Real Estate Information

By Shawn Tully, senior editor-at-large [Fortune Magazine] March 28, 2011: 5:00 AM ET

(Note, Times are better now then in March when this came out!)

Forget stocks. Don't bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing.

A home under construction in Austin. The number of new homes in the pipeline nationwide is quite low.

From his wide-rimmed cowboy hat to his roper boots, Mike Castleman fits moviedom's image of the lanky Texas rancher. On a recent March evening, Castleman is feeding cattle biscuits to his two pet longhorn steers, Big Buddy and Little Buddy, on his 460-acre Bar Ten Creek Ranch in Dripping Springs, a hamlet outside Austin in the Texas Hill Country. The spread is a medley of meandering streams, craggy cliffs, and centuries-old oaks. But even in this pastoral setting, his mind keeps returning to a subject he knows as well as any expert around: the housing market. "I'm a dirt-road economist who sees what's happening on the ground, and in 35 years I've never seen a shortage of new construction like the one I'm seeing today," declares Castleman, 70, now offering a biscuit to his miniature donkey Thumper. "The talking heads who are down on real estate will hate to hear this, but America needs to build a lot more houses. And in most markets the price of new homes is fixin' to rise, not fall."

Castleman is in a unique position to know. As the founder and CEO of a company called Metrostudy, he's spent more than three decades tracking real-time data on the country's inventory of new homes. Each quarter he dispatches 500 inspectors to literally drive through 45,000 subdivisions from Baltimore to Sacramento. The inspectors examine 5 million finished lots, one at a time, and record whether they contain a house that's under construction, one that's finished and for sale, or a home that's sold. Metrostudy covers 19 states, or around 65% of the U.S. housing market, including all the ones hardest hit by the crash: Florida, California, Arizona, and Nevada. The company's client list includes virtually every major homebuilder and bank -- from Pulte (PHM) and KB Home (KBH) to Bank of America (BAC) and Wells Fargo (WFC).

The key figures that Metrostudy collects, and that those clients prize, are the number of homes that are vacant and for sale in each city, and the number of months it takes to sell all of them. Together those figures measure inventory -- the key metric in determining whether a market has a surplus or a shortage of new housing.

Today Castleman is witnessing an extraordinary reversal of the new-home glut that helped sink prices just a few years ago. In the 41 cities Metrostudy covers, a total of 78,000 houses are now either vacant and for sale, or under construction. That's less than one-fourth of the 343,000 units in those two categories at the peak of the frenzy in mid-2006, and well below the level of a decade ago. "If we had anything like normal levels of buying, those houses would sell in 2½ months," says Castleman. "We'd see an incredible shortage. And that's where we're heading."

If all the noise you're hearing about housing has you totally confused, join the crowd. One day you'll read that owning a home has never been more affordable. The next day you'll see news that housing starts have plunged to nearly their lowest level in half a century, as headlines announced in March. After four years of falling prices and surging foreclosures, it's hard to know what to think. Even Robert Shiller and Karl Case can't agree. The two economists, who together created the widely followed S&P/Case-Shiller Home Price indices, are right now offering sharply contrasting views of housing's future. Shiller recently warned that the chances were high for a further double-digit drop in U.S. home prices. But in an interview with Fortune, Case took a far brighter view: "The lack of new home building is a huge help that a lot of people are ignoring," says Case. "People think I'm crazy to be optimistic, but housing is looking like the little engine that could."

To see where real estate is truly headed, it's critical to keep your eye firmly on the fundamentals that, over time, always determine the course of prices and construction. During the last decade's historic run-up in prices, Fortune repeatedly warned that things were moving too fast. In a cover story titled "Is the Housing Boom Over?," this writer's analysis found that the basic forces that govern the market -- the cost of owning vs. renting and the level of new construction -- were in bubble territory. Eventually reality set in, and prices plummeted. Our current view focuses on those same fundamentals -- only now they're pointing in the opposite direction.

So let's state it simply and forcibly: Housing is back.

Two basic factors are laying the foundation for dramatic recovery in residential real estate. The first is the historic drop in new construction that so amazes Castleman. The second is a steep decline in prices, on the order of 30% nationwide since 2006, and as much as 55% in the hardest-hit markets. The story of this downturn has been an astonishing flight from the traditional American approach of buying new houses to an embrace of renting. But the new affordability will gradually lure Americans back to buying homes. And the return of the homeowner will start raising prices in many markets this year.

Drumming up sales

Of course, home prices are low and home construction is weak for a reason: incredibly low demand. For our scenario to play out, America will need a decent economy, with job creation and consumer confidence continuing to claw their way back to normal.

One big fear is that today's tight credit standards will chill the market. But we're really returning to the standards that prevailed before the craze, and those requirements didn't stop prices and homebuilding from rising in a good economy. "The credit standards are now at about historical levels, excluding the bubble period," says Mark Zandi, chief economist for Moody's Analytics. "We saw prices rising with fundamentals in those periods, and it will happen again."

To see why, let's examine the remarkable shift in home affordability. A new study by Deutsche Bank measures affordability in two ways: first, the share of income Americans are paying to own a home. And second, the cost of owning vs. renting. On the first metric, the analysis finds that homeowners now pay just 9.8% of their income in after-tax mortgage, tax, and insurance payments. That's down from 17.2% at the bubble's peak in 2007, and by far the lowest number in the Deutsche Bank database, going back to 1999. The second measure, the cost of owning compared with renting, should also inspire potential buyers. In 28 out of 54 major markets, it's now cheaper to pay a mortgage and other major costs than to rent the same house. What's most compelling is that in all of the distressed markets, owning now wins by a wide margin -- a stunning reversal from four years ago. It now costs 34% less than renting in Atlanta. In Miami the average rent is now $1,031 a month, vs. the $856 it costs to carry a ranch house or stucco cottage as an owner. (For more, see The top 10 cities for home buyers)

Not all markets will bounce back equally, of course. Housing resembles the weather: The exact conditions are different in every city. But in general the big U.S. markets fall into two different climate zones right now. We'll call them the "nondistressed markets" and the "foreclosure markets." A more detailed look shows why the forecast for both is favorable.

Nondistressed markets: Ready for launch

No cities went untouched by the collapse in prices over the past few years. But markets such as Northern Virginia, Indianapolis, Minneapolis, San Diego, the San Francisco suburbs, and virtually all of Texas held up reasonably well. In those areas prices spiked far less than in bubble cities -- the foreclosure markets we'll get to shortly -- chiefly because they didn't get nearly as many speculators who thought they could flip the homes or rent them to snowbirds.

The nondistressed markets will be able to get prices rising and construction growing far faster than the harder-hit areas for a simple reason: Although some of these markets are still suffering from foreclosures, they don't need to work through the big overhang haunting a Las Vegas or a Phoenix. The number of new homes for sale or in the pipeline is extraordinarily low in nondistressed markets. San Diego is typical. It has just 921 freestanding homes for sale or under construction, compared with 4,425 in late 2005. The challenge for these cities is to generate enough demand to reduce inventories of existing, or resale, homes. In the entire country the resale supply stands at 3.5 million houses and condos. That's a fairly high number, since it would take more than eight months to sell those properties; seven months or below is the threshold for a strong market.

But in the nondistressed cities, the existing home inventory is lower, closer to seven months on average. So a modest increase in demand will translate into strong gains in both prices and new construction. That should happen quickly, because most of those markets -- including Silicon Valley, Northern Virginia, and Texas -- are now showing good job growth.

Zandi of Moody's Analytics expects that prices will rise three to four points faster than inflation for the next few years in virtually all of the nondistressed markets. His view is that prices will increase in line with rents, which are now growing briskly because apartments are in short supply. Those higher rents will encourage buyers to cross the street from an apartment to a home of their own.

In Northern Virginia, Chris Bratz, an engineer, and his wife, Amy DiElsi, a publicist, are planning to leave their rental apartment and become homeowners for the first time. The main reason? Buying has simply become a far better deal than renting. "The market got completely inflated, then it crashed, so prices are coming back to where they should be," says Chris. As the couple have watched prices fall, they have also watched the rent on their apartment spiral upward, reaching $2,700 a month. They calculate that they should be able to purchase a townhouse for between $400,000 and $500,000 and pay less per month for a mortgage.

The nondistressed markets will also lead the way in construction. Zandi predicts that for the nation as a whole, single-family housing "starts" -- measured when a builder pours a foundation for a new home -- will rise from 470,000 in 2010 to as much as 700,000 this year. A large portion of that activity will happen in nondistressed markets where a tightening supply of resale houses will start making new homes look like a good deal. "Our main competition is from resales," says Jeff Mezger, CEO of KB Home. "The prices of those homes have stayed so low, because of low demand, that it's hampered the ability of builders to sell new houses."

But many would-be buyers simply prefer a brand-new house. Eventually they'll move from renters to buyers, and the trend will accelerate now that prices are no longer dropping. In Minneapolis, Yuan Qu and her husband, Xiang Chen, a researcher at the University of Minnesota, just moved from a two-bedroom rental to a new light-blue four-bedroom ranch with a chocolate-colored roof on a spacious corner lot. They paid $400,000, a bargain price compared with a few years ago. The couple, both in their early thirties, moved to Minnesota from China six years ago. "We wanted to buy a house, and we've been waiting and waiting and waiting," says Qu. "The prices went down for so long, we finally thought they couldn't keep falling." For Qu the only choice was new construction. "We're not very handy people," she admits.

Foreclosure markets: The outlook is brightening

A home off the market in Mesa, Ariz.

The true disaster areas for housing since the bubble burst have been Sunbelt cities such as Las Vegas, Phoenix, and Miami -- places that boasted great job and population growth in the mid-2000s, only to suffer a housing crash that swamped them with empty homes and condos and crushed their economies. But people always want to live in those sunny locales, and their job markets are starting to recover, albeit slowly. In foreclosure markets the inventory problem is far greater because it includes not just traditional resale homes but millions of distressed properties. Fortunately those houses are now such a screaming deal that investors, including lots of mom-and-pop buyers, are purchasing them at a rapid pace. To be sure, some foreclosure markets won't rebound for years because they're both vastly overbuilt and far from big job centers; a prime example is California's Inland Empire, a real estate disaster zone 80 miles east of Los Angeles.

But the outlook is brightening for Phoenix, Las Vegas, Miami, and parts of Northern California. A big positive is the tiny supply of new homes entering the market. Phoenix, for example, has a total of just 8,100 new homes that are either for sale or under construction, down from 53,000 in mid-2006. The big test in these cities is absorbing the steady stream of distressed properties. The foreclosures put downward pressure on the market far out of proportion to their numbers because of markdown pricing. "We had levels of inventory even higher than this in 1990 and 1991," says MIT economist William Wheaton. "But they were traditional listings, not foreclosures, so they didn't create the big discounts you get with foreclosures."

Wheaton reckons that we'll see a flow of around 1 million foreclosures a year, at a fairly even pace, from now through 2013. That figure is frequently cited as evidence that the market is doomed for years in most foreclosure markets. Not so. The reason is that the vast bulk of those units, probably over 600,000, according to Gleb Nechayev, an economist with real estate firm CB Richard Ellis (CBG), are being converted to rentals either by investors or their current owners. Those properties are finding plenty of renters, since the rental market is still extremely strong across the country. Remember, the millions who lost their homes to foreclosure still need somewhere to live.

A typical investor is Alex Barbalat, a Russian immigrant who's purchased seven homes east of San Francisco in the towns of Bay Point, Antioch, and Pittsburg. His average purchase price is around $100,000 for homes that once sold for between $300,000 and $500,000. But he has no trouble finding renters, since his tenants can commute to jobs in San Francisco on the BART transit system. Barbalat is pocketing rental yields on the prices he paid of around 12%, and he's in no hurry to sell. "I'm holding them until prices drastically rise," he says.

Investment funds are also entering the game. Dotan Y. Melech looks for bargains in Las Vegas for UnitedAMS, a firm he co-founded that manages apartments and other real estate investments. The firm has raised more than $20 million from outside investors to purchase distressed properties. So far, Melech has bought around 300 houses and plans to purchase another 200 this year. He has no trouble renting the houses he buys, since, he estimates, occupancy rates in Las Vegas are touching 95%. The "cap rate," or return on investment after all expenses, is between 8% and 10% -- twice the rate on 10-year Treasuries. Melech rents to people who lost their homes but are reliable renters. "A lot of people can't be buyers because their credit got hurt," he says.

Even with investors jumping in, buying activity in foreclosure markets hasn't yet increased enough to bring inventories down. It will soon. Zandi thinks prices will fall a couple of percentage points lower in the distressed markets in the short run. "But that will be overshooting," he says. "It's like an elastic band. If prices do drop this year, they will need to bounce back because they'll be far too low compared with rents and replacement cost." Renters will come off the sidelines to purchase homes in the years ahead, precisely the opposite trend of the past few years.

Consider the example of Michael Dynda, a retired Air Force avionics technician who now works for a government contractor in Las Vegas. Dynda, 49, is a first-time buyer who put off purchasing for years, in part because prices were falling so rapidly in Las Vegas, with no bottom in sight. But last year the combination of bargain prices and low mortgage rates became too good to resist. He ended up purchasing a 2,300-square-foot stucco home for $240,000, or about half what it would have fetched in 2007. Dynda got a 4.38% home loan, and pays the same amount on his mortgage as on the rent on the house he left to become a homeowner. "The timing was about as good as it could get," says Dynda.

Mike Castleman's company tracks the inventory of new homes in 19 states across the country. He sees supply getting tight. "Home prices are fixin' to rise," he says.

Back on the ranch, Mike Castleman is lounging in his creek-front mansion, built from "a hundred tons of fine central Texas limestone." As he shows off his collection of custom-made guitars, including one crafted to resemble the skin of a rattlesnake, the homespun housing guru once again returns to his favorite topic.

Castleman claims that this recovery will look like all the others: It will bring a severe shortage of housing. He invokes the livestock business to explain. "It takes three years between the time a bull mates with a cow and when you get a calf ready for market," he says. "That's how it is in housing too. We'll get a big surge in demand and the drywall companies will take a long time to ramp up, and it will take years to get new lots approved. Buyers will show up looking for a house in a subdivision, and all the houses will be sold. The builders will tell them it will take six months to deliver a house." But those folks, says Castleman, will be set on buying a place. "And they'll want it so bad they'll bid the prices up!" In other words: Beat the crowd.

It's a Great Time to Buy a House
Mike Castleman, the Texan with the best realtime view of housing in the U.S., tells editor-atlarge Shawn Tully that the naysayers are about to get a big surprise: rising prices for new homes

We recently sent everyone in congress a fax about a certain large bank. They had done a lousy job on a short sale file. We waited 90 days for an answer on an offer. Get my Free, Step By Step Loan Modification Guide by clicking here. The buyer got impatient and walked. Fortunately we had a backup buyer. Instead of using the BPO that Freddie Mac paid for and reviewing the new offer, the negotiator closed the file. Freddie Mac, the owner of the loan, stands to lose $75 spent on the BPO and 90 days worth of interest. We estimate Freddie's loss over the delay to be around $1,249. Rather than just sit here and take abuse, we decided to stand up for ourselves. We found the entire list of fax numbers for congress, typed up a fax, and sent it out. If you loan mod is taking too long, then fax everyone in congress. Most many loans are federally insured or guaranteed. Examples are loans owned by Fannie Mae or Freddie Mac or insured by FHA, VA, and USDA. Uncle Sam is the backstop for a huge percentage of American Home Loans. That leaves these banks and servicers open to huge liability. If they mess up on a federally owned or insured mortgage, they are causing Uncle Sam to lose money. Send a fax and contact your congressperson and/or senators and let them know what is happening.

Thinking about a short sale? Our team can help you short sale your property and never pay the bank another penny. Send me an e-mail at: ticknors@gosteveteam.com

We will contact you for a free consultation. When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at 503-336-6113. Discover how other sellers successfully completed a short sale and request a free consultation by clicking: http://www.ShortSalesPortland.com

Thinking about a loan modification? Our loan modification kit has the instructions you will need to get a loan modification approved with your bank. Click: http://portland-shortsales.com/ to request a copy. Also learn what mistakes to avoid with collection creditors. Thanks for reading this, Scott Ticknor Broker associate of The Steve Ticknor Team. Steve is a Real Estate Principle Broker at The Steve Ticknor Team with Keller Williams Realty Professionals. Short Sales Realtor: Phone: 503-336-6111 or ticknors@gosteveteam.com Where Portland Turns For Real Estate.

View My homes for sale at Portland Real Estate "Best Buys" http://www.gosteveteam.com/Properties.

Short Sales. Realtor. Copyright 2011 SFI Marketing Institute, LLC. All Rights Reserved. Important Notice: Steve Ticknor Team, Keller Williams Realty Professionals, and the Stop Foreclosure Institute are not affiliated in any way, shape, or form with the government. Our services have not been reviewed or endorse by the government or your lender. Most lenders willingly work with agents on short sales. Why? Because most short sales are beneficial to a lender. If you accept our offer to help you on a short sale, your lender may not agree to a short sale or to modify your loan. We do offer a loan modification kit. However, the likelihood of negotiating a modification is like everything else in life. It takes work and persistence to convince your lender to modify your loan verses foreclosure. No matter what you or The Steve Ticknor Team does, your lender may not approve a loan modification. We do not recommend that you stop paying your mortgage, because this will cause further damage to your credit and could cause you to lose your home. Because we know avoiding foreclosure is so important to any homeowner, we recommend that you speak with the appropriate legal or tax advisor before making any decision. This is not intended as legal, technical, or tax advice. Please speak with a licensed professional like The Steve Ticknor Team before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. You have the option to reject a short sale or loan modification from your lender if it does not meet your approval. If you decide not to go thru with the short sale, then you do not have to pay us our fee. We normally make a real estate sales commission for helping you on a short sale. The views expressed here are Ticknor Team's personal views and do not reflect the views of Keller Williams Realty Professionals. This information on Short Sales: "What is a BPO and why does it matter on a short sale?", is provided as a courtesy to our viewers to help them make informed decisions. 503-336-6111 today!

If your loan has Private Mortgage Insurance, also known as PMI, then there is a high likelihood that they will request that you sign a promissory note.

Today’s blog post talks about how to convince the lender to waive it.

Discover how other sellers successfully did a short sale to avoid foreclosure by clicking here.

PMI companies are notorious for asking for promissory notes. The reason they ask for them so much is because there is no risk in doing so. If the home is foreclosed upon, then they will have to pay a claim for the loss. If the home is sold as a short sale, then they will have to pay a claim for the loss. Either way, they have the same result. But, if they get a promissory note, then they get some money to help cover the claim. Either way, there is no risk to them. All that you have to do to avoid the PMI promissory note is show the PMI negotiator that the seller has no assets and does not have the ability to pay a promissory note. You want to speak directly with the PMI negotiator. If you must, then escalate the file to a supervisor. When they see the seller has no assets, they will still push for a promissory note. You have to hold firm and sometimes even threaten to go to the press. If you have made a good case and talked to the right people, then they will usually waive the promissory note. We have seen this done personally!

Thinking about a short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at ticknors@gosteveteam.com. I will contact you for a free consultation. When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at 503-336-6113 Discover how other sellers successfully completed a short sale and request a free consultation by clicking here. Thinking about a loan modification? Our loan modification kit has the instructions you will need to get a loan modification approved with your bank. Click here to request a copy. Thanks for reading this, Steve Ticknor Team. Steve is a Real Estate Steve Ticknor Team at Keller Williams Realty Professionals. Short Sales Realtor: Phone: 503-336-6113. ticknors@gosteveteam.com. Where Portland Turns For Real Estate View My homes for sale at www.gosteveteam.com. Short Sales. Realtor. Copyright 2011 SFI Marketing Institute, LLC. All Rights Reserved.

Important Notice Steve Ticknor Team, Keller Williams Realty Professionals, and the Stop Foreclosure Institute are not associated or affiliated in any way, shape, or form with the government. Our services have not been reviewed, endorsed, or approved by the government or your lender. Most lenders willingly work with agents on short sales. Why? Because most short sales are beneficial to a lender. If you accept our offer to help you on a short sale, your lender may not agree to a short sale or to modify your loan. We do offer a loan modification kit. However, the likelihood of negotiating a modification is like everything else in life. It takes work and persistence to convince your lender to modify your loan. No matter what you or we do, your lender may not approve a loan modification. If you stop paying your mortgage, then you could lose your home and damage your credit. Because we know avoiding foreclosure is so important to any homeowner, we recommend that you speak with the appropriate legal or tax advisor before making any decision. Thinking about a short sale? Our team can help you short sale your property and never pay the bank another penny. Send me an e-mail at ticknors@gosteveteam.com. We will contact you for a free consultation. When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at 503-336-6113. Discover how other sellers successfully completed a short sale and request a free consultation by clicking Short Sales Portland. Thinking about a loan modification? Our loan modification kit has the instructions you will need to get a loan modification approved with your bank. Click "Stop Foreclosure Institute of Portland" to request a copy. Also learn what mistakes to avoid with collection creditors. Thanks for reading this, Scott Ticknor Broker associate of The Steve Ticknor Team. Steve is a Real Estate Principle Broker at The Steve Ticknor Team with Keller Williams Realty Professionals. Short Sales Realtor: Phone: 503-336-6113. ticknors@gosteveteam.com. Where Portland Turns For Real Estate. View My homes for sale at Portland Real Estate "Best Buys". Short Sales. Realtor. Copyright 2011 SFI Marketing Institute, LLC. All Rights Reserved. Important Notice: Steve Ticknor Team, Keller Williams Realty Professionals, and the Stop Foreclosure Institute are not affiliated in any way, shape, or form with the government. Our services have not been reviewed or endorse by the government or your lender. Most lenders willingly work with agents on short sales. Why? Because most short sales are beneficial to a lender. If you accept our offer to help you on a short sale, your lender may not agree to a short sale or to modify your loan. We do offer a loan modification kit. However, the likelihood of negotiating a modification is like everything else in life. It takes work and persistence to convince your lender to modify your loan verses foreclosure. No matter what you or The Steve Ticknor Team does, your lender may not approve a loan modification. We do not recommend that you stop paying your mortgage, because this will cause further damage to your credit and could cause you to lose your home. Because we know avoiding foreclosure is so important to any homeowner, we recommend that you speak with the appropriate legal or tax advisor before making any decision. This is not intended as legal, technical, or tax advice. Please speak with a licensed professional like The Steve Ticknor Team before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. You have the option to reject a short sale or loan modification from your lender if it does not meet your approval. If you decide not to go thru with the short sale, then you do not have to pay us our fee. We normally make a real estate sales commission for helping you on a short sale. The views expressed here are Ticknor Team's personal views and do not reflect the views of Keller Williams Realty Professionals. This information on Short Sales: "What is a BPO and why does it matter on a short sale?", is provided as a courtesy to our viewers to help them make informed decisions.

Daily Real Estate News  |  March 22, 2011  |  

Bargain prices on housing combined with low interest rates below 5 percent may bring the real estate market its busiest spring season in years, economists say.

Distressed sales continue to put downward pressure on home prices, which may lure more buyers off the fence and ready to snag a deal during the typical prime-time buying season.

Some builders are ramping up discounts on new homes as well as boosting commissions to brokers to try to spark more transactions.

Sellers of existing-homes also are getting more competitive in pricing their homes.

"After three years of the housing downturn, people are becoming much more realistic in terms of valuing their homes," says Lawrence Yun, chief economist at the National Association of REALTORS®.

An improved job market with better income potential may also motivate more people to buy, says David Berson of the PMI Group.

“Household formations are also very important," Berson says. "Kids may have moved back in with their parents, or two people may have moved in together, because of job concerns. Now they can move into their own place."

While interest rates are sitting comfortably below 5 percent for now (30-year fixed rates averaged 4.76 percent last week), economists warn the attractive low rates won’t last long.

"Few think mortgage rates are going lower," says Mark Zandi, Moody's Analytics chief economist. "It's more likely they will be 6 percent than 4 percent next spring. This lights a fire under buyers."

Source: “Discounts Expected in Spring Housing Market,” The Wall Street Journal (March 22, 2011)

If the right decision for you and your family is to sell the house as a short sale, then the sale will have an immediate effect on your credit score. Discover how other sellers successfully did a short sale to avoid foreclosure by clicking here.

You might feel like it’s just overwhelming and demoralizing to see your credit score take any more hits! But, here’s the silver lining: according to most experts, 78% of Americans have ERRORS on their credit score. Why is that a silver lining? If you have negative errors on your report that get fixed, that will be a benefit to your score. Average people can, on their own, take steps to repair and restore their credit report/ credit score after a short sale.

Here is how to avoid any double whammies during and after your short sale. Follow these simple steps.

1. Review your credit report. I recommend the site: https://www.annualcreditreport.com/cra/index.jsp. Do not go to any of those “free credit report” sites. After you get the report, review everything on it. If you see anything that is negative, inaccurate, or questionable make a note of it. On your list, write down why you disagree with that item on your report.

2. Write letters to the different credit bureaus about what you are disputing on your report. There are several sample letters available online: http://www.creditinfocenter.com/forms. Here is a simple tip: DO NOT use the online dispute forms that are on the websites of the three credit reporting agencies. Write your own letter and make it short, firm, and demanding of action.

3. Mail your letters to the credit bureaus through either registered or certified mail. This is what sets the clock for them to correct issues. The law lays out a timeline that they have to follow (45 days.) And, this gives you a record of the mailing, too.

4. Keep a file of all that you have done, including dates. Then, track your results, also.

5. When you’ve gotten back responses (or if 45 days pass and you haven’t gotten responses), then it’s time to repeat some of the process again for some item or another on your report. If you are diligent and proactive, you might just surprise yourself by the benefits you can see in on your credit report – even after your short sale!

Thinking about a short sale? Our team can help you short sale your property and never pay the bank another penny. Send me an e-mail at ticknors@gosteveteam.com. We will contact you for a free consultation. When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at 503-336-6113.

Discover how other sellers successfully completed a short sale and request a free consultation by clicking Short Sales Portland. Thinking about a loan modification? Our loan modification kit has the instructions you will need to get a loan modification approved with your bank. Click "Stop Foreclosure Institute of Portland" to request a copy. Also learn what mistakes to avoid with collection creditors.

Thanks for reading this, Scott Ticknor Broker associate of The Steve Ticknor Team. Steve is a Real Estate Principle Broker at The Steve Ticknor Team with Keller Williams Realty Professionals. Short Sales Realtor: Phone: 503-336-6113. ticknors@gosteveteam.com. Where Portland Turns For Real Estate.

View My homes for sale at Portland Real Estate "Best Buys".

Short Sales. Realtor. Copyright 2011 SFI Marketing Institute, LLC. All Rights Reserved.

Important Notice: Steve Ticknor Team, Keller Williams Realty Professionals, and the Stop Foreclosure Institute are not affiliated in any way, shape, or form with the government. Our services have not been reviewed or endorse by the government or your lender. Most lenders willingly work with agents on short sales. Why? Because most short sales are beneficial to a lender. If you accept our offer to help you on a short sale, your lender may not agree to a short sale or to modify your loan. We do offer a loan modification kit. However, the likelihood of negotiating a modification is like everything else in life. It takes work and persistence to convince your lender to modify your loan verses foreclosure. No matter what you or The Steve Ticknor Team does, your lender may not approve a loan modification. We do not recommend that you stop paying your mortgage, because this will cause further damage to your credit and could cause you to lose your home. Because we know avoiding foreclosure is so important to any homeowner, we recommend that you speak with the appropriate legal or tax advisor before making any decision. This is not intended as legal, technical, or tax advice. Please speak with a licensed professional like The Steve Ticknor Team before making any decision.

Information is deemed reliable but not guaranteed as of the date of writing. You have the option to reject a short sale or loan modification from your lender if it does not meet your approval. If you decide not to go thru with the short sale, then you do not have to pay us our fee. We normally make a real estate sales commission for helping you on a short sale. The views expressed here are Ticknor Team's personal views and do not reflect the views of Keller Williams Realty Professionals. This information on Short Sales: "What is a BPO and why does it matter on a short sale?", is provided as a courtesy to our viewers to help them make informed decisions. 

Some agents hate short sales. Why? Because they don't understand them. So, don't believe them when they tell you that short sales are impossible. I will explain what causes their problems in today's post. There are two things you must understand if you are doing short sales. They are BPOs and HUD-1s. A BPO is what the short sale lender uses to determine the value of the property.

Discover how other sellers successfully did a short sale to avoid foreclosure at Short Sales Portland.

BPO stands for "Broker's Price Opinion." They are what another independant real estate agent (Broker), thinks a property is worth. Basically the agent gives their opinion of the value of the property. "I think it is worth 300k", they put on the report. Lenders accept or reject short sale offers based on the BPO value and tend to stick to it like it was the gospel. If the agent has given a value of 300k, then a short sale lender will not accept a sales price of 250k. The problem is that, in my opinion, sometimes the values are inaccurate and usually over market value. I have seen agents drive 50 miles away to evaluate a property in an area they are unfamiliar with. They go to a place where they do not sell real estate. As a result they are not familiar with the local marketplace.

Because of this I always try to meet the agent doing the BPO at the property. I explain the market value to them and tell them what is happening with the property. I explain exactly why the property is selling for the sale price and where offers might be coming in at (ballpark figures). I tell them what buyers have said about the property and why it isn't selling for a higher price. This helps them to give an accurate value. The lender gets an accurate value and is able to make a better, sometimes quick decision on the short sale.

Thinking about a short sale? Our team can help you short sale your property and never pay the bank another penny. Send me an e-mail at ticknors@gosteveteam.com. We will contact you for a free consultation. When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at 503-336-6113.

Discover how other sellers successfully completed a short sale and request a free consultation by clicking short sales portland. Thinking about a loan modification? Our loan modification kit has the instructions you will need to get a loan modification approved with your bank. Click "Stop Foreclosure Institute of Portland" to request a copy. Also learn what mistakes to avoid with collection creditors.

Thanks for reading this, Scott Ticknor Broker associate of The Steve Ticknor Team. Steve is a Real Estate Principle Broker at The Steve Ticknor Team with Keller Williams Realty Professionals. Short Sales Realtor: Phone: 503-336-6113. ticknors@gosteveteam.com. Where Portland Turns For Real Estate

View My homes for sale at Portland Real Estate "Best Buys".

Short Sales. Realtor. Copyright 2010 SFI Marketing Institute, LLC. All Rights Reserved.

Important Notice: Steve Ticknor Team, Keller Williams Realty Professionals, and the Stop Foreclosure Institute are not affiliated in any way, shape, or form with the government. Our services have not been reviewed or endorse by the government or your lender. Most lenders willingly work with agents on short sales. Why? Because most short sales are beneficial to a lender. If you accept our offer to help you on a short sale, your lender may not agree to a short sale or to modify your loan. We do offer a loan modification kit. However, the likelihood of negotiating a modification is like everything else in life. It takes work and persistence to convince your lender to modify your loan verses foreclosure. No matter what you or The Steve Ticknor Team does, your lender may not approve a loan modification. We do not recommend that you stop paying your mortgage, because this will cause further damage to your credit and could cause you to lose your home. Because we know avoiding foreclosure is so important to any homeowner, we recommend that you speak with the appropriate legal or tax advisor before making any decision. This is not intended as legal, technical, or tax advice. Please speak with a licensed professional like The Steve Ticknor Team before making any decision.

Information is deemed reliable but not guaranteed as of the date of writing. You have the option to reject a short sale or loan modification from your lender if it does not meet your approval. If you decide not to go thru with the short sale, then you do not have to pay us our fee. We normally make a real estate sales commission for helping you on a short sale. The views expressed here are Ticknor Team's personal views and do not reflect the views of Keller Williams Realty Professionals. This information on Short Sales: "What is a BPO and why does it matter on a short sale?", is provided as a courtesy to our viewers to help them make informed decisions. 

It always amazes me when I hear the stories of agents who talk about horrible short sales are. "Don't waste your time on a short sale", they tell homeowners. "They are a waste of time. The lenders won't approve them and the process is horrible. The last short sale I worked on took 9 months", they say.

Discover how other sellers successfully did a short sale to avoid foreclosure by clicking here.

This gives short sales a bad name. Homeowners mistakenly believe that a short sale is impossible. I am here to tell you that is not true. The Stop Foreclosure Institute has sold and closed many short sales. There are two keys to being successful. Stop Foreclosure Institute of Portland.

First, you have to understand how the process works. Second, you have to keep an eye on the transaction from start to finish. Here is the closest comparison I can think of on why some agents hate short sales. Let's say that you are a brand new driver. You hop into a car, accelerate to 70 miles per hours, turn on cruise control, and then start reading a book. Every 5 minutes or so you look up to check on what is going on with your car. You aren't successful at driving a car. Your friend is thinking about learning how to drive. "Don't even think about driving a car. Driving just doesn't work and it is impossible to get anywhere", you tell them. Is what you just said correct? Is driving a car impossible? No, it's not! But, many agents make the same claim about short sales. They have never studied and learned the process. They have never successfully sold a short sale. But, they are sure ready to tell you that it doesn't work. Here is what they missed about short sales.

1. You need to be knowledgeable about the process. You need to have a solid understanding of HUD-1s, BPOs, and the short sale guidelines of the entity that owns or insures the loan.

2. You have to stick with the transaction. You need to follow up with the short sale lender regularly. You can't check in on the short sale every week or two. A lender will often ask for something and want it back within 24 hours. If they don't get what they need, then they will close the file. If you agent isn't checking in regularly, then the short sale file could be closed without their knowledge. In addition, your agent needs to be able to make sure the HUD-1s and BPOs are accurate. I will explain what those acronyms mean and why they are important in my next post. Ask the agent you are interviewing why they are important.

Thinking about a short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at ticknors@gosteveteam.com. I will contact you for a free consultation. When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at 503-336-6113 Discover how other sellers successfully completed a short sale and request a free consultation by Click here to request a copy.

Thanks for reading this from The Steve Ticknor Team. Steve and Scott Ticknor are Real Estate Brokers in the state of Oregon at Keller Williams Realty Professionals.

Short Sales Realtor: Phone: 503-336-6113. ticknors@gosteveteam.com. Where Portland Turns For Real Estate.

View My homes for sale at Go Steve Team.

Short Sales. Realtor. Copyright 2010 SFI Marketing Institute, LLC. All Rights Reserved. This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. The views expressed here are Steve Ticknor Team's personal views and do not reflect the views of Keller Williams Realty Professionals. This information on Short Sales: What can go bad on a short sale when you hire an agent that doesn't understand short sales is provided as a courtesy to our viewers to help them make informed decisions.

Survey:Sellers have a better chance at getting their house sold by using a REALTOR® than opting for the do-it-yourself approach, according to a survey of 1,000 home owners by HomeGain.com, an online real estate resource. Nearly 60 percent of home owners who used a REALTOR® to sell their home were successful compared to 39 percent of FSBOs, the survey found.

In the survey, 83 percent of home owners said they used a REALTOR® to sell their home, whereas 17 percent said they tried to sell it themselves. This corresponds to results from NAR's 2010 Profile of Buyers & Sellers, which found 88 percent of sellers were assisted by a real estate agent. (Additionally, 83 percent of buyers bought their home through an agent.)

“It is especially striking that home owners fare significantly better in selling their homes using a REALTOR®  than selling on their own,” says Louis Cammarosano, general manager at HomeGain. “Due to that relative success, the level of satisfaction in the home selling process is also higher for home sellers utilizing the services of a REALTOR® than those who try to sell their homes on their own.”

Among the findings in its For Sale by Owner vs. REALTOR® survey:

• 88 percent of home owners who sold their homes using a REALTOR® said they would use a REALTOR® again.
• 24 percent of FSBOs eventually contacted a REALTOR® to help sell their home.

See our "Best Buy" homes: http://www.gosteveteam.com/Properties or call 503-336-6111

Source: “HomeGain Survey Finds Home Sellers Fare 50% Better in Getting Their Homes Sold Using a REALTOR® Than Selling on Their Own” HomeGain.com (Feb. 24, 2011)