Short Sale Hostage

Oh, the cruel vagaries of short sales.  Not every buyer can handle the experience.  You have to be flexible about when you are able to move.  Absolutely no deadlines for when you have to be out of your current home.  You must have the patience of Job to wait wait wait as tidbits of information on the progress of the short sale drip slowly through the system, like Chinese water torture.  You might need to pay more for the home than you offered because the lender's appraisal says it's worth more.  If you don't pony up, they'll kick you out of the transaction.  Runner up for the worst outcome for buyers:  The lender doesn't approve the short sale and reworks the loan with the current owner - no sale.  Winner of the worst outcome for all parties: The lender forecloses on the property in the midst of the short sale. No deal.  No house.  Return to GO and collect your earnest money back.

I recently had a client who bought a townhome in Reston - regular sale, totally and beautifully renovated, great price.  Contract was accepted in 3rd week in May.  He had to be out of his current home by end of July.   Sounds like plenty of time.  The one contingency was "Home of Choice" - that means the seller had to find a home they wanted to buy within the specified time frame.  Only problem was that there weren't (and still aren't) very many homes for sale.  She couldn't find anything she wanted to buy.

Finally she chose - oh dear -  a home being sold short sale.  So now my buyer, who bought a home as a regular transaction, had to wait through the whole excrutiating and uncertain short sale process.  He had to move four times between the end of July and when it finally closed the end of October! I won't even go into the details of how we had to adjust the offer price three times to keep the deal alive.

Interesting that the transactions (and the lives of approximately 12 people) didn't depend so much on the short sale being approved as it did on my client's willingness to wait out the whole nightmare. If he pulled, out the whole chain of transactions broke.

I'll gladly share credit with Carole Burnett, also with Long and Foster, for coming up with creative solutions to keep the transaction alive and our clients focused on the outcomes that they wanted- their new homes.  I love happy endings!

Money Happens

If you haven't already heard the news from every Realtor, lender and title company you've ever done business with, the $8,000 tax credit for first time home buyers has been extended.  Even better, current home owners can get a tax credit of $6,500.  Even better, the income limits to be eligible are significantly raised from $75k for single filers and $150k for joint filers to a whopping $150k and $225k. One catch:  You have to be under contract by April 30, 2010 and close in 60 days.  Read the details here.

Here's why this is such a great program:  Economist predict that job growth should kick in by the 2nd quarter next year.  This program will spur economic activity during the 1st quarter.  Although these tax credits are big amounts for individual payers, the tax revenue that buying a home generates will cause it to pay for itself, plus, plus.

Just think about all of the businesses that make money, and pay taxes, when you buy a house starting with, yours truly, your Realtor.  There are also the loan officer's commission, the banks and their admin staff, appraisers, title companies, home and radon inspectors, termite inspectors, and home warranty issuers.

Think about the trades that get business either when a home owner is fixing up their house to sell, or when an inspection reveals work that needs to be done, or after the home is purchased and the buyer is making it their own.  That includes plumbers, electricians, roofers, painters,  flooring companies and installers, appliance manufacturers and their stores, handymen and home improvement stores.

Speaking of getting your house ready for sale, you'll need to be on the market by March 1st at the absolute latest to have a ratified contract by April 30th.  It isn't too early to start thinking about what you need to do to get your home ready.

The last couple of winters I've been able to stay inside and toasty warm most days because there weren't a lot of people buying and selling.  I expect this year I'll be breaking out the hat, mittens and snow boots.  I'm ready!