Short Sales: When is Offer ‘Accepted’?
There has been some confusion about when a short sale offer is “accepted.” A short sale is a sale of a house in which the proceeds fall short of what the owner still owes on the mortgage. The owner will request that the lender (third party) agree to take less and forgive the rest of what is owed on the mortgage. When an offer is submitted on the property the seller who is still legal owner of the property in most cases must be the first to “accept” the offer. When the seller accepts an offer under these conditions and a contract is formed, the offer is “accepted,” although it will have at least one unresolved contingency: the lender’s approval of the short sale.
If a seller receives more than one offer on the property, the seller picks the best one and signs that offer only and sends it to the lender. I hope this clarifies when an offer is “Accepted.”
Who is a First-Time Home Buyer?
“First-time home buyer” is defined by the Cranston-Gonzalez National Affordable Housing Act of 1990. The code specifies:
The term “first-time home buyer” means an individual and his or her spouse who have not owned a home during the 3- year period prior to purchase of a home with assistance under subchapter II of this chapter, except that– (A) any individual who is a displaced homemaker may not be excluded from consideration as a first-time home buyer under this paragraph on the basis that the individual, while a homemaker, owned a home with his or her spouse or resided in a home owned by the spouse; (B) any individual who is a single parent may not be excluded from consideration as a first-time home buyer under this paragraph on the basis that the individual, while married, owned a home with his or her spouse or resided in a home owned by the spouse; and (C) an individual shall not be excluded from consideration as a first-time home buyer under this paragraph on the basis that the individual owns or owned, as a principal residence during such 3- year period, a dwelling unit whose structure is– (i) not permanently affixed to a permanent foundation in accordance with local or other applicable regulations, or (ii) not in compliance with State, local, or model building codes, or other applicable codes, and cannot be brought into compliance with such codes for less than the cost of constructing a permanent structure. (15) The term “singe parent” means an individual who– (A) is unmarried or legally separated from a spouse; and (B) (i) has 1 or more minor children for whom the individual has custody or joint custody; or (ii) is pregnant.”
Federal Home Loan Bank of Atlanta Funds are Available up to $10,000 for First-Time Home Buyers!
The Federal Home Loan Bank of Atlanta funds are available with some participating lenders. Member Banks can access up to $1 million annually and distribute matching FHP awards up to $10,000 per household to eligible home buyers. The program is a 5 to 1 match. If a buyer puts $2,000 of their own funds in the transaction the buyer is eligible for the entire $10,000. Some participating lenders have received their funds and some have not. Contact me to receive a list of participating lenders who have received their funds.
Some of the eligibility requirements for home buyers are as follow;
Funds are only available to first-time home buyers.
A home buyer must owner-occupy the property.
A home buyer must contribute at least $500.
Home buyers must complete home buyer counseling, debt management planning, and default prevention program. The curriculum will include, but is not limited to;
Choosing the right mortgage, avoiding predatory lenders, budgeting and saving, maintaining your new home, and preventing foreclosure.
FHP funds must be used only for down payment and closing costs assistance and must be reflected on the HUD Settlement Statement. FHP funds cannot be used for reimbursement of earnest money deposits, pay discount points, or to pay cash to the borrower at closing.
If you are interested in receiving funds from an participating lender, I would advise you to set up your counseling class immediately. Federal Home loan Bank of Atlanta funds traditionally becomes available in January each year. This year we were informed that the funds would not be available until March 3rd but the participating lenders did not receive funds until April. Many first-time home buyers have been waiting for the program to start since January and they have already completed their counseling requirements. I do not think the funds will last long. With interest rates being low, home prices dropping, plenty of housing inventory, sellers willing to negotiate with buyers, and the $8,000 tax credit the market is starting to heat up. Don’t wait and miss out on a golden opportunity!
Long-Term Mortgage Rates Hit Record Low!
The Washington Business journal reported that the 30-year fixed-rate mortgage rate has dropped to its lowest level on record. The average rate is the lowest in McLean-based Freddie Mac’s weekly survey dating to 1971. Freddie Mac says its Primary Mortgage Market Survey shows the 30-year fixed-rate mortgage averaged 4.85 percent with an average 0.7 point for the week ending March 26, down from last week when it averaged 4.98 percent.
Last year at this time, the 30-year FRM averaged 5.85 percent. The 30-year FRM has not been lower in the life of Freddie Mac’s weekly survey, which dates back to 1971 for the 30-year FRM. Rates for 30-year FRMs peaked last year at 6.63 percent on July 24th. With last week’s 30-Yr FRM, the interest rate difference is almost 2 percentage points, which amount to a savings of about $225 in monthly mortgage payments for a $200,000 loan.
Now is the Time to Buy a House!
Now is a great time for first-time home buyers to buy a house! I have helped several first-time home buyers in the last 30 days become homeowners and receive fantastic deals on their properties. Unfortunately, many first-time buyers are still sitting on the fence. The opportunities that are available will not last forever. Interest rates are low, prices have dropped, sellers are willing to help with closing costs but many buyers who can buy are still waiting. The theme for my seminar presentation Monday evening was “Now is the Time to Buy a House.” I am not saying this just because I am a real estate agent. I feel so passionately about this because I see every day so many wonderful opportunities that first-time home buyers are missing out on because they will not get off the fence. I have a client who is under contract on a property for $162,900 and the seller gave $9,700 towards closing. The properties in this community sell between $220,000-240,000. My client is actually getting this property for $153,200 what a deal! Don’t miss out on your opportunity call me today!
Free Home Buyer Workshop with Harbel Housing Partnership!
I will be presenting this evening for Harbel Housing Partnership from 6-9pm at the White Marsh Library 8133 Sanpiper Cir. 21236. Harbel is a nonprofit organization that specialize in homeownership education for first-time home buyers. They conduct numerous workshops throughout the year. I have been working with Harbel for 5 years. If you would like to attend one of their workshops they can be reached at 410-444-9152. I am looking forward to bringing everyone up to speed on the current real estate market.
Baltimore County Neighborhood Stabilization Program “NSP” $50,000 Loan for Home Buyers
Baltimore County is starting a program to encourage home buyers to consider homeownership in existing residential communities that have foreclosed properties in the 21207, 21220, 21221, 21234, 21244, 21133, and 21117 zip codes. Before signing a real estate contract, a buyer must complete TWO workshops (home buyer and pre-settlement) and counseling with a Baltimore County affiliated Housing Counseling Agency. Please contact me for a list of the approved agencies for this program. Some additional highlights of the program are listed below:
Buyer(s) do not have to be first time home buyers.
Buyer(s) can get up to $50,000 for down payment and closing costs.
Property must be vacant.
Property must be in one of the zip codes listed.
Property must be a foreclosure-NO SHORT SALE.
Contract must be written for 60 days.
Gift Contributions may not exceed 3% of the sales price.
Property must be purchased at minimum discount 5%; a 15% or more discount based on an appraisal is preferred.
Buyer(s) must have home inspection.
The cost of repairs required to correct housing quality standards (HQS) identified deficiencies can be included in the borrowers maximum loan amount up to $3,000.
NSP is a loan that is forgivable after 15 years.
Contact me to receive more information about this program and to receive a FREE copy of my report “The 7 Things You Must Know to Successfully Receive Grant Money.”
CEO Kelly on CNBC: ‘It All Depends on the Stimulus Plan’
On January 5, 2009, Dave Liniger Chairman and Co-Founder of RE/MAX International met with Broker/Owners to discuss the state of the real estate industry. One of the key statistics that stood out for me was short sale properties and bank foreclosures were going to be 30-40 percent of the real estate transactions over the next 3-5 years. On February 5, 2009, Margaret Kelly CEO of RE/MAX international appeared on CNBC’s ” Power Lunch” and had messages for consumers and real estate agents. Margaret stated “If you are going to work with a REALTOR to get your home sold or purchase a home, they have to know how to handle REO’s, short sales and foreclosures.
As a consumer you should make sure your agent is experience in handling these types of tranactions. You should ask your agent how much experience he or she has in short sales or bank foreclosures. It could determine if you win the bid or get your home sold. Please watch the video.
Check Out These Statistics From The National Association of REALTORS!
The National Association of REALTORS does a study every year on people who bought or sold real estate.
Characteristics of home buyers
41% of recent home buyers were first-time buyers.
The typical first-time home buyer was 30 years old, while the typical repeat buyer was 47.
The 2007 median household income of buyers was $74,900. The median income was $60,600 among first-time buyers and $88,200 among repeat buyers.
20% of recent home buyers were single females, and 10% were single males.
For 2/3 of home buyers, the primary reason for the recent home purchase was the desire to own a home.
Characteristics of homes purchased
New home purchases were 21% of all recent home purchases, down from 23% a year ago.
The typical home purchased was 1825 square feet.
78% of home buyers purchased a detached single family home.
When considering the purchase of a home, commuting costs were considered very or somewhat important by 80% of buyers.
The home search process
For 1/3 home buyers, the first step was looking online for properties.
87% of all home buyers and 94% of buyers aged 25 to 44 years used the internet to search for homes.
Real estate agents were viewed as a very useful information source by 81% of buyers who used an agent in the home search process.
Home buying and real estate professionals
81% of buyers purchased their home through a real estate agent or broker. Among those who purchased a new home, this percentage increased to 54% from 50% last year.
43% of buyers found their agent through a referral from a friend or family member.
70% of buyers would definitely use their real estate agent again or recommend the same agent to others.
The 7 Things You Must Know to Successfully Receive Grant Money!
I am asked all the time “how do you become eligible to receive grant money.” Applying for grant money is a process that must be followed correctly or a buyer could be made ineligible to receive grand funds. I have created a free report “The 7 Things You Must Know to Successfully Receive Grant Money” to help buyers avoid potential pitfalls. The first mistake many first-time home buyers make is working with real estate agents and loan officers who are not familiar with the rules on grant programs. Most grant programs require that you take a class with a housing counseling agency and you do a one on one meeting with a housing counselor before you write a contract on a property. If your agent does not know this rule he or she could cost you your eligibility to receive grant money. Unfortunately, it happens too many times. All banks or mortgage companies do not participate with the programs. Last month a buyer told me her bank said “the grant programs were out of money” the bank olny told her that because they were not a participating lender with the programs. I gave her a bank that did participate with the programs and she is receiving $10,000. Did you know that some programs are grants and some are loans? To learn about grant programs and how you can successfully receive grant money contact me to receive your free report.