steve's White Mountain Blog

 

When a developer is having issues it can cause troubles for the existing inventory in a subdivision. Terra Mesa Resort – a Texas based resort developer recently closed shop on its marketing effort at one such subdivision here in New Hampshire. Well crafted – letters went out, “it’s the market” excuse…Ok we get that. But putting in place safety nets for the current (conveyed sites) owners need to be considered before you close the doors.

 

One of the newly unemployed staff was in charge of an Architects review committee. This means anyone wishing to submit plans to build a home on a site that was already sold over the past 7 years, can’t get an approval to build. This also means home-sites being re-sold, can’t guarantee when a construction start could commence (effectively making existing lots that are for sale, un-buildable).

 

Are these concerns felt by the minority (just a few vacant site owners) or should we all worry about this turn of events? While the 100 current owners have a warranty deed to the property they enjoy, the master plan called for more than 600 additional mixed use residential units being built. While someday they very well maybe built…will they be of the same size and quality as the first group? Will promised amenities be scrapped for the sake of “the economy”? Will the dues on the few remaining developer owned sites get paid to the association’s dues and general maintenance fund?

 

One thing is for sure when a developer moth-balls a partially completed project it has an effect on the existing property owners. I have several ways to fix this dilemma if you want to know? #1) appoint a current home owner to the voluntary position on the ARB (architects review board). #2) hire a Realtor to list your existing inventory (we’ll undertake the marketing effort for a commission as an independent contractor – with no additional employees required). #3) subordinate a couple of home-sites to one or more of the builders who have already put up more than a dozen homes on the property (new construction shows growth and solves a lot of current anxiety –real or imaginary) and you’ll get the land pay-off when the homes sell. And #4) look at the current budget to see where some fat can be trimmed, if owner’s dues go down a bit – during this quiet re-work you will endear yourself to them – and them to you. While the market is down , there is a way to make the existing home owers less nervous than...doing nothing at all.

*Pictures of South Mountain slope side and riverfront locations*

 

White Mountain New Hampshire Listing inventory picks up in the Spring time…the snow is gone, but is it time to sell?

 

Is It Time to sell? This question has more to do with the individual seller than it has to do with the market. What is your goal, motivation and what was your original purchase price has more to do with listing than Realtors are willing to admit. We want your listing, but not if it is detrimental to your goals.

 

Yes I want your listing…but what is your goal in listing now.

If you are leaving the area and have to sell to buy where you are going –Yes.

If you must sell due to health or employment issues beyond your control – Yes.

If you have your eye on a better size home and will trade equity from your current  

         Property to your new property in the same market – Yes.

If you will be doing a 1031 exchange, and re-investing somewhere else – Yes.

…If you think now is a good time to take a profit, and you will rent after you sell for the foreseeable future thereafter –NO it is not a good time to sell.

 

 

**If it makes sense to list now, then let’s make sure we get the most money we can for the property…in this highly competitive buyers’ market.**

 

 

 

 

Your issues are too close to see.

A major upgrade during your ownership, needing a few final touches may be seen as a feature by the seller, but a nuisance to finish to the buyer. I have a listing that removed the baseboard electric heat and put in a new propane system…but failed to enclose the utility room. Seller says great upgrade buyer says another cost after closing (and is comparing other places that don’t have this issue).

 

It was like that when I bought it.

A simple thing like a fogged window may escape a seller’s attention. It failed before we purchased ten years ago, and doesn’t affect the structure. It does however make the home less energy efficient and will go on the list of items a home inspection will point out as a “problem”. The shorter this list the better your property stands up against others that are competing for your buyer.

 

Outdoor clean up is a must.

Tree limbs, leaves and yard debris is secondary to the home it self right? Sure but before you hit the front door you will make an impression about how you care for your property over all. Rake, recycle and remove what was under the snow all winter and make the whole property shine…as soon as the buyer steps out of the car.

 

Good enough…should be just the start.

Looking lived in is not a goal…sweep the fireplace, dust the surfaces, empty the trash, clean the kitchen (no dirty dishes). And polish everything that you touch day to day, because the buyer is going to open cabinets, closets, showers, and every door in the house...if it’s sticky they leave feeling icky.

 

Sellers be prepared to supply the following to your lender;

A complete financial statement, with account balances and a list of other assets.

A hardship letter detailing your need for loan modification.

Supply any additional hardship circumstances, death certificate of spouse (if applicable) and or employment status.

Request any forms the lender requires to speak directly to your real estate broker, and authorize release of all pay off statements to the broker. Including account numbers and contact persons assigned to the file.

Gather and share any property taxes, home owners dues, second liens, or attachments on the property with your broker as well as the first mortgage holder.

Request from your real estate professional any additional fees that come with transfer of real estate in your town, county or state.

Your Broker will communicate with the lender and will be asked to supply the following:

A broker opinion of current market value (BPO) many times this is requested from another broker or even an appraiser to have a second opinion.

A (proposed) HUD settlement statement detailing the cost associated with the anticipated sale of the subject property. This is a crucial element, things like transfer tax, recording fees, HOA fees and commissions must be detailed for your lender to accept them as a cost associated with the sale.

When an offer is made the additional paper work supplied to the lender will be: sale contract (with the sale subject to lender approval), addendum's to the contract, required inspections and any financing contingencies of the sale.

And typically a new proposed HUD with updated prorations and contract sales price applied to the figures.

Buyers be prepared to supply the following items for a short sale.

Evidence of available funds (if it's a cash offer)

Pre-approved lenders letter indicating you have financing in place for the purchase.

And Patience, is needed in any of these transactions, if you have to close on a property with in 30 days you may want to seriously consider looking at regular re-sales or new construction with out lender issues.

I have three sales currently in the short sale arena each has some special circumstances involved with the seller.

 

Three Short Sale Examples

 

1) One sale was listed as a traditional listing with the seller prepared to bring money to closing to pay off what ever was short. The husband died prior to writing a purchase agreement, the wife didn't have the money to pay off due to complicated partnership agreements with her husbands business. This Short sale was started after the sales contract was signed and it is likely to be 4 months from start to finish.

2) Another sale, the seller had a principal pay off in hand at the time of listing and was sure the sales contract he signed was going to get him out free and clear at closing with no additional money being due at closing. It turns out he had refinanced with in the last two years and had taken out a reverse mortgage, he had a very large penalty due if the property was sold in the first few years. But due to a necessary cross country move that is what we were dealing with. This will likely take two months to unravel before the sale can be completed.

3) On the last sale,(per my instructions) the seller approached the lender's loss mitigation department with an unemployment and negative equity issue prior to marketing the property and we are on tract to close in less than 30 days. All the necessary documents were completed prior to an offer being made.

Sellers' do your due diligence prior to accepting an offer, We know this is a difficult situation for you we are here to help smooth the way to a sales that is as painless as is possible under the circumstances.

Buyers' do your due diligence have cash in hand or an approved letter of finance prior to making your offer and if you will be frustrated that the sale is not going to close on your terms, this type of transaction my not be for you.

 

The Above examples only begin to scratch the surface of the complicated nature of seller/ lender & buyer issues you will face in a short sale deal.

 

Brokers, do your leg work prior to taking one of these listings. If you are not prepared to babysit a sale every day for several months, then let someone else that is willing to, to take this listing.

steve@alpinelakes.com  / 800-926-5653

This blog is not intended to be a complete check list of all the items you may face when dealing with a short sale but the main items to be prepared for are high-lighted.