Tuesday, March 30, 2010

So, You Want to Buy a Short Sale….

Are you looking to buy a new home or investment property? Now is a great time to be a buyer as the current real estate market holds many bargains to be found.

Foreclosures are one option, but in many cases you will find that these properties are heavily damaged or in a state of disrepair. Another option is to make an offer on a short sale.

FORECLOSURE – what does that mean?

A foreclosure is when the bank, or lending institution, has taken the property back due to non-payment of the mortgage and is selling the property directly.

SHORT SALE – what does that mean?

If a home is being sold as a “short sale” that means that it is being sold for less than the current owner owes on the property and the seller does not have the funds to make up the difference at closing. Due to a number of factors, including job losses, aggressive borrowing against their home in the days of easy credit, and declining home values in a slower real estate market more home owners are finding themselves in this situation.

In most cases, the homeowner involved in a short sale still lives in the property so it has not been vandalized and may require less work or repair.

Homeowners often try to accomplish a short sale in order to avoid foreclosure as it is less damaging to their credit.

While a short sale can be a bargain, there are a few things you need to know before you make an offer.


When you write a contract on a short sale property it will be sent to the Seller (just like a normal contract). If the Seller accepts and signs the contract it will then be sent to the Lender for approval.

Some Lenders will have proactively worked on the property package and will know what they will accept. In this case, the short sale approval can be as short as 60 days. Some Lenders will not begin this process until a contract has been received. In these cases, the standard approval can take six to eight months!

I have read statistics that say that because of this lag up to 60% of short sales fail due the Buyer losing interest or finding another property.

However, a new program (HAFA) is due to begin 4/5/10 which was created to streamline these requirements and shorten the timeline. This is expected to help Buyers, Sellers and Lenders by getting more short sales completed.


While a short sale can be an excellent way to get a bargain in today’s market, it is not a good choice for all buyers.

You're a good candidate for a short-sale purchase if:

You're very patient - Even after you come to agreement with the seller to buy a short-sale property, the seller’s lender has to approve the sale before you can close. When there is only one mortgage, short-sale experts say lender approval typically takes about two months. If there is more than one mortgage with different lenders, it can take four months or longer for the lenders to approve the sale. (HAFA is a new government program that is set to begin on 4/5/10 which should reduce this time frame.)

Your financing is in order – For obvious reasons, Lenders prefer cash offers. However, if you can’t pay all cash for a short-sale property, it’s important to show you are well qualified and your financing is set. If you have a written pre-approval, a large down payment, and can close at any time, your offer will be viewed more favorably than that of a buyer whose financing is less secure.

You don’t have any contingencies - If you have a home to sell before you can close on the purchase of the short-sale property, or you need to be in your new home by a certain time, a short sale may not be for you. Lenders like no-contingency offers and flexible closing terms.

You make a reasonable offer - The Lender is already losing money so they want to minimize those losses as much as possible. If you make an offer that is significantly lower than the fair market value of the home, chances are that your offer will be rejected and you’ll have wasted your time and everyone else’s.

Here are a few other things that a Buyer needs to be prepared for.

“AS IS” Property - The property may require repairs and the buyer will most likely be asked to take the property “as is.” Because the Lender is already taking a loss on the property they may not agree to requests for repair credits. Be sure to speak with a qualified and experienced agent about how you can write the contract to protect yourself in this circumstance should significant damage be found during the inspection.

Unworkable terms - When a lender approves a short sale, it may require that the sellers sign a promissory note agreeing to repay the remaining amount of the loan (called the deficiency). This may not be acceptable to some financially desperate sellers. In which case, the Seller may refuse to go through with the short sale. Lenders can also change the terms of the contract that you already negotiated, which may not be agreeable to you. In that case, you may refuse to go through with the short sale.

As you can see there are a few downsides to making an offer on a short sale. But if you have the time, patience, and will to see it through, a short sale can be a win-win for you and the sellers.

This North Georgia Real Estate blog is hosted by
Gayle Barton of BERKSHIRE HATHAWAY Georgia Properties  located in the quaint mountain town of Blue Ridge, GA.

Please feel free to call (866-413-1781) or drop me an email gaylebarton@inbox.com if I can assist you with buying or selling your mountain home or property.

Thursday, March 18, 2010

Guest writer - J. Byron Wyndham, Real Estate Attorney, blogs on the future of our economy.

Blue Ridge Georgia Real Estate is pleased to welcome guest blogger and local real estate attorney J. Byron Wyndham. Today, Byron shares with us his perspectives on the future of our economy.

Our Economic Future....

I recently had the privilege to attend a seminar where economist Dr. Donald Ratajczak spoke on his insights into our economic future. Dr. Ratajczak is a noted economist, the former head of the Georgia State University economic forecasting center and a noted worldwide lecturer. His opinions are in demand by the media and he is often sought after by major television networks for his thoughts on the economy.

Below is a summary of what Dr. Ratajczak sees for our economy in the near future:

Banks are reeling from the bad loans that were made over the past few years. Many lenders are surprised to find out how bad their portfolios really are. The banks feel that federal regulators are looking over their shoulders. How do the banks keep the regulators at bay? How do they improve their loan portfolios? They need lend…to good qualified borrowers. Then the banks will have more good loans in their portfolios.

Are we in an economic recovery? Yes, but it is not the traditional recovery that is usually led by the housing sector. Housing, in this recession, is a laggard. We have a two to three year inventory of unoccupied residential houses. However, by 2013, the inventory should be back to “normal.”

The recovery is slow because the banks won’t lend. New loans are DOWN eight per cent (8%) from this time a year ago. However, deposits are UP eight per cent (8%) from last year. When lending is down and deposits are up, the banks have money. They have plenty of money to lend if they would do so.

The banks need to change their manner of lending in order to get better loans into their portfolios. With a required credit score of 700, only one-third of the population can qualify for a loan. If the criteria were lowered to 675, then forty-five per cent (45%) of the population could qualify for a loan.

The Jobs Report for February showed a loss of thirty thousand jobs. However, sixty-four thousand of those job losses were in construction and government. State governments are letting people go to save money; state governments are experiencing large deficits and the fastest and easiest way for government to save money is to cut jobs. If the construction industry and government jobs are removed from the report, we actually had an increase of thirty thousand jobs last month. This trend should continue into the future.

Temporary jobs have also been increasing for the last five months. This will lead to job growth as temps are hired and made permanent workers. We should see continued job growth in March, April, and May.

For more information about short sales or other real estate related matters, please visit his website or email him at jbwyndham@tds.net

J. Byron Wyndham
2460 E. First St. Suite B-6
Blue Ridge, GA 30513



This North Georgia Real Estate blog is hosted by
Gayle Barton of BERKSHIRE HATHAWAY Georgia Properties  located in the quaint mountain town of Blue Ridge, GA.

Please feel free to call (866-413-1781) or drop me an email gaylebarton@tds.net if I can assist you with buying or selling your mountain home or property.

Monday, March 1, 2010

Why NOW is a great time to buy Blue Ridge, GA Real Estate

Blue Ridge, GA is a very popular vacation destination located in the North Georgia mountains.

This quaint mountain town offers a pretty, historic downtown area with loads of shops and local restaurants, numerous outdoor activities, a scenic railway and luxury log cabin rentals with great mountain views for a very reasonable price.

These draws along with its location, just 90 miles north of Atlanta, provide a constant flow of area visitors and cabin rental guests making the purchase of a turn-key vacation rental / investment property in the area a smart real estate investment choice.

One thing that is certain about the North Georgia mountains, because of it’s natural beauty, people are always going to have an interest in purchasing real estate in the region.

Though, like the rest of the country, our local real estate market has recently experienced an economic downturn, local experts know that the moment things turn around, the property prices in this area are certain to rebound.

But, what really makes Blue Ridge investment property such a good investment at this time is the fact that a buyer can currently find quality properties in this beautiful mountain region priced well below market value.

For buyers with an experienced agent by their side, an agent who is fully tapped into the local investment property / rental market, you can find successful Blue Ridge investment properties at amazing prices.

Whether you use choose to use the property as a vacation rental investment property or keep it for you own personal mountain get-away, when the market rebounds, you are placing yourself in a position to realize valuable gains.

Owning a piece of property in this little piece of “paradise” is a desire that many people have and I would like to help you take advantage of that wish at a time when low property values combined with low interest rates are allowing more people than ever to “live the dream”.

Please feel free to call (866-413-1781) or drop me an email gaylebarton@tds.net if I can assist you with questions about buying or selling your mountain home or property.

This North Georgia Real Estate blog is hosted by
Gayle Barton of BERKSHIRE HATHAWAY Georgia Properties  located in the quaint mountain town of Blue Ridge, GA.