Foreclosures, bankruptcies, short sales … all have such negative impact on homeowners (or former homeowners to be exact).  However, the stigma of having declared bankruptcy or having lost a home is not as great as it used to be.

Remember in college when we were told, “Look to your left.  Now look to your right.  These people will probably not make it to graduation.”  It almost feels like those days have returned, but instead of not making it to graduation, it’s more like “These people are having financial problems and could lose their homes.”  The stigma of bankruptcy or foreclosure isn’t as great because it could be any of us!

But how long will one of these difficult financial situations follow your credit report?  RIS Media - a firm that specializes in information for real estate professionals - says seven to 10 years.

A foreclosure can be reported on your credit report for seven years from the date the foreclosure was filed in the court.  …

Bankruptcy, she said, legally can remain for 10 years from the date you filed - not the date of discharge or when the bankruptcy is completed. However, credit reporting agencies have agreed to voluntarily remove completed Chapter 13 filings - where someone pays off part or all of their debt under a court-supervised plan - seven years from the date of filing.

I had an interesting call yesterday from an alleged client who wanted to know if he could move in immediately to a home if he paid cash.  I questioned him some and told him that some stars would have to align in order to do this, but it is possible.

1. If it’s cash, the available has to be confirmed with a bank or other financial institution.
2. If it’s a cashiers check, the check has to be confirmed as being legitimate (not counterfeited) by the bank or whoever issued the cashiers check.
3. The seller has to agree to accept the terms of the contract, including the occupancy date.
4. The buyer must understand that he/she is accepting the house in as-is condition by taking possession.
5. The buyer must understand that no other contingency will be allowed should he take possession (no appraisal, no “wife approval”, no nothing).
6. The buyer must expect the agent to be accompanied by another agent when viewing the property because this just doesn’t happen… it sounds too good to be true.

In the end, the buyer never showed up for the appointment.  I am okay with that because how hurried he was gave me that “I’m about to be scammed” feeling.  Trust your gut.

Summer is here so the beach is calling some of you, mountains are the destination of others.  Personally, I prefer the cool shade of the mountains rather than the blistering sun of the shore, but humidity sometimes makes even shade unbearable!  Give me a healthy dose of air conditioner!

If you are making plans to travel, though, you should plan ahead to keep your home safe from would-be thieves in your absence.  Lynnae at BeingFrugal.net provides some great tips on what to think about before you leave:

Put your Lights on Timers – If you can’t line up a house sitter, make sure your lights are on timers.  Timers are not that expensive, and setting the lights to go on and off will make your home look lived in.

Truck for Sale.  Comes with House.

My colleague Adam Hensley posted this on facebook and I couldn’t resist.  I hope no one was home.  Hope the driver was okay.

My friend Sheri sent me this photo of her cool mountain getaway in the Smoky Mountains. I am so ready for cooler temperatures and summer just got her!

I hate those signs, along with the ones that read they’ll buy your home cheap!  “They” are investors trying to flip a house so they can make a profit which isn’t altogether a bad thing if you’re a seller who needs to get out quickly and you don’t mind not getting a full price for your house.

However, an agent in my own area posted an outstanding video explaining the phenomenon. I wish I could embed it directly but until then, here’s the link to go watch.  It’s worth your time!

Appraisers have a hard row to hoe these days.  Realtors and lenders, buyers and sellers are all mad at them because two and three years ago they “inflated” prices.  Now they aren’t taking any chances and seem to be “deflating” prices.  Or they mark a home as being located in a declining market area allowing some lenders - at their discretion - to require a bigger down payment or they don’t fund the loan at all.

All in all, though, I think appraisers are doing the best they can with what’s been handed them.  One appraiser I just spoke with has been handed a big pile of mess to deal with.  She’s been asked to appraise a home that has been foreclosed on and the people who lost the home are hostile about the eviction.  But she’s expected to go in - even though she had nothing to do with the foreclosure or eviction - and face an angry family so she can determine the value of the home on behalf of the bank.

I wouldn’t want to be in her shoes right now.  Not at all.

I have a nice home - almost 3000 square feet (because the upstairs is finished) on an acre and a half.  This house cost 1/3 less than a slab of concrete in Boston … a parking space in the upscale Back Bay neighborhood that went for $300,000.

Homes are expensive in this area.  For example, on one web page the least expensive home was $2,345,000 for nearly 4000 square feet.

Another home for $14,800,000 has nearly 10,000 square feet.  I love that it has both a wine room and a huge library (to go along with the seven bedrooms, five full baths and four half baths, and 20 rooms in all.

So far I want to move to Destin, Florida, Washington, DC, and now Boston, Massachusetts. Though I just returned home last night from Orlando, I think I have the travel bug!

Though an outright foreclosure is by far the worst experience for a seller, short sales are one of the most unpleasant experiences a buyer (and Realtor!) can experience.  Recently the National Association of Realtors distributed a quiz for agents to figure out how much they know about these transactions.  I missed one because it was a trick question!  But here are some of the quiz results:

What is a short sale?  When a listing sells for below the amount the seller owes on the mortgage.

When is a short sale accepted?  (This was the trick question) When a contract is formed between buyer and seller. It’s tricky because short sales have to be approved by the lender - they are agreeing to accepting less than what is owed, so my answer was when the lender approves the offer.  However, the lender can’t sell what’s owned by the seller so the contract must be between the buyer and the seller.

Some of the potential downfalls of a shortsale was the last question and these are both correct answers: The short sale can negatively impact the seller’s credit score and the seller may have to sign a note promising to pay back the remaining mortgage debt.

I don’t like short sales, but they’ve become a fact of life in today’s market.

Photo from The Wilmington Search blog.

The recovery of the housing market to lift the faltering economy is still blurry, according to an article in Business Week by David Bogoslaw.

Housing inventory fell to 10.1 months of supply from 10.7 in March and was well below the peak 13 months of supply, After a couple of strong months, there was a lull in purchases of homes priced between $150,000 and $200,000, which had had the strongest growth, Goldman Sachs said in a May 28 research note. The key to further paring excessive housing supply is a slowdown in foreclosure filings, which Goldman doesn’t see as likely. In March, foreclosure filings were 15% higher than the total inventory of new homes for sale, Goldman said, citing RealtyTrac data.

Out here in the trenches, I’m still seeing lots of foreclosures.  Also still seeing an unwillingness by lenders to work with people needing to refinance or give them time to get caught back up.  The cycle continues …