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Daniel Fisher's Blog

By Daniel Fisher | Broker in Charlotte, NC
  • How to buy a foreclosure on the courthouse steps in NC

    Posted Under: Home Buying in Charlotte, Foreclosure in Charlotte, Investment Properties in Charlotte  |  October 17, 2013 9:55 AM  |  694 views  |  No comments

    Buying real estate is typically a large investment with a significant amount of risk. Purchasing a foreclosure on the courthouse steps is a transaction which has additional risks including: rights of redemption, federal state and local tax and other liens, rights of senior mortgage holder, owners associations and tenants, title problems, violations of zoning building and other codes or owners association violations, actions by upset bidders, and time and interest rate risks. For the buyer who decides to pursue purchase of a foreclosure on the courthouse steps, they should invest a significant amount of money to protect themselves.  Most buyers will position themselves take best advantage of this unique real estate opportunity by conducting methodical due diligence , remaining unemotional about the transaction and having large cash reserves “a minimum of 20% of the bid price is recommended.

    Start with obtaining the local legal paper (in Charlotte, this is the Mecklenburg Times) and find properties that are of interest and that have a total mortgage payoff below the likely value of the property. When a foreclosure date is set/certain, hire a real estate attorney to do a title search and advise you of all covenants codes and deed restrictions, existence of other liens or notices of foreclosure action, and the insurability of title with a preliminary title policy quote.

    At a minimum, in additional to title search, your due diligence should also include: hire a licensed home inspector to review the condition of the home and provide a written report; hire a termite inspector to make sure nothing needs treatment or repair; do a radon test; get a boundary survey showing all improvements, setbacks, zoning, easements, and utilities and verify if the property is in a flood plain; get an insurance policy quote appropriate to property value, condition and your future intended use for the property; check with the Homeowners Association Manager for payoffs and transfer fees; and check with the County and City to verify if there are any zoning building or other restrictions or violations. There may be additional due diligence required for certain types of property and conditions.

    Verify the local procedures and requirements for bidding and have all required documents and payments available on and in the precisely correct form on the day of bidding. Determine your price ceiling. Many investors use the rules of thumb that total acquisition price plus repair total investment into the property = 75-85%% of the appraised value AND that monthly net operating income is 1% of total investment. Consider hiring and paying a Realtor to represent you in the transaction. Your attorney and your CPA should also advise you on the alternative and optimal tax and legal strategies for holding title and protecting against liability.

    Search Homes for Sale in Charlotte Fisher Herman RealtyDaniel Fisher

    704.617.3544
    Fisher Herman Realty
    Licensed NC & SC
    Bio & Testimonials 

    I am a real estate broker and not advising on legal or tax consequences; if you have legal or tax questions, you should contact a NC licensed attorney or CPA

  • What are ways to make sure I don't get scammed in a rent to own home?

    Posted Under: Home Buying in Charlotte, Rent vs Buy in Charlotte, Investment Properties in Charlotte  |  October 1, 2013 4:30 PM  |  781 views  |  No comments
    I was recently asked this question by a buyer who had a recent credit problem, but that otherwise had a stable income, good assets and reasonable savings, with the ability to build savings during the lease term.

    If the buyer considering a rent to own had not had a stable income or significant savings, my recommendation would have been "avoid a rent to own". The reasons are the same as they are for every real estate transaction: condition, location, price/terms, except that the rent to own or lease purchase transaction has additional risks associated with ownership, price escalation, foreclosure action, time and interest rates. Most buyers will position themselves take best advantage of the market by saving aggressively and improving credit and buying when they are financially strong.

    For the buyer who decides to pursue a rent to own home, they should invest a significant amount of money 
    to protect themselves. Buying a home is typically a very large investment with a significant amount of risk.

    First step is to hire and pay a real estate attorney and to have that attorney write a lease purchase contract for you, or, if the Seller is unwilling to use that contract, to review the contract the Seller is requiring be used and ask what attorney wrote it. Have your attorney also at the very least: do a title search and advise you if there are any liens or notices of foreclosure action; if the person who is leasing to you is actually the owner; or, if they are an entity, their legal status and standing with the Secretary of State; and to provide an attorney opinion on the insurability of title with a preliminary title policy quote. It would also be a good idea to update title every six months during the lease term.

    Regarding the terms of the deal, put as little up-front money down as possible. Don't make "extra" payments or larger than normal rent payments that go towards your down payment. Instead, start a new account with two names required for withdrawal and start saving AT LEAST 0.15% of the purchase price every month (assuming your lease term is 24 months). Get an appraisal to verify that the Purchase Price /option Price you are agreeing to is sensible in today's terms and set some terms that protect you in the event prices drop. Talk to a lender to make sure that you can qualify to purchase the home on the proposed terms and if you don't qualify now, to verify what you need to do between now and the time you purchase. Take steps to position yourself to meet the lenders conditions. Hire a licensed home inspector to review the condition of the home and provide a written report. Hire a termite inspector to make sure nothing needs treatment. Do a radon test from www.NCRadon.org if you are in NC. get a survey, especially if you plan to fence the property or there is an existing fence or if the property it is larger than 1/2 acre, then have the Seller make all required repairs. Consider hiring and paying a Realtor to represent you in the transaction.

    Search Homes for Sale in Charlotte Fisher Herman Realty

    Daniel Fisher
    704.617.3544
    Fisher Herman Realty
    Licensed NC & SC
    Bio & Testimonials 

    I am a real estate broker and not advising on legal or tax consequences; if you have legal or tax questions, you should contact a NC licensed attorney or CPA

  • Should I buy a short sale home?

    Posted Under: Home Buying in Charlotte, Financing in Charlotte, Property Q&A in Charlotte  |  June 12, 2013 10:40 AM  |  1,381 views  |  No comments

    Usually, the only thing short about a short sale is that the amount of the payoff to the existing lienholder(s) is lower or "short" of the total amoutn owed. The Purchase Price is not negotiable per se, but rather are a function of the existing lien amounts, mortgage insurance and the sale terms agreeable to the asset manager/team representing the lender(s), the investor and the mortgage insurer, and whether the junior lienholders are agreeable with payoffs offered by the primary lienholder.

    Generally short sales take six weeks to six months get through the process and Close - if approved. I have one short sale listing that took 13 months for approvals and another short sale purchase that after 10 months of waiting for a response to our offer, went to foreclosure sale without our being notified. I have also had several short sales where the mortgage servicing was sold to another firm and we had to start over completely. But then I had a cash purchase which was approved and closed for our buyer in about 45 days  (although we were accepted offer #8 after the Seller endured 3 years of negotiations with others) Short sales are distinctly a case by case basis.

    I tell people that short sales are for the emotionally stout. If a buyer has plenty of time to wait and if during the process they can maintain an unemotional attitude "if it comes to us, fine, if not that's fine too" (25%+ fail to close) during potentially long periods of not getting any updates or information, and can deal with a lot of drama just before closing (one of my short sale approvals was withdrawn 23 hours before closing, causing a 90 day delay), then a short sale can make sense.

    Bottom line question is: Are you that buyer?

    Many people do say "yes" and after a lot of uncertainty, do ultimately complete a short sale and happily purchase their home and often at a price sligthly below market.

    We'd be pleased to serve as your real estate professionals. If you have a full time agent with a Masters degree in Planning with Finance and over two decades of experience, working for you, you will likely do better in negotiations. I'd be pleased to provide that service. 

    Other Trulia Real Estate Blogs:
    Foreclosure Help: What to do to avoid NC foreclosure.
    Short Sale "vs" Foreclosure. Which is better?
    What is a short sale? How do I sell my home as a short sale?
    How does a foreclosure, short sale or deed in lieu affect my credit score?

    Search Homes for Sale in Charlotte Fisher Herman Realty

    Daniel Fisher
    704.617.3544
    Fisher Herman Realty
    Licensed NC & SC
    Bio & Testimonials
     

    I am a real estate broker and not advising on legal or tax consequences; if you have legal or tax questions, you should contact a NC licensed attorney or CPA

  • What is a short sale? How do I sell my home as a short sale?

    Posted Under: Home Buying in Charlotte, Financing in Charlotte, Property Q&A in Charlotte  |  June 12, 2013 10:39 AM  |  1,360 views  |  No comments

    As described in the North Carolina Real Estate Commission short sale form, a short sale occurs when the purchase price does not enable the Seller to pay the costs associated with the sale and Lienholder(s) agree to release or discharge their liens upon payment of an amount less than the amount owed, with or without the Seller being released from any further liability; there are liability, deficiency issues and tax consequences associated with every short sale.

    A short sale is type of settlement agreement between you as owner/borrower of real property and your mortgage lender and every other person or entity that has a lien against your real property, each of whom is generally referred to as a "Lienholder"  Liens against your property can come from a first and second mortgage, a home equity line of credit, federal, state or local tax liens, unpaid homeowners association dues or fines, mechanics liens from unpaid contractors who did work on the property, personal judgments that have attached to the property and many others.

    Since a short sale negotiation is getting the lien holder(s) to agree to settle for less than what is owed and what will happen with the loss (deficiency judgments, 1099, and credit reporting and legal documents that must be signed by the seller), it is advised that you only allow a NC licensed attorney to negotiate on your behalf, especially if you have received a notice of foreclosure see North Carolina State Statute §14-423 Adjusting Debt. The greater the number of lien holders that are involved in a transaction the more complex it will be to get approval with legal and tax terms that are most favorable to you, and the more important it will be to engage a short sale attorney to handle to negotiation and make sure the documents you sign actually reflect what is agreed.

    If you want to keep your home and avoid foreclosure, see Trulia Real Estate Blog Foreclosure Help.  If you have decided to do a short sale, but cannot afford a short sale attorney and believe you are a qualified low income homeowners you can contact NC Legal Aid which provides attorneys who volunteer their time to provide free legal services in civil matters to low-income people in order to ensure equal access to justice and to remove legal barriers to economic opportunity.

    We'd be pleased to serve as your real estate professionals. If you have a full time agent with a Masters degree in Planning with Finance and over two decades of experience, working for you, you will likely do better in negotiations. I'd be pleased to provide that service.

    Other Trulia Real Estate Blogs:
    Foreclosure Help: What to do to avoid NC foreclosure.
    Short Sale "vs“ Foreclosure. Which is better?
    How does a foreclosure, short sale or deed in lieu affect my credit score?
    Should I buy a short sale home?

    Search Homes for Sale in Charlotte Fisher Herman Realty

    Daniel Fisher
    704.617.3544
    Fisher Herman Realty
    Licensed NC & SC
    Bio & Testimonials

    I am a real estate broker and not advising on legal or tax consequences; if you have legal or tax questions, you should contact a NC licensed attorney or CPA

  • How does a foreclosure, short sale or deed in lieu affect my credit score?

    Posted Under: Home Selling in Charlotte, Foreclosure in Charlotte, Credit Score in Charlotte  |  June 12, 2013 10:39 AM  |  1,470 views  |  No comments

    When it comes to your credit score, FICO states that foreclosures, short sales, and deeds-in-lieu of foreclosure are all "not paid as agreed" accounts and considered the same by your FICO® score. This is not to say that these may not be better options for you from a financial perspective, just that they will be considered no better or worse for your FICO score.

    According to FICO Research looks at how mortgage delinquencies affect scores , here are some of the potential impacts you can expect to experience with either a foreclosure or a short sale:

    1. Credit score drop "between 100“ 160 points depending upon your starting score".

    2. Recovery time "between 3-7 years needed for scores to fully recover (unless actions taken to improve credit scores".

    3. Time to new Loan Approval "3-7 years (unless positive actions taken to improve credit scores)".

    If you have had to endure the extreme hardship of a short sale or foreclosure, you may even wonder if you will have a healthy credit report again. The good news is that there are certainly steps which you can take immediately to begin rebuilding your credit now. Remember, struggling does NOT make you a failure. You must struggle to reach every great success in life. If you have had past credit issues like short sales, foreclosures, collection accounts, judgments, bankruptcy, charge offs, etc. then you owe it to yourself to make the decision to begin your journey towards a healthier credit report today.

    We'd be pleased to serve as your real estate professionals. If you have a full time agent with a Masters degree in Planning with Finance and over two decades of experience, working for you, you will likely do better in negotiations. I'd be pleased to provide that service. 

    Other Trulia Real Estate Blogs:
    Foreclosure Help What to do to avoid NC foreclosure.
    Short Sale “vs“ Foreclosure. Which is better?
    What is a short sale? How do I sell my home as a short sale?
    Should I buy a short sale home?

    Search Homes for Sale in Charlotte Fisher Herman Realty

    Daniel Fisher
    704.617.3544
    Fisher Herman Realty
    Licensed NC & SC
    Bio & Testimonials

    I am a real estate broker and not advising on legal or tax consequences; if you have legal or tax questions, you should contact a NC licensed attorney or CPA

  • Short Sale “vs“ Foreclosure. Which is better?

    Posted Under: Home Selling in Charlotte, Financing in Charlotte, Foreclosure in Charlotte  |  June 12, 2013 10:38 AM  |  1,515 views  |  No comments

    In a recent North Carolina Bar Association newsletter it is stated that foreclosure defense in North Carolina is based upon the premise that any other available option is better for both the borrower and the lender and that attorneys should use strategies such as short sales, loan modifications, continuances, and financial workout that convince the lender that foreclosure is not in their best interest.

    If you are a homeowner and you want to keep your home and avoid foreclosure, see Trulia Real Estate Blog Foreclosure Help.  Always discuss your situation with your lender's loss mitigation department first. Your lender may be able to offer a loan restructuring. If this is not possible, then a short sale may be a good option for you. You can often do a short sale even if you are current on your payments.

    In a short sale, the ideal outcome is that Lienholder(s) agree to take less than the full, remaining balance on your mortgage and other debts and agree to not attempt to sue you or pursue any other collection methods against you for the unpaid balance. You also do not face an eviction process, but instead will have a settlement and closing date giving you a set period of time to pack and move.

    Foreclosures are a bit different. After you default on a loan, usually by failing to make required payments, the lienholder may use the foreclosure process to force the sale of the home so that they can take ownership of the property and attempt to recover their investment. Communication with you is on an "as required" basis and when a foreclosure occurs or if you voluntary surrender of title without foreclosure (called a deed in lieu of foreclosure), there is no "agreement" between you and the lender. The lender retains all rights under law to pursue you to get a judgment and collect the unpaid balance, plus any allowable penalties, attorney costs, etc.  You may also face the eviction process which can force you to move, resulting in a sheriff's officer forbidding re-entry into the home and removal of you belongings from the home.

    A short sale is the preferable way to sell your home for less than what you owe, because it allows negotiation of terms that put you in the most advantageous legal and tax position most favorable to you. A short sale, while involving an uncertainty of time tends to be less stressful than the alternatives.

    We'd be pleased to serve as your real estate professionals. If you have a full time agent with a Masters degree in Planning with Finance and over two decades of experience, working for you, you will likely do better in negotiations. I'd be pleased to provide that service. 

    Other Trulia Real Estate Blogs:
    Foreclosure Help: What to do to avoid NC foreclosure.
    What is a short sale? How do I sell my home as a short sale?
    How does a foreclosure, short sale or deed in lieu affect my credit score?
    Should I buy a short sale home?

    Search Homes for Sale in Charlotte Fisher Herman Realty

    Daniel Fisher
    704.617.3544
    Fisher Herman Realty
    Licensed NC & SC
    Bio & Testimonials
     

    I am a real estate broker and not advising on legal or tax consequences; if you have legal or tax questions, you should contact a NC licensed attorney or CPA

  • Foreclosure Help: What to do to avoid NC foreclosure?

    Posted Under: Home Selling in Charlotte, Financing in Charlotte, Foreclosure in Charlotte  |  June 12, 2013 10:14 AM  |  1,493 views  |  No comments

    Maybe you are not behind on your mortgage payments but have concerns about making future payments? Or maybe you are actually facing foreclosure? If you feel you are at risk of losing your home, know that you are not alone. Seek help. North Carolina offers several free foreclosure prevention resources including counseling, mortgage payment assistance, and fraud protection.

    Mortgage Payment Assistance

    If you've had a reduction in income or lost your job, the N.C. Foreclosure Prevention Fund* can pay your mortgage while you look for or retrain for new employment. You also may be eligible for help to pay your mortgage while you look for work during a divorce, serious illness, death of a co-signor or other temporary financial setback.  If you qualify, the Fund offers Zero-interest, deferred loans up to $24,000 for 24 months of assistance or $36,000 and 36 months of assistance in NC high unemployment counties while you seek or retrain for a new job.. Loan balance is reduced every year you remain in your home after the fifth year, and is fully forgiven after the tenth year.

    Free Counseling

    Regardless of the reason for possible foreclosure homeowners can protect their home from foreclosure and access free counseling by contacting the State Home Foreclosure Prevention Project (SHFPP) which is funded and led by N.C. Office of the Commissioner of Banks in cooperation with state and federal agencies, legal assistance organizations, mortgage servicers and community organizations. Foreclosure counseling and other services are provided by participating HUD-approved counseling agencies statewide at no cost to homeowners. SHFPP homeowners can receive help seeking loan modifications and providing counsel on options to avoid foreclosure

    *N.C. Foreclosure Prevention Fund are federal funds offered through the N.C. Housing Finance Agency, a self-supporting state agency. More info at www.NCForeclosurePrevention.gov 888-623-8631 or 866-234-4857

    Alternatives to Foreclosure:

    If you have explored loan modification and mortgage payment assistance options and decide that you are still going to let your home go to foreclosure, you should consider the short sale option.  If you do a short sale. counseling and, guidance on budgeting, restoring credit or transitioning into rental housing these services are often provided by participating HUD-approved counseling agencies statewide at no cost to homeowners.

    We'd be pleased to serve as your real estate professionals. If you have a full time agent with a Masters degree in Planning with Finance and over two decades of experience, working for you, you will likely do better in negotiations. I'd be pleased to provide that service.  

    Other Trulia Real Estate Blogs:
    Short Sale "vs" Foreclosure. Which is better?
    What is a short sale? How do I sell my home as a short sale?
    How does a foreclosure, short sale or deed in lieu affect my credit score?
    Should I buy a short sale home?

    Search Homes for Sale in Charlotte Fisher Herman Realty

    Daniel Fisher
    704.617.3544
    Fisher Herman Realty
    Licensed NC & SC
    Bio & Testimonials

    I am a real estate broker and not advising on legal or tax consequences; if you have legal or tax questions, you should contact a NC licensed attorney or CPA 

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