Written By Chris Morris
Source Bankrate.com
Provided By Shelley Dudley
Making a home sale has never been a lot of fun -- but in this economy, it's even worse.
If you've followed the usual chestnuts about boosting curb appeal and staging your living room properly, but still aren't getting any bites, there are other ways to help catch a buyer's eye.
Bankrate.com spoke with real estate professionals to get their best tips on how to move a house in the quickest amount of time -- without giving the place away.
Get an appraisal
Knowing what a professional appraiser believes your house is worth is a good reality check on a couple of fronts.
First, it gives you a realistic target price -- versus your own beliefs -- that can be factored in with recent comparable sales. It also gives you an idea of what sort of home loan a buyer can get.
"It takes a lot of the guesswork out of the price," says Naomi Brodbar, an agent with Weichert Realtors in Princeton Junction, N.J. "You can take any figures in the market and make them work to your advantage. With this, you know if you're in the right ballpark." You'll likely pay about $300 to $400 for the report.
Pre-inspect before listing
Buyers want to see that you've cared for the home during your time there. An indisputable way to showcase that is to hire a home inspector to go through the house with a fine-toothed comb and to rectify any major issues the inspector finds.
Of course, the buyer is going to hire his or her own inspector -- but this helps convince the buyer that the home has been kept up well. It also prevents the buyer from issuing a laundry list of demanded fixes, which some buyers do in an effort to further lower the sales price after their offer is accepted.
"It says 'We've thought enough of this property to make sure that if there are any unforeseen problems, then we have taken care of them for you,'" says Dorcas Helfant-Browning, an agent with Coldwell Banker in Virginia Beach, Va., and past president of the National Association of Realtors.
Offer a home warranty
Everyone likes a security blanket. Home warranties give buyers an assurance that if something goes wrong with any of the major appliances, plumbing or electrical systems in the house, they won't have to shell out a lot to get them fixed.
As the seller, you'll also reap some of the benefits, as many plans provide additional coverage for when your house is on the market. This can be particularly beneficial when you go through the inspection process after you've accepted an offer.
Plans generally cost between $300 and $450, with extra charges for some appliances (such as your washer or dryer) and items like a pool or hot tub.
Consider cash incentives
No matter how perfect you think your house is, the new owners will want to change something about it. It could be the paint, landscaping or even the front door.
Acknowledging this upfront and offering a cash incentive to pay for those improvements could make your house stand out from the competition.
It also gives you the upper hand. Because you're setting the amount of the incentive -- say, $1,000 or so -- you can work that into your house's asking price to recoup the outlay.
Take care of post-move expenses
Moving is tough for everyone, so consider making the buyer's life easier by contracting a service to mow the yard through the summer. Taking care of the tab for pool cleaning is another type of incentive that you can work back into the price.
And because everyone likes to be catered to, it can also give your house an edge if a buyer is trying to decide between yours and another.
Remain flexible on the price
Many buyers offer their home with a floor price in mind -- one they're absolutely not willing to go below. It becomes a point of pride in what can be an emotional process. That can be dangerous.
In the long run, an extra $1,000 (or even $3,000) is a drop in the bucket -- and it's not worth fighting over, even if it's below your floor price. But what about an offer that's $5,000 or even $10,000 below what you were hoping to get?
"Buyers don't care what your minimum price is," says Leslie Nichols, a broker for Nichols & Associates Real Estate in Houston. "Price is the most important thing.... Price will overcome location. Price will overcome condition. Price will overcome everything else."
Before automatically rejecting a low offer, consider a few factors and be brutally honest with yourself. Determine how many months that shortcoming works out to in terms of your regular mortgage and utility expenses. What are the odds you'll get an acceptable offer in that time period? If they're not excellent, give the "bad" offer a second look.
If you are ready to sell your home, give us a call at 972-772-7000 or email us at rockwall@kw.com.
Showing posts with label bank of america. Show all posts
Showing posts with label bank of america. Show all posts
Monday, August 9, 2010
Wednesday, May 5, 2010
Bank of America Offers Home Loan Forgiveness
Provided By Shelley Dudley
The last thing that mortgage companies want to do is forgive their customers' debts. Bank of America will make an exception for a few borrowers.
Around 45,000 homeowners will be offered reductions in mortgage debt as part of the bank's foreclosure-avoidance effort. If all of them accept the offer, and if all of those customers faithfully make their reduced monthly payments for the next five years, the amount forgiven could total $3 billion.
Before you get your hopes up, keep this in mind: These 45,000 borrowers are a small subset of the bank's customers. Principal forgiveness will be offered only to people who got certain kinds of loans from Countrywide Home Loans. Bank of America bought Countrywide in 2008.
When Bank of America bought Countrywide, it took possession of $25 billion in pay-option adjustable-rate mortgages. That's how much the customers owed on pay-option ARMs; their total value as an investment was $13.9 billion last September, because Bank of America knew that billions of dollars' worth of these loans would go belly-up eventually.
Countrywide did a lot of subprime loans, too. Bank of America stayed away from subprime. But when BofA bought Countrywide, it ended up with $1.8 billion in Countrywide's subprime ARMs on the books. The borrowers who got those loans may be eligible for principal forgiveness, too, along with a few people who got prime, two-year ARMs from Countrywide.
Bottom line: Principal forgiveness may be offered to 45,000 customers who got pay-option and subprime ARMs from Countrywide. If your loan officer sported a Bank of America ID badge, you won't be offered principal forgiveness, because you didn't get your mortgage from Countrywide.
What is a pay-option ARM?
Pay-option ARMs are adjustable-rate mortgages in which the borrower chooses the payment. The borrower usually has four options. One option is to pay less than the interest accumulated that month. In other words, the borrower might rack up $1,200 in interest in a given month, but have the option of paying $1,000. The $200 difference was added to principal. After making the minimum payment, the borrower owed more on the house. When borrowers end up owing more after making a payment, it's called negative amortization. According to an SEC filing, 72 percent of pay-option customers made negative-amortization payments in June 2008. From July through September last year, half did.
"In our experience, we have found that severely underwater homeowners are reluctant to accept a solution that does not offer some reduction in principal," says Barbara Desoer, president of Bank of America Home Loans.
Bank of America says it will offer principal reductions as the first step of HAMP-style loan modifications to this 45,000-strong subset of Countrywide customers. Pay-option ARM customers will get a different offer from subprime ARM customers.
For pay-option ARM customers, Bank of America will offer to forgive some or all of the debt that was added as negative amortization. If all of the negative-amortization debt is erased, the customer still ends up owing the original mortgage amount.
Forgiving principal
If that's not enough to qualify for a modification under HAMP guidelines, then Bank of America moves to the next stop: "earned principal forgiveness."
Earned principal forgiveness may be offered on subprime ARMs as well as on pay-option ARMs. To qualify, the borrower has to owe at least 20 percent more than the house is worth. For these customers, Bank of America will "forbear principal" for five years. The bank will forbear as much as 30 percent of the loan amount, down to 100 percent of the home's current value.
"Forbear principal" means you still owe the money, but the bank doesn't charge interest on the entire loan amount. For example, if you owe $120,000, and the bank forbears $20,000, then you pay interest on $100,000 -- but you still owe $120,000.
If Bank of America forbears part of the amount you owe, you can have some of that debt forgiven if you stay current on the loan. One-fifth of the forborn amount is forgiven each year if you make your payments on time. That happens for at least the first three years.
In the fourth and fifth years, debt won't be forgiven if the home's value has risen and you're no longer upside-down on the loan. "This helps strike a critical balance between customer and investor interests," says Jack Schakett, who heads Bank of America's loss-mitigation efforts.
The bank's message to borrowers who think they might be eligible for this program: Don't call us, we'll call you. Schakett says that every month, the bank evaluates its customers' payment histories, amount owed and estimated home value. The bank will contact borrowers who might qualify for the program, beginning in May.
Schakett estimates that the average amount of principal forgiveness or forbearance will be around $62,000 to $65,000. If 45,000 people take the offer and ride it to completion, that will total around $3 billion.
The last thing that mortgage companies want to do is forgive their customers' debts. Bank of America will make an exception for a few borrowers.
Around 45,000 homeowners will be offered reductions in mortgage debt as part of the bank's foreclosure-avoidance effort. If all of them accept the offer, and if all of those customers faithfully make their reduced monthly payments for the next five years, the amount forgiven could total $3 billion.
Before you get your hopes up, keep this in mind: These 45,000 borrowers are a small subset of the bank's customers. Principal forgiveness will be offered only to people who got certain kinds of loans from Countrywide Home Loans. Bank of America bought Countrywide in 2008.
When Bank of America bought Countrywide, it took possession of $25 billion in pay-option adjustable-rate mortgages. That's how much the customers owed on pay-option ARMs; their total value as an investment was $13.9 billion last September, because Bank of America knew that billions of dollars' worth of these loans would go belly-up eventually.
Countrywide did a lot of subprime loans, too. Bank of America stayed away from subprime. But when BofA bought Countrywide, it ended up with $1.8 billion in Countrywide's subprime ARMs on the books. The borrowers who got those loans may be eligible for principal forgiveness, too, along with a few people who got prime, two-year ARMs from Countrywide.
Bottom line: Principal forgiveness may be offered to 45,000 customers who got pay-option and subprime ARMs from Countrywide. If your loan officer sported a Bank of America ID badge, you won't be offered principal forgiveness, because you didn't get your mortgage from Countrywide.
What is a pay-option ARM?
Pay-option ARMs are adjustable-rate mortgages in which the borrower chooses the payment. The borrower usually has four options. One option is to pay less than the interest accumulated that month. In other words, the borrower might rack up $1,200 in interest in a given month, but have the option of paying $1,000. The $200 difference was added to principal. After making the minimum payment, the borrower owed more on the house. When borrowers end up owing more after making a payment, it's called negative amortization. According to an SEC filing, 72 percent of pay-option customers made negative-amortization payments in June 2008. From July through September last year, half did.
"In our experience, we have found that severely underwater homeowners are reluctant to accept a solution that does not offer some reduction in principal," says Barbara Desoer, president of Bank of America Home Loans.
Bank of America says it will offer principal reductions as the first step of HAMP-style loan modifications to this 45,000-strong subset of Countrywide customers. Pay-option ARM customers will get a different offer from subprime ARM customers.
For pay-option ARM customers, Bank of America will offer to forgive some or all of the debt that was added as negative amortization. If all of the negative-amortization debt is erased, the customer still ends up owing the original mortgage amount.
Forgiving principal
If that's not enough to qualify for a modification under HAMP guidelines, then Bank of America moves to the next stop: "earned principal forgiveness."
Earned principal forgiveness may be offered on subprime ARMs as well as on pay-option ARMs. To qualify, the borrower has to owe at least 20 percent more than the house is worth. For these customers, Bank of America will "forbear principal" for five years. The bank will forbear as much as 30 percent of the loan amount, down to 100 percent of the home's current value.
"Forbear principal" means you still owe the money, but the bank doesn't charge interest on the entire loan amount. For example, if you owe $120,000, and the bank forbears $20,000, then you pay interest on $100,000 -- but you still owe $120,000.
If Bank of America forbears part of the amount you owe, you can have some of that debt forgiven if you stay current on the loan. One-fifth of the forborn amount is forgiven each year if you make your payments on time. That happens for at least the first three years.
In the fourth and fifth years, debt won't be forgiven if the home's value has risen and you're no longer upside-down on the loan. "This helps strike a critical balance between customer and investor interests," says Jack Schakett, who heads Bank of America's loss-mitigation efforts.
The bank's message to borrowers who think they might be eligible for this program: Don't call us, we'll call you. Schakett says that every month, the bank evaluates its customers' payment histories, amount owed and estimated home value. The bank will contact borrowers who might qualify for the program, beginning in May.
Schakett estimates that the average amount of principal forgiveness or forbearance will be around $62,000 to $65,000. If 45,000 people take the offer and ride it to completion, that will total around $3 billion.
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