Category Archives: Seller Tips

Tips on Getting Top Dollar for the Property You’re Selling

How to Choose The Right Closing Date

Posted on May 5, 2008 | 2 Comments

Closing dates are one of the most stressful dates for any real estate deal – this is the meeting when you complete the real estate transaction and contracts are signed, transferring ownership of the real estate in question.

Not only are there so many important items to take care of during the weeks leading up to your closing but the closing itself brings its own brand of heavy stress. It’s during times of high stress that we make mistakes – and a mistake at the closing table can mean huge money you could be losing in the future – in the form of lawsuits or wasted time.

When to have the closing

Alarm Clock | Keep it handy for your real estate closing

I know there’s urgent events going on in your life. You may be moving and you’re trying to get that taken care of. Maybe you have tons of business items you need to get a hold of. However, I want you to want to pick a closing date that’s convenient to the lender. Yes, that’s right, think about the lender. More importantly, think about the good it’ll do for you having a date that’s convenient for the lender. If you choose a date and time where the lender won’t be as busy as usual, you’re going to save massive amounts of time and massive amounts of money that you would’ve spent on aspirin from the headaches you would’ve had.

Days: Pick Tuesday, Wednesday or Thursday. This is going to assure you get the top closing agent – plus you’re going into the office at non-peak hours so they won’t be in as much of a rush to get it done and get you out. On top of that, the usual lender closing agent may have taken that Friday or Monday off so you may get a second-tier closing agent – and you only want the best for your transaction.

Weeks: Pick your closing date to land on the 2nd or 3rd week of the month. You definitely do not want to set it for the 15th of the month either. This time of the month is non-peak so you and your file will get more attention, usually assuring your closing will be done on time.

Time: Choose from 11am to 3pm EST, especially if the parties may be on opposite sides of the country. This assures all items and packages have been received by all parties and gives some room for any unforeseen items that need to be transferred.

Get your inspection done early: As a buyer, you’re going to want your inspection done early to avoid any problems later on. TIP: Write down serial numbers of all major appliances (refrigerators, washers, dryers, etc). The reason I recommend you do this is that I’ve seen some sellers try to switch appliances after the inspection for older, broken down models – and you have no proof they did this. Sometimes they try to get real smart and switch it for the same model, just a broken version they had in a shack someplace. When you have that serial number at hand, you can feel secure you have written proof.

The importance of following the right closing procedures

The Bankers Draft | Get on your loan officer\'s good side

If you’re a buyer, you’re under contract with a seller, not a lender. The lender has no responsibility to you to close the loan on the date you want. If you’re not the persistent type, you’re going to have to learn new skills. I’ve seen so many lenders try to push dates around. You want to keep in constant contact with the loan officer – call them every few days. Make sure the loan officer has your closing documents all nice and done. Keep reminding them to keep your closing file on top of their pile – you want them to give you the attention you deserve. It often helps to tell the loan officer you’ll likely close a day early – this may give your file special attention.

Most importantly of all, when looking for a lender, you want a lender that’s known for quality service and that is known to keep their commitments when it comes to the closing date. A lot of the tips I’ve given you won’t even need to be used with a top-notch closing company because they do all the heavy lifting and it’s a dream experience for you. Don’t focus so much on saving a little money and focus on getting a quality loan officer on your team. Keep your sanity and get yourself a top-notch lender!

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Posted in Buyer Tips, Real Estate Investing, Seller Tips

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Foreclosure: House Sells For Less Than What is Owed at an Auction

Posted on March 18, 2008 | 3 Comments

I’ve decided to reach into the MichaelEmilio.com mailbag and pull out an email a reader sent in reading foreclosures. Let’s read the email:

“i was wandering in the foreclosure process when the house is sold at public auction and sells for less than what is owed, say i owe 120000 and they only sell it for 50000 what happens to the remaining balance can they garnish wages or take real property such as vehicles or no i am concearned” – Mike D.

So Mike D. wants to know about foreclosures, specifically what happens to the amount left over after a foreclosure sale. Let’s say he owes $120,000 on his house and the house is sold at a public auction for only $50,000. What happens to the money left over? What happens to that $70,000? Does the bank pay that shortfall? Does the original owner pay that amount? Does the new owner of the home pay the amount?

Bank is in control

In most cases, the bank has the power. The bank has the option to file a lawsuit against the original owner for the money that they could not collect at the foreclosure sale. In the hypothetical scenario that Mike D. brings up, the bank can have the ability to sue the former owner for that $70,000 they couldn’t collect at the auction. The bank is able to collect this money through collection actions and a court judgment.

You’re also going to want to look at your particular state’s code. Some mortgage contracts are worded without recourse, this means the sale is final, and the original owner owes nothing else. If the mortgage contract is worded with recourse they may go after the homeowner for the debt shortfall. California, among other states, usually do not allow recourse mortgages.

Keep in mind I’m not a tax attorney, so you’re going to want to set up an appointment with a tax lawyer in your area, but the former owner should know that will now have a tax liability on their hands. I know what you’re thinking, “I just lost my home and now I gotta pay the IRS?” Yes, unfortunately. That foreclosed debt you have of $120,000 that the bank sold at auction is now counted by the Internal Revenue Service as income. What this means to you is that you’re going to have a big chunk of change you’re going to have to pay as income taxes. Unfortunately, this can lead many people to bankruptcy especially when dealing with large mortgages. Put it this way, if someone can’t pay off a home, it’s going to be really hard for them to pay off that income tax they’ll have to pay the next year.

Truth of the foreclosure situation

The reality of the foreclosure situation in general is that the homeowner, while not at fault, does have the responsibility to pay the mortgage debt in full. If these payments aren’t met, then foreclosure happens. And if the foreclosure proceedings don’t provide the solution that the bank was looking for (auction where the house sells for the amount of debt owed) then the former owner is still responsible for that debt left over. The only way to get out of this tricky foreclosure situation is either file for bankruptcy or come to an agreement with the lender. This may allow you to discharge your debt – contact a reputable attorney for this.

On the bank’s side and point of view, note that they have a fiduciary responsibility to the former owner and investors to get as much money out of the sale of the home as possible. As a result, they can sometimes try way too hard! Owners, knowing that their property may go into foreclosure, stop maintaining their property and can often leave the house in bad condition, such as damaged appliances and damaged walls. Home then goes vacant, vandals come in, spray paint all over the walls and the home value plummets downwards.

If interested in buying foreclosed properties, keep in mind that banks don’t like selling foreclosed properties for a rock-bottom price unless they’re forced to. Banks often refuse to sell a home for a reasonable price offer. Then a few months later the house has major damage due to a hurricane and then sells a year later for much less than if they would’ve accepted that reasonable offer way back.

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How Short Sales Can Save You From Foreclosure

Posted on August 19, 2007 | 1 Comment

Facing foreclosure?

As bad as things can get, know that there is an option if you’re facing this situation.

It’s called a short sale.

With a short sale, you’ll be able to avoid foreclosure and save your credit from the heavy hit it would get normally under a foreclosure. You’ll be able to live in your house for free until you’re able to sell it and the lender will pay your closing costs. The lender will even pay your Realtor’s commissions in most cases too!

Keep in mind though, it’s not easy to sell your house through a short sale. A lot of steps need to be taken. But it can be done! You definitely need a solid team of professionals on your side to help through the situation.

In a short sale, the bank is accepting less than the total amount due on the loan. Not all lenders will accept this, but some will, so it pays to research this.

First, call up your lending institution. You’re going to have to have major persistence in this, because it may take you a while to get in touch with the person who handles short sales in the bank. Remember to get in touch with the actual decision-maker, not just the “short sale department”!

Prepare a hardship letter. This is YOUR plea to the lender to accept the short sale. Remember that the person reading this is a human just like you, with emotions. So make sure to appeal to their sympathy and be honest and upfront with why you couldn’t make those payments.

Prepare necessary paperwork. This can include your purchase agreement, listing agreement, copies of bank statements, proof of income, proof of assets, letter of authorization, and preliminary net sheet.

Have faith and persist in getting this handled. I know the situation is tough, so you need to keep on keeping on and persist in doing everything you can to get the situation right.

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