Foreclosures and Short Sales: “How to” remain Sane while waiting.

The market has brought us a unique opportunity to purchase Real Estate at a low price and low interest rates. This is an exciting time for a buyer to capitalize on buying not only a great home but also simultaneously make a prudent investment. Then what is the problem you may ask? With opportunity there will always be a challenge. The challenge that we face with the purchase of REO’s and Short Sales is the lack of a communicated answer. As Real Estate agents and Loan Officers we are waiting on answers from the banks themselves to see if they will agree to the conditions of our offer. They are waiting on answers themselves from the decision makers. This can be a frustrating process for the consumer because you are anxious to know if the house is yours.

Here are a few ways to remain sane while waiting on the answers:

1) Write the offer and forget about it – Many times when we make an offer on something we want to know right away whether or not it was accepted. This is not the case for a short sale and an reo. The answer can take days, weeks or months. Look at it as if you have planted a seed for a tree that you would like to grow in your backyard. You would not stand outside everyday staring at the seed waiting for it to grow. You would water it and go back about your business. Every now and again you would check to see how it was going but your expectation for a 1 year gestation was set from the get go.

2) Set realistic expectations for yourself – If you allow your self realistic expectations then you will not experience the let down of waiting for your answer. If you are going on a diet you should not expect to lose all of it in the first week. You set a goal to lose a 1/4 lb. a day and work towards it. When it does not go your way you still continue to implement the daily tasks and you refine the habits. Continue to look at other properties and continue to exercise all of you options. Don’t limit yourself to just this house.

3) Don’t Mentally Move In - This is a sure fire way to set yourself up for failure. If you mentally move in and the answer is “no” it will be very difficult to get up again. Nothing will compare to the house you lost. This is unfair to all the other homes on the market that are dying to have you as a home owner. I know that this is an emotional decision and I am not saying to not be excited but keep your cool until the offer is accepted.

4) 6 Months is not as long as 20 years – You have waited at least 20 years to start this process and many of you much longer. So do not get a head of yourself. Be patient just a little longer and you will reap the reward for at least the next 30 years in most cases. We can always talk about strategies that will help you to pay this off much quicker but for know let’s focus on the 30 years.

5) Do not try to understand the “logic” of the banks – The reasoning of the decisions of the bank one will never understand. They are many components that make up the decision of the banks and we cannot even begin to understand the first one of them. Give yourself a break and know that we will never get what they are doing and they are all in hot water. Decisions made when the wheels are falling off the truck are very difficult.

So just remember the five tips above anytime that you begin to get frustrated with the timeline of your offer. Tome is on your side and your team. Be more patient, more logical, less emotional, more realistic and without attachment more than the other party. We will guide you through the process.

As always thank you for reading,

Matt Freeman

House Hunting Frustration Setting In! Solutions to help your cause!

Are you searching for a home in Roseville, California? Are you searching for a home in Sacramento, California? Are you searching for a home in Placer county? If so this is for you.

Buying your new dream home is absolutely a process. This process can take time. It can also be a numbers game. What I mean by that is you may have to write an offer on several homes before one sticks. I work buyers in the greater Sacramento and Sonoma county areas. Some of my buyers have been approved for a home loan for 6 months or more. What are they waiting for? They are waiting to find a home that fits. Price, Location, and style matches are important to every consumer.

Naturally I wanted to take a look at the statistics in February 2009 to see the trends of the market and why finding the right home may be so difficult. When doing the search I found the following statistics to answer a few of my questions:

Stat: 54.91% of the homes that were sold were sold in the first 60 days – Homes are moving and they are moving fast. If you are a buyer in the market you have to be willing to act fast.

Solution – As a consumer you have to know what all of your numbers are. You have to be aware of your max. You have to have a list of the must haves, wants, and not needed in your home. Know the Maximum you are willing to spend, the minimum credits you may need, have your down-payment lined up, and get approved with cushion in your rate to cover the volatility of the market.

Stat: 59% of the homes that were sold were bought with Conventional Financing – This was a surprising statistic for me at first and then I reviewed my closings 6 and realized that I was exactly 50% conventional and 50% FHA.

Solution: Conventional financing requires a minimum 5% down which is difficult to do most realistically 10% down. Mortgage insurance requirements are tightening greatly. FHA minimum down payment is 3.5%. They also allow a 6% seller credit while conventional allows for 3% unless you put 20% down or more.

Stat: 63% of the homes that sold were between 200K-400K – There is a lot of competition in certain price points. The inventory is not as think as it was because the moratorium on new bank owned properties. What this means to you is that if you are approved for 225K you should start your search at 200K. This would allow you to remain in the hunt if there are multiple offers. This will save you time in the long run. I have found that if you search at your max range and the counter for highest and best you are out. This is a contributing factor to the frustration.

Summary: Know your stats and your price range. Be prepared to fight the fight. If you want a home bad enough you will make sure that you are prepared. As professionals we are going to help you do this. Be prepared to have the talk about expectations and the list that you have of must haves. Are they really a necessity if so awesome let’s look but it could be a while. There are three main categories when looking for a home and those are:

Location – This is very important. Children’s schools, proximity to work, and of course the Local restaurants of the area. This is one that you you generally do not want to sacrifice on.

Price – You are approved for what you are approved for. That is why I recommend starting your search under your max and working your way up. It gives you the flexibility to compete.

Style – This is the layout and the number of baths, garages etc. This is the one that generally ends up being sacrificed. The reason is that the other two are real difficult to give up. This is why I think that it is imperative to have you lists of must haves and wants.

Many times you will sacrifice in a category. Have a plan for this as well. Widen your search and locations.

As Always thank you for Reading,