Foreclosure fears foster true grief

Reports of foreclosures by the millions have been in the news so much over the past few years that to some, it might seem like the new normal.

But as a real estate professional who is in the trenches with financially stressed homeowners every day, it never for a second feels to me like business-as-usual.

The prospect of losing ones home is right up there among the major sources of grief, and often, it goes hand in hand with other tragic setbacks such as the loss of a job, a divorce, death of a loved one, mounting medical bills or skyrocketing mortgage payments.

Unfortunately, the first stage of grief is denial, and that’s even more the case when the threat of foreclosure is looming. No one wants to talk about or admit financial troubles—even when millions of others have founds themselves in a similar spot. It’s completely understandable, but for homeowners who are behind on mortgage payments, decisive action is often the most critical step toward ensuring the best possible solution.

As a real estate professional who has sought out the Certified Distressed Property Expert (CDPE) designation, I help homeowners to deal with every aspect of the grief and uncertainty that accompanies a mortgage which is no longer manageable. In the process, I help them to get on a path of financial solvency.

If you or someone you care about would like to change the course of a life that’s facing foreclosure, I get it and I can help.

Contact me today at Teresa Theriot, CDPE at teresatheriot@kw.com

What's a lease-purchase?

Due to the responses to my last post, I suppose I need to explain exactly what a lease-purchase is. : )

A lease-purchase is basically a lease for a period of time, usually 2 to 3 years, after which the lessee must purchase the house. It is perfect for a new home buyer who has not built up enough credit to obtain a mortgage, or for someone who has a bad credit history, but is in credit counseling and working on credit repair. It would also be a great option for someone that is new to an area. Rather than buying a home and potentially having to move, a lease purchase is much easier to walk away from than a mortgage. For sellers, it is a way to get out of a home that can't be sold in this market. For example, someone who owes more than the house will sell for, or a difficult property that is not selling because of location, an odd floor plan, etc.

Generally a deposit of anywhere from $2000-$5000 is required, depending on the price of the home, and is put towards the final purchase price of the house. The owner of the home uses the deposit as a security savings in the event that the deal is to fall through. This covers any repairs that need to be made or the mortgage during the time that the home is vacant. If the buyer is to walk away from the house during the lease, the seller gets to keep the deposit, unless otherwise noted in the contract.

The monthly note can be done several ways. Obviously, we always hope to at least get the mortgage covered with the monthly rent. It can be a set price with a certain portion of the rent going towards the final purchase price, or the rent can be set based on an amortization schedule just like the bank, which will give you the remaining balance to be paid at the end of the 2 or 3 years. The interest rate is typically a little higher than most mortgages because the rent must cover taxes and insurance as well.

The purchase price is probably the best part for sellers. Because the seller is doing the buyer a "favor" the price is not as negotiable. So, if the seller wants $150,000, then typically they get $150,000 because they can. Buyers know that they don't have too much negotiating room because the seller will move on to the next offer. (On my most recent lease-purchase listing, which was outside of the city limits, I got at least 2 calls a day with interested and willing buyers.) It's not a bad deal for the buyer either because by the end of the 2 or 3 years, the value of the house may rise beyond what they plan to pay for it.

Who you choose is more valuable than what they offer. I always try to connect sellers to people who I know, or clients of mine that I am comfortable with, to ensure that the seller is getting the best buyer. I would not recommend taking the first offer without considering the financial status and credit history of whoever is making the offer. It would be great to require that proof of income, a credit report, and proof of credit counseling or repair, accompany all offers.

And last but not least, the commission....because I know that's what my sellers are most concerned about...is better than you think. For me personally, I only get paid if you get paid. So, I charge a small (usually 6%) commission on the deposit and rent...then when the house sells in 2 to 3 years, I get commission on the final sales price. How can I afford to work for so cheap? Because I know I will get paid later...which is insuring my future income. I have absolutely no problem doing this to help my clients. Usually they only stay on the market for a very short period of time, which cuts down on the amount of work that I have to do.

Who is a person that you know who owes too much on their house or is having trouble selling their home? Do you know a person who would love to buy a home, but hasn't built up their credit yet? Please contact me with their name and situation and I promise they will get the excellent customer service they deserve.

Another One Bites the Dust!

Holly was a referral from Mary, who was so ecstatic about her quick home sale, that she referred Holly to me. Holly was in a tough predicament. She owned a cute, older, 3 bedroom 2 bathroom house. There was nothing wrong with the house. In fact, it had all of the charm that old homes have to offer: brick fireplace, cypress beams in the living room, pecky cypress on the ceilings, an office, walk-in closets, and a half acre lot...nothing to be ashamed of!! However, Holly had her house listed with another agent for over 6 months with no offers. She vacated the house early on in the process, so she was paying 2 house notes and caring for 2 yards by herself!

Her home was located in a decent area, it had a beautiful country setting, but it was in an zip code where there were over 200 homes in the same price range just sitting on the market. When you are selling your home, you have to have more to offer than all of the other homes: more updates, nicer landscaping, and a lower price, just to name a few. But with this many houses on the market, there was no way to compete!...until she met me.

I had a trick up my sleeve that I love to use with difficult properties. We listed the house as a lease purchase. We got an offer within 4 days from a young couple that was dying to get into a home, but just hadn't built up enough credit yet. They made an offer that she couldn't pass up and we went under contract.

Holly never smiled at any of the meetings we had. I think she was so skeptical about Realtors after her first experience that she was not really excited about me. She was at her wits end and feeling very hopeless about ever selling her home. But when I called her to tell her that we had an offer on the fourth day, Holly was nearly screaming with excitement through the phone. I feel such a sense of accomplishment to have proved to her that there are good Realtors out there who care.

Who is a person that you know who is in a similar situation or is having trouble selling their home? Or do you know a person who would love to buy a home, but hasn't built up their credit yet? Please contact me with their name and situation and I promise they will get the excellent customer service they deserve.

Unexpected Relocation

I sold Jon and Mary a home only 6 months ago, in a brand new neighborhood that is still under construction. It was their dream home. A beautiful, 3 bedroom, 2 bath home, on the water. They were so happy to be settled down after several relocations with the military, and they were certain that they would be there for at least 2 years. So, they bought the house knowing that the neighborhood would be complete, and the home would be easy to sell when they had to move again. Then, I got the call....they were being relocated...now! Being that there were so many brand new houses in the neighborhood, I knew there was a chance that they would have to take a loss on their "already lived in" home. They didn't have enough equity built up to pay for a Realtor or to sell for less than they paid. They were potentially going to have to pay money at closing to sell their dream home.

Most Real Estate agents would have told them to take the loss, that there are no other options. They would have had to pay about $10K - $15K out of pocket, and walk away in the negative. Instead, we talked about all of the other options available: renting, lease-purchase, etc. We decided that a lease-purchase was the right option for them. So, we offered the house for lease for 5 years with an option to purchase at the end of the lease. This ensures that they would get the price that they wanted and wouldn't have to pay a Realtor for services until the home is sold in 5 years and the home has more equity. As a result, we found a buyer before the sign even went in yard! It was a young couple with children that were dying to move out of an apartment and into a home, but were still working on their credit. It was a great fit.

Mary and Jon were ecstatic that we were able to come up with a solution that worked for everyone. As a "thank you" they referred me to a neighbor who was in a similar predicament and whose Real Estate agent had not shared that option with them. I have an appointment on Monday to list their home!

Who is a person that you know who is in a similar situation or is having trouble selling their home? Please contact me with their name and situation and I promise they will get the excellent customer service they deserve.