Foreclosure v.s Short Sales

As a real estate broker, I try to stay current on all things housing related. If my clients have questions, I want to have the answers. Some of the questions I get are about foreclosures and short sales so for this week’s blog, I thought it would be helpful to discuss them.

Can I Buy a Home That's In Foreclosure?

I am often asked by buyers looking to find a good deal on a home if I can help them buy a home in foreclosure. As much as I’d like to help them with this goal, I have to tell them that in the current market with rising property values, there just aren’t many foreclosures or short sales. In most cases, homeowners that find they can’t make the mortgage payments for some reason, are able to refinance or sell their home and pay off the mortgage so they can start over.

The attached chart from the Colorado Department of Local Affairs 4th Quarter Foreclosure Report for 2017 demonstrates this. Notice that the  4th Quarter 2017 foreclosure filing rate is higher than the sales at auction rate. This shows that the homeowners were either able to bring the mortgage current after the Notice of Election and Demand was filed or they were able to sell the home and pay off the mortgage.

According to this report from the Division of Housing:

“During the fourth quarter of 2017, Colorado public trustees reported 1,654 foreclosure filings and 447 sales at auction (completed foreclosures). During the fourth quarter of 2016, there were 1,794 filings and 633 sales. Comparing year-over-year for the fourth quarter, foreclosure filings fell 7.8 percent and completed foreclosures fell 29.4 percent. The foreclosure sales totals reported for the fourth quarter of 2017 was the lowest sales totals recorded since the Division of Housing began tracking quarterly foreclosure totals in 2007.”

What Can You Do If You Find You Can’t Make the Mortgage Payment

As unfortunate as it can be when homeowners fall behind on mortgage payments and must face the possibility of losing their homes, short sales and foreclosures provide them options for moving on financially. The terms are often used interchangeably, but they’re actually quite different, with varying timelines and financial impact on the homeowner. Here’s a brief overview.

A short sale comes into play when a homeowner needs to sell their home but the home is worth less than the remaining balance that they owe. The lender can allow the homeowner to sell the home for less than the amount owed, freeing the homeowner from the financial predicament.

On the buyer side, short sales typically take three to four months to complete and many of the closing and repair costs are shifted from the seller to the lender.

On the other hand, a foreclosure occurs when a homeowner can no longer make payments on their home so the bank begins the process of repossessing it. A foreclosure usually moves much faster than a short sale and is more financially damaging to the homeowner.

After foreclosure, the bank can sell the home in a foreclosure auction. For buyers, foreclosures are riskier than short sales, because homes are often bought sight unseen, with no inspection or warranty.

The good news is if you are a homeowner and you find you can’t make the mortgage payments due to job loss, medical bills or some other reason, you have options. If you need help, give me a call. I can put you in touch with a lender to help with the refinance or advise you on selling your home.

A Better Paint Job

No matter what the state of the house I own, I end up painting something. Painting is one of the most inexpensive ways to give your home a makeover and personalize it. Whether it’s updating an old bathroom paint scheme or adding a bold accent wall, paint can totally transform a room. But painting can be a big hassle and come with tons of prep work and clean up. Here are a few tips to make your painting experience more enjoyable and lead to a more professional finish.

PREPARATION

Alexander Graham Bell said " Before anything else, preparation is the key to success" so take the necessary pre-steps if you want to make your painting a success.

Prep beyond tape and drop cloths

A drop cloth will protect your floors, but a thick and durable drop cloth is also a little clumsy to maneuver. For smaller, awkward items that are in danger of paint splatter, use plastic wrap. It’ll make it much less frustrating to protect a toilet or bathroom sink.

Be ready for spills and splatters
At the very least, a few drops of paint are going to end up where you don’t want them. Have a rag and some Q-Tips ready for the inevitable paint splatter, so that you can quickly wipe them off before they dry and set on your frames, countertops, or hardwood floor.

Use heat to remove the tape
Painter’s tape should not be left on the surface for more than 10 days but sometimes you get distracted and can’t get back to your project. When that happens, patience is the key when removing painter’s tape. Hold a heat gun or hair dryer a few inches away from the tape as you remove it little by little. The heat will break down the adhesive and make removing the tape a much less frustrating task. Be prepared though, it can still tear and leave splotchy edges no matter how careful you are.

Stopping and Starting
When you are painting you may find you have to stop before the job is completed. Try wrapping your paintbrush in plastic wrap. It will keep the brush from drying out for a day or so until you can pick up where you left off. Putting a plastic bag over the paint can and tape around it will keep your paint fresh until you can come back to finish.

CHOOSE THE RIGHT PAINT FINISH

It can be intimidating to stand in front of the paint swatches at the paint or hardware store and try to make a decision. Picking a color can be difficult enough—and then you have to choose the finish. Choosing the color is up to you, but here’s a simple guide to choosing the correct finish for your project.

High Gloss
High gloss paint has the most sheen, and will be the most durable. That durability is best suited for the kitchen, on surfaces like cabinets, door frames, and window trim. It’s best to avoid using high gloss on walls, because it will be too reflective.

Semi-Gloss
It’s not as shiny as high gloss, but it’s still great for kitchens and bathrooms, because the sheen protects from drips, splatters, and other moisture.

Satin
Satin has a velvet-like look, but is still a durable finish, and works best in high-traffic areas. Be careful when applying, because satin paint will reveal sloppy brush strokes.

Eggshell and flat
These finishes have the least amount of sheen, and are the least durable. They’re great for hiding imperfections in your walls, but the low durability means they should be avoided if the room is subject to wear and tear from kids or pets. Use these paints in dining rooms, bedrooms, and other low-traffic rooms.

Finally, the best thing about paint is if you don't like it you can paint over it. So relax and have some fun with it!

Secret Weapons for DIY Projects

Is there a home maintenance project that’s been lingering on your to-do list for too long because you’re dreading the trip to the hardware or craft store? I’ve mentioned before that I am a Pinterest junkie and one of my favorite things to find on Pinterest are common household items that I can use on cleaning projects around that house. Here are a few of my favorite finds:

1. Vinegar: There’s probably a jug of vinegar in your pantry right now. You can soak items in vinegar to remove mineral deposits (like in a clogged showerhead), and you can boil vinegar in your microwave to remove odors and make it easier to clean. Have a puppy that had an accident? Put some white vinegar in a spray bottle. After cleaning, spray the white vinegar on the spot to neutralize the smell and discourage the puppy from going there again. Make sure you only use white vinegar on your carpeting as other types might stain.

2. Cola: A can of Coke or Pepsi can be used to clean many surfaces, including your glass windows, porcelain toilet, or chrome fixtures. Just do some research before using it on metal surfaces, as it can be corrosive. I haven’t tried it myself, but some people have indicated that Coke can remove the mineral deposit ring in the toilet bowl also.

3. Baking soda: This item may be more useful for applications other than baking. A baking soda-vinegar paste is great for cleaning bathrooms and kitchens. Baking soda can also be used to absorb odors.

4. Butter knife: Screwdrivers are easy to misplace. If you can’t find a screwdriver when you need one, a butter knife—preferably an older one that you no longer need for table setting—is pretty effective for both Phillips- and flat-head screws.

5. Toothpaste: Is there an unsightly scratch on your car or bike? The grit in tartar-control kinds of toothpaste makes for an effective scratch remover. Clean the scratch, apply some toothpaste, let it sit for a few minutes, and then buff it out with a paper towel.

6. Dryer sheets: After drying your clothes the used dryer sheets are great for wiping off TV screens and computer monitors as they don’t generate static electricity. You can use new dryer sheets to remove crayon marks from the wall and clean off chrome faucets. Just be careful when cleaning walls especially a wall with flat paint as the dryer sheet can remove the paint.

7. Aluminum Foil: Foil crushed into a ball can be used to remove rust on pipes or grunge from the exterior bottom of pans. It can also be used as a replacement for dryer balls to remove static electricity from clothes.

Do you have some favorite DIY ideas you'd like to share?