Starting a business is troubling enough at times. But to start a home based sales business is frightening for most people. The reason being is because most do not like the idea of selling. I can understand where they are coming from.

What comes to mind when you hear the word sales is always the pushy, stank breath, used car salesman. I think this is a bit outdated now.

Contrary to popular belief there is always a sell taking place. We are always selling something.

Case in point, when you are on an interview you are selling yourself so you can get the job. When you go on a date you are selling yourself so you can get a second date. Whenever you impose your ideas on someone else and they take your viewpoint, your just completed a sales transaction.

So as you can see we are always selling. The fear that comes into play is rejection. We fear sales because we don’t want to get rejected. That is probably why a lot of people don’t even start a home based sales business.

Selling is a skill that needs to be learned. It can take time to be honest. But if you want to start a home based business but don’t want to physically sell someone on a product by verbal communication then I suggest you find a business that has a system in place that does all the selling for you.

Here is what I mean by that. Particularly in the direct sales network marketing industry they are big on systems. The reason being is because they help to leverage time, energy, and money. If you do a search right now for direct sales network marketing system you will see thousands of search results come up.

Now not all are created equal. I want to dive into why this is the best option for you if you want to start a home based business but again don’t want to physically sell.

You may be saying that up above you said there is always a sell going on. That is true. But with a system in place it does the selling for you.

It does the sifting, sorting, explaining, telling, and selling for you. In this business model all you have to do is focus on driving targeted traffic to your site.

If you have a great system, when you point people to your site, it will spit out leads on the other end. Conversions vary, but your end goal is to turn those leads into distributors.

Again this is specific to the direct sales network marketing industry, I can’t speak for any other type of home based business.

One of the main reasons why a system is so important is because you are educating them while selling them on your idea or business. So when you mix in value with a subtle sales pitch here and there it is non offensive. Again this is not done by you verbally but by your system, ie:autoresponders and website.

Hopefully by now you can see how having a home based sales business can work for you to where you do not have to face rejection.

To learn more about this type of system and how to run a profitable home based sales business go here.

It is an enormous frustration to investors doing short sales that the lenders take months to make a decision and just don’t seem to care. The homeowner stuck in the middle gets frustrated because he doesn’t know how soon he will be required to move or worse, be evicted from his former home. In fact, the business of short sales by lenders is a gigantic part of their business and is absolutely necessary to keep their inventory of homes (REO’s) as low as possible.

Despite the benefit to the lender and to the investor, the investor-buyer is often treated as a “bottom feeder” and with minimal respect. Why should the lender treat investors any differently? Common sense, which is not all so common, would say that getting rid of a headache is better than suffering. However, if lenders agreed quickly to short sale offers, they would be putting their portfolio at risk by not doing good and proper due diligence with regard to the real value of the property. In the old days, an investor could walk into a local bank office and ask if they had an REO’s. The clerks or tellers would send them to an officer who would have a few properties that were For Sale by the bank. These days are gone in 99% of the country. To avoid favoritism and possible fraud, these transactions are centralized in loss mitigation facilities throughout the country. All foreclosure cases are handled by these highly trained professionals that are taught how to handle investors.

Handling investors is very simple. The investors who get short sales done quickly and efficiently are offering way too much money, usually 80+% of the mortgage amount due. Lenders will take this 20% discount all day long. The real short sale specialists are the ones who work diligently and get discounts of 30% to 50% off. To get this amount the lender has to cool his heals and have the property listed on the MLS® to make certain the property can’t be sold for a more reasonable price.

Investors target the deficiencies in the property and any weaknesses the lender will have to correct or pay for until the property is sold through a realtor. If the realtor lists the property too high, there will be no offers. If he lists it too low, he will have offers but the buyer will have the low offering price on the MLS® to contend with when he rehabs and re-sells it to retail buyer, resulting in some buyers not being able to get financing.

The loss mitigation reps have hundreds of cases assigned to them and are paid on performance. Yes, the lender knows how much he is willing to discount each and every mortgage that comes into loss mitigation. So despite the best efforts of the investor to de-value the property, the loss mitigation rep already knows the amount he can allow the mortgage to be discounted. The “loss mit rep” knows because he has access to real estate agents’ price opinions (BPO’s), real estate agents’ comparative market analysis (CMA’s) and appraisals that all indicate the fair market value at a specific time.

The public records are reviewed to see what other issues the lender may face. Finally, a “kick-out” price is determined by a supervisor and the loss mit rep is given a monetary incentive to get anything higher for the mortgage. What happens is the loss mit rep is actually bidding against himself by allowing the investor too low a price. So the incentive is to control the investor by driving him crazy by not answering calls, and holding off as long as possible. If the short sale isn’t completed it is not a demerit against the loss mit rep.

The system of loss mitigation is inherently flawed by the way lenders compensate their employees and the number of cases (250+) each rep is required to handle. The cases that get the attention are the ones with the highest offers or lowest discounts because the loss mit rep gets a higher compensation. Unfortunately, this means that viable properties are left to sit and decay that could have been sold quickly otherwise and often for more money. So the lenders may care about getting properties off their books, but their loss mitigation system is flawed in the favor of the people who should be interested in doing the best job for the lender, not the homeowner or the investor.

First the bad news:  the number of homes sold in Bellingham in November of 2008 was down 41% from November of 2007 and down 38% for Whatcom County as a whole.  Average prices were down 16% in both Bellingham and Whatcom County.  The average prices were impacted strongly by softness in the upper end of the market, as was indicated by the smaller change in median prices – down 10% in Bellingham and 12% in the county as a whole.

Residential units sold in Bellingham by month through 2007 and 2008 saw less bounce during the typical “selling season” and in November declined considerably below the level at which it began in the first quarter of the year.  This is not typical of the normal sales curve, which tends to end the year at about the same point where it began.  The next 2 months should tell us if this is an aberration or an indication that the 2009 sales curve will be lower still. 

Bellingham Average Prices

Average sale prices have been rather sticky, dropping just 3.8% year-to-date from 2007 to 2008.  October and November saw this trend change, at least in part due to softness in the upper end of the market.  While these numbers reflect Bellingham sales, they typically constitute approximately 50% of total Whatcom County sales, and the trend lines are very similar.

Inventory levels, particularly in Bellingham and Sudden Valley, are definitely lower than a year ago, at least in part due to little new construction.  Sudden Valley is seeing fairly strong sales due to the new construction inventory available there, and contractors have been discounting prices fairly heavily.

Another bright spot in the local real estate scene are current interest rates.  Most lenders have FHA programs and rates that are very attractive with as little as 3% down.  I received an e-mail notice from a local mortgage broker this week with 30-year fixed rate home loans available at 5% interest, no points, 20% down.  The key to that one was a credit score of at least 740.  That is the best I have seen, but there are a number of good loan opportunities out there and they are changing constantly, so stay in touch with your lender if you are planning to buy.

I was asked today if people are still moving here, and the answer is yes.  We are also seeing investors coming into the market, which is a good sign. So what is coming for Bellingham/Whatcom County real estate?  Probably more of the same for some time, although I think the contraction in inventory and lack of new construction will be with us for a while, which will serve to help hold the price point.

To review this information plotted on a chart, refer to our web site which is referenced below.

In any type of real estate market it is important to know what is going on before you jump in as either a buyer or a seller.  We track many segments of the market so that our clients have the knowledge they need to make good decisions.  It’s one of those services that we consider essential, so if you have a need to know, contact us at 360-527-8766. You can meet us on the web at Johnson Team Real Estate or view or Blog

Homeowners looking to stop foreclosure are faced with a number of options, one of which is doing a short sale. Some people, depending on their situation, may allow a property to go into foreclosure instead of attempting a short sale. One reason is they don’t want to keep the home in the first place. By accepting a short sale, the lender can avoid a lengthy and costly foreclosure, and the owner is able to pay off the loan for less than what he owes. The primary consideration above all is the affect both can have on your credit score.

The Basics Of A Short Sale

The concept of a short sale is fairly simple. A short sale occurs when the sale proceeds of a house fall short of what the owner still owes on the mortgage. Many lenders will agree to accept the proceeds of a short sale and forgive the rest of what is owed on the mortgage when the owner cannot make the mortgage payments. A few words of warning are in order. Not every lender will negotiate a short sale. If for example your payments are current, yet you foresee imminent cash flow problems arising that will affect your ability to make your monthly mortgage payment. Lenders have no interest in negotiation unless your payments are several months late. Another consideration is you may be held liable for taxes on the difference between the sale amount and the original loan amount. Short sales require nerves of steel.

The Credit Affects

Foreclosure

Without a doubt sellers will incur more damage on their credit report by going through foreclosure. Typically your credit score will take plunge between 200 to 300 points.

Short Sale

Short sales have a far less damaging affect on a seller’s credit report. Credit scores typically lose between 80 to 100 points. What happens to your credit down the road? It is takes around three years after a foreclosure before a lender will offer a sensible interest rate, whereas for a person who went through a short sale typically waits around 18 months to buy another home at a good interest rate.

Salvaging your credit should always be the primary concern when making the decision between a short sale and stopping foreclosure. The savings in interest payments alone should be convincing enough for most people, not to mention your buying power in the near and distant future.

There is a high inventory of homes on the market in Phoenix, Arizona. Right now may be an excellent time to buy, not such a good time to sell. Sellers and builders are offering wonderful incentives to buyers. It has become slightly more difficult to obtain a home loan due to the high foreclosure rate. Lenders have been tightening their standards due to the high foreclosure rate. This article discusses foreclosures, pre-foreclosures, and short sales. At any time while reading this article, please feel free to click on the website associated with this article to get in contact with a professional Realtor in Arizona to help you with all of your Arizona Real Estate needs.

Whom ever people are making their mortgage payments to are the ones taking the hardest hit when a home goes into foreclosure. When a home is in foreclosure, it means that the home owner has stopped making their house payments. When this happens, the bank is forced to foreclose on the home and re-claim the home. Once they re-claim the home they want to get rid of the home. To get rid of the home, the bank must sell the home at fair market value for the home to have any chance at selling. If the fair market value is less than the amount owed on the home, the bank is going to take a loss because they loaned the home owner more money than the home is currently worth. If the home had any equity at all, the home owner probably would not have had to foreclose because they could have refinanced the home to take money out to pay the mortgage payments.

Lists are distributed to Realtors that are in pre-foreclosure, which means, the people are on these lists are late making their house payment, and have a possibility of going into foreclosure. This is a touchy subject to the people that are making their house payment late. There are multiple reasons why someone would stop making their house payments. Usually, the people that stop making their payments on their home are not doing it by choice, but out of necessity. However, you may be helping someone by an investor or home buyer purchasing a home in pre-foreclosure. If you can not afford the home any more, perhaps someone will purchase the home for you so you do not have to make the payments anymore.

If the home owner that went into foreclosure owes three hundred thousand dollars on a home, and other similar homes in the area are now selling for two hundred and thirty thousand, the bank is going to take a loss. This is a good time to get a home at fair market value, or possibly less. When the bank forecloses on a home, they own the home at this point. The bank acts as the seller, and the buyer and the buyers Realtor are now negotiating on a price with the bank. If no better offers are coming through the door, the bank may take your low offer.

When a property is in pre-foreclosure may be a beneficial time for someone to purchase a home. That is, if the property that is in pre-foreclosure has some equity. If the homes in the area are selling for three hundred thousand dollars, and the person that is in pre-foreclosure owes two hundred and thirty thousand dollars on the home, a good purchase price would be two hundred and thirty thousand dollars, or maybe two hundred and forty thousand. If a similar floor plan just sold in the area for three hundred thousand dollars, then this would be a wonderful buy because you just picked up some equity. Sometimes a Realtor will represent the bank and act on the banks behalf and negotiate a list price for the home. The bank is asking for a Realtor to sell this home at fair market value. This way, the bank can continue banking, the Realtor can try to get the property sold, and the homeowner can possibly get out of their mortgage once the house sells. This is a winning situation for the buyer, the bank, the homeowner, and the Realtors.

However, it is common when the seller owes more than the home is worth, then, the bank will ask the Realtor to price it to sell. When a bank tells a Realtor this in this hypothetical situation, the Realtor will have to price it lower than the surrounding competition in order for the home to sell. This is called a short sale.

A short sale is good for the buyer, better than nothing for the bank, and an act of desperation by the seller. It is good for the seller because they will get out of paying their mortgage payment if the house sells, but generally has a negative effect on the sellers credit rating. A bank will not negotiate with the seller on a short sale unless the seller is not making their house payments. This will have a detrimental effect on the sellers credit rating.

This does not guarantee that market conditions could get worse. Home values may drop any time, so this is a risk a home buyer or investor needs to contemplate. If the interest rates are dropping, and the market seems to be heading upwards, this might be a great investment. There is no way to predict market conditions, what goes up may very well come down. None of the information in this article will guarantee any type of return on your investment. When buying, selling, or leasing property in Arizona, it is imperative that you are properly represented so that you know what you are getting your self into. To get in contact with an honest, experienced, and proven Realtor, please click on the website partnered with this article. Arizona welcomes you.

With the economy in a recession and the Real Estate Market at its worst in decades, many taxpayers have either experienced or are facing the threat of a foreclosed home or other piece of Real Property.

The number of foreclosed homes and short sales has skyrocketed in recent years amongst a failing economy and an unemployment rate hitting historical highs. To make matters worse, some experts are predicting a “bottoming out” of the economy as late as 2012. In the meantime, the number of people losing their homes continues to rise.

The foreclosure of Real Property can give rise to many questions and concerns for taxpayers. 

Upon the foreclosure or short sale of a piece of real estate, the lender with the deficiency will issue a Form 1099-C, Cancellation of Debt to both the taxpayer and the IRS. In past years, the amount of cancelled debt would give rise to what is sometimes referred to as “phantom income”. This phantom income would be taxable as ordinary income and would result in tax that had to be paid by the taxpayer. The taxpayer however, having never taken actual receipt of any cash, would many times be unable to pay the tax this phantom income produced.

Fortunately for taxpayers, Congress addressed this very issue in The Mortgage Forgiveness Debt Relief Act of 2007. The bill; H.R. 3648, was passed by Congress and was signed by President George W. Bush in December of 2007. The bill, grants relief to homeowners that have been given relief from mortgage debt through a foreclosure, short sale or other similar agreement with the lender. Generally, eligible debt is what is referred to as acquisition indebtedness. Acquisition indebtedness is defined as debt incurred to acquire, construct or rehabilitate a residence. However, refinanced debt will qualify, so long as the debt does not exceed the original amount and home equity debt will qualify so long as the funds were used to improve the taxpayer’s home. No relief is available for cash-outs. The forgiven mortgage debt must have been secured by the residence and no more than $2 million of mortgage debt is eligible for the exclusion ($1 million of mortgage debt for a married person filing separately). The relief applies to qualified debt forgiven between January 1st 2007 and December 31st 2012.

While the State of California does not conform exactly to Federal law, it also provides relief from tax on forgiven mortgage debt for calendar years 2007 and 2008. Senate Bill 1055, enacted September 25th, 2008

allows taxpayers to exclude up to $250,000 of cancellation-of-debt income resulting from a discharge of a loan that was used to acquire, construct, or substantially improve the principal residence of the taxpayer. The maximum amount of a loan eligible to be excluded is $800,000. The exclusion is further phased-out for discharged loans that exceed $800,000. Some taxpayers may need to file an amended California return for 2007 in order to take advantage of these provisions. Doing so may result in a refund or reduction of tax liability.

For taxpayers who have lost their homes either through foreclosure or a short sale scenario these relief provisions are welcome news. However, it is important for taxpayers to remember that these provisions only apply to principle residence loans that were used to acquire, construct or rehabilitate a taxpayer’s principle residence. Taxpayers who have used loan proceeds for other purposes may still be facing a taxable income situation. Taxpayers who have experienced or are facing foreclosure or short sale scenarios on rental, business or investment properties are likewise at risk as these provisions will not apply. In these situations it is imperative that taxpayers have a competent tax professional to assist them with their tax planning and preparation. Taxpayers may still be able to obtain relief under other provisions such as the establishment of insolvency. However, navigating specific tax laws in these areas can be tricky.

Christopher R. Jacquez, EA

CEO, eTaxRelief – Tax Negotiation & Preparation Services, Debt Relief

www.eTaxRelief.com

That dream home in California has become a nightmare. Interest-only loans provided a way for anyone to own a perfect little palace with all the trimmings, but after a few years the rates soared and the payments became too much to bear. Four of the top ten metropolitan foreclosure areas are located in California. But there is hope. While you’re in the pre-foreclosure stage, a real estate short sale may be the financial savior that you need.

The housing boom of several years ago in California caused many to get in far over their heads. What seemed like a steal for a home in paradise became a bid for a shack in the underworld once adjustable-rate mortgages shot through the roof. If you find yourself in this situation, the short sale may be your best friend.

Many times pre-foreclosure happens because of a sudden and drastic change in your financial situation. Everything’s been downsized, you’re bringing home less money and your payments have skyrocketed. Before you realize what’s happened, you’ve fallen a month or so behind on your mortgage and have been notified of the default on your loan. Your world is shaking, but there’s no earthquake being recorded. Fortunately, this financial hardship will most likely mean that you are eligible for a real estate short sale.

When the amount you owe exceeds the value of your home but you still need to sell, you are talking about a short sale. While still in the pre-foreclosure stage, a deal is arranged with the lenders wherein you would pay less than what is owed on the property. The difference is generally forgiven; though there are pitfalls to avoid.

It’s important to be well aware of any possible legal consequences before committing to a short sale. Be sure that every little detail regarding the release of debt is in writing. Make sure that the lender is not going to force payment of the remainder after the short sale, especially if you have other assets to protect. There have been instances when sellers have been notified that the lender will seek repayment of the debt after the short sale is complete.

Lenders will usually consider a short sale only when you are at least one month in default on your mortgage. It’s also important to have a buyer at hand who is financially able to take on the responsibility. Much documentation is required as proof of your inability to make payments because of your financial hardships. These may include tax returns with W-2s for the last couple of years, bank statements of the last few months and recent pay stubs. A copy of your ‘deed of trust’ and ‘mortgage note’ is also required. All of these documents will combine to form an image of your present financial state.

A home in pre-foreclosure need not be the proverbial financial guillotine that it appears to be. By choosing the option of a short sale you can avoid proceeding into the dangerous zone of foreclosure. Yes, it will affect your credit score. But it’s a far brighter way out of the dark tunnel of mortgage debt than a foreclosure. As always, when considering options such as this, do your homework and find out the best option for you.

Are you currently mired in a mortgage of doom? If you are afraid that you’ve bitten off more home loan than you can chew, you are not alone.

Statistics show that nine out of every thousand homes in the United States had pre-foreclosure status in the first seven months of 2007. California is the national leader in the annual amount of pre-foreclosures, with 132,101 actual filings in the first seven months of the year. Alpine County in California saw an amazing 39.3 instances of pre-foreclosure status per thousand homes in July 2007.

What options are available to a homeowner in trouble? You don’t have to sit back and wait for the bank to take your home away. Short sales offer pre-foreclosure properties an exit strategy.

Short sales offer an option to the smart homeowner that is trapped in a mortgage they simply cannot afford to pay. Whether your interest rate ballooned out of control, your job situation changed or you simply have more money going out coming in with your current income, there are options left even if your home is in pre-foreclosure.

How do short sales work? Once you find yourself in pre-foreclosure, find a realtor that specializes in such situations. Because the market is flooded with vulnerable homeowners, it is important to choose a reputable real estate agent.

They will assist you in approaching your bank or lender with the proper information to request a short sale. If this is granted by your lender, a large portion of your debt may be forgiven. In essence, short sales save the bank a long and drawn out foreclosure process and the expenses that go with it. They are likely stuck with several foreclosures and simply want to recover the majority of their funds. In other words, the amount of money you owe on your home becomes negotiable.

A good realtor will save your credit rating and help your family find an affordable home. It is wise to hire their services, as short sales can be tricky. For instance, you will need to consider interest in the total amount you currently owe on your home, which is not included on the amount listed on your monthly statement.

Your realtor will help you assemble documentation on your financial status. This is proof for your lender of your inability to pay on the mortgage. You will need financial statements as well as a hardship letter, which is a personal statement on your situation. Your realtor will then approach the bank on your behalf and attempt to free you from your unmanageable mortgage.

Pre-foreclosure is a stressful time. Just know that many other people across the country are in the same situation. The most important thing to remember is to be proactive, or else suffer the mark of a foreclosure on your financial records for many years to come. With guidance from a trusted real estate agent, you will find a way out of this difficult situation that will not leave you in ruin. Short sales help save your financial status.

An Alternative to Foreclosure – Short Sales

For those of you who now find yourselves upside down in your mortgage, facing foreclosure and sometimes even bankruptcy here are a few facts to know.

A short sale is something that the lending market has recently come to terms with as a alternative solution for foreclosure. With the alarming rate of foreclosures coming into the real estate market this step seems to ward off the inevitable and save the seller’s credit.

Most sellers are now finding themselves in the horrible situation of losing their American Dream. When they first purchased their house it was explained to them that when the adjustable rate mortgage kicked in that they could easily refinance the house to a 30 year fixed note with their equity in place. However, the market has turned and now these homeowners are finding themselves with a mortgage that is far in excess of what their homes are worth and lenders are not readily available to refinance. In most instances their loan has been sold and they are stuck with a mortgage that continues to escalate.

A short sale is a process in which you list your house with a realtor familiar with the process. They garnish an offer and submit it to your lender for review. All fees are paid by your lender and in most cases the loan is reported as satisfied. It’s important to remember a few things about the short sales.

1. Sometimes your second mortgage will require you to sign an unsecured note for the balance of the loan. Be prepared for this. Not all lenders do it and I sometimes suggest that the borrower go back at a later date to renegotiate the note.

2. Do not ignore your HOA fees. Your homeowner’s association can and will put another lien on your home and that lien will have to be cleared before the short sale is accepted. You lender will not be willing to pay these fees and in most instances neither will an interested buyer.

3. Most lenders request a financial worksheet, 2 most recent copies of pay stubs, tax returns, bank statements and a hardship letter.

4. Ensure your realtor is familiar with the process and let them know your home is in distress.

5. Short sales take time. Be patient and ready and willing to show your home on a moments notice. Your showing records are very important.

6. Don’t give up! Short sales typically take 60-90 days while the loss mitigation department reviews your short sale.

For more information on the process you can visit my website www.fortbendland.com or contact me directly at Linda@fortbendland.com.

Are you interested in buying a new home or a real estate investment property?  The current turmoil in the real estate market offers astute buyers great opportunities to buy real estate at a discount.  A record number of homeowners are now either in or at risk for foreclosure.  Foreclosure, however, will destroy the credit of a homeowner.  An alternative to foreclosure is a short sale.  In a short sale, the homeowner and lender agree to sell a property for less than the amount owed on the loan.  

If you are considering buying a short sale, there are some key points you need to consider.  

Get a Realtor: A realtor can help you find the perfect property.  Choose a licensed realtor that has experience in short sales.  Properties may or may not be listed as short sales.  Short sale listings, however, often tip off that offers need to meet the lender’s approval. 

Get a Lawyer: Even if the seller doesn’t have a lawyer, it doesn’t mean that you shouldn’t.  A short sale can have tax implications since debt forgiveness may be considered income for the seller.  In addition, a lender may go after the borrower for the difference between the amount owed and the amount paid.  For more information and help finding a real estate attorney, visit RealEstateAttorneyGuide.com

Check the Local Market: Your realtor should be able to get you  a comparative market analysis.  You will be able to see active sales, pending sales, and past sales of other similar homes in the area. 

Check Public Records: Before you make an offer, find out who is on the title, whether a foreclosure has been filed, and how much money is owed.  Also check if multiple lenders are involved.  Multiple lenders can complicate the approval process.

Get Pre-Approved: The lender will want to see that you are pre-approved and that you have a loan available.

Give the Lender a Deadline: Any offer you make should be contingent on the lender’s acceptance.  Make sure to give the lender a deadline to accept, after which you are free to cancel.  Most lenders should take two to three weeks to make a decision. 

Expect Commission Negotiations: Since the seller is not receiving any money from the sale, it is actually the lender who is paying the realtor commission.  The lender is likely to negotiate a lower broker’s commission.

Inspect the Property: Be sure to properly inspect the home.  Do not waive your right to conduct inspections and make your offer contingent on approving them. 

Buying a short sale can be difficult but can also be very rewarding.  To learn more about buying short sales or foreclosures, visit BestForeclosureDeal.com