*  When should you consider selling your house under its present value?
* Tax issues should be taken into consideration
* Be upfront with your lender about why you’re selling your house for less than it’s worth

If you’ve taken out a large mortgage, and perhaps refinanced to cover remodeling or other expenses, you may find yourself unable to keep up with your mortgage payment after a layoff, divorce or illness. More and more people are finding they need to sell their homes for less than they owe on the mortgages, known as a “short sale.”

Selling short is definitely better than foreclosure, which stays on your credit record for ten years. But it’s best to try to work things out with your lender before going through the embarrassing and laborious process of selling your home on a short sale.
Tax Issues

Before you put your home on the market for a short sale, it’s best to talk with a tax advisor about possible tax repercussions. It’s likely the IRS will consider the difference between the value at which you sell your home and the mortgage balance as “income” on which you’ll have to pay taxes.

An exception to this rule is if you can prove that you were “insolvent” – that your debts were bigger than your assets- before your mortgage lender agreed to a short sale of your property. A tax advisor will be able to tell you for sure whether you’d be considered insolvent by IRS standards.

If you can’t prove you’re insolvent, and the tax bill on a short sale would be more than you can pay, you may have to let the mortgage lender foreclose, or declare bankruptcy.
Be Upfront With The Real Estate Agent

If you find selling you house for less than you owe on the mortgage is an option short of foreclosure or bankruptcy, you’ll want to find a real estate agent who understands your situation. Agents typically take a much lower commission on short sales, and it often takes much longer to actually close the sale once the seller accepts an offer. But many agents sympathize with financial problems brought on by unexpected circumstances, and may want to help.
Convincing Your Mortgage Lender

The buyer will need your help in negotiating a short sale approval with your mortgage lender.

Your bank will have to be convinced that you deserve to be approved for a short sale. You’ll need to tell your mortgage lender about your financial hardships, including layoffs, divorce or medical issues.

While this may seem obvious, now is not the time to rack up the purchase of luxury items, like fancy cars or jewelry. Your lender will see these debts on your credit report and become convinced you’re a loose spender who doesn’t deserve a break.

It may also be necessary to provide the lender, either directly or through the buyer or buyer’s agent, documentation of your financial hardship, such as paystubs, bank statements and so forth. While this may seem like an invasion of your privacy, try to think of it as the fastest way out of an otherwise overwhelming debt.

Short sales take much longer to close than more conventional sales, so plan accordingly. If it works, you’ve avoided bankruptcy and an ugly mark on your credit report. If it doesn’t work, you’ll know that you’ve done everything you could to avoid foreclosure and/or bankruptcy.
Questions For Your Attorney:

* Are there any tax advantages for selling my house below its worth?
* How much lower than its value should I sell my home before I keep it?

If you have are seeking an experienced short sale agent go to www.idshortsale.com and fill out your private complimentary short sale application form and see how you may qualify. Joshua Groesbeck 208-353-7131

Source:Bennett

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Star Idaho is a rural town located about 20 miles west of Boise. The community offers a quiet atmosphere and is close to many of the recreational opportunities that Idaho has to offer. Star offers a lifestyle that is still within reach, a four seasons climate and a very low crime rate. Because of this, many have found Star to be the community of choice to raise their children. It isn’t uncommon in Star to see local children walking down to the river with their fishing poles in hand.
Just like much of the Treasure Valley, Star has grown a lot over the last few years. The growth has taken Star to a population around 5,500 which in turn has given the town access to more services. More businesses have opened, allowing residents the opportunity to shop locally for goods and services.

Stats provided by IMLS

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If you are in the market to buy a great home at a discount price and still get the $8,000 Tax Credit for first time home buyers then it’s not too late. Start by looking at homes on www.homeswithjosh.com or call Josh direct at 208-353-7131. Then we get you financially qualified for your loan, find the home of your dreams and get our offer accepted by May 30, 2010 and then we will fund and record before June 30, 2010. I know some things sound to good to be true but this my friends is how it works. If you have any questions please don’t hesitate to call 208-353-7131.

Josh Groesbeck specializes in selling Idaho short sale homes, bank owned homes and distressed properties. Boise, Eagle, Meridian, Nampa, Caldwell, Kuna, Star and Middleton- No Idaho home deserves to go unsold!

Stats released from: IMLS

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A great place to search REO, Bank Owed Homes, Short sales and all other homes for sale is www.homeswithjosh.com or call Josh direct at 208-353-7131

Also if you are seeing this and your current home has become a financial distress and you need help with options please visit www.idshortsale.com here you will find a short video and a free confidential no obligations short sale application this will help us find the best solutions for you.

josh@homeswithjosh.com

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For more information about Meridian, Idaho short sales, Bank owned homes, Distressed properties, REO properties visit www.homeswithjosh.com or call 208-353-7131.

If you currently own a home and are having trouble making payments due to loss of income — Or your payment is too high and your home is worth much less than what is owed- Please visit www.idshortsale.com there is a short video and a confidential no obligation short sale application for you to fill out.

Listing source:IMLS

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Simply go to www.homeswithjosh.com and put in Mls# 98423866   Call or email Josh to schedule your showing today!  208-353-7131 or josh@homeswithjosh.com

Of course if you would like more information on short sales in Eagle, Boise, Meridian,Garden City, Nampa, Caldwell, Star, Middleton or Kuna look on my accurate real estate website or give me a call. Don’t lose out on the $,8000 tax credit for first time home buyers and the $6,500 tax credit for home owners looking make the next move.

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Homes in this category are referred to as “underwater” or “upside down” properties, and their ranks have been growing as home values have declined.

The Boise area’s performance has been worse than both the national average and the state average, according to national research firm First American CoreLogic. Nationally, 24 percent of all residential properties with mortgages were in negative equity at the end of the fourth quarter of 2009. In Idaho, 23 percent of residential mortgages (53,663 homes) were under water in that quarter.

“Negative equity is a significant drag on both the housing market and on economic growth. It is driving foreclosures and decreasing mobility for millions of homeowners,” said Mark Fleming, chief economist with First American CoreLogic. “Since we expect home prices to slightly increase during 2010, negative equity will remain the dominant issue in the housing and mortgage markets for some time to come.”

If you are having trouble making your house payment or want to know if your home is “underwater” please go to www.homeswithjosh.com or idshortsale.com

Source: IBR

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Canyon county had 32 short sale properties fund and record in the month of February 2010. Prices ranging from $359,000 down to $42,000. Canyon county includes the cities of – Nampa, Caldwell, Kuna, Melba, and Middleton.  That is a %90 increase of short sale homes closed from the same month last year, I ask again are we seeing a trend? 2009 highest sold price was $417,500 and the lowest was $71,070 (not including a manufactured sale of $12,500)

So for comparison we have the month of February in 2009 and again the same month for 2010, closed short sales are up while prices have continued to go down. I do feel that values should start finding the floor while more and more short sales get completed. While loan modifications are still trying to make sense (will they write principle balance down to current market value?) or will 2010 be the year of the Short Sale! April 5th is the deadline for new short sale rules to be rolled out which should increase the success of short sales closed. Sum it up short sales sold are up and the prices are down- Great time to buy and also could be a great time to take a look at your home if it is underwater and you have trouble making payments- If your are wondering what your options are and would like assistance please don’t hesitate and call Joshua Groesbeck 208-353-7131 or visit http://www.homeswithjosh.com or http://idshortsale.com

Certified Distressed Property Specialist 208-353-7131

statistics are from the intermountain mls

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Negative $70,000.

At least according to First American Core Logic. FACL put out its quarterly negative equity report today, showing that the number of “underwater” loans is rising, from 10.7 million in Q3 to 11.3 million in Q4 or 24 percent of all borrowers from 23 percent.

What interested me was a paragraph lower down in the report:

“The rise in negative equity is closely tied to increases in pre-foreclosure activity and is a major factor in changing homeowner default behavior. Once negative equity exceeds 25 percent, or the mortgage balance is $70,000 higher than the current property values, owners begin to default with the same propensity as investors.”

This behavior is apparently measured by the actual data, that is, the default rates of investors vs.. owners and comparing that to loan-to-value ratios.

Source: Diana Olick

This is a measuring stick of how most home owners view their property. Take into consideration that there still are many people that aren’t quite 25% negative equity but do have loss of income and not enough equity to still sell their home outright that may still qualify for short sale. For more information go to http://idshortsale.com also more information at www.homeswithjosh.com or simply call Joshua Groesbeck at 208-353-7131

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A common misconception that people outside of the real estate industry make believes that foreclosure and an REO purchase is the same thing. Although they are similar, they are in fact different; more precisely they are corollaries of each other, with an REO being a direct result of a failed foreclosure sale. To understand the difference between the two and how they vary from each other it is best to define what each is, and their respective merits.

The term Real Estate Owned propriety is sometimes used ambiguously, but has a specific meaning in the real estate industry; a property that has been fore-closured on by a bank or Loan company and has reverted back to the ownership of the lender. So as already explained above an REO is the result of property that has been foreclosed on, and is produced only as a result of a failed foreclosure sale.

Knowing that an REO is the result of a foreclosure leads us to wonder what is foreclosure, what are the benefits of buying a house that has been foreclosed on and what are the reasons why they fail to find a buyer.

Under the terms of foreclosure a bank or Loan Company reposes the property due to the tenants inability to continue with payments on their loan; that they used to purchase the property the first instance.

Once the foreclosure notice has been issued and foreclosure has started the bank or Loan Company legally has the right to sell the property; regardless of whether the tenants haven’t moved out yet.

In order to purchase a property in a foreclosure sale there are a number of items that the bidder needs to successfully complete. Firstly the buyer has to submit a minimum bid that includes the following:
The loan balance on the property. All accrued interest on the property Attorneys fees All costs associated with the foreclosure process.

Regardless of the above, in order to bid at foreclosure the buyer must also have a cashier’s check in hand for the full amount of the bid. If the buyers is successful then they will be offered the house in its ‘as is’ condition; complete with tenants who need evicting and liens secured on the property.

Because of all the difficulties and lack of concrete benefits in buying at foreclosure, most people who want to buy a foreclosed property will go through the REO route.

The REO method of purchase offers much more benefits, incentives and less stress than the foreclosure method.

When a bank or Loan company takes back a property they then have the property listed as a sellable asset on their books. The role of the bank is to maximize the wealth of its shareholders. If the foreclosed property can be sold to release cash to invest, then this is the main motive for the bank or Loan Company; sell the property and invest the cash.

In most situations a bank will be looking for a quick sale, and as such will offer many incentives and benefits to prospective buyers:
Savings of up to 20% off the market value of the property Market an REO purchase as the most simple way for first time homebuyers and experienced investors to buy properties Give prospective buyers have immediate access to the property for home inspections Remove all back taxes and liens Allow negation on rehab costs, interest, closing points, loan amount, etc. Describe the purchase as nearly 100% risk-free Accept a less than normal down payment

Although the benefits of an REO seem to out weigh those of a foreclosure purchase you should not take them at just face value; you should always look into exactly what you are getting and what you are liable for, should you choose to purchaser a property.

In a REO sale the bank will evict the tenants (or you could leave them there and let them pay rent), remove any liens etc and do the basics. Most of the time however the bank will not make any repairs to the house and want to sell it to you in what is called ‘as-is’ condition: the condition the house was in when it reposed it. IF this is the case you should seek the services of a home inspector, to find out the sate of the property and to help you decide whether you wish to continue the transaction.

Although a bank owned property might look like a good deal on the outside, it is necessary that you do your background research on the property before you commit to any contracts. Your first priority should be to find out what the house is worth in today’s current market; having a comparative market analysis carried out will help you with this aspect of the purchase.

The reality that a bank or loan company is trying to sell its REO property does not necessarily mean that they are going to sell the property at a bargain price; such would be going against their role: to maximize shareholder worth.

If after you have had the property checked you still wish to continue with the purchase you will most likely make the bank or Loan Company an initial offer. Generally the bank’s response will be to counter the offer and ask for a higher price; a standard trick for the industry.

The emphasis will now be on you to decide on what you want to do. If you decide that the price that the bank or Loan Company is asking for does not reflect the market value of the property then you can stop and walk away. If you are happy you can counter their offer and submit a new bid.

It is most likely that the bank or Loan Company will have a whole department to handle their REO transaction, and as such it may take a while to get back to you, as around 3 or 4 people may have to review your offer.

If the bank approves your offer, then great for you! If they reject the offer however you should look at whether you are happy paying more or whether you feel that the price they are asking is either above market value or unacceptable to you.

If you continue with the transaction the bank or loan company will draw up a contract. It is necessary for you to take a good look at the contract and maybe have your attorney go over it with you, as once you sign it you are liable for what it states.

If you have not done so by the time you accept the banks offer you should have the house inspected by a professional. If you are waiting for an inspection, and already have the contract drawn up you should have an inspection contingency written into the agreement, so that you can pull out of any deal if the result of an inspection produce surprises or faults you are not comfortable with. You should always remember that the bank or Loan Company will always want to sell the property ‘as-is’.

You should if possible always consult a realtor or real estate agent before committing to a contract, or indeed making your offer to the bank or Loan Company. If you do have a realtor working for you, you should as him or her to find out from the listing agent the following details about the property, before you come to you conclusion on the offer you will make:
Are there any inspection reports? What repair work has the bank agreed to? Is there a special “as is” form? How long will it take the bank to accept your offer? How do you, or your agent, deliver the offer?

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