For the most part, homeowners in the City of Alexandria, particularly in the neighborhoods of Old Town and Del Ray have been somewhat immune to the wave of foreclosures and short sales that have plagued the surrounding areas.

But even with sought-after benefits including four metro stations, many homes with high walkability scores, and a close-in location, foreclosures and short sales are still a reality.  Homeowners who find themselves with a troubled mortgage should not waste any time in negotiating with the bank.

When it’s time to make the call to the bank to renegotiate your mortgage, here are the five papers you’ll need on hand:

1. Your most recent mortgage statement or coupon booklet.  If you receive monthly statements, you’ll need to reference your loan number and view your payment history.  Once the account representative retrieves your account information, they’ll also be able to see your recent payment history.  While a coupon booklet will have your loan number, it will not be as detailed as a monthly statement.
2. A brief explanation of your current circumstances.  Be honest and specific about your current situation.  Every person and every situation will be different.  Be prepared to provide documentation to support your circumstances.
3. Recent pay stubs or tax returns.  Pay stubs are proof of past income earned.  If you are presently in a position where you need assistance, or if you fear you may need assistance soon, your pay stubs will help you prove that you were capable of earning a steady income.
4. A list of household expenses. Include your utility bills, food, insurance, and the basic necessities.
5. A list of other debt obligations.  Any credit cards, car loans, student loans.

The number one comment that I hear about foreclosure prevention is that homeowners often wait too late to get help, making foreclosure inevitable.

Source: FHA

Free Brochure: Learn How To Avoid Foreclosure and Keep Your Home

City of Alexandria Resources

Free Consultation: See If You Qualify For A Short Sale for your Old Town or Del Ray home

The term ’short sale’ has definitely gained popularity with the Alexandria VA real estate market over the past year.  While a short sale may not be suited for every homeowner, here are some basics to let you know how we help those who may be a candidate for a short sale.

The factors necessary in order to move forward with the short sale process:

• The homeowner may be behind on payments.  You don’t have to be behind on mortgage payments to qualify for a short sale.  Every bank, and every situation is different.
• There is little or no equity in the house, or homeowner owes considerably more than what the house is worth.
• The homeowner can prove a legitimate hardship.

Once the homeowner is aware of all options with the current mortgage company and if the owner chooses to proceed with a short sale, then we prepare the ‘Short Sale Package’ and submit it to the lender.

The short sale process for FHA loans if different than the process for VA and conventional loans.  With FHA loans, the homeowner must have written acceptance into the HUD short sale program prior to listing the home.  With conventional mortgages, the seller can proceed to market the home in the MLS and receive offers.  Based on the total amount owed on the home (which could include late payments, taxes, HOA/condo fees, mechanics liens), and a market analysis, we help determine the asking price for the home. 

The mortgage company may not explicitly offer a bottom line figure for what will be acceptable, so the market analysis proves to demonstrate what buyers are currently paying for similar homes.  This information is also included in the prepared short sale package to help strengthen the owner’s case for the approval.

The average time for a home to successfully close with a short sale is 60-90 days.  The benefits to the homeowner include the relief of no longer carrying a mortgage that is not affordable, and still being able to purchase a home.

As with a seller-owned resale home, the home is aggressively marketed both online and in print publications to secure a buyer.  As with all transactions, all financial information is kept in confidence, so you will never see our listings blatantly advertised as short sales.

To assist Alexandria VA area homeowners who are having difficulty making mortgage payments, I’ve received extensive training and have added another service to help.  In the midst of all of the talk about foreclosures, you may not be aware that if a homeowner has fallen behind on their mortgage payments, they may be able to take advantage of a short sale.

A short sale is an agreement where the bank gives permission to the home owner to sell the home for less that the total mortgage balance owed on the home.

To qualify for a short sale, you must first be able to prove that you are facing a financial hardship and are unable to make your mortgage payments.  Some examples may include a recent job loss, unexpected medical bills, divorce, or an adjustable rate mortgage whose interest rate has recently changed, making your home no longer affordable.

It’s important to remember that each bank is different, and each bank has its own separate set of procedures to determine if a homeowner can qualify for a short sale (final approval is granted by the bank, not the listing agent or broker).  If there is more than one mortgage on the home, then the short sale will have to be approved by each lien holder.  The home can be sold for market value, or a little below, and the bank can either forgive the outstanding debt, or work out a separate payment arrangement.  The homeowner benefits from a short sale by avoiding a foreclosure on his/her credit report.

Due to the number of inquiries, I have created a new website for you to share, or visit if you need more information: www.SaveMyNovaHome.com.

While foreclosure homes are traditionally a ‘good deal’ for would-be home buyers, they can be very costly for banks, and banks do not want to be in the property management business, they want to be in the loan business.

A short sale can be an alternative that proves to be a win-win.  The bank can avoid the costs it would incur to go through the foreclosure proceedings, including taking over taxes and utilities, and the financially strapped homeowner can protect his/her credit rating.

We will also assist homeowners who qualify for a short sale and have bank approval with finding another home.  Many homeowners are able to purchase a new home right after a short sale, however in some cases, renting may be better to allow credit scores to improve and cash reserves to be rebuilt.

When a buyer considers the option of buying a foreclosure or short sale home in Alexandria VA, usually the dream of buying a home in model condition at a deeply discounted price comes to mind.

I’ve recently sold two bank foreclosures and I can tell you that not only are they sometimes tough to sell, they’re also tough to show, take a look at the following video: http://slideroll.com/show.php?s=abq5b10a

I’ve shown homes where the cabinets have been pulled from the walls, all of the appliances have been taken, carpet has been ripped up down to the subflooring, not to mention the odors and living things with multiple legs that can sometimes greet you at the door.

Getting a home way below market value is one thing.  Having the time and money to make repairs is another.

Here are some things to consider when purchasing a foreclosure or short sale home in Alexandria VA:

1. How much money do you have for repairs after down payment and closing costs?
2. What types of repairs are you willing to take on?
3. If the repair costs end up going over budget, what’s your plan B? 
4. Do you already have a team of trusted and reliable contractors to help you with cosmetic and structural repairs?
5. Have you secured the best type of financing for your foreclosure purchase?
6. Do you have the time to oversee the repairs?

Many times when buyers start out looking at the foreclosure homes that are available, the thought of costly repairs and time become too overwhelming and we end up looking at seller-owned homes that show ‘pride of home ownership’.

There’s a story behind every foreclosure, there’s also a story behind every purchase.  To make your homebuying experience a smooth one, consider the pros and cons of buying a foreclosure.  Sometimes, the time spent on repairs is not worth the money.