brown

Add to DeliciousAdd to DiggAdd to FaceBookAdd to Google BookmarkAdd to RedditAdd to StumbleUponAdd to TechnoratiAdd to Twitter

If You’re Upside Down On Your Kansas City Home, Consider A Short Sale Before Walking Away

Posted on by
Checking The Pulse Of The Kansas City Real Estate Market

If you’re upside down on your home, you may wake up some mornings thinking about walking away from your home. Millions of homeowners in the U.S. are faced with this dilemma. But I’ve never met anyone happy to simply walk away from their home, uproot their family and damage their credit. But for many, the mortgage owed on their home is too large of an obstacle to overcome… and these two options seem to be the only options to many. But there’s a third option that more and more homeowners are using to deal with housing problem — that option is a Short Sale.


With a third option in the mix, it’s a lot to consider but just know that many homeowners who are successful in selling their home in a Short Sale are able to finance another home as quickly as two years down the road.  That possibility alone is exciting to many who were sure they weren’t going to able to get financing on another home for years to come.  Many homeowners will also ignore the Short Sale possibility because they don’t have the money to pay the closing costs. When I explain to sellers that their lender will pay all of the closing costs, including the real estate commission, most are very surprised. If they’re going to accept a Short Sale, your lender UNDERSTANDS you don’t have the money to pay these costs. So they factor them in when considering the Short Sale.

If you’re going to achieve a successful Short Sale, you’ve got to get your home under contract with a buyer. From there, you’ve got to submit the contract to your lender for review. Why would a lender agree to accept a Short Sale? Because if you aren’t able to continue making your payments, they realize that foreclosure is the other option. And lenders don’t want more REO properties on their books. When deciding to accept a Short Sale, the lender will have the home appraised – hopefully factoring in issues with the home – and decide whether it makes sense to accept the Short Sale (or decline it and foreclosure on the property and sell it later once they’re in control of the property).

The first step to getting the process moving is hiring a listing agent. Selling a home in a Short Sale is much different from a typical resale transaction and you’ll absolutely need an agent who knows what they’re doing. The initial list price of the home will need to be at market value, though the home is unlikely to generate interest at the initial list price. You need to start at market value however to show your lender you’re doing all you possibly can to sell the home for as much as possible. After a short amount of time on the market, you’ll want to start dropping the price incrementally until you locate a buyer — remember Short Sale buyers are not going to pay market value for a home that has to go through the unpredictable Short Sale process.

To make the Short Sale process as smooth as possible for sellers, I have a Short Sale specialist in my group to negotiate with your lender (with your approval). So while I’m busy working to sell the home and get it through the typical sale process, my negotiator is working with your lender to get their approval on the Short Sale. But don’t worry because I take care of the costs of having the negotiator working to move the process along. Buyer’s agents are becoming more aware of how the process works and asking questions up front. If a buyer’s agent senses the listing agent has no clue what they’re doing, they’ll likely advise their buyer clients to look elsewhere. So be sure you don’t just hire any agent and should you have any questions about the Short Sale process, please contact me to discuss your options.

Posted by Jason A. Brown

Add to DeliciousAdd to DiggAdd to FaceBookAdd to Google BookmarkAdd to RedditAdd to StumbleUponAdd to TechnoratiAdd to Twitter

Consider This Before Calling Your Buyer’s Agent To Schedule A Showing On A Short Sale Listing

Posted on by
Checking The Pulse Of The Kansas City Real Estate Market

Many buyers call in wondering why a particular home appears to be such a great deal. It’s become routine really. I get the call, I log into MLS and check the “Showing Agent Info” section of MLS and, bam, there it is…  SHORT SALE, SUBJECT TO LENDER APPROVAL.  The public can’t see the Showing Agent Info section of MLS, so it takes an agent logging into the Kansas City MLS to actually tell (in most cases) whether a home is a Short Sale listing. Once I know we’re dealing with a Short Sale, I always provide an abbreviated layout of the Short Sale process. At this point most buyers choose to go a different direction with their home search.


The main reason most Kansas City home buyers won’t mess with a Short Sale is because they need a closing date they can rely on. Short Sales however rarely close on the date written into the contract. In the last year, I found around 1,200 Short Sale listings came on the market in the Kansas City metro area. I then searched to see how many Short Sale closings occurred and found 375.  At that annual sales rate and considering the , that’s 13 months of Short Sale inventory in the Kansas City area.  I’m betting that more than half of the current Short Sale listings do not make it to the closing table — which means they’ll head into foreclosure.

Still thinking you want to mess with buying a Short Sale? Let’s dig into WHY Short Sale listings are such a challenge. The definition of a Short Sale is the homeowner is “upside down” on what they owe on the home. Many buyers think of Short Sales as the same or similar to a Foreclosure and that couldn’t be further from the truth. A bank foreclosure is a listing ALREADY taken back by the bank (the homeowner is out of the home), the bank now has ownership of the property and can sell it in any fashion the bank sees fit. A Short Sale on the other hand still has the homeowner in the home (in most cases) and they may be struggling to get/keep their house payments current still.

In a Short Sale, the seller is HOPING their lender will accept a “Short” payoff of what’s owed on the home. The problem for buyers is you have no idea whether the seller’s lender will be willing to accept losing the money necessary in any particular Short Sale contract proposed to the lender. So a buyer and seller can be on the same page in regards to the contract price, but what REALLY matters is if that price is high enough for the lender to accept the Short Sale, rather than just letting the home go into foreclosure. If a Short Sale offer is too low, the lender could easily determine they’d do better by foreclosing on the home, taking possession of the home and selling it after the foreclosure process is complete. Either way, the bank loses. So it becomes the bank choosing the lesser of two evils.

Some buyers are willing to take the chance and feel all they have to waste is some time. That may be true and the inspections are often allowed to be postponed until after finding out whether the lender will accept the proposed Short Sale. But most buyers can’t wait 2, 3… 6 months to find out. If you can, then you may be the perfect Short Sale buyer. But there’s one more trait that any buyer must have for me to work with them on a Short Sale purchase — complete patience with the process. There is little a buyer’s agent can do to move the process along. The success of the transaction lies with the listing agent because they are the only one the seller has authorized to have discussions with their lender.

It’s also not out of the question that the lender will never respond to the Short Sale contract that’s presented. You’d think they’d provide a yes, no or some type of other response. But they’re not required to do so and sometimes you never even hear back. For this reason, there’s a place in the base Short Sale addendum we have where we can write a maximum amount of time the buyers are willing to twiddle their thumbs waiting for a lender response. 60 to 120 days is pretty common. One more tip. Before you EVER think about making a Short Sale offer, have your buyer’s agent ask the listing agent “have you received a complete short sale package from the seller that’s ready to be submitted today to the lender?” If the answer is no, the chances of that particular home making it the closing table just dropped into the single digits.

Click this link if you’re considering selling your Kansas City area home in a Short Sale.

 


Posted by Jason A. Brown

On The Bright Side: 80% Of Us Aren’t Upside Down On Our Kansas City Homes

Posted on by
Checking The Pulse Of The Kansas City Real Estate Market

The site with figures more questionable than Enron (starts with a Z and ends with a W) estimates that 1/5th of U.S. homeowners are upside down on their homes. If you believe these stats then that tells us that 80% of us are happier than a fat tick on skinny dog! OK, maybe  it isn’t telling us THAT but – at the very least – it indicates 80% of homeowners won’t be walking away from their homes and mortgage payments any time soon. So what about the other 20%? Well, contrary to popular belief, many of the upside down 20% won’t be walking away from their homes either. There’s a school of thought that homeowners will walk away from their responsibilities at the drop of a dime, putting holes in the walls on their way out. Yes that DOES happen sometimes but it’s not the typical outcome for pressured homeowners.

It’s well-known that many buyers who purchased homes since 2005 are now upside down. Heck, some who purchased homes 10 years ago or 10 months ago are upside down. But the majority of homeowners and home buyers today go forward under the assumption that real estate prices will rebound – sooner or later. Furthermore, not nearly enough consideration is given to the pride of homeownership and to the other measurable and immeasurable benefits derived from owning a home.  Some will scream that renting is the way to go but I don’t personally know anyone who would prefer to live in apartment – or even rent a home – to owning a home of their own. I’ve also seen enough  in recent years to know that most homeowners will do whatever it takes to stay in their homes — it’s that important to them.

Even homeowner’s who believe it’s time to get out have options other than foreclosure. Some will work out a Short Sale with their lender while others will sell their home at a loss to save their credit and live to buy another day.  So if 80% of homeowners are not upside down and a large portion of the 20% who are upside down will not simply walk away, is there concern elsewhere? The answer is yes and it’s in the large number of  homeowners who are already 90+ days behind on their mortgage payments and in the large number of adjustable mortgage interest rates that are scheduled to reset in the next six months or so.  Many won’t be able to overcome being months behind on their payments and others won’t be able to make a several hundred dollar higher mortgage payment. I also have concerns about further job losses, pay cuts, shorter work weeks and higher credit card interest rates, among other things. Any of these factors could push an upside down homeowner – or a right side up homeowner for that matter – out of their home.

Posted by Jason A. Brown