Important FHA & VA Home Loan Standards

Buyers with FHA (Federal Housing Administration) and VA (Veteran Administration)loans can't just buy any home. In an effort to protect their consumers, the FHA and VA have set criteria for the conditions of the homes that their buyers can purchase. They have specialized appraisers, who not only look at the comps and value of the home, but they also inspect the properties for safety and health hazards as well as other costly problems. In an effort to reduce wasting time and money, buyers should use a critical eye to take good look for some the following criteria:

Approved Condominium Complexes. If you are looking at condominiums, the complex must have been approved by the FHA or VA. Approved complexes are listed on the Department of Housing and Urban Development and Veteran Administration Websites. You may also find complexes on the website, that are not approved. It must show an active approval. If a complex approval has expired, the home owners' association has to reapply for the approval. Detached houses and Planned Unit Developments that have Home Owner Associations do not require approval.

Foundation Issues Cracked foundations (see photo) are a problem for any kind of loan. Things to look for are cracks in the stucco and drywall, difficulty opening and closing doors and windows, cracked floor tiles, and sloping floors.

Permanent Heat Source. The home must have an attached, built-in heat source that is turned on with a switch or knob. Wood burning stoves and fireplaces do not quality. A wall heater is approved.

Pools & Pool Equipment. Besides being filled, pools & equipment must be in good working order with no health hazards including algae and cloudy water.

Paint & Drywall Damage. If the house was built before 1978, peeling paint or damaged drywall/plaster (see photo) will need to be repaired.

Safety Hazards. Cosmetic issues are not concerns; however, safety issues such as electrical hazards, exposed wiring, broken windows, etc. need to be replaced or repaired.

Stove. The home must have a functioning stove (see photo). Buyers can purchase a stove and place in the home before close of escrow.

Unpermitted Additions. Garage conversions are probably the biggest culprits that will not be approved. While many Realtors believe no unpermitted additions will be approved, others claim it depends on the appraiser and the workmanship of the addition whether or not it will be approved. So if the buyer is willing to risk the cost of an appraisal, you may get a thumbs up.

Roofs. Worn roofs may be approved, but leaking roofs will not.

Termites. While a termite inspection is not always required, if there are obvious signs of termite damage and wood rot, then treatment or repair would be reqired.

While some of these problems can be addressed by the buyers prior to close of escrow, if they so desire, it is good to know what you are facing before making an offer. By keeping an eye out for these problems, buyers can avoid heart break and frustration.

Virginia Hall
ABR, CRS, e-Pro, GRI, SFR
Coldwell Banker Residential Brokerage
VirginiaHall.com
Direct (619)258-8585

Secrets to Winning in a Multiple Offer Bidding War

As you search around the streets, you may notice there are not as many homes up For Sale as usual. In some parts of San Diego you are right. For example, in Santee the total number of homes listed during the first quarter of the year declined 4%, compared to last year.

According to the California Association of Realtors, the number of homes for sale has been declining for the past 8 months. As the number of homes decline, the law of supply and demand kicks in leading to more multiple offers.

So what are the secrets to winning a bid on a home where there are multiple offers?

1. Use a Realtor®. Many think they can find properties online and don’t need help. But in truth, many of the property websites that consumers use have a 48-72 hour delay. A Realtor can locate new listings and represent you in the purchase of a home.

2. Don’t delay. When you find the right home, there will be other buyers out there feeling the same thing. Get your complete offer in as soon as possible. The offer must include a loan preapproval and the Proof of Funds.

3. Don’t low ball the property. Using the comparable properties prices, determine the fair market value and give your highest and best offer. If you are buying the home with a loan, the home will be appraised to make sure that you are not paying too much for the home. When the market prices are climbing, you can offer a little more than the comps. However, if you are too high, you may have to renegotiate the difference between the appraisal and your offer.

4. Factor in Closing Costs. If you need to have closing costs, you are best to bring up the price up to make up the difference. So at the end of the day, the seller still nets a fair price.

5. Include a letter explaining why you would make a better buyer. Some people include mini biographies with family or individual photos. Any information that might emotionally influence the seller to accept your offer over another will help your position.

With the use of these tips, hopefully you can succeed in a more competitive market and win the home of your dreams.

Virginia Hall
ABR, CRS, e-Pro, GRI, SFR
Coldwell Banker Residential Brokerage
VirginiaHall.com
Direct (619)258-8585

Aces of Real Estate: 8 Short Sale Negotiation Strategies

Ready to tear out their hair, many agents and buyers have declared, “I don’t want to look at another short sale!” Like a game of poker, I always look at it as a game of strategies. You just have to know who you are playing with and what their next move is. When you know what to expect, this will help you to negotiate the best deal.

While the seller accepts an offer on a short sale, their short sale bank has to review and approve the price and terms of the offer because, ultimately, the bank will be taking the biggest loss. Each bank handles negotiations differently, but I have found some patterns that make it easier to negotiate. These items need to be considered when making an offer so that there are no surprises, only negotiations:

1. First and foremost, Buyers must understand that short sales take longer than the traditional sale. While the banks have improved on their time frames, they still require anywhere from 2-6 months on average to review the seller’s financial records and the offer. See Short Sale--An Oxymoron--A Word for Wait.

2. Normally the offer has to be reasonable within 10-15% of the comparable properties in the area. The bank will have an appraisal to compare the offer to.

3. Depending on the type of loan the buyer has and the price offered, some banks may pay for termite inspection and work, repairs, and closing costs. A lot of banks tend to be more flexible with VA and FHA buyers.

4. Most short sale banks will not pay towards Homeowner Association (HOA) Dues in the rear. If the seller can, they should continue to pay their HOA dues. The mounting fees seem to be a real source of contention for short sale banks or buyers to accept. The buyer’s first reaction is “why should I pay” for something the seller should have kept up. But if buyer can get the bank to pay closing costs or reduce the price in exchange and looks at it as part of the cost of buying a nice home at a great price, it is easier to accept.

5. Depending on the Bank, they may also ask the buyer to pay for the HOA documents which range anywhere from $200 to $500. Again it is best to look at it as part of the cost for a nice home.

6. Most banks won’t pay for the Buyer’s home warranty. So no need to ask.

7. Normally, the oven/stove will be sold with the home; however, the seller will often want to sell any other appliances separately outside escrow.

8. If the seller has two loans on the home, the first lien holder offers the second lien holder money to release their interest. Depending on the situation, a second lien holder may ask for more money than the first lien holder is willing to give. It may seem that you are in a stalemate. Without the second lien holders' cooperation, the sale cannot happen. While the seller cannot contribute any more money, and the banks cannot ask the buyer to contribute. If it is a great house, rather than let it go, the buyers may offer to contribute to the cause.

Short Sales definitely have a longer bumpier ride with less frills than a traditional sale normally does. However, with the help of a knowledgeable short sale specialist, one who understands the game and with these ace strategies you may be able buy a great home at a lower price. The long ride and some added cost may be well worth it.

Virginia Hall
ABR, CRS, e-Pro, GRI, SFR
Coldwell Banker Residential Brokerage
VirginiaHall.com
Direct (619)258-8585

Short Sale Now or Pay Tax Consequences

A seller recently called me in a panic, "I received a 1099C from the bank and I owe the IRS almost $18,000." She had done a Short Sale last year and was preparing her taxes. She received the Bank's 1099 Form showing the forgiven debt, the difference between what the house sold for and what she owed.

However, the good news for this seller is the Mortgage Forgiveness Debt Relief Act of 2007. The law saved her from having to pay this huge tax. Once the seller filed the IRS Form 982, the problem was corrected on her taxes.

According to the IRS, "The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief."

Prior to 2007,the difference between what the house sold for and was owed, was considered forgiven debt, and may have been taxable.

Since the law only protects those that qualify until of the end of 2012, if you have been considering a short sale now is the time to do it. Since short sale bank approvals can take anywhere from 3-6 months, you need to start making plans .

While I always advise sellers considering a short sale to consult with their attorneys and/or an accountant, you will also want to consult with a Realtor who has the Short Sale Foreclosure Resource designation from the National Association of Realtors. Agents with this designation have gone through special training to specialize in short sales.

For more information, you will want to visit the IRS website on Mortgage Debt Relief Act of 2007 .


Virginia Hall
ABR, CRS, e-Pro, GRI, SFR
Coldwell Banker Residential Brokerage
VirginiaHall.com
Direct (619)258-8585

An Exciting World of Its Own--Santee Town Center Park East (Santee Parks Part 10)

It was a warm July night in 2010, when I first visited the wonderful world of the Santee Town Center Community Park East located at 550 Park Center Drive, tucked away behind the Sportsplex and Cameron YMCA. People scattered across the giant grassy area on blankets and lawn chairs in front of the concert stage, preparing to hear the sounds of the Corvettes. Many enjoyed their picnic dinners while listening to the music. Children danced to the sounds of rock and roll. It was a delightful sight.


The following September, I vounteered at the first Santee Wine and Blue Grass Festival held at the park organized by the Santee Park and Recreation Committee. What an exciting affair!



On July 4th, the city held a concert festival in celebration of the nation's birth. The locals picniced and strolled around vendor booths. A live band played and people danced, while waiting for the clock to stike 9pm and the fireworks to fill the sky.


Recently, I visited the park again on a lazy Sunday afternoon. As we pulled into one of the large parking lots, I was amazed to see the athletic fields that lied beneath where all the festivities I had been to had taken place. The 40 acres of park includes the Cameron YMCA and the Sportsplex just across two bridges that transcend the San Diego River Bed.



The park was a buzz with activity. My husband and I stolled along the walkway with our dog. As we entered the park, I spotted a gentleman flying a remote control airplane to the delight of all who watched. Lots of open sky to zoom and zag.



As we walked further on, to my amazement, there were lighted synthetic turf football and soccer fields, home to the Santee Pop Warner Ravens. A few soccer games were winding down, and players were gathering up their nets.

I noticed people picnicing at tables, some even under gazebos, along the way. We even stopped to rest on one of the benches that doted the walk way.



The park also includes grills, restrooms, a jungle gym playground area, a concession stand, and a trail system interlinked to all parts of the park.



You will want to visit the Santee Town Center Park East to see this exciting world of its own.


by Virginia Hall
ABR, CRS, e-Pro, GRI, SFR
Coldwell Banker Residential Brokerage
VirginiaHall.com
Direct (619)258-8585

A Park Amongst the Heavens--Sky Ranch Park (Santee Parks Part 9)

If you are looking for a spectacular view and a new park in Santee to visit, Sky Ranch Park is the place for you. This 1.3 acre mini-park is located in the newer Sky Ranch development at 5850 Cala Lily Street.

The small Santee City park blends in with the rest of the Sky Ranch neighborhood, careful you may drive right by it.


The park has scenic views overlooking the surrounding Santee and El Cajon regions, including Gillespie Field Airport and nearby mountains.



While it is a small park, there is a covered giant playground area along with picnic shelters, picnic tables and barbecue grills. You can stroll along a walkway surrounging the open grassy area or rest on one of the benches and enjoy the solitude.


Dogs on leashes are allowed. Open dawn to dusk, it fits in perfectly with the executive home neighborhood.





by Virginia Hall
ABR, CRS, e-Pro, GRI, SFR
Coldwell Banker Residential Brokerage
VirginiaHall.com
Direct (619)258-8585

A Tucked Away Wonder--Shadow Hill Park (Santee Parks Part 8)

This eastern Santee park is tucked away in the Shadow Hills neighborhood off Woodside Road on the east side of Highway 67. It is located, off of Woodside Road, at 9161 Shadow Hill Road, between the newer Black Horse Estates and the Sky Ranch subdivisions.

The Shadow Hill Park, like many in Santee, features benches where you can just sit and enjoy the sunshine on a warm day or rest under the shade of a tree. Young children race about the large playground equipment. For the adults and teens, there is basket ball and tennis courts. People can barbecue on grills, plan parties under the covered gazebo. or just share a sack lunch on a picnic bench. Air jumps are also permitted with plenty of green space for children to run and play.

You will find a small bridge leading to a set of benches and a few trails to explore. Time to get away and enjoy another one of the Free Santee Parks.

For more information go to the Santee City website or for more information about other Santee Parks see my blog series on Talkin Real Estate.


Virginia Hall
ABR, CRS, e-Pro, GRI, SFR
Coldwell Banker Residential Brokerage
VirginiaHall.com
Direct (619)258-8585 begin_of_the_skype_highlighting (619)258-8585 end_of_the_skype_highlighting