Short Sale vs. Foreclosure

I’m not a fortune teller, soothsayer, or any other predictor of the future. The economy  is what it is, and shall be for at least several months from now. People have lost their jobs at an alarming rate. We read it in the paper, the web, and see and hear on radio and TV. The housing market controls the economy, they say, but I believe the economy drives the housing market. The job lost, down turn in retail sales / manufacturing, and with companies  going out of business have led some of us to a place we have never been before.-Unable to afford the home we so longed to have. If you find yourself in this situation, you are definitely not alone!  Sometimes the loss of the house  is unavoidable due to financial concerns. It is hard to face this fact. The reality is you have some options.

Most people with a 401K can take money out without penalty  to  get the mortgage current or to save it from foreclosure. I didn’t know if you knew this.

Give the house back to the bank “in lieu of foreclosure” You can contact your bank and discuss this with them. This will not count as a foreclosure against you and the credit hit is not as severe. This is easier when the house is in good shape. The stays on your credit report for about 3-4 years as a rule.

Stay in the house until the dreaded forced “foreclosure” when you are actually forced out. I would say this is the most challenging and damaging to your credit. Foreclosures usually stay on your credit report for 10 years and is hard to run from. Banks do not like this to happen, because of all the legal issues that accompany it. The banks tend to be more forgiving to your credit in a short sale or just giving the house back.

The “short sale” in most cases is the best scenario. The term short sale simply means the fair market value for the house is less than the mortgage. Several things have to happen to allow this. The bank will ask for the financial information from the sellers to make sure they can not pay the full amount. In this day and age that is not hard to do. You will need a realtor to do a competitive market analysis to show the bank  the true value. Then it is just a matter of marketing the house at a selling price that satisfies the buyers and the bank. The difference of the amount owed and the sold price is the short sale amount. This will hit your credit, but it is the least damaging.  Credit hit is 2-3 years as a rule.

Contact a realtor and ask questions concerning your options.

Bank owned properties and short sales are the things driving down the value in the housing market. It will be this way for awhile.  So, if you need to give it back or short sale it, you are not alone. Do what you need to do to help you and your family.

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Stress on Life’s Highway

Life sometimes feels like a highway which is bumper to bumper in expectations, wants and needs. Have you ever tried getting somewhere when you were rudely cut off, tailgated, or delayed by an agonizingly slow driver? What was your reaction? Often we don’t take the time to look at these incidents objectively. We read too much into things, saying to ourselves, Why is this person slowing me down?  I’m in a hurry and they need to get out of the way! We forget that the annoying driver is a someone also trying to get somewhere. Our fast-paced society makes us all feel anxious about getting where we need to go. In the end, this can even lead to road rage.

Have you ever been at an intersection, minding your own business, when a honk startles you out of your daydream? You feel offended and upset. What you may forget is that the intrusion wasn’t anything personal. That driver behind you felt the stress and anxiousness you yourself have felt. She didn’t realize that this offense was nothing personal, just a simple case of not seeing the light turn green.

It may be tempting to “get even” with other impatient drivers, perhaps with a glare as they zoom past you. On the other hand, when I’m the offending driver, I may offer a sorry smile. But the important thing is to understand the reason for the driver’s behavior.  Recall what it is to be stressed and in a hurry. Acknowledge this, and as much as you can, move out of the way and let the anxious driver – and all those negative thoughts – go on past.

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Members For Members

What does the local chambers of commerce do for their members?  In most cases they keep their members up to date on current affairs with e-mails, scheduled events, and the web.  Networking events and meetings are one of the most important ways to get, and keep your name out there. During these, you develop relationships  that hopefully help  grow, what ever business you’re in.  Chambers do work if you get involved. But, what if you don’t have the time to devote to meetings, what then?  Do you feel the dues don’t  justify a return on investment?  Belonging to a chamber does give you some clout, I believe. Chambers do stand for  community involvement and members  are given credit for that.

One chamber has gone a little further to help its members in this economic down turn. The North Clackamas Chamber of Commerce has started a new program. It is call BizBoosters! We didn’t come up with the idea ourselves, but we embrace it. It is away the members can directly help one another.  Last Friday, for example, we had 29 members and friends attend lunch at Bajio’s Mexican Grill on 82nd. It was an informal get together and all that participated had a good time. Nothing better than breaking bread with friends!  The NCCC plans to extend this program to service, retail, and other members that supply consumer goods. Want to know more? Visit: www.yourchamber.com (events calendar)

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Realtors Know This, But Do You?

Our house is usually our biggest investment. For that reason, we take great care  in keeping it in good shape. All those Sundays when you want to watch the game, but make the decision to mow the yard instead. You want  it to look good, right?  We pull weeds, fertilize, water, and landscape the yard.  We change  the air filters every month or so to  keep the air in the house dust free and the equipment in good shape. We walk the foundation to check for insect entry points and repair when necessary. The house gets a new coat of paint when needed.  All and all we take care of our houses inside and out.

But! Who thinks about the appliances, plumbing, water heater, furnace, air conditioning, or washer and dyer? We usually take these for granted  until they break down. Ever notice, they break down just at the time you can’t afford a repair bill.  When was the last time you had to load all of your clothes into the car and take’em to the laundry? Furnaces and air conditioners break down when you need them the most.

There is such a thing has a Home Warranty. Now, I’m not selling these things, but I thought you might like to know they exist. As a real Estate Broker, I encourage sellers to offer one or the buyers to buy one.   There are two major ones:

 First American Home Buyers Protection Corporation: www.firstam.com/warranty

American Home Shield:  www.ahswarranty.com

You might just want to check them out.

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A Success Story

It is always a pleasure to report success stories during this difficult economy. The following story is about someone who “turned lemons into lemonade” and then sold the drink for a profit.

Let me introduce you to a wonderful lady I met in 2009. Her name is Jamie Teasdale. She became unemployed in March of 2009, when the business she was working for, closed their doors. Rather then hiding in a dark closet, Jamie decided to explore her options. She investigated purchasing a franchise, but that requires a lot of capital.

She comes from a family of businesspeople who have started companies in the past so the idea of owning a business was not foreign to her. Jamie has enjoyed business strategies and activities, while serving customers and planning events in the past. A friend of her parents simply needed more time in the day to accomplish everything, so they hired Jamie. That first customer encouraged Jamie to consider starting a business helping others.

Ms. Teasdale currently owns JJT Solutions. She specializes in assisting Small Business, Event Management and Individuals. She opened her doors in June of 2009 and currently has numerous clients. Jamie has accomplished a wide variety of projects since starting her business. So far, her company has been successful because of her attitude. Jamie is not afraid to tackle complex tasks like a wedding or even running errands for a client who has run out of time. She has also filled in, when some of her business clients have needed a project managed.

Jamie has currently replaced about 75% of her former income. She has utilized the services of other individuals as temporary contract workers and may be hiring them as employees in 2010.

You will enjoy her pleasant demeanor and intelligent input regarding your project. So if you need some temporary assistance, call Jamie.

Ken Bear Cole

A Second Look Business Consulting LLC

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Get To Know A House Inspector

Now, we all know we should use a home inspector when we buy a home. You want to know what your are buying, right!  They find things that the average person just doesn’t see. They crawl under, over, and through the house to look into every little corner looking for things that should not be there.  You know, the little things, that over time de-value or sometimes almost destroy a house! Unnoticed small water leaks, insects that only come out at night, mold, and mildew, heating and cooling issues, are just some of the issues that can cause major repairs with home ownership.

This idea came to me today after talking to a few folks . What if we had a professional inspector come out, as little as every 2 years, to just to go through our house. Potential problems might be found and repaired before they became larger issues. Automobiles that have set maintenance programs tend to surpass their life expectancy. Is now the time to put our homes on a contract?  Food for thought!

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Don’t Worry, You Can Still Get Mortgage Loans

Well, 2010 is here, and with it comes some new guide lines for mortgage loans. Shockingly, this has been on the table for over 5 years with the feds. Some of the changes were the result of predatory lending practices we so fondly remember from 2006-2007.  You know the ones where buyers were treated to low low rates for 3 to 5 years on homes they really should not have purchased. The loans where the loan officer looked the husband in the eyes and said” Don’t you think you’ll be making much more money when it’s time to pay the much larger amount” ? It is good for us, those types of lending practices, are going to the wayside. Another issue with some of the loans came at the table when the closing took place. Sometimes the loan officer made a slight mistake in the calculations and the buyer had to pay more than expected to get the deal done. 2010’s programs or rules will help with the process. Here’s  how.

The loan officer will need the buyer’s full name, SS#, date of birth, 2 years address history, and a signed credit authorization form to pull their credit. They should not ask for a loan application or give any loan information at this time. They can however give the buyer a verbal estimate of what they could possibly purchase.  Once a property is found, they will ask for all of the above plus the loan application, property address, property value or sales price, and gross monthly income. Once all information is recieved, a  Good Faith Estimate (GFE) of all charges can be given to the buyer. The buyer will have 10 days to agree with the amounts.  In 2009, this information could be given just as an estimate and was likely to change. The difference now is the GFE can only change in the buyer’s favor.

So, you can still find a house, apply for the loan, and buy it with the help of a good real estate broker and loan officer.  It might take a little longer, but it’s worth it. Good home hunting. Hunting season is open until April 30, when the $8000 tax credit is scheduled to go away.

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