Raining in Dela-Where? - Kathy Sperl-Bell

Don't trash talk the competition!

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Thu, 05 Nov 2009 15:53:06 -0600

The other day I brought a buyer client to a new home community. As we entered the sales office, the sales person was still talking with another couple and their buyer agent.

"We're the only game in town," he was saying in a derisive tone of voice. "We have 40% market share in this area and so and so builder next door has only sold like 6 homes in the past year!" he continued. More talk at the prospects wondering why anyone would even think of buying a home from anyone else, etc., etc.

I looked at the other buyer agent and could tell he was just as unimpressed by this performance and ready to move on. My clients had gone wandering through the model home, so I had a minute alone with the sales person. I asked him to please refrain from trashing other builders and to simply talk about what they had to offer. I told him it was totally unnecessary and besides what he was saying was untrue; I have sold homes in the other community and know that they have sold more than he was reporting.

If you're the leader why do you have to put down the competition? It is so unprofessional and it just makes me wonder. Do you have 40% market share because you're the best or because you're the cheapest production builder in town? Perhaps your prices are lower because of quality? I could go on but the point I'm trying to make is -

SELL YOUR PRODUCT - DON'T TRASH TALK THE COMPETITION!

What I learned at REBCDC and what you missed if you weren't there!

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Fri, 30 Oct 2009 07:56:35 -0500

I first learned about REBARCamps right here on Active Rain. Someone wrote a post about the "Ten Things I learned at REBARCamp in Charlotte" and I knew I had to go to the next one. Several months ago I attended my first in Philadelphia and was overwhelmed by the amount of learning and the number of new friends I made. But I digress. This story is about what I learned at REBCDC, my second BARCamp.

Probably the most important thing I learned is that you really can get to know people on Twitter and FaceBook. In the short time between Philadelphia and DC (aka Herndon, VA), I truly feel that I have made good friends that I only see IRL once in a while. Apply this same knowledge to blogging and tweeting in general and you realize that prospects and future real estate clients can get to know you online well enough to feel comfortable calling you when they need to buy or sell a home in your area.

Second, I saw a degree of cooperation among agents, brokers and service providers in an open environment that I don't get to see on a daily basis in my market area. I think REBARCamps bring out the best in the best among us. I was part of a group like this once before in my life. Back in the late 1970s, I got into the personal computer business when no one in the REAL computer business would take a job selling those "toys". They were sure that PCs were just a fad and would never penetrate the real business market. I managed one of the first computer stores on the East Coast up in Framingham, Massachusetts, and I can tell you we sold a lot of those early Apple computers to CFOs and corporate executives. We were a ragtag group back then. I came from the hotel industry and others came from selling carpet to running a restaurant. I had no degree in Computer Science, in fact many of us had no degrees at all! Apple Computer did a study and found that this group of people that gravitated to the PC Industry early on had one thing in common - a need to know! I've never forgotten that and remembered it yesterday while thinking about REBCDC. Those that lead and those that attend are the ones that care about this business and want to do it better.

I now have over 500 followers on Twitter and it all started with a dozen or so great people I met at REBCPHL. Many now in "My Realtor Friends" column on TweetDeck I only met for the first time at REBCDC, but I felt like they were old friends. For those agents that don't get it, help them if you can, but remember those dinosaurs in the mainframe computer business and know that you are the future of the real estate business.

Try Before you Buy in an Active Adult Community!

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Thu, 01 Oct 2009 08:34:44 -0500

If you are not yet sure where and how you want to live when you retire, why not try it first? The last couple that did rent this fabulous home in Delaware's premier active adult communities, has made a decision to buy a new home! Is a 55+ community with all the bells and whistles right for you? Try it and see for yourself.

Mortgage Delinquencies - The Coming Storm

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Thu, 01 Oct 2009 08:24:54 -0500

I don't normally re-blog posts, but this is such an important topic and this post was so well-written and researched, I wanted my readers to see it. Thanks to Jeff Geoghan MBA - Lancaster PA Real Estate Expert (The Jeff Geoghan Realty Group, Coldwell Banker Lancaster PA) for excellent work.

Via Jeff Geoghan MBA - Lancaster PA Real Estate Expert (The Jeff Geoghan Realty Group, Coldwell Banker Lancaster PA):

This is one of those posts where I wish I didn't have to write it, but felt it was so important to my readers that I would be remiss not to at least talk about it.

Everyone out there probably knows somebody who is behind on their mortgage payments, looking for alternatives and likely also just finding out that their home's value has dipped below what their loan amount is. I know some within my own personal circles. It's a tough situation for me to advise them as a professional because it's such a personal challenge to their pride and self-worth, not to mention their plans an dreams for the family. The question we're asking is "when is this going to stop and where are we heading?"

I'm going to put up a few graphs that show the trends nationally with regards to mortgage delinquincies:

This chart is by quarter - Single-family mortgages set a new record delinquency rate in the second quarter of 2009, according to a quarterly survey by the Mortgage Bankers Association. Those of us in the real estate business see the foreclosure process (just visit the local Sheriff Sale docket to see the current numbers) but the looming delinqency-to-foreclosure issue is far, far larger.

The Wall Street Journal on 8/3/09 reported the following quote: “While subprime mortgages sparked the first round of housing problems two years ago, now "troubles are lurking further up the food chain," says Joshua Shapiro, chief U.S. economist at MFR Inc. White-collar job losses have accelerated while more adjustable-rate loans to prime borrowers are resetting to higher payments. ‘You put all that together, it leads me to believe that the next leg down on home prices is going to come from the top,’ he says.”

The first objection someone may have would be to say "yes, but historically those who are delinqent usually get their act together and come current on the mortgage after a while". That WAS true, but not anymore! We call that the "Cure Rate", that is the rate of delinquencies that go back to current. The Wall Street Journal reported on 8/24/09 about a Fitch analysis that found that the Cure Rate from 2000-2006 was 45% (which means about half of people fix their delinquency). However, as of July 2009 the rate had dropped to just 6.6%! That means that over 90% of delinquent customers are going to foreclosure. Take a look again at the above chart...

The next thing someone will say is "well, that's the 'sand states' and not my area". Here's the chart for all 50 states showing the same breakdown of delinquencies and foreclosures. Guess what - most states have a significant problem, especially compared to historical figures.

Now the next thing someone may say is "aren't those loans going to get 'fixed' by a loan modification?" I know several people right now who are applying for a Lancaster County loan modification but are waiting and waiting. I hope it works out for them...

In reality, loan modifications are hardly making a dent. To me, that's a burning question. Why arent banks being more aggressive in giving customers the option to extend their loan and/or reset to a lower rate? Why are they being SO difficult? The people I know don't want to be foreclosed. They CAN make payments. They just need the terms redrawn to allow them to catch & keep up. Loan modifications are not helping us get this crisis under control.

What are the causes of all these delinquencies? Here's a chart that is enlightening:

We hear a lot about adjustable rate mortgages being the culprit, but the reality is that it's the loss of jobs and the tanking real estate market that's the perfect storm. See my previous post on unemployment in the nation, the state and Lancaster County.

Keep in mind, this post is not intended to give us "good news". You may be experiencing good things in your market and that's great. My intent is to get us thinking about the challenges that aren't going away and how we're going to address them as homeowners, agents and professionals. I'd love to hear your ideas!

What ever happened to "Win-Win"?

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Wed, 23 Sep 2009 17:27:18 -0500

Although I have only been in real estate for about 8 years, I have been in Sales and Marketing most of my adult life. Someone taught me early on that the best deals were the ones where both sides could declare a WIN!

If both the buyer and the seller leave the settlement table happy, that is a great transaction. If either side walks away feeling like they got treated badly, who wins? No one.

Let's consider the buyer. Negotiate hard, but always remember that your new neighbors were probably good friends of the seller. If they feel "taken advantage of", how welcome will you be when the neighbors get together for the next Happy Hour? This is a market that has definitely favored the buyer side of the transaction, but sometimes I feel it has brought out the worst in many people. Get a great deal, but be grateful and know when enough is enough. Be gracious and give ground so the seller can move on feeling happy you will be the new owner of their home. It does matter.

We just sold our own home recently. We put a lot of sweat and money into renovations and updates. It was our "model" home. The buyer really loved what we had done and expressed his enthusiasm several times. Yes, he negotiated hard, but he was very respectful and I believe we were as well. We came to the settlement table with both sides feeling good. That made it much easier for me to leave my home and be happy it was in good hands.

In other cases, I have had both sellers and buyers forget when to shake hands and work together for a successful transaction. This also applies to both the Buyer's Agent and the Listing Agent. Don't be the one who is remembered for a stressful and difficult transaction, please.

NEW LISTING - Estates of Chapel Green

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Wed, 23 Sep 2009 16:49:58 -0500

Some great properties for sale in Milton, Delaware

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Sun, 06 Sep 2009 15:51:38 -0500

There is a great choice of properties for sale in Milton, Delaware. From a few totally renovated Historic homes to a great corner property in the Town Center where you can live and have a business, or rent the efficiency and use the 1st floor for business.

There are also some very affordable ranch or cottage style homes in town like the one shown below for only $159,000!

Communities like the Reserve at Fortune Field with large wooded lots and estate-style homes are well located half-way between the towns of Milton and Lewes, Delaware.

New Lot Listed in Lewes, Delaware

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Sun, 23 Aug 2009 12:16:33 -0500

Nassau Station is a wonderful residential community just outside the Lewes town limits. You reach the community from New Road, and you get to New Road by turning at the Nassau Bridge and avoiding the Five Points intersection. There are very few lots left and this one is definitely priced for today. There are no costly impact fees when you're ready to build. Public county sewer and water are both available AND since you are not in town limits, there is only a very reasonable county tax. If yor're looking for a nice lot on which to build your dream home at the beach, Nassau Station is a great place to start ... and finish!

My husband is not a Hurricane - Hurricane BILL!

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Thu, 20 Aug 2009 06:27:15 -0500

Bill couldn't create the kind of havoc the Weather Channel is talking about, could he? Back in 1996, I lived in Wilmington, North Carolina. I had escaped the Washington, DC, Beltway and was searching for a new place to call home. Then along came Fran and Bertha, two hurricanes in the same year and both caused a fair amount of damage. No one wanted to talk to this Northerner about new career opportunities for a burnt-out boomer. All they wanted to talk about was how hard it was to get their insurance agent to call them back!

If it weren't for those two hurricanes, I might still be living in Wilmington, North Carolina. But then I wouldn't have moved again to Coastal Delaware. I wouldn't have met my husband BILL to whom I have now been married for almost 7 years. I wouldn't be a Realtor in Lewes, Delaware, and we wouldn't be in the process of renovating our next home in Lewes, Delaware.

The beauty of living near the Coast in Delaware is that we usually don't see the kind of hurricane activity that our neighbors to the south can experience. AND, as many Baby Boomers are learning, Delaware is so centrally located in the heart of the Mid-Atlantic Region. We are within a short drive to Annapolis and Baltimore, Maryland, Washington, DC, Northern Virginia, Philadelphia, Pennsylvanie, all of New Jersey and New York City or Long Island.

So, let's hope Hurricane BILL passes us by this weekend and heads out to sea. And if you haven't yet visited Lewes, Delaware, come see us this fall. Lewes is a year round place to visit and a great town in which to live.

Commercial Building and Real Estate on busy road in Sussex County Delaware

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Fri, 14 Aug 2009 07:58:20 -0500

This is a great commercial property for sale on busy Route 16 just a mile East of Route 113 in Sussex County Delaware. Everyone escaping to the beach for the weekend from Baltimore and the Washington, DC, metropolitan area goes by your front door on Friday afternoon and evening and back again on Sunday. It's also a busy east-west road travelled by contractors, local business people and consumers that use Route 16 on a daily basis.

A good location for a small business office, a restaurant, an insurance office, real estate office or many other uses. Contact Kathy or Bill for a complete list of approved uses for this property, zoned commercial, within the Ellendale, Delaware, town limits. It is on county sewer and there is a new well!

If you've always wanted to own your business real estate rather than leasing and watching your annual costs escalate, this is a great time and a great location.

Will your duckie win The Great American Duck Race in Milton Delaware?

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Fri, 14 Aug 2009 06:13:12 -0500

There's only one way to find out! First, mark your calendar for August 22, 2009, the day of the big annual race in the heart of Milton, Delaware. Hundreds of yellow duckies are being sold now and on race day for only $5.00 each. As the newest member of the Milton Chamber of Commerce Board of Directors, I believe I have sold the winning Duckie to one of my clients, but you never know!

RACE TIME is 1 PM in the Milton Memorial Park located behind the Milton Public Library at the head of the Broadkill River. FIRST PRIZE IS $500! and there are lots of other prizes donated by local businesses.

But come early and enjoy the BARGAINS ON THE BROADKILL with local vendors, great food and music all day beginning at 9 am.

This event benefits local businesses and the Milton Chamber of Commerce. I'll be there early helping to set up and hope to see you there.

For the latest event information in and around Milton, Delaware, visit the Chamber web site!

The Ultimate Green Building - it only looks blue!

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Thu, 13 Aug 2009 12:00:31 -0500

There is a story behind this charming cottage now located on McCaulley Avenue in Ellendale, Delaware. The Phil-Moor cottages were located on Rehoboth Avenue in Rehoboth Beach, Delaware, and were the summer home for vacationers year after year. In the housing boom, they were removed to make way for spiffy new luxury townhouses and we were fortunate to buy several cottages. We had plans to create an artist colony until we ran into resistance (costly entrance improvements) from the Department of Transportation, so we searched for other ways to preserve at least some of these wonderful historic structures. We sold two and Bill created this 2 bedroom, 2 bath home out of three cottages. You can see the crane placing them on their new foundation.

Bill and I also own Gotcha Covered, a full service remodeling company that specializes in Universal Design and Green Building. Bill likes to say that the ultimate green building is reuse - don't throw things away! We were able to preserve the original hardwood floors, the original doors and hardware, the original trim and many other details. The plumbing and electric is all new however and so are all the appliances and fixtures. Bill rebuilt the front porch and added a metal roof. On the side, he screened the porch and added a large paver patio.

It is listed now for only $159,900 and ready for new owners. Find MLS#568091 featured at http://www.KathyandBill.com. This would be a perfect house for First Time Homebuyers and now is the time to take advantage of that $8,000 Tax Credit before it expires.

Open Sunday in Milton, Delaware 19968

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Fri, 17 Jul 2009 15:47:49 -0500

NEW LISTING

OPEN SUNDAY 12 NOON - 3 PM

315 UNION STREET, MILTON, DE 19968

Need directions? Call Kathy on her cell 302-542-1203!

Croquet at 1 pm in the Boxwood Garden! PRIZES.

Good News! My Buyers homes are selling!

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Thu, 02 Jul 2009 07:19:35 -0500

My Buyers are Baby Boomers coming to Coastal Delaware as they get ready to retire. For the past year now, they have been hesitant to be buyers until their homes sold back in PA or NJ, DC or MD. The bravest buyers, especially those who owned their homes outright and those who could pay cash, have been able to take advantage of the best home prices and the lowest mortgage rates we'll see in our lifetimes.

Lately I am getting calls like the one I received this morning - "Hey Kathy, we got a contract on our home Saturday!" The offer came from people who had SOLD their house and and want to settle quickly!

This call came from a client who did purchase an inventory home in a great new community in Lewes, Delaware, earlier this year. We got together for lunch on Saturday and they admitted to a little concern that they had not received any offers on their home back in PA - lots of showings, but no offers yet.

The news about these TWO SALES is exciting because this is the way the real estate market works when it does work. When trade up buyers begin to sell their homes, the retiring Baby Boomer can sell theirs. AND, when stories like this one start to spread, more people feel comfortable making a purchase decision with the knowledge that the homes they have had on the market for a while now are going to sell.

Right now is the perfect opportunity - you can still buy at a great price and with low interest rates. Don't wait too long or you'll miss out.

Boomers make headlines in Delaware!

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Fri, 26 Jun 2009 07:08:23 -0500

First thing I did this morning was read the great front page article written by Esteban Parra in the Wilmington News Journal on Boomers in Delaware. We are such an attractive place for Boomers from surrounding states that we Boomers are the majority and growing fast.

Both my husband Bill Bell and I were among those interviewed not only because we are both Boomers, but because in both our real estate and remodeling businesses, we focus on the issues identified in this terrific article.

You can read it online at DelawareOnline.

SHOULD I PAY MY MORTGAGE?

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Tue, 23 Jun 2009 19:58:57 -0500

This issue is affecting so many people that never could have anticipated it. I wanted to share this great article that presents the issues to consider before making any decisions.

Via Richard Zaretsky, Florida Real Estate Attorney (Richard P. Zaretsky P.A. ):

This seems to be THE NUMBER ONE question I get. Unfortunately there are several answers and which is correct for you depends on the Circumstances. I will address the common scenarios in this article.

Policy in my office is to never "tell" - as in "instruct" - our borrower client to pay or not to pay their mortgage. Paying or not paying has a lot of collateral effects and the borrower needs to know what they are before making the decision. We don't make the decision for the borrower (our client) because the effects of paying or not paying are not going to affect me - but they will affect the client, so it is the client that must make the final decision.

Let me make one issue clear - when we are hired to help facilitate a short sale or loan modification it is far easier for us to negotiate with the lender if the payments are late, but it is almost never a requirement. The exceptions to which will be discussed later in this article. Additionally, internal rules change at the banks constantly. A new client came in totally frustrated. They called their bank to help with a modification and the bank said they could not address their situation until they were at least 60 days late. So the near perfect (800+) credit score couple stopped paying for 60 days and then called the bank back. Now the bank says that because they are 60 days late they cannot speak to them about a modification! The point is, if you don't have to be late then why voluntarily create a late payment credit history that will adversely affect your credit-dependent life almost immediately and for years to come?

SO LET'S GET INTO IT - Danger - this is a long article and it covers a lot of ground!

Short Sale:

A borrower that is current and contemplating a short sale wonders if they should stop paying their (first) mortgage. They are upside down and until now they have been current. However they are paying the mortgage at a cost of not paying other bills. (Other or different facts may be that they are paying all their bills but taking the money from savings or a pension fund to make those payments, or they are borrowing money from another equity loan).

Generally, it is not a good idea to get into debt to pay your mortgage, unless you have a solid plan to both (i) keep the mortgage current and (ii) repay the additional indebtedness you are creating. It is not like taking from one pocket to put into another - it is more like taking from someone else's pocket to pay your bills. This would include credit card loans as the source of funds. It all has to be paid back, so if you don't have a plan to pay it back, don't borrow it in the first place! You are only digging a bigger hole for yourself and making it harder to get out of the hole.

If you are taking from your pension or savings money, again you better have a rock solid plan to get that money back into those accounts, or there is no sense in giving up that hard earned and usually irreplaceable retirement money, especially considering these are monies that are usually protected from creditors' judgments including those your mortgage lender could obtain (deficiency judgment)..

Of course the "amount" of money you have "in reserve" comes into consideration. If you have 2 million dollars in reserve and you decide to spend 10% of it to keep the loans current until you can short sale the property, that plan has a basis that the 10% is not going to make a difference in the way you run your life over the remaining time you have left as a mere mortal.

Sometimes, but rarely, we run into a lender that says they won't approve a short sale or modification because the borrower is current with his payments. When we have encountered this it is in most cases associated with a government backed loan, (but later on we will show you why this may be motivated by plain greed on the part of a loan servicer). A properly compiled financial snapshot of the borrower should show why they are current and what will happen if the short sale or modification is not approved.

Your decision on how to proceed should be based on what goal you are trying to accomplish and how you plan to get to that goal (see how to determine your goal).

Mortgage Modification:

Apart for some voluntary government programs regarding (Fannie Mae or Freddie Mac) government involved mortgages, I know of no lender that absolutely will not deal with a borrower who is current with their mortgage payments. Lenders deal with all sorts of situations and "absolutely not" is just not in the vocabulary. A typical borrower calling a lender may hear that they must be late, but that is more of a "vetting" statement than an absolute policy.

The exceptions are some government program guides for modification. The first step to seeing if your loan comes within this exception is to see if it is a Fannie Mae or Freddie Mac loan. You can do this online at the Making Home Affordable site. Many servicers and lenders whose loans are not "government backed" are now choosing to follow this government plan (known as the Home Affordable Modification plan or more affectionately called the "Obama Plan" - see below) for the simple reason that they are being compensated by the government for each successful modification they execute within its guidelines, and either the servicer or lender receive a residual bonus for the loan staying current under the modification. In these cases we have seen non-government backed loans insist on the borrower being late to qualify for modification as well. What is confusing on this point is that when the plan was introduced it included modifications (and compensation for such) for current loans as well. However, we are told time and time again from the lenders directly that they must be late to qualify. There is no such rule in the guidelines.

While this is contrary to what has been published by the government about the plan, keep mind that following the plan and any of its various aspects is entirely voluntary and up to the Lender or servicer. They can pick and chose from this plan as they see fit for their own internal reasons. Here is a more interesting twist - a servicer that modifies a delinquent loan is paid more under this incentive plan than if the borrower were to modify while the loan is current! If the borrower is current, the servicer can receive up to $3,500 in incentive fees from the government. If the borrower is delinquent, the servicer can receive up to $4,000 in incentive fees from the government. Thus it seems that it pays ($500 to)the servicer to encourage a borrower to be delinquent!

We often see a client that fits the profile for modification under this government plan. Some of these plans are said to require that to be qualified the borrower must be late 60 days (see Guidelines page 5 at bottom). But in fact, being late is not a requirement, but only one factor of many (see Guidelines page 16 at the top - "However, a NPV (net present value) positive result is not necessary to qualify a loan for a Home Affordable Modification"). If the goal is to qualify under such a plan as put in place by the lender at that time, then to accomplish that qualification the borrower may need to make themselves late, but that cannot be determined in a 2 minute telephone call with a lender representative. I cringe when we go this route because just like these "plans" came into existence, I can see them change the plan thus leaving the now 60 day late borrower with ruined credit scores that occurred needlessly.

Generally about a quarter of our modification clients never go late and still get a modification offer from the lender. However, keep in mind that nearly all lenders put up as their first line of defense the policy that going late is a necessity to qualify. We can only speculate this is done to deter the enormous inflow of loan modification requests from borrowers that would come in if this was NOT said to be a requirement. It also helps address those in the most dire amount of need first.

The Pro's and the Con's:

The general rule of thumb we use is if you can pay your mortgage and maintain your life's necessities, you may consider keeping the loan current, taking the points in this article into account. However, if you need to choose between buying food or medications and paying the mortgage, the decision that should be made is clear: your life necessities take precedent.

Here are the pro's to consider when in the short sale or modification process. Keeping the loan CURRENT has the following benefits:

a) Your credit score is not dinged until the short sale transaction occurs (and not at all in most loan modifications) and your overall credit score reduction will be minimized, and b) You will remain in good standing with your lender without worry of penalties, fines, or a foreclosure.

The "con's" of keeping the loan current are that:

(a) You will be out of pocket for the monthly mortgage payment (monies which you may or may not need to survive), and

(b) Your lender may question the sincerity of your claimed hardship, and you may be spending funds that would otherwise be potentially (but rarely) forgiven by the lender. In addition, occasionally the lenders in a short sale may require a lump sum payment above the sale amount from the borrower to forgive the debt. Coming up with that money is sometimes the difference between a deal or no-deal. If you can put your mortgage payments aside and stockpile them, it will help you cover that potential lump sum.

A similar pro/con approach applies to GOING DELINQUENT with your mortgage. In favor of going late is being able to keep the unspent mortgage payments in your pocket (or applied towards other necessities as the case may be) in which event your hardship may appear more sincere to the lender. On the other hand, there are very real consequences to going late with your mortgage payment:

a) You WILL incur late fees and other penalties on the late interest. Usually this is not a large issue as it is part of the forgiven debt in a short sale and usually forgiven in a modification, but it is something to consider,

b) Your credit score downgrade will be harder as you will compound the short sale hit with a 30 day late, 60 day late, etc, (and if this is a modification you will make a non-negative credit score event turn into a negative credit score event), and

c) You will eventually cross a threshold (typical industry standard of 90 days late) where the lender will initiate a foreclosure action in State court.

Going Late on Your Second Mortgage:

Often a borrower comes to us and says that they are late on the first mortgage but current on the second mortgage. The second mortgage is almost always totally upside down with no equity left in the property to secure that financial obligation. The borrower says they paid the second mortgage because they had the money for the smaller payment (second) mortgage but not the larger amount first mortgage. Our answer - if you don't pay the first mortgage they are going to foreclose it and then paying the second mortgage is not going to save your house.

Lately we have seensecond mortgage lenders with 90 day late mortgages skipping the foreclosure process (since if they cause a sale of the house it is sold subject to the first mortgage, and thus any buyer still has to pay the first mortgage, which usually makes no economic sense). Instead the second mortgage lender sues the borrower on the promissory note only and gets a money judgment that they can keep for a long time (20 years in Florida).

So if a client says they are paying the second mortgage but not the first mortgage, we usually suggest they look at the common sense approach and what are they likely to gain or lose by doing so.

Effect of Non-Payment / Late Payment on Credit Score:

This is a big question and nowhere is the answer clear cut. Definitely if you get a report on your credit that you were "late" (in mortgages that means 30 days or more late) then your credit has been "dinged" and your credit score is adversely affected.

Credit scores are used for many purposes, including the amount of credit you can get on a credit card, the interest rate you get on credit cards, car loans and mortgages, your ability and price of life and disability insurance and even car or house liability insurance, your ability to get a certain type of job, or to establish business relationships, and your ability to rent a place to live, to name a few. So credit scores are important. If you want to better understand credit scoring you can see the Federal Reserve Board's Report to Congress from April 2008.

How much your credit score is affected by a 30, 60 or 90 day late report depends on a lot of other factors about your financial well being, your past credit history and myriad other issues. Generally though we have our clients reporting drops of as little as 50 points for a no late payment short sale or up to 150 points for a short sale with multiple late payment reports. We have seen an 800 go to 720 and we have seen a 740 go to 500. It all depends on too many uncontrollable credit issues to be able to give a formula that works for everyone. For a discussion on credit scores this our past article.

Confused?

Rightfully so. The fact of the matter is that we are in uncharted waters and there is no industry standard for Short Sales or Loan Modifications, which makes pinning down exactly what the Lenders may do near impossible. Pile on the fact that there are a large number of lenders out there and each have their own internal policies which change as readily as the tides. The best anyone can hope to do is make an educated decision, set a plan, and be ready for anything.

Copyright 2009 Richard P. Zaretsky, Esq.

Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.

Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com New Website www.Florida-Counsel.com. See our easy to find articles at SHORT SALE AND LOAN MODIFICATION TABLE OF CONTENTS

Milton Garden Party

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Tue, 16 Jun 2009 21:21:00 -0500

There is an active group of small business owners that make up the Milton Chamber of Commerce. Tonight the June Mixer was hosted by the Milton Garden Club. Kathryn Greig's personal garden was the site and what a beautiful garden for a party. If the other gardens on the tour - July 11th - are anything like Kathryn's garden we are all in for a treat.

I was the winner of two tickets to the Milton Garden Tour! That's what I call the "Grand Prize"!

Zestimate ruined my clients' day!

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Mon, 15 Jun 2009 20:35:37 -0500

I spent Sunday at the office as I usually do when I'm not booked with clients. About 2 pm, in walked a very nice couple looking for information about retiring to Lewes, Delaware. I stopped tweeting, closed down Active Rain and we all sat down to talk.

Like so many newcomers to Coastal Delaware, this Boomer couple is about two years from retirement and they wanted to begin exploring their options here in Lewes, Delaware. I asked what brought them here and learned that their favorite restaurant is right across the street from our office - The Buttery! For years they had been vacationing in Bethany Beach, about 20 miles south of Lewes, but they felt that Lewes would be a better place to retire. Bethany, they felt, is more seasonal while Lewes has become a year round town in which to live.

So, how did a Zestimate ruin their day and what is a Zestimate? When I asked them where they lived now and what they thought their current home would sell for, they hesitated and said they hadn't talked with any agents yet. Turns out they had lived in their home for over 20 years; they asked me how they could find out generally what their home was worth without taking up an agent's time right now. You see, they aren't going to retire for another two years yet and they don't plan to sell until then. "Does that mean you don't plan to buy your future retirement home until you sell," I inquired? "That's correct, and we plan to pay cash for our retirement home with the proceeds", they replied.

So, while we were talking, I brought up the Zillow site. I asked them what their current address was and I entered it. There it was on the screen and their faces were surprised. That easy - their home was on my computer screen with a description of #bedrooms and baths, the square feet and an aerial view of their entire neighborhood.

They were shocked at the value Zillow assigned to their home; it was at least $200,000 below what they anticipated. Their idea, remember, was to sell their home at retirement, move to Delaware and buy a home, saving the balance for retirement income. Zillow does not claim that their Zestimate is accurate, but it's a starting point. An experienced real estate agent will be able to do a more thorough comparable analysis based on knowledge of the local market and homes in similar communities.

Then I showed them what homes are selling for in Lewes, Delaware, even today! Their shoulders slumped even more. When people learn about the low property taxes in Delaware they tend to think that homes must be low priced. Not true. Our property taxes do not adjust when homes are sold. They are not reassesed. Our county property taxes on a home that sells for about $400,000 are only around $1200 a year. If that same home is located in town limits of Lewes or Milton, the town taxes might add another $300 to $800 or so a year. For people living in New Jersey, that's a pittance. Delaware has the lowest property taxes in the entire Mid-Atlantic Region.

Home prices for a Coastal area, a resort where no house is more than an hour from the Delaware beaches are more reasonable than the New Jersey Shore, but depending on location houses are not cheap. If you live in an upscale suburb in Pennsylvania, your taxes will be lower here and the quality of homes will be what you are used to. The cost of living when you get here, however, will be much more reasonable.

Prices today are better than they have been since the early 2000s, but inventory is shrinking. Trying to look ahead two years and predict home prices and interest rates is difficult. Only one thing is certain -

PRICES TODAY ARE THE BEST THEY WILL EVER BE IN A BABY BOOMERS LIFETIME.

So, I sent the prospective buyers on their way with a list of current properties for sale, my Buyers Packet, Delaware tax information and more. They have a lot to think about but the good news is - they are in the driver's seat. They have approximately 80% equity in their current home, AND, it will sell for more than they will spend on a retirement home here in Coastal Delaware. Will they see the opportunity and use their strong position to buy in this Buyer's Market, wait to sell until their market strengthens and be among the winners? Or, will they wait and miss out on the opportunity of their lifetime? Only time will tell.

Pam Tillis entertains at the 6th Annual Summer Bash in Milton Delaware!

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Sun, 14 Jun 2009 20:05:23 -0500

On Saturday, June 6th, 2009, the town of Milton, Delaware was abuzz. All 850 tickets were sold out for the 6th Annual Summer Bash happening right in the heart of town. Last year the event was a fundraiser to elect Jack Markell the next Governor of Delaware. This year, Governor Jack Markell welcomed all and hosted this year's fundraiser for the Food Bank of Delaware!

It was a beautiful day with temperatures in the 70s, not the sizzling 90s of last year's bash. The talent this year - PAM TILLIS - probably had something to do with the size of the crowd.

I hope you enjoyed the Summer Bash video and I look forward to seeing you at one of the great events we have throughout the year in my home town - Milton, Delaware!

New Listing in Lewes Delaware 19958

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Wed, 03 Jun 2009 16:22:12 -0500

New Listing in Diamond Overlook, Milton, Delaware

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Wed, 03 Jun 2009 16:15:50 -0500

Barbara Corcoran will feature my Milton, Delaware listing on the Today Show!

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Wed, 03 Jun 2009 15:56:53 -0500

Last week, the day after Memorial Day Weekend, I had a call. The message said "This is Sally and I work for Barbara Corcoran. We found your listing at 102 Bangor Lane in Milton, Delaware, on the Internet and we would like to feature it on the Today Show".

After I picked myself up off the floor ... no wait, I was in the car and had to pull over ... I listened to the voicemail again. I immediately returned the call and talked with Sally about their requirements. Barbara does a regular segment on the Today Show on what your money buys you in different towns and neighborhoods around the country. This great new listing is a beautiful contemporary home just outside the MIlton Delaware town limits for only $499,000.

They asked me to write up a commentary on the home, the neighborhood, the town and what makes it all special. Here's what I wrote:

102 Bangor Lane, Diamond Overlook
Milton, Delaware 19968
$499,000

102 Bangor Lane - an elegant contemporary home built as the model home in 2004 Diamond Overlook, a community of semi-custom homes just outside the town limits of Milton, Delaware. It's an unbeatable combination: a superbly crafted home near the beach in a tranquil setting close to town. Just a short stroll from Historic Milton, Diamond Overlook is built around Diamond Pond, at the headwaters of the Broadkill River. Still shows like a model:

Brick front home with covered front porch on both 1st and 2nd floor
4 bedroom, 2 1/2 baths
Large lot just over .6 acre
Detached 2 car garage
Spacious open floor plan
Hardwood Floors in the main living areas
Ceramic tile in all baths
9' ceilings throughout first floor with soaring cathedral ceiling in the living room
Gourmet Kitchen with 42" KraftMaid cabinets, Island and Granite Counters
Butler's Pantry
Sunroom off the Kitchen/breakfast area
First Floor Master Suite
Open Living Room/Great Room with gas fireplace
Formal Dining Room
Large Family Room
Private Study/Library

Delaware is one of the most Tax Friendly States in the country.

The county property taxes on this home are only $731 per year! Because this property is not in town limits, there are no town taxes. With its own well and septic system, the annual cost to live in this neighborhood is extremely reasonable

Milton, Delaware:

Jump off the beaten track and come to Milton. Even though Milton is very close to the better-known destinations of Rehoboth Beach and Lewes, it has a heritage and an atmosphere that's all its own.
Milton shares the honor of being the first of Delaware's towns (along with Lewes) to be designated as one of the nation's Preserve America communities. The Preserve America initiative is a new White House effort to encourage and support community efforts for the preservation and enjoyment of America's priceless cultural and natural heritage. The goals of the initiative include: a greater shared knowledge about the Nation's past; strengthened regional identities and local pride; increased local participation in preserving the country's cultural and natural heritage assets; and, support for the economic vitality of our communities.
Experience a taste of small town life. Picnic in the park, enjoy an outdoor summer concert, tour the local world-famous craft brewery of Dogfish Head or take a seat in front of King's Ice Cream Shop and watch the world go by.
Explore the natural world. Situated on the Broadkill River, a beautiful and little-known tidal river, Milton offers fishing and canoeing right in town. Nearby are Prime Hook Wildlife Refuge, Oyster Rocks and Broadkill Beach for quiet bay beaching, canoeing and migratory waterfowl and wildlife observation.
Enjoy historic architecture. The Milton Historic District is listed on The National Register of Historic Places of the US Department of the Interior. Explore a town essentially unchanged in the past century. Milton contains a wide variety of eclectic and indigenous architecture ranging from poultry sheds and button-making shops to Second Empire mansions.

It's still not definite that the segment will air this Friday, June 5, 2009, but I'm hopeful. Please watch and let me know if you saw it! Regardless of the outcome, the good news is that Barbara Corcoran found my new listing online. I keep forgetting to ask them which web site(s) they use for their research, but I'll do a follow up post when I find out.

Do Real Baby Boomers Blog?

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Mon, 01 Jun 2009 15:36:15 -0500

Do Baby Boomers Blog today? At the REBAR Camp in Philadelphia last week, one of the presentations by Darrin Friedman, Branch Vice President, Coldwell Banker Residential Brokerage in DC, talked about Gen X and Gen Y home buyers. There are about 120 Million of them compared to the 78 Million Baby Boomers and Realtors who want to work with them need to learn how to communicate online. Social networking is the primary way Gen X and Gen Y will find like-minded individuals with whom to do business.

How many Baby Boomers use Social Networking sites?

I have noticed Boomers on Facebook communicating with family and friends. I have reconnected with old friends from high school on Facebook for example and it's been fun catching up with the lives of people I grew up with. LinkedIn has been the way I have found colleagues from my past career in the personal computer industry. Many of that group would qualify as Baby Boomers, but most were techies after all. I'm curious if we can find out the average age of the Active Rain bloggers? Some pictures may not be recent and other bloggers use Avatars - no way to tell age! At REBAR Camp, I was pleasantly surprised at the age diversity. Not all real estate bloggers are in their 30s!

But back to he question at hand, do Real Baby Boomers Blog? (Remember when we learned that Real Men do Eat Quiche?) Will they find their next real estate agent on Active Rain or Twitter? Will they start by friending us or becoming a fan on Facebook? While searching online for a home, will they also be reading our blogs, following agents on Twitter and actively seeking our help as they prepare for retirement? Will they choose a listing agent by finding one online that actively promotes their area using social media?

Most of my Baby Boomer Buyer Clients have found me online. Are they the exception? I'd like to get comments from the Baby Boomers out there. Is all this blogging a help to you?

Lewes, Delaware awaits the return of the Lightship Overfalls TODAY!

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Sun, 31 May 2009 12:04:09 -0500

The town of Lewes is abuzz with people and bikes and boats - all coming to see the arrival of the Lightship Overfalls.

"We plan to start the welcome home celebration around 2 PM at the slip. Please bring some munchies and the Overfalls will provide the rest. Sam and Mariah Calagione have donated some Dogfish Head beer so those of us who appreciate an excellent brew will be very satisfied. The public is welcome at our celebration so please tell your friends and neighbors if you think they would enjoy it."

I plan to go and bring my camera and maybe my video camera if the batteries are still good! For now, you can find more information at the Lightship Overfalls web site - http://www.overfalls.org

Details and more photos later today!

Horseshoe Crab & Shorebird Festival Memorial Day Weekend

Kathy Sperl-Bell, ABR, CRS, SRES (RE/MAX Realty Group) — Thu, 21 May 2009 10:01:25 -0500

May 23rd-
Horseshoe Crab & Shorebird Festival Milton Memorial Park & Prime Hook Wildlife Refuge

Friday Night-Delaware Comedy Improv Theatre
7 PM in the tent in Memorial Park
Fun for all ages-tickets $5.00; kids under 10-$1.00

Saturday-8:30 AM to 4 PM
PRIME HOOK NATIONAL WILDLIFE REFUGE
Rt 16 East, left at Turkle Pond Rd.
Hay Rides, Trail Walks, Birding, Canoe & Kayak tour & lots of Nature
Call 302-684-8419 for details about Fowler Beach field trip

10 AM til 4 PM
DOWNTOWN HISTORIC MILTON
Events throughout the town. Crafts, Art Tent for artists of all ages, Rides, Great food, Plane Ride Raffle, Boat trips on the

Broadkill River, Live Entertainment. Art of Nature '09 Art Show , Environmental Exhibits, and lots more.
Continuous Shuttle All Day
Saturday 5:30 -7:30 PM-
BBQ Dinner in the big tent sponsored by Mt. Zion Holy Church

Sunday activities in Milton-
Kayaking on the Broadkill River sponsored by Quest Kayak
Walking tours through the town center provided by the
Milton Historical Society. For tour reservations call 302-684-1010. Tour starts at 1 PM

For all other information about the Horseshoe Crab & Shorebird Festival Contact the Milton Chamber of Commerce-302-684-1010