Troy Charlton

Get your calculator out. I recently closed on a short sale where the seller walked out of closing with a check for $15,000 and $3,000. The home sold for $25,000. The commission for both sides was $1500. Title companies got paid a little and the recording fees were paid. A check was sent to Chase Mortgage for a little over $3000. The math worked, but just did not make much sense.

When I received a call in May from Chase Mortgage to list a home that they had the loan on and that the owner did not qualify for a modification, I quickly accepted and quickly got the home on the market. While meeting with the seller, they mentioned they had received a letter from Chase stating that if they place the home on the market and sold it, Chase would pay them $15,000. My initial response was that they someone had sent them a letter to try to scam them in some way. They produced the letter for me and I called Chase. Chase confirmed that they sent the letter and that it was true. Chase was going to pay them $15,000 upon a successful short sale!

We listed the home for $35,000 and quickly sent the listing documentation to Chase, as they were one day from a foreclosure. We were able to get the foreclosure postponed. An offer was obtained and Chase accepted the offer (BTW, Chase short sale department was excellent with the speed at which they worked this short sale). We closed the property yesterday at a sales price of $25,000. The seller received a $15,000 check form Chase and a $3,000 check from HAFA.

The sellers were ecstatic and are getting a new start on life. I will not go into their story, but I pray that they can use this money wisely and get back on their feet again. My paycheck will get my kids some new shoes as school starts back next week. But my question is, what did Chase get out of this. I do not see how the math adds up for them. I believe the seller incentives on behalf of the mortgage companies could do a lot for the short sale market and keep more foreclosures off the market. But $15,000 on a $25,000 property. When all was said and done, Chase received a check for just over $3,000. That probably did not even handle the cost of the servicing that took place on the loan during the short sale process.

Oh well, I am going to put my calculator up. I am not sure what Chase will get out of this, but a few things that I know will come out of this transaction......My sellers will get a new start on life and a home that is in bad need of repair is going to get a major uplift. There will be some job opportunities as the home is rehabbed. The new and improved property will make for some happier neighbors as it will make a better looking neighborhood and hopefully a move towards increasing the property values in the neighborhood. An investor will put some money into the economy as he purchases supplies and pays his crew of handymen. Someone will begin to pay rent on this home or a real estate transaction may take place if he chooses to "flip" the home. And, Dick's Sporting Goods will close on three new pairs of shoes next week.

There is still a way to buy a home without emptying your savings account for a down payment. HUD is still offering the $100 down payment program that few people know exists. With this program, you can buy a HUD foreclosed home with $100 down payment and they will still cover some of your closing costs. This is a great way to buy a home below the market value and keep your money in the bank. For a list of homes that qualify in your area email me or the HUD registered broker of your choice and they can guide you through the process and share with you the homes that can be bought with $100 down. If the home is in need of repairs, those can be added to the loan with the FHA 203k loan. For more information on the $100 downpayment program, go to http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/salesincentives

A short sale can be an excellent solution for homeowners who need to sell, and who owe more on their homes than they are worth. In the past, it was rare for a bank or lender to accept a short sale. Today, however, due to overwhelming market changes, banks and lenders have become much more negotiable when it comes to these transactions. Recent changes in corporate policy and the Obama administration have also improved the chances of getting a short sale approved.

But to be technical, here's a more official definition:

• A homeowner is 'short' when the amount owed on his/her property is higher than current market value.
• A short sale occurs when a negotiation is entered into with the homeowner's mortgage company (or companies) to accept less than the full balance of the loan at closing. A buyer closes on the property, and the property is then 'sold short' of the total value of the mortgage.

For homeowners to qualify for a short sale, they must fall into any or all of the following circumstances:

• Financial Hardship - There is a situation causing you to have trouble affording your mortgage.
• Monthly Income Shortfall - In other words: "You have more month than money." A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
• Insolvency - The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.

This seems simple enough, but it is a complicated process that takes the expertise of experienced professionals. I hold the CDPE® Designation and am ready to identify all possible options and, when possible, assist in the quick execution of a short sale transaction.

If you have questions or feel you may qualify for a short sale, please contact me for a free consultation.

Understanding your options now could mean all the difference in the world.

Go to www.lettroyhelp.com for more information.

There are still ways to buy a home will little or no money down in Nashville Tennessee. These options come with competitive interest rates and work in most all areas. The two most common programs that are currently being used are Tennessee Housing and Urban Development Association (www.thda.org) loan and the USDA rural development loan (http://www.rurdev.usda.gov/HSF_SFH.html). Both loans have options for no down payment. The seller is able to pay for the closing costs. This will allow the first time buyer to get in a home for zero money out of pocket. They will need to be prepared to pay for an inspection and appraisal. However, they can get reimbursed for the appraisal at closing. To get started, call a real estate professional that knows about the two loans and can assist you in finding the right lender as well as the home that would qualify. We have consulted with hundreds of first time buyers and are ready to help.

We did it October and now it is time to go again. We will depart from CENTURY 21 Charlton Realty at 8:30 am to see 6-8 foreclosed homes. We will return around noon. Along the tour you will be able to speak with mortgage consultants, home inspectors, handymen, and real estate consultants to discuss the ins and outs of real estate investing. If you are thinking about diversifying your portfolio and investing in real estate, this is a good place to start. If you are a seasoned veteran, you will be able to see more homes in a three hour time period than you can on your own. If you have a few investment properties and have made mistakes with them in the past, please come hear our professionals as they give you insights so that you do not make those mistakes again. If you are looking for a home to buy and live in, join us this Saturday. You may find a good deal.

Our next two dates are November 13th and 20th from 8:30 am until noon. For more details and registration, visit my website at www.Troycharlton.com.