Low Home Sales Reported
MSNBC Confirms June 17th Blog Post:
As I wrote on June 17, 2010, I believe home sales are headed even lower than they already are. As I watched the nightly news on NBC with Brian Williams, it was reported that new home sales in May hit a record low. In fact, new homes sales in May 2010 were down 33%. This can be attributed to the lack of potential buyers possibly due to the end of the government tax credit. It could also be due to the fact that the ecomony is poor right now. We have high unemployment and on the flup side, slow job growth.
As the inventory of homes in the Twin Cities remains relatively stable, the demand for homes is down. This will most certainly cause the prices to plumet even more. As more and more people find themselves in a predeicament with mortgage payments and either reductions in pay or job loss all together, short sales and eventually REO/Foreclosure homes will lead the charge of what sales there are.
If you'd like to discuss your options, please don't hesitate to contact us at the Twin Cities Short Sale Realtor.
What Is The Redemption Period?
Redemption Period & A Short Sale:
In Minnesota, the term "redemption period" is the period that the owner of real estate has to redeem the property after a Sheriff's sale. The time is typically 6 month's from the date of the Sheriff's Sale. The redemption period can be shortened to 5 weeks if a court order is obtained and the home is either abandoned or the homeowner does not live there. The redemption period is 12 months if the any of the following apply:
- The amount due to the lender is less than 2/3 of the original balance.
- If the property is greater than 10 acres in size with additional limitations.
- If the property is greater than 40 acres in size.
What happens During the redemption period?
- The homeowner may continue to live in the home until the end of the redemption period.
- If the homeowner would like to keep the property, they must pay off the entire balance of the mortgage plus any fees.
- The owner can refinance the home if they can find a lender willing to do so.
- The owner can work with the lender for a forbearance, mortgage modification, repayment plan if the lender allows it.
- The homeowner can sell the home. If there is equity in the home, the homeowner may keep any equity that is left after selling fees. If there is no equity, the owner may pursue a short sale.
- After the Sheriff's Sale (during the redemption period), additional interest and fees accrue which will increase the payoff amount.
- The owner is still responsible for all fees associated with the home, including insurance and utilities.
- If the owner files for bankruptcy during the redemption period, the period may be extended by an additional 60 days. A court order must be obtained to get additional time during the redemption period.
What happens After the redemption period?
- Whoever was the winning bidder at the sheriff's sale and holds the certificate is the rightful owner of the property.
- The owner must vacate the property. If they do not, a court order and eviction will take place. This can go on public record and may further damage the credit of the occupant.
- If the property is offered for sale after the redemption period has expired, any equity left in the home goes to the new owner.
- If there are additional mortgages or liens on the property, they will become unsecured and the owner will still be responsible for the balances owed (unless bankruptcy is filed and the debts are discharged).
Real Estate $8000 Tax Credit
Real Estate Tax Credit Extended:
The real estate tax credit is about to expire for almost all existing and new homeowners. Home buyers that had an executed purchase agreement before April 30, 2010 that closes before June 30, 2010 are eligible.
The real estate Tax Credit of $8000 for first time home buyers and $6500 for existing homeowners has been extended for military, intelligence and foreign service members who have had at least 90 days of active service outside the country between January 1, 2009 and April 30, 2010.
If you qualify for this extension, you must have an executed contract by April 30, 2011 and close by June 30, 2011. The recapture of this credit is also waived if you are relocated prior to the normal 3 year period.
Interested parties can purchase any type of home they qualify for, including regular home sales, short sales, REO homes and Foreclosure or bank owned homes.
Please contact us today and we can help you navigate the tricky waters of buying a home!
What Is A Short Sale?
Real Estate Short Sale Definition:
A real estate short sale occurs when the proceeds of the sale fall short of the balance of what is owed on the home. Many things can contribute to this but most often declining market values or the fact that the home is over-mortgaged.
A Real Estate Agent like the Twin Cities Short Sale Realtor will work with the lender to get them to agree to the short sale. Often times the lender will realize that accepting this offer, even though they are losing money, is financially more sound than trying to force the owner to pay or foreclosing on the property.
Unfortunately, a short sale is not short in time. The time frame required to complete a short sale can be as little as a couple weeks or as much as several months. Buyers will need to be patient during this process but can reap the rewards on a good deal.
To learn more about short sales and what this means for you, please contact us.
What Is A Sheriff’s Sale?
All about the Sheriff's Sale:
In Minnesota, when a mortgagor (the person paying the mortgage) falls into default, the lender, or mortgagee may commence the foreclosure process. Part of the foreclosure process is to hold a sheriff's sale, or public auction on the home.
This auction is typically held at the sheriff's office and anyone may bid on the home in question. The winner of the auction is said to have equitable interest in the property. Minnesota law dictates that an owner who is residing in the home can have up to 6 months to redeem the property, or bring the home out of foreclosure. This is called the redemption period. If the owner is not living in the home, the auction winner may obtain a court order to reduce the redemption period from 6 months down to 5 weeks. With a couple of minor exceptions, once the redemption period expires, the winning bidder from the sheriff's sale is the new owner of the home.
If you owe more on the home than what it's worth, you may continue to pursue a short sale with the lender(s) during this redemption period while the home is in foreclosure. Most lenders are still willing to consider a short sale during this time.
At the Twin Cities Short Sale Realtor, we're experts at working short sales during the redemption period. Please contact us today if you would like to request a short sale from your lender(s) and we'll get working right away!
Can I Do A Short Sale With More Than One Mortgage?
Multiple Mortgages and Short Sales:
Often times people have more than one mortgage and need to apply for a short sale. This is OK and it's actually a good idea to consider a short sale if you have more than one mortgage. Here's the reasoning behind my statement.
In Minnesota, a lender can either foreclose on your home, or they can pursue a deficiency judgment against you for the balance owed, but not both. In most circumstances, if your home is headed to foreclosure, it's the first mortgage company that purchases the rights a the sheriff's sale. They've opted to start the foreclosure process on your home, so the first mortgage company has given up it's right to pursue a deficiency judgment against you. However, you have a second (and maybe a third) mortgage on your home.
Since two mortgage companies cannot pursue the home in foreclosure action, the only thing that is left as an option to the second mortgage company is to get a judgment for the balance owed. Of course, avoiding this situation is important because if a judgment is obtained, they can legally use your assets to pay themselves (Bank accounts, cars, etc). The purpose of the short sale does have it advantages. Getting your lender to agree that any amount received at the closing to satisfy what you owe them can certainly become a powerful "must have" when considering your options to apply for a short sale.
We're experts Realtors at the Twin Cities Short Sale Realtor in getting your mortgage companies to agree that what they've received as part of your home selling, is a good deal. Contact us today to learn more!