Thinking About Buying a Short Sale?

Thinking about buying a short sale? You may not like the bank's short-sale conditions, but any deviation from the rules can be risky. If you fail to agree to the terms-the sale can be put into jeopardy. There could also be civil and criminal actions if the terms are violated.

The buyer must be an owner occupant
The acceptance of a short payoff is sometimes conditioned upon the buyer living in the home. In lenders' eyes, this rule is based upon the theory that an investor would be interested in buying the home only if there were some undisclosed equity in the property-and that equity should be going toward the payoff. Even if buyers come into the transaction with the legitimate intent to become owner-occupants but then end up renting out or reselling the property soon after closing, this could be in breach of the lender's terms.

The purchase price must be highest and best
In certain instances, a practitioner might be aware at the time of the short sale that the buyer is under contract to sell the property to another party for a profit. While this may make business sense for the buyer, it would violate a condition in which the parties certify the purchase price to be the highest and best price obtainable. In transactions that are part of the Affordable Foreclosure Alternatives program, the federal government prohibits a sale by the buyer of the short-sale property for 90 days after the purchase.

Proceeds received by seller
To help the seller net more money than permitted by the lender, the buyer might make a side agreement to move in early and pay rent or the purchase personal property such as furnishings. But if the lender's terms include a condition that the seller net no more than a stated amount, then the seller cannot use these side agreements to circumvent that restriction. Payments to the seller for rent or personal property should be disclosed to the lender on the HUD-1 settlement statement, and any amount over what's stated on the HUD-1 would violate the lender's terms. Also, the short sale may not be approved in time and the home goes into foreclosure or to an auction. What if you were living in the home?

Even if the lender has already issued an estoppel letter or short-sale agreement, it could legally refuse acceptance of the negotiated payoff if its conditions aren't met. And considering how much effort and energy go into a short sale transaction, that is an outcome no one would like. The bottom line: Once the lender has made clear what it's willing to take to accept a short sale payoff, anything a buyer may do to get around those terms can spell big trouble.

There are some short-sale bargains on the active market at this time and these are important things to think about before writing an offer on one.

How can I cut my electric bill painlessly this winter?

Try these few simple tricks that can save you a bundle.

Compact fluorescent lamps (CFLs) are much more efficient than incandescent bulbs and last six to 10 times longer.When Mom told you to turn out the lights, she was thinking of saving energy dollars, not rolling blackouts and bankrupt utility companies. Rarely have Mom's words of wisdom been as fitting as they are now and not just in California. Electricity rates are going up everywhere.

Besides switching off lights, there are several other painless methods to conserve energy and save money on your electric bills.

Plug ins
Look for those electronic devices, especially those with digital time and date displays that are infrequently used such as alarm clocks, TVs and VCRs in a guest room and unplug them.
Unplug devices used to recharge electronics/batteries when they're not being used.
Transformers consume energy. Consider unplugging devices like calculators that are not in use.

Appliances
Wait until you can fill up your dishwasher before running it. And if you have a heated-dry option, switch it off. Prop open the door a bit after the cycle to air dry your load.
If you have an electric cooktop, turn the burners off a few minutes before the allotted cooking time. The heating element will stay hot long enough to finish the cooking without using more electricity.

Refrigerators
Refrigerators use more power than any other appliance in the home and deserve special attention. Although rushing out to buy a new refrigerator may not be in your budget, it is important to know that new models are more efficient and use as little as half the electricity of older units. Full refrigerators run more efficiently than ones that are only partially full. So buy more food and save some energy.

If you have two refrigerators, or an additional freezer, decide if the extra expense is really worth it. Cram as much as you can into your primary refrigerator or consider disposing of two older refrigerators and replacing them with one larger, newer and more efficient model.
Make sure the refrigerator door seals are tight. Test them by closing the door over a piece of paper or a dollar bill so it is half in and half out of the refrigerator. If you can pull the paper or bill out easily, the latch may need adjustment or the seal may need replacing.
Place food and liquids in airtight containers. Uncovered foods release moisture and make the compressor work harder.
Move the refrigerator away from the wall and vacuum its condenser coils yearly unless you have a no-clean condenser model. Refrigerators will run for shorter periods with clean coils.
Maintain a consistent temperature in the refrigerator and freezer. Recommended temperatures are 37 to 40F for the fresh food compartment of the refrigerator and 5F for the freezer section. If you have a separate freezer for long-term storage, it should be kept at 0F.

Lighting

Its obvious, but true: Turn off lights that are not being used. Consider installing timers or photo cells on some lights. Another option is occupancy sensors that turn on and off automatically when someone enters or leaves a room.
Rather than brightly lighting an entire room, focus the light where you need it. For example, use fluorescent under-cabinet lighting for kitchen sinks and countertops
Consider dimmer switches and three-way lamps. These provide low light levels when bright lights are not necessary.
Use linear fluorescent and energy-efficient compact fluorescent lamps (CFLs) in fixtures throughout your home to provide high-quality and high-efficiency lighting. Fluorescent lamps are much more efficient than incandescent bulbs and last six to ten times longer. Although fluorescent and compact fluorescent lamps are more expensive than incandescent bulbs, they pay for themselves by saving energy over their lifetime.

Realty Times - Value in Homeownership

Realty Times - Value in Homeownership