ARIZONA RESIDENTIAL SHORT SALE TIPS

1.  Understand your loan terms, your liability to the lender, tax implications and the market for your home.  A borrower must understand whether its loan falls under Arizona’s anti-deficiency laws, the tax consequences of a potential short sale, and the home’s current value.

2.  Know your leverage, if any, and what your lender wants to accomplish in the short sale.  Some lenders are better suited than others to conduct and approve short sales, while some lenders may prefer a foreclosure given insurance or guarantees on the loan.  If your loan falls under Arizona’s anti-deficiency protections, you’ll have more leverage when dealing with your lender.

3.  Hire a real estate agent or other real estate professional with experience handling short sale paperwork, submittals, negotiations and review of short sale terms and conditions.  Most borrowers simply don’t have the time, experience or patience to handle a short sale transaction from A to Z.

4.  Understand the typical requirements for a short sale and be sure to get your specific lender’s complete list of requirements before starting the short sale process.  Most lenders require a borrower to demonstrate a hardship and to disclose its current financial condition, along with supporting documentation.  If you could be liable to a lender after a short sale, you may want to re-consider whether submitting personal financial information to your lender is a good idea.

5.  Know what you want in a short sale approval letter or short sale agreement and be sure the key terms are in writing.  If you are seeking a written release of liability following the short sale (highly recommended, but often times not given), be sure your documents don’t reserve the lender’s rights to a deficiency or state that you are responsible for a deficiency.

6.  Be patient and don’t give up.  Lenders can and often times do change their initial position – an initial denial or demand for a large borrower monetary contribution may not be the lender’s last offer.  Short sales are negotiations, so don’t be afraid to negotiate.

7.  Stay current with Federal and other short sale programs or lender incentives.  Commencing on April, 5 2010, the Federal Government’s Home Affordable Foreclosure Alternatives program will implement changes to short sale and deed in lieu workouts for participating lenders and loans.  Among the many requirements of the program, a lender will not be able to seek a deficiency following a qualifying short sale or deed in lieu.

Marc McCain,

McCain & Bursh, Attorneys At Law, PC,

www.marcmccain.com     www.mccainbursh.com

(602) 604-2138  mmccain@mblawaz.com

Contributed by Mario Romero, CRS, CDPE, CLHMS
602-252-4191 office, 602-254-9810 fax
The Romero Team - Melcher Agency
www.TheRomeroTeam.com
www.ShortSaleTeamAz.com
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Boat loads of cash: The chart below shows U.S. corporate borrowing as a percentage of GDP and cash balance as a percentage of income. Corporate borrowing is at historic lows and cash is at historic highs. Given the stark difference to the frantic reminders of the overleveraged government, banking system and the consumer, one would think we are on two different planets.

The overleveraged story is constantly in the news and due to the fact that bad news makes good copy, the cash rich group is hardly ever mentioned.  The last time corporate borrowing was this low Paula Abdul had a hit in the top ten and the time before that Nat King Cole had a top hit.

Although the government has managed its budget like an out of control shopaholic, U.S. Corporations have done a stellar job of managing their finances with near historic discipline.  American corporations are as flush with cash and as flexible as they have been in nearly 60 years.  One could be a bear on U.S. corporate stocks if that is what you are determined to do but to bet the farm against equities, one would have to conclude that the cash available will not find any better opportunities than the current return on cash (which is below 1%).    One would have to conclude that the same smart managers who accomplished this disciplined amazing horde of cash can’t find anything smart to do with it.

However, if you do believe they are smart enough to find opportunities with this much cash they can do pretty much anything they want.  They can acquire opportunities for cash, buy back their own stock, or raise dividends; they are already practicing the latter two.  To bet against this opportunity seems like a long shot to this Advisor.

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Contributed by Mario Romero, CRS, CDPE, CLHMS
602-252-4191 office, 602-254-9810 fax
The Romero Team - Melcher Agency
www.TheRomeroTeam.com
www.ShortSaleTeamAz.com
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Rarely will a consumer find so much contradicting, confusing and downright incorrect information on a legal topic as they currently do when it comes to short sales and related issues. Rarely heard of just 2-3 years ago, short sales now make up a significant majority of current MLS listings in the metro Phoenix market and the trend doesn’t seem to be changing any time soon. Agents, consumers and other professionals are scrambling to get up to speed on the process, strategies and legal issues surrounding short sales. From a legal perspective, there are three (3) main issues I discuss with clients who may be considering a short sale (or other loan workout for that matter): (1) deficiency issues, (2) credit issues, and (3) cancellation of debt income issues. With respect to issue #1 – deficiencies, short sales present interesting issues and possible outcomes. Arizona has two anti-deficiency statutes that act to prevent a lender from collecting on a deficiency following a judicial or non-judicial foreclosure on certain residential property situated on 2.5 acres or less. Because these statutes deal with foreclosures, many real estate professionals, including attorneys, take the position that Arizona’s anti-deficiencies have no application to short sales. This is categorically false. Either these real estate professionals do not understand the law, or they are trying to create confusion to help attract clients for their services. While a short sale can result in a deficiency situation where a foreclosure on the same property would not (for instance, without a lender’s agreement to not seek a deficiency, a short sale involving a non-purchase money loan on qualifying property will not extinguish a borrower’s liability for a deficiency, while a foreclosure by the same lender at a non-judicial trustee’s sale will result in the lender being barred from seeking a deficiency), for many loans (specifically, purchase money loans on qualifying property), a short sale should never result in a deficiency for a borrower. Notwithstanding Arizona’s relatively broad anti-deficiency protections afforded to purchase money loans on qualifying property, lenders continue to misrepresent their rights and borrowers’ liabilities in short sale transactions. Lenders continue to demand cash contributions from borrowers to approve short sales even though they would have no right to seek a deficiency if they foreclosed on the property. Borrowers and their real estate agents should never engage in short sale negotiations without knowing exactly what rights and obligations a lender and borrower have under the loan and any particular workout scenario. For a more detailed analysis of Arizona’s anti-deficiency laws and their applicability to short sale transactions, see my letter to the Editor of Maricopa Lawyer attached. letter-to-the-editor-of-maricopa-lawyer

Marc McCain, Attorney at Law McCain & Bursh, PLC

www.mccainbursh.com mmccain@mblawaz.com

Contributed by Mario Romero, CRS, CDPE, CLHMS
602-252-4191 office, 602-254-9810 fax
The Romero Team - Melcher Agency
www.TheRomeroTeam.com
www.ShortSaleTeamAz.com
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Thats right, Cindy, Bruce, Geri, Michael and I have taken the training necessary to become CDPE’s – Certified Distressed Property Experts. This means we have become well versed in short sales – or selling a home for less than what is owed to the bank – as this has become more and more commonplace in today’s market. In fact, on a national level some 51% of all sales in September were distressed sales, and in badly hurt markets such as Florida, Nevada and Arizona its as much as 90%.  I felt we needed to become very knowledgeable about such sales and we now have the proven skillset to ensure these sales go through with the least hassles possible to all parties involved. There are very few agents in Phoenixwho have taken this voluntary extra training, and I am proud of us doing so. If you know of anyone in trouble with their house, please have them contact me. Did you know over 50% of all foreclosures have no visible means of intervention? A persons credit can be saved with a short sale vs. a foreclosure and you would be able to buy another house in as little as two years vs. five plus with a foreclosure.

WE CAN HELP !

Contributed by Mario Romero, CRS, CDPE, CLHMS
602-252-4191 office, 602-254-9810 fax
The Romero Team - Melcher Agency
www.TheRomeroTeam.com
www.ShortSaleTeamAz.com
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When preparing to sell your home it is important to find a real estate professional that will best suit your needs.  A warm handshake and a friendly smile is all well and good but if you want to sell your home pick a broker that is experienced and knowledgeable, someone that will do the best job for you.  When selecting your real estate agent here are a few things to keep in mind:

Data.  Get a prospective Realtor to bring in a copy of what they have listed and closed.  They can present you with an MLS report that displays their inventory.

References.  Get references from a potential Realtor and call them.  Find out what other people’s experience with a particular Realtor has been.

Price.  Get an evaluation of your property.  A solid real estate professional will be able to detail what has been selling and for what price.  He will be able to evaluate your home and your location, giving you a value for your home that will help sell it not deter people from looking at it.

Plan.  What does your Realtor plan to do for you in terms of marketing, sales, listing, etc.  Make sure he has a plan for your house and find out what he is willing to do to get it sold for you.

Real estate is often a person’s most valuable asset.  Do your legwork and choose the best broker for your home.  He or she should be a salesperson.  If they can sell themselves to you perhaps they are halfway to selling your home for you as well.

Contributed by Mario Romero, CRS, CDPE, CLHMS
602-252-4191 office, 602-254-9810 fax
The Romero Team - Melcher Agency
www.TheRomeroTeam.com
www.ShortSaleTeamAz.com
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Low interest rates have been gracing the real estate market with their presence for the past year but the word on the street is that they won’t be here much longer.  While mortgage rates aren’t going to skyrocket out of sight, it is doubtful that they will decrease and certain that they will steadily begin to rise.

For those wishing to lock in at below 5%, the time just might be now or never (or at least for a very long time).  This past week, the first week in January, the average 30 year fixed mortgage rate was 5.09%.  The general sentiment among economists is that rates are not going anywhere but up from here.

The strengthening of the economy equals less chance for discounted rates.  If you want to refinance or purchase real estate, now might be the best time to do so.

For more information on mortgage rates click here to look at a recent article from CNNMoney.com.

Contributed by Mario Romero, CRS, CDPE, CLHMS
602-252-4191 office, 602-254-9810 fax
The Romero Team - Melcher Agency
www.TheRomeroTeam.com
www.ShortSaleTeamAz.com
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There is an annual report that examines the cost versus value for home remodeling.  The report is helpful for those who are considering making improvements to their homes, especially if their home is one that they consider selling in the near future.  Historically, bedrooms and bathrooms are where people consider spending their money but the return on the remodel investment is not necessarily there.

According to the 2009 Remodeling Cost vs. Value Report the best return for your money are exterior improvements that often are lower cost projects to begin with.  Adding decks, replacing siding, new doors and windows are among projects that recoup the most money when re-selling a home.  The return on these projects is typically 80% or more.

The annual report shows how important first impressions are.  If you are considering selling your home make sure that the exterior is as eye catching as it can be.

Click here to learn more about remodeling costs versus value at The National Association of Realtors’ website.

Contributed by Mario Romero, CRS, CDPE, CLHMS
602-252-4191 office, 602-254-9810 fax
The Romero Team - Melcher Agency
www.TheRomeroTeam.com
www.ShortSaleTeamAz.com
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Today’s real estate market is a buyer’s market, which means sell only if you have to.  The bottom of the market is near, if it has not already occurred, which means if you don’t have to sell don’t.

The reason you shouldn’t sell your real estate right now is clear, you are not going to get top dollar.  However, if you have to sell you need to make your home as competitive as possible.  Your home not only needs to be priced right it needs to look its best.
It is not the best time to pour money into your home to fix it up but it is a good time to make it look its best.  Paint it, stage it, make it eye catching.  Most importantly, price your real estate better than  the neighbor’s house and you will be more likely to catch a buyer.

Real estate is expected to drop a bit more if not remain flat.  If you have to sell be as competitive as you can.  If you don’t have to sell don’t.  It will be a while before real estate values start to climb, but if you can hold out you might fare better in the long run.

Contributed by Mario Romero, CRS, CDPE, CLHMS
602-252-4191 office, 602-254-9810 fax
The Romero Team - Melcher Agency
www.TheRomeroTeam.com
www.ShortSaleTeamAz.com
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Bill Vaughan
An optimist stays up until midnight to see the New Year in. A pessimist stays up to make sure the old year leaves.

Mark Twain
New Year’s Day… now is the accepted time to make your regular annual good resolutions. Next week you can begin paving hell with them as usual.

Jay Leno
Now there are more overweight people in America than average-weight people. So overweight people are now average… which means, you have met your New Year’s resolution.

P. J. O’Rourke
The proper behavior all through the holiday season is to be drunk. This drunkenness culminates on New Year’s Eve, when you get so drunk you kiss the person you’re married to.

Contributed by Mario Romero, CRS, CDPE, CLHMS
602-252-4191 office, 602-254-9810 fax
The Romero Team - Melcher Agency
www.TheRomeroTeam.com
www.ShortSaleTeamAz.com
Follow Me on Twitter

When it comes to real estate the general sentiment appears to be that of putting 2009 in the past and looking forward to a brighter 2010.  Looking at where we are and where we are headed as far as real estate goes will take us from the present into the future.  Currently home values are affordable, because prices are low and interest rates are low.  Both of these low levels add up to the fact that it is a great time to be a buyer when it comes to real estate.

Interest rates have been hovering at 5% or lower for the better part of the past year, a trend that cannot be expected to continue.  As the market stabilizes more and the economy gets better, interest rates will rise.  While home prices still may drop in many areas of the country, they will not drop much more.  Areas that are less affected by foreclosures, short sales and REO properties are likely to level out faster than other areas due to the lack of distressed sales in their inventories.  A rise in interest rates may bring real estate prices down to sell but the days of 20% and 30% decreases appear to be unlikely.

In a nutshell now is a great time to buy if you have been waiting for the right time to plunge into the market.  Take advantage of low interest rates while they are here.  It is a buyer’s market now, it won’t be forever.

For an interesting analysis of the real estate conditions and a forecast of 2010, by CNN Money, click here.

Contributed by Mario Romero, CRS, CDPE, CLHMS
602-252-4191 office, 602-254-9810 fax
The Romero Team - Melcher Agency
www.TheRomeroTeam.com
www.ShortSaleTeamAz.com
Follow Me on Twitter