Foreclosure In Nevada: Myths & Mysteries
Posted on March 7, 2010
Filed Under Foreclosure short sale | Leave a Comment
Foreclosure in Nevada?
How, Whys, and Defense?
By
Malik W. Ahmad Attorney at Law
 [Malik Ahmad is a licensed attorney and admitted to practice to the Supreme Court of Nevada. Malik Ahmad is a solo practitioner and has his own law office in Las Vegas Nevada. Malik Ahmad is admitted to practice in all the courts in State of Nevada. His areas of practice includes bankruptcy, civil and business litigation as well as foreclosure defenses in Nevada.]
All loans in real estate property are considered secured loans. Whenever there is collateral attached to a loan, it is called secured loan. Unsecured loans are mostly credit cards loans and has no collateral attached with them. Here, in Nevada, and in the real estate context, all loans are secured because they are attached with property. When a loan secured by your lender goes into default, the secured creditor has a right to initiate foreclosure proceedings to take over this collateral. The lender has two choices: one is judicial foreclosure, and the other is non judicial or statutory foreclosure. Also, these days lenders are using other tactics like workout package, surrender deed in lieu of foreclosure, short sale, and of course the much touted loan modifications.
A foreclosure happens much after all these remedies or solutions are exhausted. Lenders does not like to lose money and like the homeowners wants to pursue all of the options at all the times. A workout package may or may not work because the lender is exploring all the choices where the homeowners can be made current. In a workout package, the lender sees your financial situation, the nature and value of your collateral and whether there are instant advantages which can be accomplished through the workout package. In almost all cases, sooner you talk to your lenders; they would suggest a workout package. The lender may send a workout package to you right away. There is a glimmer of hope for them to see their delinquent loan cured by your through this workout package. Also, it may follow a forbearance period. Just like borrowers, lenders are in a hurry to see a quick solution to this delinquency. Again, there is no uniform method of conducting such negotiation, each lender has their different guidelines and of course very skilled negotiator for this purpose.
A deed in lieu of foreclosure:
The borrower executes a deed where he conveys the property to the secured creditor in lieu of conducting the foreclosure sale. This way the lender becomes the owner of the property without going through the hassle of foreclosing and avoiding extra expenditure of publication. It is a voluntary matter from the borrower where no money in return can be expected. Sometime the borrower offers some money in exchange of clean returning the keys and up keeping the property during the transition times. This paper, however, only discusses situation after the workout package is exhausted or not discussed. There are some advantages of deed in lieu of foreclosure:
               1.           Quick negotiation process.
               2.           Borrower avoids negative publicity.
               3.           Less expensive for the lenders, does not pay for publication of notices.
               4.           No recordation of documents with the county or recorders office.
                5.           There is no public record of any kind created.
               6.           Borrower may obtain some legal as well financial concession from the lender.
               7.           May stay in the property for sometime without paying any mortgage payments.
               8.           The foreclosure process is lengthy and parties can avoid for some mutual benefits.
                9.           Lenders can do to avoid potential bankruptcy problems.
                10.  The borrower can negotiate the reporting of foreclosure to the credit reporting agencies. A foreclosure on a credit agency is extremely damaging, and the creditors may be approached to report such foreclosure in a more human and decent way.
11. The lenders can have an immediate possession of the property.
 12.   A deed in lieu of foreclosure does not eliminate junior encumbrances. The lender that takes a deed in lieu of foreclosure takes the title subject to those junior encumbrances. The lender takes over these encumbrances and therefore the rights of secondary lien holders.
13.         The lenders who accepts this deed in lieu of foreclosure also loses the right to pursue a deficiency judgment against the borrowers or guarantors either as a matter of law or as a matter of contract. See Maloney v. Boston five Cents Savings Bank FSB, 422 Mass. 431, 436, 663 N.E. 2d 811, 815 (1996). Both parties should pay particular notice to the doctrine of merger.
14.    Doctrine of Merger: When one party holds both a fee interest in property and lien on the same property, the lesser interest will merge into the greater interest. See Alladin Heating Corp. v. Trustee of the Central States Pension Plan, 93, Nev. 257 (1977) (holding that whether merger occurs is dependent upon the intent of the parties). If a merger occurs, junior liens increase in priority as a result of removal the senior lien held by the lender. If there are junior liens of the property, therefore, the lender may prefer that its higher priority lien remain of record after the conveyance by the deed in lieu.
 15.         Another pitfall is that if the borrower files a bankruptcy, this can be considered a collusive transaction. The bankruptcy code and state law allow a bankruptcy trustee to avoid certain transfers of property that are made prior to a bankruptcy filing known as “fraudulent transfers” 11 U.S.C. Section 548(a)(1)(B); NRS 112.180,., 190. A transfer of property through a deed in lieu of foreclosure is a voluntary transfer that is not subject to the “protections” of the foreclosure process. See Main v. Brim, 75 B.R. 322, 327 (Bankr. D.Az. 1987)
Foreclosure Process in General in Nevada:
               Most of the loans are premised upon continuous payments to the lenders. If these payments are not timely paid, or not continuously paid, the borrowers can start the foreclosure process. The lender reviews the loan documents and determines about the occurrence of a default. Failure to make loan payments triggers this default process. Also, it is contingent upon events which have not been corrected by payments or failure of a workout package.
               A trustee under a deed of trust may exercise its statutory power of sale without the judicial intervention. In Nevada, the foreclosure is mostly a statutory foreclosure. (NRS 107.080(1)). Judicial foreclosures are also permitted under Nevada law (NRS 40.430-40.450) but judicial foreclosures are not the preferred choice in Nevada for most of the lenders because of the looming danger of the right of redemption. Upon default, the initial step is for either the beneficiary or the trustee to execute a notice of breach and election to sell, which is usually accompanied by an unrecorded Declaration of Default. (NRS 107.080(2)(b)). The beneficiary executes the notice, but the trustee records it. The notice of breach and election to see must be recorded in the county in which the property encumbered by the trust deed is situated. This notice must also be mailed (notice of breach and election to sell) by registered or certified mail, return receipt requested with postage prepaid, to the address of the trustor and to the person who holds the title of record, if known, otherwise to the address of the property. (NRS 1076.080(3)
Notice of Default and Election to Sell?
               1.   Must describe the property
               2.   Must describe the deficiency in performance of payment.
3.           May contain a notice of intent to accelerate the entire unpaid balance if the terms of the obligations so permit (NRS 107.080(3).
 4.           Within 10 days of recording and mailing the notice of default to the trustor, copies of the notice must also be sent by registered or certified mail, return receipt requested, to each person who has either (1) filed a request for a copy of the notice; or (2) holds a record interest in the property subordinate to the deed of trust being foreclosed. Additionally, 20 or more days before the sale, the trustee must mail a copy of the notice of the time and place of the sale to the same parties by register3ed or certified mail, return receipt requested. (NRS 107.090.)
 5.           Nevada laws make it immaterial whether the notice is actually received by the trustor. The notice is effective nonetheless. (Turner v. Dewco Services, Inc., 87 Nev. 14, 479 P. Wd 462 (1971)
 6.           NRS 107.080(2)(a) provides that no power of sale may be exercised unless the trustor or his successor in interest, a beneficiary under a subordinate deed of trust or any other person with a subordinate lien or encumbrance of record (referred to below as “trustor or interested person”) has, for a period of 35 days, “failed to make good the deficiency in performance or paymentâ¦.” The 35-day period commences on the first day following the day upon which the notice and election is recorded and mailed to the grantor and to the record owner of the property in the manner specified above. (NRS 108.080(3). If the trustor other interested persons “make good” the deficiency in payment or performance within the 35-day period, the trusteeâs power of sale may not be exercised, and the obligation may not be accelerated. NRS 107.080(2)(a), (3). The 35-day period in the statute exists independently of any notice or cure periods contained the applicable notes or deeds of trust. If the notice of breach contains a permitted election to accelerate and the breach is not cured within the 35-day period, the trustor or other interested persons can thereafter only prevent the sale by tendering the entire unpaid balance of the obligation, as well as any costs, fees and expenses incidents to the preparation or recordation of the notice and incident to the making good of the deficiency in performance or payment (NRS 107.080(3).
What is the Procedure for Trusteeâs Sale?
                When three months have elapsed from the date of the recordation of the notice of breach and election to sell, the trustee may give notice of the time and place of the trusteeâs sale, which notice must be given in accordance with the statutory provisions for execution sales of real property â posted notice in three public places for 20 successive days and published once a week for three consecutive weeks. (NRS 107.080(4);231.130(1)©. The trusteeâs sale may be held at the office of the trustee anywhere in Nevada, even if it is not in the county where the property being sold is located. (NRS 107.080(4).
                If the power of sale is exercised in compliance with the Nevada statute, the purchaser is vested with the title of the trustor, without equity or right of redemption NRS 107.080(5).
What are the Guarantorâs Rights to Notice and Subrogation?
         The notice of breach and election to sell must be mailed by certified mail, postage prepaid, to each guarantor or surety of the debt at the address of each if known, or at the address of the trust property. The notice must also be mailed to any other obligor who has filed a request for a copy of the notice under NRS107.090. Failure to provide such notice would release that guarantor, surety or obligor from liability on the obligation. (NRS 107.095(1).
           Under NRs 107.095(3) a guaranty, surety or other obligor is not released if the required notice is give at least fifteen (15) days before the later of the expiration of the 35-day period described in NRs 107.080 or any extension of that period by the beneficiary, or if the notice of default is rescinded before the sale id advertised.
          Upon full satisfaction by the guarantor, surety or other obligor, other than the trustor, of the indebtedness secured by a mortgage or lien, the paying guarantor or obligor is entitled to enforce every remedy which the beneficiary has against the trustor, and is entitled to an assignment from the beneficiary of all of the rights the beneficiary then has by way of security for the payment or performance of the trustor. NRS 40-475 (1989). Such an obligor is also entitled to subrogation, junior only to the secured lenderâs rights, in the case of partial satisfaction of the indebtedness. (NRS 40.485 (1989). These rights may only be waived by the guarantor, surety or other obligor after default. NRs 40.495(1)(1989).
What are the rights under One Action Rule?
In Nevada, a deficiency judgment can be filed under non statutory foreclosure provisions without having filed a judicial foreclosure.
                            What is a deed of Trust in Nevada?
         The most common type of security interest in real property in Nevada is a Deed of Trust. A DOT has three parties.
    Lender: It is the first party who is referred to as “Beneficiary.”
     Borrower: It is the second party who is referred to as the “Maker”, or “Grantor”, or  ”Trustor” who conveys legal title to the property to the Trustee.
      Trustee: This is the third party who holds legal title to the property.
     Process: A DOT can be foreclosed in a simple process and cheaper as well. A Trustee sells the property encumbered by the DOT. All the lender needs to do in order to foreclose on a DOT is to determine that an even of default has occurred under the DOT and have the trustee conduct non-judicial foreclosure proceedings. Here, in Nevada, the trustee sale does not entail redemption. The borrower, in Nevada, does not have the statutory rights of redemption unlike the judicial foreclosure where the right of redemption lasts one year. Compare NRs 107.080(5) (no right of redemption in a foreclosure on a DOT ) with NRs 21.210 (one year period of redemption).
Determination of Default.
 Your default notice also consists of a determination of default. It can be monetary or non monetary. Monetary is when it is linked to borrowers failure to pay, failure to pay property taxes, failure to pay homeowners association assessments and failure to pay special improvements and other assessments against the property. The non monetary events of default are spelled out in the notice of default and Deed of Trust as well as related loan documents. They can be failure to insure property, the failure to maintain debt service coverage ratios and waste.
Acceleration of Obligation:
 A trustee under a deed of trust may exercise its statutory power of sale (commencement of foreclosure process) without judicial intervention in Nevada. NRs 107.080(1). Judicial foreclosure is also permitted under Nevada laws though seldom exercised. (NRs 40.430-40-450). They carry with them a one year right of redemption which lenders does not like it as they like to close this chapter once for all.
Steps in Foreclosure In Nevada:
1.           The beneficiary or the trustee to execute a notice of breach and election to sell which is usually accompanied by an unrecorded Declaration of Default. (NRS 107.080(2)(b). The beneficiary executes the notice, but the trustee records it. The notice of breach and election to sell must be recorded in the county in which the property encumbered by the trust deed is situated. The notice of breach and election to sell must also be mailed by registered or certified mail, return receipt requested with postage prepaid, to the address of the trustor and to the person who holds the title of record, if known, otherwise to the address of the property. (NRS 1076.080(3).
 2.           The notice and election must describe the deficiency in performance or payment, and may contain a notice of intent to accelerate the entire unpaid balance if the terms of the obligation so permit. (NRS 107.080(3).
 3.           Within ten days of recording and mailing to the trustor the notice of default, copies of the notice must also be sent by registered or certified mail, return receipt requested, to each person who had either (1) filed a request for a copy of the notice; or (2) holds a record interest in the property subordinate to the deed of trust being foreclosed. Additionally, 20 or more days before the sale, the trustee must mail a copy of the notice of the time and place of the sale to the same parties by registered or certified mail, return receipt requested. (NRS 107.90)
 4.           Under Nevada law, it is immaterial whether the notice is actually received by the trustor. Turner v. Dewco Services, Inc., 87 Nev 14. 479 P.2d 462 (1971).
 5.           NRS 107.080(2)(a) provides that no power of sale may be exercised unless the trustor or his successor in interest, a beneficiary under a subordinate deed of trust or any other person with a subordinate lien or encumbrance of record (trustor or interested persons) has, for a period of 35 days, “failed to make good the deficiency in performance or paymentâ¦.” The 35-day period commences on the first day following the day upon which the notice and election is recorded and mailed to the grantor and to the record owner of the property in the manner specified above. NRS 107.080(3). If the trustor or other interested person “make good” the deficiency in payment or performance within 35-day period, the trusteeâs power of sale may not be exercised, and the obligation may not be accelerated. NRs 107.80(2)(a), (3). The 35-day period in the statue exists independently of any notice or cure periods contained in the applicable notes or deeds of trust. If the notice of breach contains a permitted election to accelerate and the breach is not cured within the 35-day period, the trustor or other interested persons can thereafter only prevent the sale by tendering the entire unpaid balance of the obligation, as well as any costs, fees and expenses incident to the preparation or recordation of the notice and incident to the making good of the deficiency in performance or payment. NRS 107.080(3).
 6.           Nevada Revised Statutes Chapter 107 governs Deeds of Trusts. The transfer of real property may be made in trust to secure loans and other obligations. See NRs 107.020. In the event a transfer is made in trust to secure payment, the Trustee is granted a power of sale which may be exercised if an event of default has occurred. See generally NRS 107.080.
 How a Foreclosure Process in Nevada is Commenced?
1.           The lender must first determine that an event of default has taken place.
2.           The lender employs the Trustee or a successor.
3.           The Trustee will prepare and record in the Office of the County of Records of the County in which the property is located a Notice of Default and Election To Sell. (NRS 107.080).
 4.           The Notice of Default and Election to Sell must be mailed by registered or certified mail, return receipt requested Election to Sell must be mailed by registered or certified mail, return receipt requested and postage prepaid, to the grantor of the Deed of Trust, the person who holds title of record on the date of the Notice of Default and Election to Sell, each guarantor or surety of the debt, NRS 107.095(1), and any person who recorded a request for a Notice of Default and Election to Sell. (NRS 107.090.
 5.           On the first day after the Notice of Default and Election to Sell is recorded and sent by mail to all interested parties, the borrower and the other obligors are then given 35 days to make good the deficiency in payment or performance. NRs 107.080(2)(a)(2). This essentially allows the borrower or other obligors to de-accelerate the default under the Deed of Trust and terminate the foreclosure proceedings.
 6.           In the event the borrower or other party in interest fails to cure the deficiency in payment or performance, the Trustee must wait until the expiration of three months following the recording of the Notice of Default and Election to Sell (55 days after the 35 day reinstatement period expires) before giving notice of the time and the place for the sale of the real property (NRS 107.080). The notice of the time and place for the sale of the real property must be published in accordance with Nevadaâs execution statutes.
 Requirements of Publication for the Notice Under Nevada Laws
 Nevada statute requires the following publication of the notice of the date, time and place of the sale:
 (1) Personal service or service by registered mail to the last known address of each person entitled to Notice of Default and Election to Sell;
 (2) The posting of a similar notice particularly describing the property , for twenty days successively, in three public places of the township or city where the property is situated in or where the property is to be sold; and
 (3) Publishing a copy of the Notice three times, once each week for three successive weeks, in a newspaper, if there is one the county. (NRS 21.130(c).
 (4) In addition to the notice required by Nevadaâs execution statutes, the Trustee is required to, at least twenty days before the date of the sale, deposit in the United States mail and envelope, registered or certified, return receipt requested and with postage prepaid, containing a copy of the Notice of time and place of sale, addressed to each person who has recorded a Request for Notice of Default and Sale. See NRS 107.090(4).
 (5) If the Trustee fails to give any person liable to the beneficiary or any other person who has requested a Notice of Default and Sale the required notices, that person may be released of its obligation to the lender. NRs 107.095.
 (6) NRs 107.080(4) allows the Trustee to conduct the sale at the Trusteeâs office.
 (7) At the foreclosure sale, the Trustee may sell the real property by public auction. Generally, the lender will provide the trustee with a minimum credit bid before the foreclosure sale. The amount of the credit bid may be for the full amount of the debt owed to the beneficiary or only a portion of what is owed to the beneficiary. Any person or entity may attend the foreclosure sale and bid for the real property.
 What is Nevadaâs “One Action Rule”?
 Nevada has adopted a one-action rule. It provides that there may be only one action to collect a debt secured by a mortgage or other lien. The Nevada One Action rules provides: (NRs 40.430(1)-(3).
            1.           There may be but one action for the recovery of any debt, or for the enforcement of any right secured by a mortgage or other lien upon real estate. That action must be in accordance with the provision of this section and NRS 40.433 to 40.459, inclusive. In that action, the judgment must be rendered for the amount found due the plaintiff, and the court, by its decree or judgment, may direct a sale or the encumbered property, or such part thereof as is necessary, and apply the proceeds of the sale as provided in NRs 40.462.
                2.           This section must be construed to permit a secured creditor to realize upon the collateral for a debt or other obligation agreed upon by the debtor and creditor when the debt or other obligation was incurred.
                3.           A sale directed by the court pursuant to subsection 1 must be conducted in the same manner as the sale of real property upon execution, by the sheriff of the county in which the encumbered land is situated, and if the encumbered land is situated in two or more counties, the court shall direct the sheriff of one of the counties to conduct the sale with like proceedings and effect as if the whole of the encumbered land were situated in that county.
 Conclusion: The Foreclosure–The End of the Dream:
       The foreclosure is the final and definitive step and the end of the whole nightmare process. There is no right of redemption for a non judicial foreclosure in Nevada. The acceptance of the winning bid concludes the bidding process. The execution sale is final and deprives the debtor of any entitlement to the rights of ownership in the property. It is final elimination of any liens on the property along with the junior encumbrances.
What is right of Redemption?
        Few words on redemption: The foreclosure process may not be final unless a final remedy can be exercise in Nevada, and that is called right of redemption. There is no redemption in non judicial foreclosures. However, there is one year period of redemption in a judicial foreclosure sale in Nevada. Right of redemption is paying off all the existing monetary obligations up to and before the final fall of the hammer. The full amount may consist of all delinquent amounts, plus interest and attorney fees and other publication costs. Under Nevada law, there are no rights of redemption in connection with a properly conducted non-judicial foreclosure sale. NRS 107.080(5). There is one year right of redemption in a judicial foreclosure sale (NRS 21.210)
 What is Deficiency Judgment, and Where This Money Will Come From?
                As it is happening quite often these days, the Trustee will sell property at a foreclosure sale for less than the amount which is owed to the creditor or beneficiary under the Deed of Trust. Deficiency judgments are governed by NRs 40.451 to 40.459. The beneficiary must file the deficiency action within six (6) months after the date of the foreclosure sale or the deficiency action will be time barred. Specifically, NRs 40.455(1) provides:
 Upon application of the judgment creditor or the beneficiary of the deed of trust within six months after the date of the foreclosure sale or the Trusteeâs sale held pursuant to NRs 107.080, respectively, and after the required hearing, the court shall award a deficiency judgment to the judgment creditor or beneficiary of the deed of trust if it appears from the sheriffâs return or the recital of consideration and the trusteeâs deed that there is a deficiency of the proceeds of the sale and a balance remaining due to the judgment creditor or the beneficiary of the deed of trust, respectively. NRS 40.455(1)
 Nevada law places stringent limitations on the amount of a money judgment, which may be recovered against the debtor, guarantor or surety who is personally liable for the deficiency. The court shall not render a deficiency judgment for more than:
 1.     The amount by which the amount of the indebtedness which was secured exceeds the fair market value of the property sold at the time of the sale, with interest from the date of the sale; or
 2.      The amount which is the difference between the amounts for which the property was actually sold and the amount of the indebtedness which was secured, with interest from the date of sale, whichever is the lessor amount.
 3.       The court may also consider expert appraisal testimony to evaluate the fair value of the property.
 4.      The junior lien holder if their rights are not properly extinguished can also sue for deficiency judgment.
 5.    Nevada law provides that the anti deficiency legislation protects a guarantor and any other entity that is personally liable for the debt. See generally NRS 40.459.
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Malik Ahmad Attorney at law
http://www.articlesbase.com/bankruptcy-articles/foreclosure-in-nevada-myths-mysteries-740739.html
Posted on March 5, 2010
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Posted on March 5, 2010
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Get Help With Phoenix Foreclosures
Posted on March 5, 2010
Filed Under Foreclosure investing | 7 Comments
Owning a home is the great American dream. Losing that home to foreclosure in Phoenix can seem like the end of the world. However, Phoenix foreclosures are completely avoidable and can be prevented if you are willing to weigh your options. For starters, you need to know that there are alternatives to Phoenix foreclosure, and you can avoid the process. Whether you’re trying to sell your home before time runs out, or if you just don’t know what to do but can’t afford your home. You need to research Phoenix foreclosures to make sure that you’ve done everything that you can to stop the process. When it comes to Phoenix foreclosures, you should first consider any companies you can find that are willing to buy a foreclosure in Phoenix or will work with a Phoenix foreclosure. These companies are usually made up of real estate investors, and work with cash, so that mortgages aren’t needed. This is one great alternative to Phoenix foreclosures.
Waiting for an individual buyer for your home can jeopardize your time, as well as your financial well being. Phoenix foreclosures don’t happen overnight, but can be a fast process if you’re not prepared. Taking the time to learn about Phoenix foreclosures is the best thing that you can do. If you do nothing about Phoenix foreclosure, you’ll likely face foreclosure in Phoenix much faster that you might have imagined. It doesn’t matter why you are facing this problem. With the current state of the economy, Phoenix foreclosures can happen to anyone, so you need to take them very seriously.
The companies that you can find who invest in Phoenix foreclosures are usually real estate investing teams that can turn your nightmare into a profit for their company. It doesn’t matter what shape your home is in when it comes to foreclosure in Phoenix. You can even avoid Phoenix foreclosure if your house isn’t perfect. It doesn’t matter if the home is in need of repair or just ugly, many companies will take Phoenix foreclosures however they can get them. Phoenix foreclosures are a popular item right now, because of the present state of the economy. It’s unfortunate, but too many people have gotten in over their heads. By educating yourself and getting out before it’s too late, you can avoid becoming another statistic of Phoenix foreclosures.
Even if you feel like you’ve tried everything and failed, that isn’t necessarily true. While your mortgage lender might not be willing to work with you, you can find another company or investor that will when it comes to Phoenix foreclosure. Understanding the process of Phoenix foreclosures is essential to your success. By taking the time to educate yourself and learn about Phoenix foreclosures, you can be certain that you’ll have a better experience than if you were ill informed and did nothing. Facing foreclosure in Phoenix might be scary, but it can be avoided. You need to take the time to learn about Phoenix foreclosures and what options you have. If taken seriously, Phoenix foreclosures can be avoided quite easily.
Reed Lattin
http://www.articlesbase.com/real-estate-articles/get-help-with-phoenix-foreclosures-688239.html
Tips For Preparing Your House For Sale
Posted on March 5, 2010
Filed Under Foreclosed Homes For Sale | Leave a Comment
When acting as your own real estate agent, it is imperative that you cover all bases adequately.
(there is a free ebook: 101 Tips For Selling Your House,for you to download, that gives you plenty of tips for preparing your home for sale, from a link at the bottom of this page).
You must have a for sale by owner home that is in excellent condition and ready to be shown to potential buyers.
It is not difficult to prepare your for sale by owner home for show but it does require proper planning and a little bit of work on your part to ensure success.
The outside of your for sale by owner home is the first thing potential buyers will see so it is very important to make sure it is clean and attractive.
“Curb appeal,” or the way your home looks from the outside, is what attracts potential buyers so if you spruce it up a bit, they will want to view the inside of the for sale by owner home.
A neatly manicured and well-kept lawn implicitly signifies a well maintained for sale by owner home. You should make a weekly habit of cutting your lawn while your home is on display for sale. Be sure to rake leaves and to sweep the sidewalks on the weekends when your house is to be shown.
If you have shrubs and or trees, remove debris and dead limbs to make them more presentable. It is a nice touch to plant extra flowers for color or to add potted flowers to lighten up the landscaping.
If fences are in ill repair or need work, repair them and touch them up with stain or with paint. Put away lawn equipment, children’s’ toys, and any other outdoor items.
Keep large pets with neighbors so they do not interfere with the showing of your for sale by owner home.
The inside of your for sale by owner home is next on the list to make presentable for showing. It has been proven that people buy homes that appear spacious, clean, and solid.
Dark colors and clutter turn off most buyers, this means you must get rid of everything that you can possibly live without.
A good rule of thumb is this, if you cannot see your baseboard, the room is probably very cluttered.
To get rid of unnecessary things you may have, you may donate them to a charity or have a garage sale. The larger items that you must keep can be placed in storage.
If you will be painting your interior, use white or an off-white paint. You should also replace your light bulbs with brighter, higher wattage bulbs. Again, the look you are going for is bright and spacious. Be sure to clean everything thoroughly including carpets and mirrored surfaces.
Clean the oven and all appliances and be sure to polish any chrome fixtures. Be especially particular about ridding your home of any odors such as from smoke or from pets.
Fix any loose doorknobs, repair any broken windowpanes or leaky windowsills. Be sure any light fixtures are secure and in good repair. Also, be sure to repair any leaky pipes and to reapply caulk as needed.
These general tips will get you started on preparing your for sale by owner home for show. It is a good practice to view the for sale by owner home as though you are the buyer and to be particularly hard on yourself so a potential buyer won’t have to be.
If you are worried that you may overlook something, it won’t hurt to get a friend or neighbor to do a walk thru of the home and to critique your efforts. This will ensure a complete and thorough preparation and will boost the appeal of your home.
If you follow these tips you should have no trouble in selling your house.
Geri Mason
http://www.articlesbase.com/real-estate-articles/tips-for-preparing-your-house-for-sale-96497.html
How to Purchase Your Home at a Cheaper Price
Posted on March 5, 2010
Filed Under Foreclosed Homes | 6 Comments
First-time home buyers facing financial constraints sometimes abandon their plans to buy a home. By identifying a foreclosed property, you can often buy a house at below market prices and with little initial cash down payment. Foreclosures homes are simply homes that have been repossessed by the bank or by a government agency due to default in mortgage payment by the original owner. Because the bank or agency is usually eager to unload the property, there’s a real opportunity to buy the home at a cheap price. But you have to do a lot of pre-study and some hard work to succeed in buying a home at foreclosure.
Where can you find foreclosures? The Internet has made things easy. Several web sites offer complete lists of properties at all stages of foreclosure. Properties offered by the Department of Housing and Urban Development are also available on-line. Many lender web sites now include lists of foreclosed properties.
How do you buy one? HUD homes (Housing and Urban Development) require a written bid, and except for those homes offered through exclusive listing contracts, HUD sells homes only through sealed offers. You can use any HUD approved real estate agent to help you submit one. For bank foreclosures, the procedures may vary. Auctions are usually advertised in the newspaper with specifics as to how much of a deposit will be required by bank check to secure the bid the day of the auction.
Please bear in mind that foreclosures homes are usually sold in âas is” condition. It is therefore critically important that you thoroughly inspect the home before deciding to buy. Do not fail to calculate what repairs on the foreclosure may cost by obtaining a bid from a contractor. Strangely, in quite a few cases, when you add the cost of the repairs to the purchase price, you may end up paying much more than you originally envisaged.Â
Now let us examine buying pre-foreclosure homes which are lot cheaper then even foreclosure homes. The basic advantage in buying pre-foreclosure is buying the home at under market value price. If you are an investor in real estate, then buying pre-foreclosure is a windfall income. However, no matter investors or home buyers, you should first understand pre-foreclosure in order to avail the benefit.
Pre-foreclosure is the first stage of a home being foreclosed. This happens when the home owner has missed at least one payment and is now considered delinquent on the loan. The home owner receives a formal warning sent to the homeowner. The homeowner will be given a certain period to respond to the borrower. In this state, home owners are somewhat desperate and look for prospective home buyers to bail them out.
It should be understood that the home owner is passing through a bad patch in his life that has caused him to fall behind in his mortgage payments. Therefore, foreclosure home owners are very distressed when borrowers send in the warning of foreclosure. Remember, you as a home buyer can always help these foreclosure homeowners. If you are able to buy the foreclosure home with some amount above their mortgage balance, homeowners would settle part of their financial problem. Thus, buying pre-foreclosure is a win-win situation for both buyer and existing homeowner. You can get a under market value foreclosure home while homeowners could settle their unpaid home loan. However, the biggest challenge of buying pre-foreclosure is getting the attention of homeowner. Thus, acting fast and effectively will help you to reach pre-foreclosure homeowners.
Sarah Jose
http://www.articlesbase.com/investing-articles/how-to-purchase-your-home-at-a-cheaper-price-690903.html
Buy a Short Sale for a Great Deal
Posted on March 5, 2010
Filed Under Foreclosure short sale | 3 Comments
If you have been looking at the real estate market, I’m sure you have noticed that many of the homes up for sale are advertised as short sale. Buying a home for under the amount that is owed on the real estate is called a “short sale.” In the current real estate market, there are many short sale options open to a potential home owner. Adjustable rate mortgages and the economic downturn have caused higher than normal foreclosure rates. If you are in the market to purchase a home, this is the ideal time to exploit the market to your own advantage. With some precise research and an open mind, you may find the home of your dreams at an unheard-of price.
Locating a Short Sale Quickly
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To initiate the short sale process, meet various real estate agents. Many real estate agents already are knowledgeable in dealing with properties that are short sales. Selling agents often have pre-existing association with the lender that is holding the mortgage. You want to use a realtor that has experience and information on how to get a property that is a good value. Once you settle on a realtor, let him or her know right away that you are looking for a short sale property. This will help the realtor find an ideal property more quickly.
Short Sales are Often Bargains
A short sale will often be offered at a good price to the buyer since the bank does not want to have their assets tied up in the property. A bank is vulnerable to losing a substantial amount of money in a foreclosure proceeding. The listing price is minimal and so you will not have to try bargaining with a seller over the price. The bank wants the property sold as quickly as possible to eliminate losing any more money.
What to Anticipate When Buying a Short Sale Property
The process of buying real estate in a short sale is a little different than purchasing a home from an individual because you dealing with an corporation instead of a person. Once the bank accepts your offer, the title company working with the bank will handle all of the title and escrow details of the purchase agreement. With a short sale, as a buyer you have to proceed swiftly. The title company and the bank may not act as quickly owing to the large amount of paperwork involved in selling a property in this manner.
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To speed up the process of purchasing a home in a short sale, get all of the required documentation in as quickly as you can. Generally there is a month or more before your closing date but that does not mean that nothing is going on. There is a complicated behind the scenes process involved in the mortgage documents and the transfer of the property. Keep in touch with your lender and realize that you are dealing with a corporation and not a person so the process will be a little different. The time before closing will slide by, and you will be in a great new home.
Lee Bell
http://www.articlesbase.com/real-estate-articles/buy-a-short-sale-for-a-great-deal-712659.html
Wholesaling Bank Owned Foreclosures ‘ a Definitive Guide
Posted on March 2, 2010
Filed Under Foreclosure investing | Leave a Comment
Beginning investors who find themselves strapped for cash often start real estate investing by wholesaling properties to other investors.
With the market in its current condition more and more investors find that they are coming across hordes of motivated sellers. Unfortunately, all of these potential prospects tend to share one thing in common. They don’t have any equity! This little dilemma is causing many investors to turn their efforts toward bank-owed foreclosures.
The single biggest advantage associated with REOs is the fact that equity can be created instantly either by finding a hot deal or through shrewd negotiation. There’s nobody telling the bank that they owe too much on a property and can’t lower the price a bit. In theory…any house could be sold for as little as a dollar.
In fact, there is only one downside to wholesaling REO properties. Non-assignability. When an investor gets a bank owned property under contract it always comes with multi-page addendums that make the deal non-assignable.
A lot of new wholesalers will consider this one obstacle to be the end of the line where flipping bank owned homes is concerned, never knowing that there are four ways to maneuver around this bump in the road.
Method #1 - Add to Contract, Then Quit Claim
Most banks do not have an issue with adding an additional party to a contract, they just do not want the ORIGINAL parties removed from it at any time. So Ivan Investor can get an REO property under contract for $50,000. Ivan calls Louie Landlord and after talking about the deal Louie agrees to pay a total of $60,000 for the property.
Ivan calls the bank up and requests that an addendum be drawn up that adds Louie to the contract and title. The Bank agrees and everyone shows up on closing day.
Louie brings TWO certified checks. One for $50,000 for the purchase of the property, and one for $10,000 made out to Ivan. All parties then show up for closing and both Ivan and Louie then own the home. Louie hands Ivan the $10,000 check and Ivan signs a quit claim deed removing him from title on that property. Pretty simple, right?
Pros: The advantage to this method is that there is only one set of closing costs. It’s a rather simple and straight-forward method that works for most deals. It works around the 90-day deed restriction that comes packaged with many Fannie/Freddie properties.
Cons: Here are the negatives that come with this method. This does NOT work for HUD properties because HUD does not allow any changes to the parties that are on the original offer and the end buyer usually cannot be getting a mortgage because a mortgage company won’t allow you to be on title if they are lending someone else money against the home.
Method #2 - Simultaneous Double-Close
The simultaneous double-close (also known as a simul close or a “dry” close) is actually two transactions. An investor is buying from the bank and then instantly reselling to a third party in a separate transaction. It follows a typical A-to-B-to-C deal flow.
The “twist” that comes with this method is that the wholesale investor never actually brings any money into play. The end-buyer’s funds are used to fund BOTH transactions. This is possible because, as long as both closings take place on the same day, it doesn’t matter which one closes first for the title company’s accounting purposes. The second transaction (B-to-C) could take place a 9am with all the paperwork for that transaction taken care of at that time while the first transaction (A-to-B) doesn’t close until 2pm.
What really matters is that the deeds are RECORDED in the proper order when filed with the county. It’s important at that time to have the A-to-B deed filed first with the B-to-C deed following on record.
Pros: This works well for those who have zero cash as long as they have a good title company that will still do these types of transactions. It still works even with end buyers that are getting conventional financing if the end buyer is getting their financing through the right lender.
Cons: This method is NOT an option if the end buyer is getting FHA financing. This method also does NOT work for Fannie/Freddie foreclosures in most cases because these super-banks put a deed restriction in place that prevents you from reselling the property to ANYONE for a full 90 days.
Also, with all double-close deals there are two sets of transfer taxes, recording fees, and other closing costs that cut into your profit. Of course you can just build that into the deal by lowering your offer price in order to circumvent this small annoyance.
The biggest roadblock to getting these transactions closed is the fact that fewer and fewer title companies are comfortable with the “dry” simultaneous close where the wholesale investor brings in no cash to the deal. In fact, they are often refusing to close these deals at all!
Method #3 - True Double Close
The true double close (also known as a “wet” close) is the same as the simultaneous close in that the investor is buying the foreclosure property and instantly reselling it to the end buyer for a profit. However, the wholesale investor is actually bringing in his own cash to fund his end of the deal.
This little difference makes the title companies happy but it doesn’t work so well for beginning investors that don’t have piles of cash sitting around to make the deals work.
Then came Flash Funding. There are “transactional funding” lenders will lend you all the money you need to do these same-day double-close deals…for a price. Most will never run a credit check or request an appraisal on the property.
The pros and cons to this method are pretty much the same as the simul close, except that on the good side more title companies are willing to do business with you if you go this route and on the bad side you have additional costs in the form of Flash Funding fees chewing away at your profits.
Method #4 - Sell The LLC
This last method has been popularized by Steve Cook who’s said that he swiped it from commercial real estate investors who have been using it for years to avoid paying transfer taxes.
The idea is that an investor would submit an offer in the name of an LLC. If the investor was placing an offer on 1221 Sycamore, he may send it in with “Sycamore Group LLC”. If the offer is accepted, the investor immediately faxes in his LLC articles of organization and creates the company to match the Buyer on the purchase agreement.
From there the investor finds his end buyer and they agree that on closing day the end buyer will purchase the entire LLC from the original investor for the amount of the wholesale fee. From there, as the new owner of the LLC, the end buyer is empowered to close on the original transaction and purchase the property.
Pros: The upside to this method is that you workaround the extra costs in the form of transfer taxes and/or Flash Funding fees that come with the two Double-Close methods, and for those who are concerned about guarding their privacy, your name never goes on the deal.
Cons: The major obstacle to this one is that the end buyer has to pretty much be paying cash. Banks do not loan traditional mortgages (either to owner occupants or investors) in company names. You have to buy it in your own personal name to get a mortgage. Other concerns are that if you do this often enough you may attract the attention of state regulators who are confused as to why you start and sell 5-10 LLCs each month.
Armed with these four workarounds, investors nationwide are able to successfully wholesale flip REO foreclosures. None of these methods require the wholesaler to bring his or her own cash into play other than the initial earnest money deposit and none require a credit check. One of these methods will work for pretty much any situation you will come across when flipping bank owned homes.
Brian Kurtz
http://www.articlesbase.com/finance-articles/wholesaling-bank-owned-foreclosures-a-definitive-guide-736881.html
Is Selling Your Own Home A Good Idea?
Posted on March 2, 2010
Filed Under Foreclosed Homes For Sale | 12 Comments
Selling your own home seems like a good idea.
You can do so much more with a few thousand dollars than pay it to a real estate agent for commission.
But there are a few draw backs to consider
This is especially true if you have to lower your asking price as many for sale by owner sellers end up doing.
When you sell your home for sale by owner, you take on all the responsibilities real estate agent would normally handle.
This includes marketing the home, fielding phone calls from potential buyers, having open houses, making the negotiations, and closing the deal. If these steps were as easy as they might seem there would be more real estate agents.
Consider that a real estate agent’s only job is to sell real estate. The agent doesn’t have an emotional attachment to the home. He (or she) is experienced in juggling multiple priorities and can quickly determine what a buyer is looking for in a home.
In many cases, buyers feel more comfortable working with a real estate agent because they feel freer to voice their true opinions on the home than they would with the home owner.
Many for sale by owner sellers are not able to show the home to potential buyers in an objective manner. Often the seller skews the home showing to his own point of view, talking about experiences that he and his family have had in the home.
This can make it difficult for the buyer to truly get a feel for what it would be like for them to live in the home.
Pricing the home is vital to the sale of the home. A for sale by owner seller with no prior experience in setting home prices might end up setting a price that is too high.
Often homeowners have unrealistic expectations of how much their home is worth. This expectation stems from emotional ties to the house. A real estate agent, who might work with several houses a day, is better able to look at the home objectively and set a succesful selling price.
For sale by owner sellers often lack the negotiation skills necessary to ensure that they are getting a good deal from the sale of the home.
If the buyer has an experienced real estate agent, it could be difficult for the seller to negotiate a favorable deal. This is the reason that many for sale by owner sellers end up walking away with a lower price on the home than they initially expected.
Buyers have schedules just like sellers do. Selling for sale by owner put the seller in a position where he must schedule his day around showing the home to prospective buyers, some of which might not even show up. This can end up being extremely frustrating for the for sale by owner seller.
Geri Mason
http://www.articlesbase.com/real-estate-articles/is-selling-your-own-home-a-good-idea-95166.html
Harnessing the Power of Real Estate to Achieve the American Dream
Posted on March 2, 2010
Filed Under Foreclosed Properties | Leave a Comment
In New York, the Wall Street super-firms are struggling for survival. Many have called 1-800-BAILOUT to keep from going the way of the 8-track tape and the cuckoo bird.
In Detroit, the automotive industry is on life support and hoping for mouth-to-mouth resuscitation from everybodyâs favorite Uncle or Big Brother â depending on their perspective.
Elsewhere, from Main Street to some of the lesser-known boardrooms across this great land, Americans from all backgrounds and political persuasions have one thing in common: theyâre all circling their collective wagons, convinced that life as we know it has either come to an end â or soon will.
So where do you fit in?
Are you inclined to join the crowd or are you willing to harness a once-in-a-lifetime opportunity and hitch your wagon to real estate and grab your piece of the American Dream?
Itâs really no secret that people everywhere are fearful for the future. Theyâve watched their lifeâs savings evaporate in a few months time, seen some of the biggest financial giants in the world topple like dominos, and in some cases have learned first-hand what itâs like to be handed a pink slip.
With all this bad news, one of the soundest pieces of advice known to man has been relegated to junk bond status by almost everyone. As a result, most people have little hope for the future.
You have a chance to be different
Now is a very special opportunity for you to secure a future free from financial worry. When everyone else is cashing in their chips and going home, savvy investors are taking some initiative and buying all the real estate they can get their hands on while prices are low.
Itâs true that real estate prices have hit distressing lows and billions of dollars of equity has disappeared from the real estate market. Thatâs all the more reason to buy real estate now â before prices shoot back up.
Economics 101 tells us that the Law of Supply and Demand dictates that the best time to buy something is when nobody else wants it. The fact is, right now nobody wants real estate. That means demand is low. Which means that prices are even better.
Nobody ever got rich overnight by buying an asset that is expensive and in demand. The best time to buy real estate is now, while prices are low. Thereâs no competition and many of these properties can be purchased for as little as 40 or 50 cents on the dollar.
I know that the average person would rather shoot themselves in the foot than buy something that may or may not go up in value. Before you take aim on your big toe, think about this: real estate values will go back up. When they do, equity will appear out of nowhere and millionaires will be made.
You can be one of those millionaires.
During the Great Depression, millionaires were created when people with a little bit of money or credit bought as many low-priced investments as they could reasonably get their hands on, with the firm belief that times would eventually get much better. When that happened, they would become overnight millionaires or multimillionaires.
Conventional wisdom says that you run from danger whenever possible. But these arenât conventional times. Now is the time to scoop up as many bargain properties as you can. You can guarantee a winning transaction by making sure youâll have positive cash flow.
Instant equity will be yours with a few signatures when you buy properties in this fashion. Then youâll have the added bonus of monthly, on-going cash flow. Ultimately, property values will skyrocket. When they do, your net worth will grow with meteoric speed.
Youâll become an almost overnight success story.
All because you had the nerve to defy the flawed logic of the rest of the crowd.
Now is the time for you to harness your future. The wealthiest people in the world canât all be wrong. Theyâre buying as much real estate as they can.
Shouldnât you be doing the same?
How big is your American Dream?
How many horses will you need to pull your wagon?
Now is the time for you to break camp and get started.
Isnât life wonderful?
Charrissa Cawley
http://www.articlesbase.com/real-estate-articles/harnessing-the-power-of-real-estate-to-achieve-the-american-dream-695919.html
