Janna Rankin Scharf - Realtor Coeur d'Alene and North Idaho Homes

Coeur d'Alene Idaho Real Estate Short Sale Q&A: If it sells for full price, does the seller still make a little money?

I regularly feature my blog posts on my Facebook page, and sometimes the comments they bring come in the form of questions.

Last week I posted a link to my post, Coeur d'Alene Real Estate Short Sale Heart Warming Moment. It was a story about some of my current clients who had just received an approval from their lender to short sale their house. I mentioned that we got their house under contract at full listing price. Then came the question as to whether or not those sellers would then make a little money since it sold for full price. The answer, no.

The home price was set at its value today in the Coeur d'Alene real estate market, not at what the sellers needed to pay off the mortgage.

The definition of a Short Sale is the sale of a home for less than is needed to pay off their mortgage(s). So if it's a short sale, it goes without saying that the seller will always be short of enough proceeds to satisfy their mortgage and/or closing costs. In a short sale, the lender will usually cover all closing costs. The lender's stipulation is that the seller doesn't receive any of the money from the sale of their home.

So then, what does it mean that it sold for full price if it wasn't enough to pay off the mortgage and closing costs?

A seller can be in a short sale situation for a number of reasons. It always has to do with the CURRENT market value of the home versus what they owe on the home.

Anyone who bought a home in 2005-2007 in Coeur d'Alene, at the top of the price run-up and feeding frenzy, has seen their home value decline. Let's use two of my clients as real life examples:

One bought a new home for $200,000 in 2006. It is now worth only $160,000. When he purchased it, he put $50,000 down and currently has it for sale at $160,000. It's not a short sale because he will be able to sell it for enough to pay off his mortgage, pay his closing costs and be done with it. A traditional sale, not a short sale. Although, this seller will still have lost his $50,000 down payment.

Another client purchased a home for $200,000 with 100% financing at the top of the market. That home is now only worth $160,000. Not having put any cash down, it's not possible for him to sell it for enough to pay off the mortgage. In order sell it, his lender will have to agree to take less than is owed. As with the guy in the example above, SOMEONE is going to lose $50,000 to sell it now - in this case the lender who loaned $200,000 to mortgage the house. In the other, it's the homeowner.

That's why two houses built and sold at the same time for the same price, can be For Sale side by side today for the same price, with one being a short sale and the other a traditional resale.

(Someone who bought a house at the top of the market, no matter how much they put down, isn't necessarily in a bad situation if they can afford to make their payments and don't have to sell right now. History has always shown that home values appreciate over time. After this rough market correction, they will rise again. It's just going to take some time, but values will come back.)

In this crazy market, you are bound to have real estate related questions from time to time. Don't hesitate to call or send an Email if there is something you would like help understanding. Knowledge is Power!

Links to recent posts of mine dealing with Coeur d'Alene Idaho Short Sales:

What does a short sale Realtor do?
Can I Short Sale My House To Avoid Foreclosure if I Have an IRS Tax Lien?
Coeur d'Alene Short Sale Success Story~ Today was a good day!
Is the FDIC killing short sales and loan modifications in Coeur d'Alene Idaho?
The Joy of Short Sales ~ Today was a GOOD Day

Some of my happiest childhood memories involve huge piles of leaves under the ancient poplar trees that framed our house at 9th and Sherman. They're all gone now, our home and those trees. But each fall as the leaves pile up around town they live on in my memories.

The city's annual leaf pick-up program has begun. Residents are asked to rake their leaves and pine needles into the streets, about a foot out from the gutter line to allow for water drainage. Please do not put bagged leaves, branches, rubble or refuse in the street. There is no cost to you.

City crews will be moving fast, beginning south of Sherman and working their way north. Once an area has been cleared they won't return, so if you're too late you're just out of luck. City crews are unable to provide an exact schedule but there will be morning updates on the KVNI 1080 radio morning show.

Please note that there is no charge to residents to haul leaves, pine needles, limbs, branches, or debris to the landfill. Waste Management WILL charge to haul bagged leaves.

For more info you can contact the Street Maintenance Department at 769-2233. And thanks to my sister Kerri Thoreson for the great photos!

Coeur d'Alene Real Estate Short Sale Heart Warming Moment - It's not often I have a chance to use the terms "heart warming" and "short sale" in the same sentence!

There are so many distressed homeowners right now. They are embarrassed, ashamed and they tend to suffer in silence. Frozen in fear. Not knowing what they can do, not realizing how many others there are that are living the same financial nightmare. Afraid of their friends finding out. Wondering what the neighbors will think. In many cases a short sale is a good solution to get you onto the next chapter of your life.

On September 17th I opened my email and found this message:

You've received a contact message from your Contact Form on the ActiveRain network. Message details: From: xxxxxxx xxxxxxxxx
Email: xxxxxxxxx@aol.com
Subject: Short Sale (Sent via Activerain)

My wife and I are interested in a short sale of our home. I'm wondering what we need to do to get started with this process, with you as our Realtor. We have researched a little bit and you seem to be very experienced in this area....

I made an appointment with this local police officer and his wife to discuss their situation. It was a an awful story of being harassed for most of the past year by their mortgage company following a successful loan modification. There were discrepancies in payment amounts, payments received, the modification details - and these homeowners who had been trying to get this resolved for the better part of a YEAR were getting no help with the resolution. They were getting up to nine hostile calls a day from the lender's collection department. But no one would LISTEN to them, or help them.

They were both fighting back tears while we talked. They had accepted the reality that they were going to lose the modest home they built 8 years earlier, and loved. They didn't have the means to pay what their lender claimed they needed to bring their mortgage current, although they have records showing they had paid what they had been told they needed to pay. They had come to the end of their emotional ropes and couldn't hang on any longer. They were hopeless, which is not a good place to be. They had found a rental and were making plans to move out. Hoping to avoid foreclosure and make the best of a bad situation, we listed their house as a Coeur d'Alene short sale.

A week later we had a solid offer for full listing price. A good start. Nothing left to do but find out if their lender would approve them for a short sale, and at what price. After their grueling and frustrating experience trying to get someone to sort out their mess this past year, they were realisticly expecting the worst. A process that drug out forever. Short sale terms and conditions that they couldn't meet.

Today I received the approval letter. Accepted offer. No harsh terms or conditions, just a request for a notarized Arms Length Transaction form and a closing within 30 days.

I made the call to my Seller. As I told her the news, she broke down on the other end of the line. She was overcome with a huge flood of relief after such a prolonged period of mental exhaustion.

I may not have found a cure for cancer today, or pulled someone from a burning building. But to this frazzled homeowner I was a hero. A hero, because I had simply helped her find a resolution to her nightmare. Because FINALLY someone was willing to listen, and help.

Please, if you just can't keep up your mortgage payments and think you have no option but foreclosure, contact me! I can help you explore your options, whether it be a loan modification, short sale or something else, and advise you as to a course of action to bring the best possible outcome to a bad situation.

Holiday Toy Drive to benefit CASA (Court Appointed Special Advocates)
November 2 - December 4

Join me and the Coeur d'Alene Association of Realtors
as we collect unwrapped toys and gift cards for Kootenai County
children and teenagers this holiday season.

Make a difference in a child's life!

There are over 600,000 abused, neglected children in the U.S. Over 260 of these children are in Kootenai County. CASA volunteers represent these children in court, focusing exclusively on the child's best interest. They research their background & serve as fact finders for the judge. Volunteers continue to monitor during the life of the case, helping to ensure that the child makes it to a safe, permanent home as soon as possible.

Click on the link to the CASA website to find out more information about the organization and volunteer opportunities you can become involved in.

If you would like to join me in making a difference, please consider a donation of toys for children to age 12 or gift cards for teenagers, with a $15 value. Gifts should be unwrapped, gift bags are appreciated. Call me if you have questions or need more information. You can drop off toys and donations to me at my office. I'd love a chance to shake your hand and thank you personally!

Keller Williams Realty Coeur d'Alene
1044 Northwest Blvd. Suite F
Coeur d'Alene, ID 83814
208-651-9700

Thank you for whatever you can do to
bring a smile to a child's face this holiday season!

My dad, Ron Rankin, had a vision to build a veterans memorial plaza between the old courthouse and the new administrative building in Coeur d'Alene. Dad was elected Kootenai County Commissioner in 1996, and served two terms from January 1997 through January 2003.

Dad began to raise money from private individuals for the three flagpoles and dedicatory stone. In 1998 the 8-ton black marble "Killed In Action" monument was placed in the plaza. Over the next few years the 13 wall panels of battle scenes from history, and the Hall of Heroes/Medal of Valor recipients and Purple Heart Honor Roll were added. Dad considered this memorial to veterans as his legacy. To this day, no public money has been used for the memorials, including the 14th marble wall panel honoring those who have and continue to serve in Iraq which was added in 2005.

After Dad's passing in 2004, the county unanimously decreed that the plaza be dedicated in his name. On Memorial Day 2005, the Rankin family donated the eagle statue to the citizens and veterans of Kootenai County during a ceremony to dedicate the Ronald D. Rankin Veterans Memorial Plaza.

My dad enlisted in the Marine Corps in 1946, shipped out to the Philippines, and was stationed at Subic Bay U.S. Naval Base. He was discharged in 1948. In 1950, dad enlisted in the Marine Corps Reserves, just before he was activated on July 29, 1950, and shipped out August 18 for Korea, leaving behind my mom and my 7-month-old sister Lynne. Dad saw combat at the Inchon Landing and continued on to the liberation of Seoul, heading north to the Chosin Reservoir Campaign. After surviving 100,000 Red Chinese, he was discharged as a corporal on July 12, 1951.

A life member and founding Judge Advocate of the Pappy Boyington Detachment #966 of the Marine Corps League, Dad was also a life member of Veterans of Foreign Wars Post 9831; a member of American Legion Post 14; and a member of the "Chosin Few," a last-man organization of those who survived the Chosin Reservoir Campaign in North Korea, November-December 1950.

My sister, Kerri Rankin Thoreson, continues today as the curator of the Kootenai County Ronald D Rankin Veterans Memorial Plaza and oversees the memorials and ceremonies which take place there. She is also the wonderful photographer credited with these photographs.

I hope you'll join me today in prayer for our veterans, past and present, that our Heavenly Father will hold them in His loving hands as they stand between us and tyranny. Semper Fi, daddy.