Today, the U.S. Senate passed S. 4256: Help for unEMployed People or HEMP.  The program is designed to help homeowners facing foreclosure, cities facing blight, and the unemployed from the construction sector of our economy.  

In phase one of the HEMP program, the government will start today purchasing foreclosed homes in depressed neighborhoods that are in foreclosure; eliminating shadow inventory.  $18 Billion Dollars has been set aside for acquisition and rehabilitation of residential real estate in the 50 hardest hit states as identified by the White House.  Then large teams of experienced unemployed laborers to rehab the properties with the goal of selling or renting the properties as government housing.

Homeowners can also trade their current home for a HEMP home if they meet certain requirements.   

"It is my goal that we can make Detroit the next Beverly Hills, and we can do this with HEMP" said President Obama in a statement released today.  

Unlike HAMP, 2MP, and HAFA, non-delinquent homeowners will benefit as well.  Starting July 1, any homeowner that has not missed a mortgage payment in the last 3 months can apply for 1 year of mortgage forgiveness.  "The goal is if homeowners don't have to make a mortgage payment, they can stimulate the economy" said Treasury Secretary Tim Geithner.  "To apply, homeowners must make less than $50,000 a year, have a mortgage in excess of $500,000, or be a member of Congress."  

Celebrity Spokeperson and Hemp advocate Woody Harrelson could not be reached for comment.

The program is slated to expire November 7, 2012: one day after the presidential election.  

About two years ago, I left my former office and relocated to another - leaving my phone number.  Now, I realize that some agents advertise their cell phone on EVERYTHING but I don't.  I have only one phone and it was getting overwhelming to have calls coming in all hours of the day and night from buyers, sellers, banks, personal calls, etc.  There was no way to separate the personal from the professional.  So I leveraged my office's phone system which worked well until I moved!

At the same time, I no longer wanted to be the point man for every call that came into our phone number.  I wanted to find a way to get buyers to talk to the the buyer agents and sellers to talk with me and agents with files in progress to connect with my closer.

First solution: buy a used telephone system on ebay.  I love used and ebay so this spoke to me.  However, running wires, handsets, and we already had cell phones....this didn't look like an attractive option at all.  

Second solution: buy a cell phone for the buyer agents exchange among themselves.  Ok, not a bad plan but the user experience from the caller could be poor.  "I was calling for Deanna...oh, this is Amanda, what happened to Deanna?."  It's not the best nor most professional.  

Third solution: Google voice.  Great for a solo agent but not really what I wanted as a team.  Great for a hotline phone but it didn't have individual mailboxes, efax, etc that could prove valuable.  Plus, what if Google decided to start charging or drop the service altogether: back to square one.  

I lucked onto RingCentral.  Sure, there were commercials for GotVmail (I think they're called Grasshopper now) but RingCentral offered me a free trial..and if it's free, it's for me!  RingCentral is a cloud-based phone system so there's no hardware needed, everything is managed online and it can scaled for as small or as large as I needed.  

Some of the features I like about RingCentral:

• Unlimited number of extensions.  I have an extension, each agent has their own extension, and I even have one for my office and attorney.  For lines other than mine and one other, call transfers automatically out of the system to their cell phone or landline.  Therefore, if they don't want to maintain a mailbox with me, no big deal!
• Local phone numbers. The only phone number on my card, aside from fax, is our RingCentral number.  It's local to Charlotte (not like that matters too much any longer) but I also have an 877 number for long distance.  With my calling plan, the toll-free numbers are not additional to dial, so I don't mind advertising that either
• eFax. The eFax through RC is awesome.  A small desktop application allows you to upload a PDF document, type a message for the cover page and its off!  If you can send an email, they also have a feature that allows you to fax from any email prompt...very slick!  
• Call Queue.  As I have multiple buyer agents, I use the call queue to route calls to each one automatically.  It functions in a round-robin manner.  When you call into our line, the first prompt says "to speak with an agent about a home you see for sale, press 1" and when a caller does, it rings the appropriate agents phone for them to pick up.  Callers get to the right people every time.

The North Carolina Real Estate Commission has set out its guidelines on who is violating the rules when it comes to broker price opinions.  While this guy is as exciting as watching paint dry in a dark room, it is important to point out that there needs to be a reasonable expection that the agent would receive the listing for performing the BPO.  

Reasonable expectation?  What exactly does that mean?  

On 70% of the BPO's received on our short sale listings, the agents are new or not MLS members, have not sold a home in a number of years, or have never even sold a bank owned property.  Now, some are on teams and their teams list REO's but most are not.  Instead, they are assigning values to property as their sold source of income.

What kind of job does that sound like?  

My short sale real estate business is growing by leaps and bounds and to be transparent, it had been difficult stay up on all of my new files.  My prior system was a simple spiral bound notebook that I would keep notes in for each homeowner.  That way, I would easily reference my notes during each call.  While that has been effective, I now have in excess of 25 active and pending short sale files and the old notebook just wasn't cutting it.  

After a search online, I discovered an online software called Short Sale Commander that seemed to do everything I was needing and more.  Granted, I've had the software for less than a week but so far, I am pretty impressed.  Here's my review so far.  

This online software allows you to create and store your entire short sale file online.  It stores all of the contact information for the seller, lender, and attorney.  Also stored is all of the information for every lien on the property (1st mortgage, 2nd mortgage, etc) which the system stores separately for easy retrieval with your next file.  If you like a particular negotiator, you can store their contact info which will appear the next time you have a file with that lender.  Very cool.  

It offers agents the ability to keep track of tasks and stores notes on every task.  So now when I'm calling the bank, I simply type my notes into that property file and it saves for future reference.  It can store documents and even build a short sale package for you which you can print, save, or efax from their system.  Ok, so their system doesn't technically efax but if you had an efax system like RingCentral where you can fax from any email prompt, you could efax from this system.  It knows to add account numbers and street addresses in the header and footer of every page...a real time saver.  Prior to this, I was building my short sale files with Cute PDF Professional and imposing a header on each page.  

By far though, my favorite feature is that Short Sale Commander will allow you to give access (limited guest access) to the buyer agents on your short sale listings.  I field a lot of calls from agents wanting to get an update on their short sale contract.  Often, the same agent will call 2 or 3 times in a row, desiring not to leave a message.  With Short Sale Commander, I can post an update which the buyer agent can see.  Plus, the buyer agent can post notes too...similar to how it's done in the Equator system.  

Guest Access from Short Sale Commander on Vimeo.

Now, there's little need to field calls when that agent can gain access to the system using a secure username and password and see any notes I choose to make available to them.  It's not just limited to agents.  Sellers are also able to get access to their own file so that they feel more in control with their file.  

Here in North Carolina, an attorney is required to handle much of the negotiations of a traditional short sale.  Now, my attorney can have full access to the file, including the documents associated with the file, and we can stay in compliance with any regulating organization.  

There are two or three letdowns with the product so far.  First, the HUD-1 generator doesn't pro-rate property taxes and it a little limted.  Seems like an oversight that should be corrected in a future release.  The contact manager does not have a space for company of the lender...again a slight oversight.  Finally, and maybe it's there and I havent' found it, it doesn't have the ability to build a default set of tasks that kick-in every time I launch a new file.  Still, this isn't a deal killer for me.  

What would make this product great is if you could give sellers the ability to upload their own documents....just saying.  

Is it worth the $50 a month for the basic subscription?  So far: Absolutely!  This beats the multiple folders and notebooks any day of the week.  Plus, the ability to keep every one on the same page without fielding dozens of calls a day is incredible. 

If you plan on handling short sales at a high volume, I recommend trying out Short Sale Commander.

For buyers who have faced a foreclosure event (foreclosure, short sale, or deed-in-lieu of foreclosure), you can buy a home again provided you complete the following.  

No one likes to take a job, expecting to earn compensation, and then learning that it isn't so. In the real estate world, it happens all the time. When representing a buyer, it's a few days from closing when the buyer learns they lost their job or that they're being transferred. Sorry for your hard work real estate agent but there's no pay day resulting from that.

One gripe that real estate agents have / had with short sales is that often when negotiating a short sale, the lender will come back and ask for a reduction in commission earned by the real estate agents. Some have fought to the death with the lender in the hopes of defending their income. At times, they were successful however on the other side, there have been real estate agents who have stood in the way of a short sale over compensation. On five occasions last year, sellers called into our office looking to switch agents after their current / former agent cost them a short sale approval because they weren't making enough money.

For 95% of real estate agents, the commissions earned is the only source of compensation. We're not reimbursed for gas, insurance, marketing...you name it as the list goes on and on. So compensation is a touchy subject and I totally get why some fight so hard. However, beware of fighting so hard as it may land you in a lawsuit.

Apparently, some lawyers are contacting homeowners who were foreclosed upon looking for a lawsuit. By examining the documents and issuing sopeanas to the lenders for recorded conversations and emails, they are getting a sense of what went on in the transactions and why it didn't go through.

The belief among some real estate commissions and local Realtor boards (including the Charlotte Regional Realtor Association) is that the listing agent and selling agent are taking on a short sale knowing the homeowner is in financial distress. As the fiduciary duty is to the seller, if the commission is reduced, they feel it is appropriate to split the balance among the two firms. An example of this would be an agent who took a short sale listing at 8% commission (where their firm paid the buyer agent firm 4%) but the seller's bank said they would only pay 3% total commission, they would each earn 1.5%. Most real estate compensation models for agents would result in that agent earning about .75% or less of the sales price before taxes.

Ultimately, in a tough market such as we are in currently, that means that the buyer's agent can (and they do) steer their client away from short sale properties out of the fear of being paid a reduced fee. The thought is that with so many opportunities on the market, why risk being compensated less? Buyers too tend to agree with their agent as they are faced, through a Buyer Agency Agreement, of paying any unearned income themselves should their agent choose to enforce the agreement.

The good news is that that vast majority of lenders have at least made the effort to at least pay up-to a 6% real estate commission without a fight....kinda. The latest trend among lenders is to hire a third-party to act as their loss mitigation team and pay them from the real estate compensation. I closed a HAFA short sale with Saxon in November 2010 where Saxon agreed to pay our fee of 6% provided that we pay 1% (or 16% of our income) to Zenta realty. Zenta isn't a real estate firm but rather a third-party hired by Saxon.

Commissions are cheaper than foreclosures.

The average foreclosure costs a lender $60,000 and that doesn't include the amount lost by the poor property condition, vandalism, etc. Therefore the argument from the real estate community to lenders is that by not paying up now, they are costing themselves money in the long run. However, I would recommend that agents take a different approach, which is the approach I follow:

No amount of compensation is worth a foreclosure...period.

While no one wants to work for months and earn nothing (and certainly my family and the family of the other agent would agree), putting ourselves ahead of the situation is out of place in every situation.

Short Sale Charlotte NC

In 2009, 63,283 homes received a foreclosure notice in North Carolina

Through November 2010, 63,589 homeowners received a foreclosure notice.  

North and South Carolina are the Top 10 Foreclosure Hot Spots in the United States

You Hold The Keys to Reversing This Trend

Learn How You Can Help Stop This Epidemic!

What CE Class Didn't Tell You About Short Sales

Presented by Attorney Jaime Kosofsky and Realtor Jonathan Osman

You will learn:

• Foreclosure stats you need to know
• Options for homeowners facing foreclosure
• Implications for homeowners
• How to Write your Short Sale Contract to Protect Buyer & Seller
• Questions to ask Short Sale Listing Agents
• Behind the Scenes of a Short Sale file
• The Unauthorized Practice of Law
• Dumb Stuff Agents Do
• How to Pre-qualify your Buyer for a Short Sale
• How to Treat Multiple Offers & Backup Contracts

Special Guests Gwen Oberg and Leah Gamble from Wells Fargo Home Mortgage to provide insights as to Wells Fargo's Short Sale Process, Tips to Improve Your Files, and so much more!

Seating is limited so register today.  

After registration, share this event with your colleagues using the Facebook Like, Tweet, and Email buttons on top!

If you have an FHA loan and are possibly facing foreclosure, there's help for you in the form of the FHA Pre-Foreclosure Sale Program. Introduced in 1994, this program is one of the best short sale programs available in my opinion. For more information, you can read the entire program guidelines in HUD Mortgagee Letter 2008-43 however this post has the highlights in plain english.

If you are facing foreclosure, first contact your lender directly by way of the number in your statement. Do Not Follow any third-party solicitation that advises you to contact them and then requests a fee as that is illegal in North Carolina...but it doesn't stop people from trying.

How to you know if you have an FHA loan? Ask your lender or check your closing documents.

The FHA Pre-Foreclosure Sale Program allows homeowners with a hardship to sell their home when the fair market value exceeds the current amount owed on the mortgage. As a homeowner, you must be in default (delinquent more than 30 days) on your mortgage AT THE TIME OF CLOSING however it is the lenders discretion to accept applications from owners that are current but facing imminent default.

Additionally:

• Default must be as a result of adverse or unavoidable financial situation
• Borrower must have only one FHA-insured loan
• Are owner occupants (i.e. primary residence) unless it can be demonstrated that the reason to vacate was related to the cause of default (i.e. left for work in another state, divorce, death and the property in question was not purchased with the intent as a rental or used as a rental for more than the past 18 months.

Once you have fallen behind on your payments, you will receive a pamphlet (How to Avoid Foreclosure HUD-PA-426) which has information on this program. Remember, you don't have to fall behind to get into the program.

When the borrower applies for the program, the lender will need to analyze the borrower's ability to pay which includes examining their monthly income and expenses. HUD considers all monthly reoccurring expenses so do not forget to include utilities, food, outstanding obligations such as student loans, credit cards, etc.

Who Sets the Value?

The property value is set by an FHA appraisal. The appraiser will need to complete a full interior inspection for the appraisal and the the value set is for an AS-IS sale. Distressed sales (foreclosed homes and short sales) may not be considered by the appraiser unless they represent the only comparables within a reasonable proximity of the subject property. The homeowner and their real estate agent may request a copy of that appraisal. The appraisal is good for six months however a new appraisal may be ordered to ensure the most current Fair Market Value.

Property Condition

The home must be kept in marketable condition. That means no excessive damage, no removal of fixtures that should be in place, or additional neglect. The must remain maintained as normal however sold in as-is condition. That means, the lawn must remain trim, minor repairs must be completed, etc.

Approval to Participate

When you receive your approval to participate, you will need to hire a real estate agent within 7 days. The broker cannot be anyone that shares a conflict of interest otherwise they will not receive a commission. Your agreement must contain the phrase: "Seller may cancel this Agreement prior to the ending date of the listing period without advance notice to the Broker, and without payment of a commission or any other consideration if the property is conveyed to the mortgage insurer or the mortgage holder. The sale completion is subject to approval by the mortgagee."

The buyer of the property cannot be a relative or someone you have an arms-length relationship with.

HUD will allow your lender to pay your real estate agent a commission of up to 6%, real estate taxes to the date of closing, typical and reasonable seller real estate fees and will pay you up to $1000 at closing for a successful transaction.

HUD will also allow up to 1% in seller paid closing costs for your buyer provided they are obtaining an FHA mortgage in the purchase. If more is requested, the lender can request a variance from HUD and it will need to be approved.

You will be given four months to complete the sale of the home and during that period, all foreclosure proceedings will cease. An extension can be granted for 2 additional months under certain circumstances.

The Sale
If you are able to sell your home within the first 3 months of your Approval to Participate, you will receive $1,000 at closing as a relocation incentive and most importantly, relieved of any mortgage obligation. If the sale occurs in the last month or later, the amount drops to $750. This relocation incentive is only available if there are not any additional junior liens (2nd mortgage, past due HOA, past due IRS, past due property tax, etc) that must be paid by the lender in order to close.

Participation in the short sale program will be reported on your credit report as a "short sale" and a 1099 will be issued for the forgiven balance. If the home was a primary residence, borrowers can find relief in the Mortgage Forgiveness and Debt Relief Act of 2007.

During the first 30 days the home is listed, lenders will only accept contracts that have a net proceed above 88% of the appraised Fair Market Value (FMV). During the next 30 days, that figure drops to 86%. For the balance of the program, the lender will only accept contracts above 84% of the FMV. That figure includes commissions, taxes, etc.

If you are are unsuccessful in selling your home in the time allotted to you, you should request a Deed-in-Lieu of Foreclosure. So long as you complied with good faith in selling your property and were not kicked out of the program, HUD and your lender will not hold a deficiency against you.

Charlotte NC Short Sale

The Mecklenburg County Tax Assessor's office is set to release it's reassessed real estate tax value for every home in Mecklenburg County starting this month.  Tax values were last set in 2003 in Mecklenburg and were delayed several times by the county commissioners "due to the economy."  Now, with the county in financial crisis, there's no time like the present to raise your taxes.

A Mass Appraisal was performed to update the value of your home.  The assessor is unable to examine every sale in your neighborhood, rather a value is set based on a few sales of an entire area.  Recent sales in the area will be considered as well as any permitted improvements.  It is unlikely that someone from the assessor's office actually visited your home.  Rather, they analyzed the sales date and assign based on the information at their disposal.  Foreclosures are also not taken into account because they are not considered "arms length" for some reason.

So what should you do when you get your new tax value in the mail?

1. When you stop either laughing or crying, research to determine what homes in your neighborhood have recently sold for.  Start by using our free Market Snapshot tool, which gives up-to-date sales data around every address in the Charlotte area straight from the Multiple Listing Service.

Alternatively, you can request a market analysis of your home from a Realtor, which would provide you with sales of similar properties.  If sales around your home are below your tax value, complete the form attached to your revaluation notice and include your report as evidence.  

2.  If your request is denied or they request more information, you may want to consider hiring a licensed Appraiser to complete an appraisal on your property.  This will cost $300 - $500 but may be worth the money considering your potential tax savings.

3. If your request is denied at the Real Estate Division of the Tax Assessors office, your next step is to file an appeal to the Board of Equalization.  All appeals must be made by May 15th or within 30 days of your notice. 

4. If your appeal to the Board of Equalization was declined yet you feel very strongly that the value was too high, your next steps involve hiring an attorney and appealing to the North Carolina Tax Commission and the North Carolina Court of Appeals. 

There are tax deferment and relief programs available to Home Builders with unsold inventory, low-income elderly, disabled veterans, and disabled citizens. 

What You Might Expect

A brick ranch in Charlotte (28226), built in 1966, on .70 acres, and 2,993 square feet has a tax value today of $223,400 based on the 2003 assessment.  Their 2010 tax bill was $2,958.  Similar homes in the area have sold as high as $400,000 over the last few years.  Today, however, the revaluation tax value could be $350,000. 

• 2011 Tax Value of $350,000
• 2011 Combined Charlotte / Mecklenburg tax rate of 1.2973
• 2011 Property Tax: $4540.55 or $161.88 more per month 

In 2008, Union county completed property tax revaluations and the result today is that the majority of properties are selling for less than the tax value. 

On January 1, 2011, a new Offer to Purchase and Contract debuts and will be the basis for nearly all residential resale purchases in the state of North Carolina.  It is vastly different from it predecessor, which was written to benefit the buyer rather than the seller.  Here are the highlights:

1. The Due Diligence Period

For the last few years in North Carolina, the statewide contract had always given buyers the ability to back out of the contract and keep their Earnest Money Deposit (money deposited at the time of contract, credited to the buyer at closing, that could be liquidated to the seller in the event the buyer breached the contract) so long as they did so before a series of separate dates.  They were:

• Inability for loan approval
• Appraisal
• Home inspection / Negotiation / Cost of Repair Contingency
• Mortgage Application
• Closing Date
• Receipt of Property Disclosure...and so on.  

Savvy buyer agents could structure the old contract in such a way as to always enable their client retain their earnest money.  This has now been consolidated into one date called the Due Diligence Period. This is a hard date (noted by Time is of the Essence...meaning that it is a firm date).  During the Due Diligence Period, the buyer must:

• Complete all inspections and negotiate repairs with seller
• Review all Homeowner Association and Condo Documents
• Investigate and agree to the cost to insure the property
• Order the appraisal and find it the results satisfactory
• Order a survey to assess if any fences, sheds, etc are over the property boundaries
• Investigate any special assessments that may be pending for the property (i.e. city to install sidewalks and charging the homeowner for the work)
• If the home is in a flood hazard
• Zoning and Governmental Regulation (i.e. buyer discovers that the school assignment for the upcoming year is no longer desired).

The buyer's inability to get a loan is no longer apart of the equation as well as many of the other provisions of the old Offer to Purchase and Contract.  During the Due Diligence period, the buyer may elect to walk away for any reason or no reason and the seller MUST forfeit the Earnest Money Deposit.  If the buyer backs out after this period, the Earnest Money is liquidated to the Seller.

The typical closing in North Carolina currently takes 4 weeks and much of that time deals with the buyer staggering how they investigate a property and the financing.  For example, a buyer may obtain a mortgage pre-approval letter but not apply for the loan and pay for the appraisal until after the home inspection has been completed.  Under this new setup, everything will need to be investigated altogether of the buyer might risk losing their Earnest Money.  

2. Due Diligence Fee

For Sellers, this means taking the home off the market for a few weeks while the Buyer completes the Due Diligence Period.  For the privilege, the Buyer will pay the Seller a non-refundable (except in the case of material breach) "Due Diligence Fee" that will be credited to the Buyer at closing.  The amount of the fee is completely negotiable but expectations will be the seller wants $1000 and the buyer will only offer $10.  Earnest Money is still apart of this contract as well.   

The remainder of the contract is fairly straight forward with another variance from the current Offer to Purchase is that closing can be delayed for up to 14 days without agreement while currently, the figure is 30+.  

If you are a prospective home buyer, you might be thinking that purchasing a home has just got a lot more complicated but not so.  More expensive for you...no, but there is more required earlier in the transaction.  

Tips For Home Buyers in 2011 

Here are a few tips that will help you when using the new contract and your purchase:

1. Investigate up front what has been completed by the Seller.  

When I sold real estate in Maryland, I learned quickly that gathering as much information up front was the best way to ensure that the property was headed for a smooth closing.  Even today, I follow the same tactics which involves gather HOA docs from the seller, any surveys they have on file, completed disclosures ahead of time, etc.  As a buyer, a property where the seller has taken these steps in advance should be a HUGE green flag that there's nothing to hide and that they want to sell their home more than they want your Due Diligence Fee.  Consider holding off from making an offer until the disclosures are completed and submitted for your approval.  If the seller is unable to supply some items, consider holding off until either you, your agent, or their agent has gathered the required information.

Some sellers may even complete a home inspection up front and complete the recommended repairs.  

2. Don't just get a pre-qualification letter, get a Conditional Loan Commitment.  

Even to this day, I get pre-qualification letters from lenders that do not state what program the buyer was qualified for, how much they are qualified for, if credit, employment, accounts have been verified and they are WORTHLESS.  As a buyer, it is essential to meet with a lender before ever making an offer on a home to determine exactly how much you can afford, exactly how much they charge, and the time they will need to complete the appraisal and loan review.  On the phone with someone you've never met while driving back to the agent's office to make an offer is NOT the right time.  Ideally, you want the lender to issue stating that aside from a contract, completed appraisal, and final underwriting, this buyer is approval.  

3. Bank-Owned sales will Nullify the New Contract. 

If you have purchased a bank-owned home in the past, you will know that the addendum that follows will completely overwrite any contract that you have on a local level.  The same is true here.  Actually, the new contract is exactly like a bank owned sale, minus the as-is clauses, as the bank requires that everything is completed within 3-10 days of Contract.  

I am certain that the next few months will be interesting as we all adjust to the new contract in North Carolina.  The good news is that now that you've read this post, you're prepared to use the new contract to your advantage.  

Charlotte NC Homes For Sale