We’re pleased to welcome Tyler Meyer to the Shorewest, Realtors® Delavan Office, located at 830 East Geneva Street in Delavan. With his valuable real estate experience — combined with the services and benefits of Shorewest, Realtors® — he has the tools to serve your housing needs.

Tyler Meyer offers over two years of real estate experience and specializes in the Walworth County market.

“We are pleased to have Tyler join our Shorewest family,” says Jan Alvey, sales director of the Delavan Office. “Tyler’s clients benefit from his comprehensive real estate knowledge. He is skilled at combining his insights with unsurpassed customer service.”

Tyler Meyer can be reached at the Shorewest, Realtors(r) Racine Office at 262.740.7300, ext. 1032, cell at 262.374.4435 or via e-mail at tmeyer@shorewest.com.

Shorewest sales associates and Wisconsin Mortgage loan officers received special recognition for their performance and production during the first quarter of 2012.

The were recognized at a breakfast held at Bluemound Country Club. Congratulations on a great first quarter!

Wisconsin is a great place to live. People typically enjoy Wisconsin’s four unique seasons and the beauty it brings. Here’s some beautiful spring-time flowers in Wisconsin.

If you look around, you’re sure to see many signs that the real estate market is picking up. Besides the numerous homes on the market for sale, Shorewest, Realtors® is seeing a lot of traffic in its open houses and offices, as well as multiple offers.

Shorewest’s Burlington Office located at 911 Milwaukee Avenue in Burlington broke an office sales volume record in April. That means its total dollar volume of sales was higher than any other April in the office’s history.

“That’s a huge indicator of the market picking up,” says Lyle Albro, associate sales director at the Burlington Office. “Our agents are busy and excited to be helping people buy and sell homes.”

If you’d like to buy or sell a home, contact Shorewest, Realtors® Burlington Office at 262.763.8477 or go to Shorewest.com.

Mortgage rates are at record lows. Contact Wisconsin Mortgage Corporation today to get financing for your new home – or refinance the home you already enjoy.

Here’s a great article to check out from CNN.

http://money.cnn.com/2012/05/10/real_estate/mortgage-rates/index.htm

We’re pleased to welcome 20 sales associates who joined Shorewest, Realtors® in April 2012.

Brookfield/Waukesha Office
(2212 E. Moreland Blvd., Waukesha)
Kevin Anderson
Melissa Patton
Michael Robeson

Cedarburg/Grafton Office
(1245 Cheyenne Ave., Suite 103, Grafton)
Lynn Sewart

Delavan Office
(830 E. Geneva St., Delavan)
Amy Kadlec

Janesville/Rock County Office
(4323 Milton Ave., Suite 200, Janesville)
Molly Leonard

Lake Country Office
(1296 Summit Ave., Oconomowoc)
Sandra Knodl
Mike Schwartz

Lake Geneva Office
(623 Main St., Lake Geneva)
Sarah Adams

Menomonee Falls Office
(N94 W17900 Appleton Ave., Menomonee Falls)
Betsy Timm

New Berlin Office
(3580 S. Moorland Rd., New Berlin)
Lisa Moriarti
Greg Nowaczynski
Joe Singsheim

Racine Office
(1557 S. Green Bay Rd., Racine)
Debra Swenson

South Suburban Office
(8880 S. Howell Ave., Suite 800, Oak Creek)
Jordan Caldwell

West Bend Office
(2419 E. Washington St., West Bend)
Tyia Kemnitz
Tony Favata

Waukesha Office
(921 Meadowbrook Rd., Waukesha)
Gerald Engelhardt

It’s likely you’ve heard the term “short sale” thrown around quite a bit. But what, exactly, is a short sale?

A short sale is when a bank agrees to accept less than the total amount owed on a mortgage to avoid having to foreclose on the property. This is not a new practice; banks have been doing short sales for years. Only recently, due to the current state of the housing market and economy, has this process become a part of the public consciousness.

To be eligible for a short sale you first have to qualify!

To qualify for a short sale:

• Your house must be worth less than you owe on it.
• You must be able to prove that you are the victim of a true financial hardship, such as a decrease in wages, job loss, or medical condition that has altered your ability to make the same income as when the loan was originated. Divorce, estate situations, etc… also qualify.

Now that you have a basic understanding of what a short sale is, there are some huge misconceptions when it comes to a short sale vs. a foreclosure. We take the most common myths surrounding both short sales and foreclosures and give a brief explanation. LET’S BUST SOME MYTHS!!

1.) If you let your home go to foreclosure you are done with the situation and you can walk away with a clean slate.  The reality is that this couldn’t be any farther from the truth in most situations. You could end up with an IRS tax liability and still owing the bank money. Let me explain. Please keep in mind that if your property does go into foreclosure you may be liable for the difference of what is owed on the property versus what is sells for at auction, in the form of a deficiency balance! Please note this is state specific and in most states you will be liable for the shortfall, but in some states the bank may not always be able to pursue the debt. Check your state law as it varies widely from state to state.

Here is an example of how a deficiency balance works

If you owe $200,000 on the property and it sells at auction for $150,000, you could be liable for the $50,000 difference if your state law allows it.

Not only could you be liable for the difference to the bank, but in some situations you could also be liable to the IRS! Although there are exemptions (mostly for principle residences) under the Mortgage Debt Forgiveness Act, there are times when you could be taxed on both a short sale and a foreclosure, even in a principle residence situation. Since the tax code on this is a little complicated and I am not a CPA, I advise always talking to a CPA when in this situation as you are weighing your options. Hard to believe?  Well, believe it or not, the IRS counts the difference between the sale and the charged off debt as a “gain” on your taxes. That’s right-you lost money and it’s counted as a gain! (I didn’t make that rule, that’s a wonderful brainchild of the IRS). Banks and the IRS can go as far as attaching your wages. Not to mention if you let your home go to foreclosure you will have that on your credit, as well.

Guess What?  A short sale can alleviate your liability to the bank, in most situations. There are also exceptions to this, but in most cases banks are releasing homeowners from the deficiency balance on a short sale.

2.) There are no options to avoid foreclosure. Now more than ever, there are options to avoid foreclosure. Besides a short sale, loan modifications along with deed in lieu are also examples of the many options. In most cases (but not all) a short sale is the best option. Either way, there are more options today than there have ever been to avoid foreclosure.

3.) Banks do not want to participate in a short sale, or, it is too hard to qualify for a short sale. Banks would rather perform a short sale than a foreclosure any day. A foreclosure takes a long time and creates a huge expense for the banks; a short sale saves both time and money. Banks have more foreclosure inventory than ever before, and certainly do not want any more. Banks more than ever welcome short sales. Qualifying for a short sale is easier than you think, you need to have a true financial hardship, or a change in your finances and your house has to be worth less than what you owe on it. Not only do consumers, but banks also now have government incentive to participate in short sales.

4.) Short sales are not that common. At this present time, short sales range from 10-50 % of sales in various markets and it is predicted that in 2012 we will have more short sales than any other year, to date. Due to economic changes in the last few years, this is something that is affecting millions of Americans. Short sales are in every market, and are not just limited to any particular income class. This has affected everyone from all facets of life. A short sale should be looked at as a helpful tool, not a negative stigma. That is why the government is offering programs that actually pay consumers to participate in short sales. It is not just affecting one community; it is affecting communities and consumers across the nation.

5.) The short sale process is too difficult and they often get denied. Though the short sale process is time consuming; it is not as difficult as the media would have you believe. The problem is that most short sales are denied because of a misunderstanding of the process.  It is true that if the short sale process is not followed correctly there is a good chance of getting denied. An experienced agent knows how to avoid this. Short sales require a lot of experience, and a special skill set. If you are looking to go the option of a short sale make sure your agent is skilled and experienced in this area.

6.) Short sales will cost me money out of pocket. A short sale should not cost you any out of pocket money. In fact, you could get between $3000-up to $30,000 to participate in a short sale. In many ways, a short sale may put you in a better financial position than prior to the short sale. Almost every short sale program now has some type of financial incentive for the home owner, as long as it is a principle residence, and we are even seeing relocation money being paid on some investment/second homes. As a seller of a property you should never have to pay for any short sale cost upfront to any professional service. Realtors charge a commission that is paid for by the bank. In most communities there are also non-profits and HUD counselors who can help you with foreclosure prevention options for free. The only potential cost you could incur is if the bank would not release you from a deficiency balance in the short sale, which is happening less and less now.

7.) If I am behind on my payments, I can perform a short sale any time. The farther you get behind on your payments, the harder it is to get a short sale approved. The closer a property gets to a foreclosure the harder it is to convince the bank to perform a short sale. As they get closer to a foreclosure sale more money is spent, thus deterring them from doing a short sale. If you think you need to perform a short sale, time is of the essence; the sooner you start the process, the better. Waiting too long can trigger the ramifications of a foreclosure, losing the ability to do a short sale as a viable option.

8.) I have already been sent a foreclosure notice so I can’t perform a short sale. For the most part just because you received a foreclosure notice or notice of default it does not mean that you do not have time to perform a short sale. The timeline and specifics do vary from state to state, but having done short sales all over the country, I have seen banks postpone a foreclosure to work a short sale option as close as 30 days prior to the scheduled foreclosure auction, but the longer you wait the less chance you have. If you have received a legal foreclosure notice, please reach out to a professional right away. The longer you wait, and the closer you get to foreclosure, the fewer options you have. If you have received a notice to foreclose this means the bank is filing paperwork and starting the process to take legal action to repossess the house. You still have time at this point to prevent foreclosure, but do not hesitate! The closer you get to the foreclosure date the harder it becomes to negotiate with the bank for whichever option you choose.

9.) I was denied for a loan modification, so I know I will get denied for a short sale. Short sales and loan modifications are handled by two separate departments at the bank. These processes are totally different in approval and denial. If you got denied for a modification you can still apply for a short sale; in some cases you can get a short sale approved faster than a loan modification, as some loan modifications are denied because they cannot reduce the loan low enough based on the  consumers income.

10.) If I go through a short sale I cannot buy another house for a long time. The time to buy another house depends on your entire credit picture and can vary from 12-24 months. There are even a few FHA programs that allow for a purchase sooner than that. I have worked with clients who went through a short sale and bought another house in less than 12 months.

These are just a few of the common myths surrounding short sales and foreclosure. With the options available today, no homeowner should ever have to go through foreclosure, and hopefully this information can help a few more homeowners think twice before walking away from their home not realizing the possible long term ramifications a foreclosure can have.

By our friends at Keeping Current Matters

HELP FIND A MATCH FOR TOM

Tom Dellemann is an active runner, hard worker, loving father and brother-in-law of Joe and John Horning. He never would have guessed that a standard health assessment at work would come back with unusual results. Upon receiving his results, he went straight to his doctor for more testing, and in January 2012, he was diagnosed with T-cell prolymphocytic leukemia. He is currently undergoing chemotherapy to put the leukemia into remission and is looking for the perfect bone marrow match to rebuild his immune system.

Tom asks for you to join the Be the Match marrow registry and be the life-saving match for someone waiting for a transplant. Who knows – you could be a match for Tom.

The Bone Marrow Donor Registration will be held in conjunction with Shorewest’s quarterly Blood Drive. Bone Marrow Donor Registration takes about 10 minutes. No appointment is needed. However, if you wish to donate blood, please make an appointment for the approximately 45 minute donation.

Blood Drive & Marrow Donor Registration

Friday, May 11, 2012
8:00 a.m. to 12:00 p.m.

Shorewest Realtors
Training Room (downstairs)
17450 W. North Avenue, Brookfield
Please make your own appointment at www.bcw.edu/Shorewest or contact Sharon Bertram at 262-510-4522 or at sbertram@shorewest.com and she can assist you.

Appointments encouraged. Walk-ins welcome.

We’re pleased to congratulate Amy Karegeannes of Shorewest’s Racine Office as being named Racine County Board of Realtors — Realtor® of the Year.

Amy Karegeannes works with her dad, Jim Smith. They have been full-time, top producing real estate professionals in Racine County since 2003. Together they are number one in sales in Racine County. They were named “Best in Client Satisfaction” by Milwaukee Magazine from 2009 through 2011. They were also voted Best Real Estate Agents in Racine County by Reader’s Poll of Racine Journal Times. They have been office sales leaders and team of the year seven out of the last eight years. Amy is also a Shorewest President’s Club Member. Amy served as past president of the Racine Board of Realtors® from 2010 to 2011.

“We’re so very proud of Amy for this recognition,” says Kim Casper, sales director of the Racine Office. “Amy is a great sales associate, employee, friend and mother/wife and daughter. Amy couldn’t be more deserving for this award.”

Amy Karegeannes can be reached at the Shorewest, Realtors(r) Racine Office located at 1557 S. Green Bay Rd., in Racine. Her direct office number is 262.884-7331 or cell 262.989.3003. She can also be reached via e-mail at akaregeannes@shorewest.com. Amy’s website is amy-k.shorewest.com.

by our friends at Keeping Current Matters.

It seems that the banks have finally realized that a short sale is a better option than foreclosure for them, the homeowner and the neighborhood. It is for this reason we believe that 2012 will come to be known as the year of the short sale. CNN Money reported on this exact point:

“We believe 2012 could be a record year for short sales,” said Daren Blomquist, vice president at RealtyTrac.

Banks are showing signs of being more open and willing to approve the deals — even if it means accepting less money. The average sales price for a short sale was $174,120 in January, down 4% from December and 10% year-over-year.

Market Watch also addressed the short sale situation recently:

Fitch expects the increase in short sales to continue because of the potential benefits afforded to both lenders and borrowers. Some borrowers may prefer short sales because, though they cannot stay in the property, they often walk away with cash incentives from lenders and healthier credit reports unmarred by foreclosure. For lenders, short sales provide a more efficient and cheaper alternative to the increasingly lengthy and costly foreclosure process.

Why Are the Banks Now Leaning Towards Short Sales?

The simple answer is that the banks lose less money when doing a short sale. The CNN Money article mentioned above explains:

Typically, banks get about 20% less for a foreclosed home. Foreclosure can also take years to unload, during which expenses, like property taxes, insurance and other expenses, mount up.

The Market Watch report breaks it down further:

Short sales…are currently getting completed 20 months after the last payment made on the loan, approximately 10 months less than the average time to foreclose. Shorter timelines reduce lenders’ carrying costs (i.e. accrued loan interest and property taxes, insurance, and maintenance) and eliminate most of the legal expenses associated with foreclosure and liquidation. As a result, loss severities tend to be considerably lower. Historically, for loans with similar attributes, short sales have severities 10%-15% less than REO sales. As the proportion of short sales increases, we expect average loss severities to improve further.

How Many Short Sales Could Be Completed?

JPMorgan has projected that over 500,000 short sales will be done this year. Also, NECN.com recently reported:

RealtyTrac estimates that if the January numbers it found hold up, there would be about 105,000 “pre-foreclosure” sales of homes, most of them short sales, during the first quarter of this year, and at that rate something like 400,000 for the year.

How Long Will Short Sales Be a Major Part of the Market?

The NECN article shows us that short sales are here to stay for some time.

According to the Mortgage Bankers Association, there are nearly 3.5 million homeowners delinquent on their mortgages by at least one month, including 1.5 million who are 90 days or more behind on paying their mortgage. And there are 12.5 million homeowners still who are “underwater,” owing more on their mortgage than their home is worth. That suggests that at the current rates, barring some spectacular economic recovery, it would take years, even decades, for short sales alone to clean up the mortgage mess that remains.

Short sales are here to stay. We must accept this fact and work hard to learn the process and apply it where it makes sense.