There are so many terms when it comes to short sale , it seems like it's a foreign language. Here is a break down of the basic terms :
Lender - This is the bank that you have the loan with. Everyone has at least one lender while others have multiple lenders on one property.
Borrower - That is the person who's name is on the loan. Look at your loan documents to see who owns the loan. There is a difference of who owns the property and who owns the loan.
Short Sale - This is when the lender will agree to accepting less than what is owed on the property.
On the Market - When you hire a real estate agent to list the property on the MLS (Multiple Listing Service), they are advertising your property to everyone to get it sold.
Offer - This will consist of a Purchase and Sale Agreement that states the price and terms of how the Buyer wants to buy your property.
Addendums - Your real estate agent will have a lot of paperwork for you to sign. Make sure you understand all the stipulations.
Multiple Offers - This more than one offer on the same property. They will all have different price and terms.
Contingencies - These are different ways for the Buyer to get out of the transaction and not buy the house.
Financing Contingencies - If the Buyer's lender does not loan the money to the Buyer, they can get out of the transaction.
Inspection Contingencies - After the Buyer inspects the property and decide not to buy it, they are able to get out of the transaction.
Net payoff - After all the closing costs are paid, the left over amount it the net payoff that the lender will accept for a short sale.
Mutual Acceptance - When both Buyer and Seller agree to the price and terms of the agreement to buy the property.
Short Sale Package - All the paperwork that is needed for the Lender to decide if they are going to accept a short sale.
BPO (Broker's Price Opinion) - A real estate agent that is not involved in this transaction will inspect the property and give the bank the opinion of what the value of the property is.
HUD - This is the closing statement that shows all the amounts that will be paid at closing and who the money goes to.
Closing Costs - This consists of homeowner association fees, recording fees, escrow/closing agent fees, any and all taxes to sell the property, etc.
Closing Agent - In some states this is a real estate attorney. In other states, you can have an escrow agent close the transaction .
These are some of the basic terms that you will hear or get familiar with as you are in the process of the short sale.
Ernesto Vega
www.RWSF.com
Monday, August 3, 2009
New home sales jumped 11% in June
The botton has been reach, Monday, July 27, the Commerce Department reported new home sales jumped 11% in June to a seasonally adjusted annual rate of 384,000 from an upwardly revised rate of 346,000 in May. It was the largest monthly increase in more than 8 years. Economists had expected a sales pace of 360,000 units.
The Standard & Poor’s / Case-Shiller 20-city housing price index dropped 17.1% from May 2008 to May 2009. However, therewas a ligth the end of the tunnel with a 0.5% increase in housing prices in May compared to the previous month. It was the first sign of a run arround or rise in the monthly index since July 2006.
The consumer confidence index fell to 46.6 in July from 49.3 in June. Economists had expected a slight decrease to 49. The index was benchmarked at 100 in 1985, a year chosen because it was neither a peak nor a trough in consumer confidence.
Orders for durable goods — items expected to last three or more years — fell 2.5% in June, the first decrease in three months. Economists had anticipated orders for durable goods would fall 0.6%. However, excluding automobiles and aircraft, durable goods actually rose a robust 1.1%, a much better performance than the flat reading economists had expected.
Initial claims for unemployment benefits rose by 25,000 to 584,000 in the week ending July 25. The figure was higher than the 575,000 that economists had forecast. The number of people continuing to claim jobless benefits in the week ending July 18 decreased by 54,000 to 6.197 million, the lowest level since April.
The Commerce Department announced that gross domestic product — the total output of goods and services produced in the U.S. — decreased at an annual rate of 1% in the second quarter of 2009. This follows a 6.4% decline in the first quarter of 2009. Economists had expected a slightly larger 1.5% decrease.
The Standard & Poor’s / Case-Shiller 20-city housing price index dropped 17.1% from May 2008 to May 2009. However, therewas a ligth the end of the tunnel with a 0.5% increase in housing prices in May compared to the previous month. It was the first sign of a run arround or rise in the monthly index since July 2006.
The consumer confidence index fell to 46.6 in July from 49.3 in June. Economists had expected a slight decrease to 49. The index was benchmarked at 100 in 1985, a year chosen because it was neither a peak nor a trough in consumer confidence.
Orders for durable goods — items expected to last three or more years — fell 2.5% in June, the first decrease in three months. Economists had anticipated orders for durable goods would fall 0.6%. However, excluding automobiles and aircraft, durable goods actually rose a robust 1.1%, a much better performance than the flat reading economists had expected.
Initial claims for unemployment benefits rose by 25,000 to 584,000 in the week ending July 25. The figure was higher than the 575,000 that economists had forecast. The number of people continuing to claim jobless benefits in the week ending July 18 decreased by 54,000 to 6.197 million, the lowest level since April.
The Commerce Department announced that gross domestic product — the total output of goods and services produced in the U.S. — decreased at an annual rate of 1% in the second quarter of 2009. This follows a 6.4% decline in the first quarter of 2009. Economists had expected a slightly larger 1.5% decrease.
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