Historic areas of Nashville (East Nashville, 12th South, Germantown, Belmont and Hillsboro Village, to name a few) are so hot these days!  Local restaurants, bars,  minor shopping and consistently available rehabbed or reconstructed homes are relatively new in some Nashville neighborhoods and I’m finding them to be exceedingly attractive to buyers of all age groups.

Many people are in love with the Victorian, Bungalow or Craftsman style of home found in larger metropolitan areas of the U.S. while others find that they can do much more without using a vehicle than they can if they live in the suburbs.

Although suburban homes can be significantly more affordable than these continually up and coming, trendier areas, many buyers are opting for single home “city living”.  What’s missing from many newer subdivisions is that small town “feel” you get when you meet and greet familiar neighbors on foot.  In the suburbs you must drive to the market or restaurants; thus limiting interaction with neighbors.

For more information about East Nashville, 12th South, Belmont, Germantown and Hillsboro Village, please email me ASands@RealtyNashville, call me at 615.668.9940 or check my website, www.RealtyNashville.com for quick links to homes in these and other areas or sign up for real time listing updates.

There are thousands of available homes for sale: retail homes, bank forclosures and “short sales” (the lender is willing to accept less than the amount the seller owes).  It seems like short sale properties would be the answer for the many owner-occupant buyers who are looking for a home at a good price.  Instead, these homes can be on the market or under contract for long periods of time.  Why?  Because there are simply no time stipulations for the lenders to approve of prices and terms.

The short sale process is unclear to many.  All owner-occupant buyers I work with want to know when they’ll be able to move into their new home.  With more information about short sales available, buyers can decide if they want to consider these types of listings before they spend valuable time trying to purchase one.

Here are some things I’ve learned from short sale transactions I’ve been involved in.  I hope these points will help to clear up confusion I’ve heard from agents, buyers and sellers.

1. A short sale may be more attractive for a seller as opposed to allowing the home to go into foreclosure because a short sale may hurt the seller’s credit significantly less than a foreclosure would.
2. A lender would prefer that the owner sell as a short sale and take it off their books rather than to end up owning the property as a foreclosure which costs them more time and money.
3. The seller must be behind in their payments and prove hardship and the value must be more than the amount owed in order for a lender to agree to short sale the property.
4. Various lenders handle short sales differently from each other.  Each have their own policies and have employees who are at different levels of experience.  Some may take a shorter time than others to respond.  Each step of a transaction may be routed to a different department and each desk may need to clear earlier files before getting to a new one.
5. Despite what I’ve heard from a few investors, there is no particular percentage of list price or market value that a bank is willing to accept.  Each varies according to the amount owed and the determined value.
6. A contract for a “short sale” property is between the seller (the owner of record) and the buyer; not between the bank and the buyer.
7. The terms of the contract will be “contingent” upon the approval of the third party lender/lien holder.  The contract is like any contract with a contingency (for instance: other contingencies can be on inspection or appraisal).  Once the property is under contract, the property is not available for secondary buyers to bid on unless they wish to be in a “back up” position to the contract.
8. Earnest money will be deposited and held in escrow until closing or until the parties release the contract. Surprisingly, a buyer I had once was surprised that the money was taken from her account.  It was explained to her prior but she had a hard time grasping the process.
9. Although it is a legal and binding contract between the seller and buyer, the lender views it as an offer (to them it is).  Nevertheless, it is still a contract between the buyer and seller that is contingent upon the bank’s approval.  There seems to be some confusion about this which is why I’m repeating it.
10. The seller may or may not be required to pay the difference between the sale price and the amount they owe.  This is between the seller and their lender.  The lender may forgive the balance of the debt if the seller’s hardship is insurmountable.  It’s in the seller’s best interests not to accept a very low offer for this reason and because the lower the offer is, the more apt the lender is to decline it when they finally respond.
11. The seller must normally settle other liens such as taxes and HOA fees before the bank will close (unless the bank agrees, beforehand, to pay for these). Sometimes the buyer will agree to pay these liens if the seller cannot.
12. If there are  mortgage, the bank may work out a settlement with the second lien holder.  Later filed liens may suffer the loss.
13. The lender may require changes other than the price.  They usually do not pay buyer’s closing costs or provide a home warranty.   A buyer can write these into an offer in order to let the seller know what the buyer would like but requests like these will only hold up the process and the seller will be required to remove them in their counter-offer.
14. A bank will only warrant “real” property.  Personal property such as appliances will be removed from the contract.  Since it can take a long time for a response from the lender, make sure that the response is regarding the terms that the lender will work with by asking for terms that the lender will likely not oppose.  The seller may agree to leave items but, contractually, they are not required to.  If you’re writing an offer, a buyer can ask for appliances just so the seller is aware of the desire but the seller will remove them in their counter-offer.  If they don’t, your first response from the lender may be to tell you that.  You may not hear from them for another stretch of time afterwards.
15. The property needs to be approved “AS” a short sale before the lender will accept a short figure.  Most of the time, although the listing may state that the property is approved as a short sale, the price is rarely approved by the lender until sometime after the lender has seen a firm offer from a qualified buyer.
16. The list price may not be agreeable to the lender.  It may be listed low by the seller to lure buyers in hopes of quick or multiple offers, especially if the property has been on the market for a while.
17. Once the lender approves the short sale terms, they may require a quick close.
18. The lender pays the agency fees but is not required to pay the same fee to the listing agency that the seller agreed to pay in their listing agreement.  The lenders set their own percentage for commission and they will not pay any marketing or brokerage fees.

Be prepared to wait for weeks to months for the third party approval.  Once a contract is submitted to the lender, the lender will order an appraisal or hire agents to provide a Broker Price Opinion for value purposes.  They will require a minimum earnest money deposit.  They will require more forms to be signed which can hold the process up longer so act quickly when anything is requested.  There’s no sense in more than one party holding up the process but the lender can and will require time frames from the other parties involved.  It’s important to present the lender with offers that won’t cost the seller unnecessary time off the market or the buyer the property.

Without enlightenment of when or whether purchase price will be approved, although one can get a great value, a short sale purchase may not be the best choice for a buyer who needs a home to live in within a specific time frame.  Until the numbers of available properties dwindle, it will continue to be difficult to sell retail properties and, ultimately, allow for values to increase.  Why isn’t anything being done to speed up the short sale approval process?  Obviously, this would create desirability and ability to qualified buyers.  It suffices to say that we would more quickly get past the abundance of available short sale homes if we could sell them.  In closing, the more you know and prepare before you start the short sale process, the less disappointment and stress you will experience throughout the course of the transaction.

Dear Home Seller,

I see that you're trying to "short-sale" your home.  Since your lender will be accepting less than you owe them, don't you think it's fair that you provide a clean, tidy product for prospective buyers to view?  After all, it's you who isn't paying what you owe on the home you purchased.  I understand that financial difficulty led to the mess you're in but cleaning and keeping your stuff neat for showings is the least you could do to ensure a smooth transaction and yield your lender the best, possible, sale...you know...since you get to walk away.  The condition will greatly affect the showings, the time it takes to get an offer and the sales price.  You're being bailed out by your lender and, yet, you're hindering a sale...

...like it's their fault...

Dear Listing Agent,
I see that you have a property listed as a "short-sale".  Even though the bank will accept less than the seller owes them, don't you still have a responsibility to the seller (and their lender who will be paying your commission) to provide and market a salable product?  If the seller produced a dirty, messy home for you to market, wasn't it your job to advise them to make the product presentable and keep it that way?  Doesn't the way it looks show a lack of respect for your expertise?  And, by the way, I viewed the photos that you haphazardly posted in the MLS. The "drive-by shooting" shows one end of the home cut off and the whole photo sliding off the page to the left.  The interior photos are so dark you can't make out what room it is.  All I can see is clutter on the kitchen counters amidst a dark, purple background.  Do you want to sell this home or did you simply put it in the MLS on your way to the mall?

Dear Home Seller and Agent,
When I see that this property has been reduced to $50,000 below what it should be and has been on the market for 6 months, I can see why a buyer wouldn't come to view this house.  I can understand why, if a buyer DID venture into the home, they wouldn't buy it.  Your lack of concern for the quality of the home and disregard for the lender (who, by the way, will take a greater loss due to the presentation) exhibits indifference and selfishness. Your neighbors will bear the effect of the rock-bottom price your listing will finally sell for which will bring their home values down but why should you care? You won't be there after it sells.

A clean, tidy home and great photos could have sold this home months ago.  The fact that it hasn't sold is NOT a result of the economy!

Do you attend networking functions?  I do.  It's the best way to make new contacts.  Do you find that networking is helping your business?

Ultimately, our goals are the same, regardless of what type of work we do. We attend networking events to meet new people, to learn from them, to seek empowerment and to grow our businesses via reciprocal business and referrals from other professionals.

One thing I've noticed is that, while I attend events to network and exchange business cards, I rarely see anyone following up with me after the event (I'm a culprit, myself). In an effort to make the time taken to network more effective for our businesses, I've been thinking of questions that we could ask of each other more often like, "How can I help you to reach your potential?", What do YOU need that I can provide" and "What can I do to earn your business or make you want to refer my services?" We should all consider these questions, listen carefully to the answers and use them to qualify our contacts to see if they're worth cultivating. 

After you collect business cards, what do you do with them?  Are you using these contacts to your advantage or do you have something to offer them?  If not, we should make it a point to use these answers or the questions, themselves, as a reason to follow up with our new contacts.

Afterthought: I've been put on newsletter email lists after attending events.  I'd much prefer to be contacted, directly, via email.  I'm on so many newsletter email lists that, if I were to read even half of them, that would be all I would do, night and day, so I have to send them to the junk filter so I don't miss emails that are timely or urgent.  I prefer email to phone calls, as well.

Alyse Sands, Broker

Specializing in Nashville Real Estate

ASands@RealtyNashville.com

www.RealtyNashville.com

by Alyse Sands, Broker, GRI, ePRO

Recently I visited a home for a couple who were about to get married. They wanted to sell a house that he's owned for 15 years. I walked through the home with them as I always do, to point out anything needing attention and to suggest things that could be done to increase the home's marketability. An hour and a two page list later, we all sat down.

"Seller", I asked, "did you have a roof leak repaired? There are a lot of large, discolored spots on the ceiling." He said "Yes, but I never got around to getting the ceiling painted". I thought, "Isn't painting the ceiling part of the repair?" Then I wondered "What about the 4 shutters whose paint is peeling next to the two new vinyl ones and the fact that he built an addition to the deck but the original deck is coming apart from the house and needs to be stained?" The list continued with paint, corroded plumbing, scratched vinyl flooring, etc.

I felt sorry for them because they couldn't get the value that they should have been able to get after owning a home for 12 years.  Then I realized this: I was feeling badly for someone who put themselves in the position that they're in. The thing is that part of being a homeowner is the responsibility of keeping a property up throughout the years. If we keep putting off repairs or we only fix items that are affecting our usage, the result will become an overwhelming compilation of repairs at one time when we're ready to sell. Why wait until it all piles up and becomes worse because things deteriorate over the years?  Don't we deserve to live in a repaired, upgraded, beautiful home? We buy homes to enjoy the pride of ownership so why do some people let themselves live in a "broken" home and then wait until they need to sell it to make repairs (or not make the repairs because by that time, they don't have the money or time to do so)?

Had this owner kept up the repairs, there may have been a few things to do but now, the job has become time consuming, costly and seemingly insurmountable. My advice: besides repairing problems as they arise, look around your house twice a year and address anything that you see at that time. If something is in dire need of repair, look around to see if there is anything else that can be done at the same time. When you're ready to sell, you won't add more stress to the already overwhelming task of packing, cleaning (which also needs to be kept up on a regular basis although I know people who don't seem to agree with that theory) selling and finding another home.

Alyse Sands is a Broker, specializing in home marketing and buyer representation in Nashville, TN.

by Alyse Sands

Now that the tax credit and the flood are behind us, Nashvillians must forge ahead!   If you think that this means another hit to the Nashville Real Estate market, you're mistaken!  NOW is the time we move upward!  Don't stop dreaming and working towards your goals because you "heard" that the market is bad.  Don't allow the opinions of others, including the media, to influence your plans.  When consumers hear negatively slanted news, they have a tendency to react accordingly.  Our beliefs and our actions set results in motion.  

As a community, we have to stay confident and positive.  Today is a new and wonderful day and Nashville is rebuilding quickly.  If we believe that the flood was our "Rock Bottom" then there's only one way to go...UP!  We've seen that Nashville is not only a great city to live in but that it's also filled with amazing people who have proven that they will rise to the occasion for others in need .  People have helped people like we never imagined.  Neighbors, friends and strangers dropped everything to clean up devastated homes and rebuild them once again. 

Who wouldn't want to live in a city like that?  And what's more, even though the tax credit is gone, people still must move for many reasons; one of which is for jobs. Nashville was voted one of the top cities in the U.S. for business relocation. 

I recently found a page I'd saved from the "Tennessean" from 2/27/05.  The front page says, "Values skyrocket in some upscale Nashville neighborhoods but trend overall in Midstate is a steady increase that lags the South and nation" (by Keith Russell).  At the time, that sounded negative for us.  In retrospect, this was good news!  Had we experienced the record value increases as other areas did, more of us would have lost homes and there would have been many more bank foreclosures to deal with.

So, Nashville, let's be happy!  Here's to the future...WE ARE NASHVILLE and that's a beautiful thing to be!

Should I Sell My Home Before Finding a New Home?

There are exceptions to every point but the answer is usually yes.

Imagine that you must sell your home. You spend the time to get it ready to sell and then your agent puts it on the market. There are showings but no offers yet. You want to move and sometimes you need to move. Does this sound stressful? Selling a home is one of the most stressful things you’ll ever do along with your wedding day and having a baby.

Now imagine that you have a time limit to sell your home. You must start a new job in a certain amount of time.

On top of that, imagine now that you now have a time limit but you’ve imposed one on yourself! Why and how would you do that?

By finding a home you want to buy before you have sold your home or put your home on the market, YOU ARE SETTING A TIME LIMIT FOR YOURSELF! Your seller knows that he must sell his home before he can buy his new home but he doesn’t know anything about your house or when it will sell. If you were him (and you will be when you're selling), given the choice, would you prefer a buyer who needs to sell a home to buy your home or a buyer who doesn’t have a house to sell? If the seller is willing to entertain the offer with a contingency to sell a home*, the seller is less apt to negotiate on other terms as they feel they’re already negotiating by signing a contract that is contingent on selling another home**. You’ve already lost some of your negotiation “power”.

Until your home is under contract, they don’t know if and when they can move. Because of this, seller’s agents know to write a “kick out” clause into the contract. What this means is that, if another buyer who does not have a contingency to sell a home wants to buy the home, you will be given 48 (example) hours to take the contingency off or the other buyer will get the home. Removing the contingency can mean selling the house or merely taking off the contingency, which can be dangerous for you if you get stuck with two mortgages.

If your home doesn’t sell in the time frame that it takes to close on the home you’d like to buy, you may lose that home. This becomes more stressful for you and for the seller than it would be had you waited until you had a contract on your home before you looked for a new home.

Since you have the choice, why put yourself through the additional stress? Buying and selling a home is stressful enough!

Overall, the best choice is to have a contract on the home you're selling before you write an offer on one you want. You should wait to look at homes because if you see one you like you’ve started the process. By the time you’re ready to look for a home, there will be different homes on the market.Also, by selling first, you know how much money you'll have to work with.

You ask, “What if I don’t find the home I want? Am I stuck selling my house?”

The solution: When we find a buyer for your home, we will write a contingency into the contract. It will state that the contract is contingent upon the seller finding suitable housing. It is easier to find a home with the many options out there than it is to sell one. It’s usually easy to get a buyer to agree to this.

*To qualify to purchase a home, you must sell your home. Without a contingency in the contract, you may not qualify. If you do, you must stick to the terms of the contract and may be stuck with two house notes.

**An exception is that some of the new homebuilders I work with are willing to work with a contingency to sell, but even these builders have some type of time limit.

New federal rules were implemented to give lenders financial incentives to expedite and streamline the short sale process.  This doesn't come without a catch, though.  http://is.gd/bIXrn

Alyse Sands, Broker, GRI, ePRO, Real Estate Expert

www.RealtyNashville.com   ASands@RealtyNashville.com

If you aren't familiar with the definitions of "Agency", this may not be clearly understood by those who aren't involved in the Real Estate business.

I just received a call from a buyer about one of my listings.  He wanted me to come show it to him.  I would, of course, but then I asked him if he had an agent and he said "yes".  I asked him to have his agent contact me.  (Let's just say that this property has some baggage that is detailed in the agent portion of the listing and would otherwise need to be explained in a painfully time-sucking way to a buyer who may or may not understand what I'm talking about.)  He replied that he wanted to see it "on his own" and that he didn't want to disturb his agent.

Note to Buyers, if you have an agreement with a buyer's representative then you ought to utilize their services.  I'm sure that most agents would gladly earn their keep if you would mention your curiosity about a property.  As a buyer's agent in other transactions, I would prefer to be the one to research the home for you.  As a buyer's agent, I'm the one who knows what you're qualified to buy because we discussed your needs, wants and ability before we embarked on the home-seeking process together.  As your buyer's agent, I've learned your level of understanding so I know how to explain the reasons why there are limits to who can purchase a particular home.  As your buyer's agent, if there is a reason that this property is not a good match for your qualifications, I'd know before we took our time to drive there and look at it.  As a buyer's agent, I'd also appreciate knowing that the listing agent respects my relationship with you.  Furthermore, homes for sale are not normally open to the general public so you wouldn't be able to see it "on your own".  Someone has to let you in.

If I am to represent a buyer then part of my job is to explain the home-buying process and that they should allow me the opportunity to do my job.  If they don't know what my job is then how do they know what to expect from me"?

Alyse Sands, Broker, GRI, ePRO, Real Estate Expert

www.RealtyNashville.com  ASands@RealtyNashville.com

A contract is a contract, regardless of the contingency, right?  Why are buyers shying away from buying short sale properties now?  They or their agents are afraid they won't be under contract if they don't have a response from the lender by 4/30/10 so they can get their tax credits. 

We write contracts that are contingent upon financing and/or inspections every day so why is this an issue?  It's still a contract.  It is a contract that is contingent upon third party approval of the price. You can write it to close before June 30,2010 so you can get that $8000 or $6500 tax credit (depending on whether you're a first time buyer or repeat buyer).  I'd write in a closing date of earlier than that in case of delays on either side.

Let me also add that the condition of a short sale is normally better than that of a foreclosure.  There are many reasons for that which I'll discuss in a future post.

That said, please see my short sale listings:

553 Whispering Hills Dr. http://www.postlets.com/repb/3100205

2065 Nashboro Blvd. This one is "Cash only". http://www.postlets.com/res/3102985