2110 Ivy Road   |   Charlottesville, VA 22903

Short Sale Thoughts

So about 4 months ago I was asked to represent a client here in Charlottesville on a short sale of a condominium unit that he had purchased about 3 years ago. Ever since then, we’ve learned a LOT of things about short sales and I’ve even been the source of short sale education/updates to other Realtors, attorneys, and potential sellers

Great Chart On Credit Scoring; Check this out if your credit might be in danger

739SEO-Flush-final600.jpgI really like this chart on credit scoring- I receive lots of questions from potential buyers about credit, including how they can improve their credit scores in order to prepare for a home purchase. Whether in the market for real estate or not, these are things that everyone should be aware of pertaining to their credit. If you are interested in learning more about your credit score or looking for ways to improve it, contact me and I will connect you with a lender who can help you through your questions!

What is a strategic default?

A strategic default is the decision by a borrower to stop making payments on a home mortgage despite having the financial ability to make the payments. Usually this occurs after a substantial drop in the house’s price such that the debt owed is considerably greater than the value of the property, and is expected to remain so for the foreseeable future.

… As discussed in CRS Course-111 on Short Sales and foreclosures, a strategic default will likely effect your credit score negatively by 140-150 points and will also result in 5-7 negative marks on your credit. This is likely going to be more detrimental than going through the process of a short sale or a loan modification, but is said to not effect your credit score as negatively as filing for bankruptcy. … Before making any decision to pursue a short sale, a foreclosure, a strategic default, or to file for bankruptcy, it is in your best interest to consult with a licensed Realtor, your tax accountant, and an attorney.

Answer these questions to determine if purchasing a bank owned home/foreclosure is right for you…

All during the time that we are awaiting closing, mortgage rates will be fluctuating, and if the loan lock deadline passes, you will have to re-apply for the loan and incur any related charges. … It is very unlikely that we will be allowed to occupy the property prior to closing, so you would need to have a backup residence in mind, in case of any delays. If this is your primary home, some sort of temporary living arrangement would need to be made, and it may include moving twice- from your current home to the temporary residence, and the temporary residence to your new home. … Some of the changes that are often arranged in the addenda; tougher restrictions on the Purchaser, shorter timelines for the Purchaser to secure a loan, conduct a home inspection, etc, a larger deposit, deposits to be held in the escrow of the lenders choice, and very few provisions that will allow for the Purchaser to get out of the contract and many ways for the lender/seller to walk. … You will also want to make sure that any liens that may have been held against the previous owners (who may have had difficulty paying many bills, aside from their mortgage) have been released and you will have the ability to purchase the home free and clear of liens and encumbrances.

How Much Will A Short Sale/Foreclosure Hurt My Credit?

I have had a couple of people over the past few months mention that they may consider a short sale, so that they can just get out from under their homes and move on. While the ramifications of a short sale or foreclosure seem to be getting slightly more lenient in light of all of the predatory lending that has occurred in the past several years, they are still significant. Here are some general credit score ranges (as provided by the National Association of Realtors CRS Course 111 ); 990: highest calculable credit score. 900: 15% of borrowers have a credit score at 990 or above. 740: a rough number around which people are usually able to get a good, competitive loan. 680: the average credit score. 501: lowest calculable score. 500: 18% of people have a credit score of 500 or below. Let’s imagine that you have a credit score of 740 and own your home, but are having trouble making your payments (which may actually be causing your credit score to drop in the meantime). … Before making any decision to pursue a short sale, a foreclosure, a strategic default, or to file for bankruptcy, it is in your best interest to consult with a licensed Realtor, your tax accountant, and an attorney.

Short Sale Debt Could Follow You (And Often Does in VA)

If you are considering selling your home as a short sale, and are choosing a short sale instead of a bank foreclosure, you should make sure to read this Washington Post article about short sale debt. It is very important to know that the debt from a short sale may follow you.  Since we are still early in the history

Purchasing a Short Sale

Charlottesville is currently seeing a handful of short sales, and for every short sale that we can successfully achieve, we are avoiding a foreclosure hitting our market. Short sales, however, are not for the faint of heart! They are highly unpredictable, and while they can result in an incredible deal on a home, they can also result in frustration and

100 Abandoned Houses

It is undeniable that Charlottesville has suffered far less than many other parts of the nation throughout the housing crisis. I just came across a website that is truly fascinating- 100 Abandoned Houses. This site documents photographs of homes all throughout Detroit that have been abandoned due to hardship. The homes are truly fascinating, some of them beautiful. We are

Foreclosures 101

I have had 2 people call me in the past month who wanted to search the foreclosure market for a deal so I’m writing this to explain how foreclosures work and why they’re not for everyone. Foreclosures are becoming more abundant nationwide in the wake of the major shift in the U.S. mortgage market, but they’re not for the faint-hearted

The Virginia Foreclosure Market

Courtesy of Virginia Business Magazine, here is a good article on how Virginia’s housing market has fared in 2007, despite trouble nationwide with foreclosures. As stated in the article, “At a time when foreclosures are soaring and some mortgage lenders have gone out of business, plenty of homebuilders would gladly trade places with Genuario. And homeowners in other states can’t