Market Trends
Navigating the Real Estate Market - the Home Affordable Foreclosure Alternatives (HAFA) Short Sale program
The recently enacted Home Affordable Foreclosure Alternatives (HAFA) Short Sale program is providing tremendous incentives for distressed homeowners and their lenders to speed up the Short Sale process and provide a realistic alternative to foreclosure.
A Short Sale occurs when a lender allows a homeowner to sell their home for less than what is owed on the mortgage. Short Sales reduce financial losses and lessen damage to a homeowner's credit. However, these transactions can be difficult to navigate, and HAFA guidelines seek to simplify the process, offering cash incentives to homeowners and lenders who successfully conclude Short Sale transactions.
Choosing a realtor with experience in distressed property sales can help sellers effectively manage the Short Sale process. When an individual or family is unable to stay in their home, whether the reason is economic or personal, working with a trained professional versed in the HAFA process will provide homeowners with a viable alternative to foreclosure and peace of mind so they may exit a stressful situation. Nearly 70 percent of distressed homeowners are so humiliated by the prospect of foreclosure they tend to ignore ways to avoid losing their homes. By working with a realtor and their lender, they increase their opportunity for a successful Short Sale and can begin the next chapter in their lives.
The HAFA program will free up existing housing inventory, thus bringing new buyers into the marketplace and spurring future economic recovery. Many people begin looking to buy a new home in the spring and with the HAFA program in place, it may be the perfect chance for many to experience the American Dream.
What should a homeowner ask a realtor about a Short Sale?
Do they have a relationship with the lender holding your mortgage? Do they know what additional documents are required from you, the homeowner? Are they familiar with the specific procedures…such as should you apply for a loan modification first? Do they know what is required by the bank in the case of a "hardship package" and can this information be submitted electronically? Does your company/broker maintain an "Individual Short Sale Procedures List" per lender and if so, will they provide you with a copy?
A reputable and experienced agent should be able to answer these questions and provide the necessary information to facilitate a Short Sale. It is important to know how individual lenders process their Short Sales because time is everyone's enemy in a Short Sale. The agent who is trained in distressed property sales and knows each lenders process will be best suited to make the Short Sale process work for you.
How should a distressed homeowner prepare their home for a Short Sale?
They should do the same thing all homeowners should do when putting a house on the market – make sure your home is inviting, clean, de-cluttered, and de-personalized. Stick with neutral wall colors, remove personal items and photos, and use minimal furniture and rugs to make rooms look larger. And since it is springtime, freshen the landscape beds with straw, plant flowers, pressure wash the outside and put a fresh coat of paint on the front door to provide a welcoming first impression for buyers.
How important is the Internet in selling real estate these days?
It used to be all about Location, Location, Location, but today it's all about Price, Condition and the Internet. I tell clients you must have all three! Without a presence on the internet, many buyers will never have a chance to approve of your home's price or condition. With so many people relocating to the Midlands, having a national internet presence for your home with professionally staged photos and a virtual tour is vital to getting a buyer's attention, and more importantly, on the short list of homes to go see.
What trends are you seeing in the Midlands?
People are downsizing and are looking more carefully at the resale history of the neighborhood. Buyers are more concerned with the "bones" of the home – how old are the roof and windows? What age is the HVAC unit and water heater? They want energy efficiency and low maintenance. It is a buyer's market and they know it! People are cautious, conservative and always looking for a reason NOT to buy your house! They demand competitive pricing, excellent condition, low maintenance, energy efficiency and knowledge about the home and market.
Molly Sims is co-owner of RE/MAX Real Estate Consultants in Chapin. A licensed agent in commercial and residential real estate since 1990, Molly is a Certified Distressed Property Expert (CDPE) and an Accredited Buyers Representative (ABR). She also has experience in the mortgage industry originating residential loans, as a licensed appraiser, and as a commercial investment consultant.
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