NEWS FOR YOU 

What is a short sale? 

With the Real Estate Market we’re currently in, you may have heard the term “short sale” and wonder exactly what it means. A short sale occurs when a homeowner is trying to avoid foreclosure. Let me explain a few things before hand though. How this usually works is lenders want people to borrow money when they buy a home, but when irresponsible lending occurs, as it has recently, some people get in over their heads financially, especially in this market. It’s very important not to borrow money that is ahead of one’s income, or this can cause a serious issue. Usually when the market drops, it brings some people down and can even turn a few upside down. This happens when people are not aware of the current market also, and don’t realize that they need help. According to Gary Keller of Keller Williams, “many homeowners will owe more than they can get on a house they can no longer afford to own and face a looming foreclosure. At the same time, many institutions will have foreclosed on homes they can’t afford to own and will themselves be facing a fiscal crisis. Because both sellers (individual and institutional) must sell, home prices become attractive enough to draw serious interest from bargain hunters and investors.” This creates a flood of distressed or bank-owned properties on the market and impact the marketplace. Once a homeowner is in trouble, they may experience stages of the process: default, shortsale, foreclosure, and REO. 

So what exactly is a short sale then and how does it actually affect homeowners? A short sale occurs when the proceeds of a real estate sale fall short of the balance owed on the property and this is when the lender accepts less than the full amount due on a mortgage once the property is sold. By the lender accepting this discount on the loan balance, they understand that economic or financial hardship is involved. Usually the lender will accept the short sale to avoid the time and expense of a foreclosure. It is highly recommended that homeowners contact an experienced and professional short sale negotiator to work with lenders on the homeowners behalf. The agent negotiates by written authorization from the homeowner, with the banks loss mitigation department. Usually lenders do not accept short sale offers or requests for one until a Notice of Default has been issued where the property is located. Notice of Defaults is made public soon after a homeowner gets behind on the mortgage payments. It varies how long a lender will allow the owner not to make payments or partial payments. Most lenders have pre-determined criteria for such transactions. Distressed lenders may allow any reasonable offer subject to a loss mitigator’s approval. Junior liens, second mortgages, and HOA’s may need to approve the short sale as well. Frequent objectors to short sales include tax liens and mechanic’s lien holders. 

There are several steps when considering a short sale as a solution. First is to talk with your lender immediately. The lender doesn’t want to foreclose on the property. They may be willing to work with you to refinance or provide help to resolve the situation. If they won’t allow one to resolve the default, this is when the homeowner needs to see if they will accept a short sale. The lender will ask the borrower to submit a lot of information to even consider the short sale. For example, W-2’s, bank statements, hardship letter, fair market value for the property, preliminary proceeds sheet, etc. This process can be lengthy so patience is critical. The lender still may or may not approve the short sale, and if not, then one proceeds to a foreclosure. If they do, the lender takes the loss, which is more likely to happen in a downward market. Most banks do approve a short sale because they believe it will result in a smaller financial loss than foreclosing. 

An experienced real estate agent then sells the property for less then the outstanding balance on the loan, and turns over the proceeds of the sale to the lender, sometimes but not always in full satisfaction of the debt. In this case the lender will have the right to approve or disapprove of the proposed sale. Most short sales leave a deficiency balance for which the Mortgagor/borrower is still liable, so it may not be a settlement in full. A deficiency balance will remain while the mortgage broker, real estate agent/broker, loan officer, title and closing agents still receive their profit. For the homeowner, a short sale helps avoid a foreclosure on their credit history and the partial control of the monetary deficiency. A short sale will affect ones credit, but it typically does so with less negative affect than foreclosure. Short sales are in deed a settlement. Short sales may remain on a person’s credit for 3-7 years. Depending upon other credit information, it may be possible to obtain another mortgage in 1-3 years after a short sale though. 

So is the borrower off the hook once their home is sold? Not necessarily. The lender still has the options to try and collect this shortage although it is unlikely; it all depends on the lender. As a condition of the short sale the lender may require the borrower to sign a note to repay the shortage. They may also file a collection or judgment for the amount of the shortage between the loan amount and the final sales price. This is when you need to consult an attorney or real estate agent. The IRS may also come after the borrowers for income taxes on the amount of the shortage. If the shortage was forgiven, the lender will report the shortage as income to the IRS and the IRS will collect taxes on this amount. Consult a tax professional in this case though. 

Again, a short sale is definitely a better option that to let a home be foreclosed on if someone is having financial difficulty. A short sale is nothing more than negotiating with lien holders a payoff for less than they are owed, or rather a sale of debt, on a piece of real estate, short of the full debt amount.  

For more information on Short Sales and Foreclosures, call Beverly Fast Sinclair at Keller Williams Realty 317-846-3277. 

CLEANING HAZARDS 

One of the most common home accidents is the mixing of cleaning products that contain chlorine bleach with those that contain ammonia.  

When chlorine and ammonia are mixed together, a gas called “chloramines” is produced that is highly irritating to the lungs and causes coughing and choking. Chlorine bleach also produces dangerous chlorine gas if mixed with an acid product like toilet-bowl cleaner or rust remover. Be sure to read labels carefully before using any of these substances.  

A sale alternative to toxic cleaners can be made using substances commonly found around the home, such as baking soda, salt, distilled white vinegar, liquid soap and vegetable oil. Remember to keep all cleaning products out of the reach of the children, and visit the Take Heart Website for safe cleaning recipes. 

Source: Washington Toxics Coalition
www.hopehealth.com 

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Be a Blood Donor 

“Saving the world isn’t easy. Saving a life is.” Every two seconds someone needs blood. On any given day, an average of 38,000 units of red blood cells are needed for trauma victims – due to accidents and burns – heart surgery, organ transplants and patients receiving treatment for leukemia, cancer or other diseases, such as sickle cell disease. Your gift of life can save up to three lives. Donation is a safe process.  

North Branch
The Centre
1416 South Rangeline Road
Carmel, IN 46032
(317)844-0313
Monday, Wednesday, Thursday
9:00 am to 6:00 pm
Tuesday 9:00 am to 8:00 pm
Friday 7 am to 4 pm
Saturday 8:00 am to Noon 

www.bloodsaves.com
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Moving With Kids 

How to Make it Easier For Them
by Katharine Canfield 

Moving can be as challenging as it is exciting. Sometimes more so. Moving is as hard for kids as it is for adults. They, too, are leaving behind familiar places and important friends. They, too, are starting over: seeking new friends and adjusting to a new home, neighborhood, and school. But because they're still learning how to socialize and how to effectively get their needs met, children need caring adults to listen and help them adjust to their new home, now more than ever. 

If you're a parent contemplating a move, this article's for you. By considering a move in three stages - before, during, and after - and thinking about your children's needs during each stage, you can make a big difference in how your kids feel about the move and how they adjust afterwards. 

• Before the move: Preparing
• During the move: Remembering What's Important
• After the move: Getting Settled  

BEFORE THE MOVE:
Preparing 

Tell your children about the move as soon as you can. The more time they have to think about and prepare for the move, the easier it will be for them.  

Give your children a chance to express their feelings, and try to be honest about your own feelings. Most children will feel some anger, sadness, or worry about the move. These responses are natural, and kids who have a chance to express them will work through their doubts more easily. Gently tell your children about any sadness you may feel about leaving or uncertainty about a new home, job, or city. This will reassure them that they aren't alone in having worries or concerns.  

Help older children prepare a list of phone numbers and addresses of close friends, relatives, and other important people in their lives. Knowing they can stay in touch with these people is an important part of a successful move.  

If your kids are old enough, let them participate in decision making. Have the kids keep a notebook of potential new homes with the positives and the negatives listed.
If you are able to, before you move take your children to your new home and explore the new neighborhood and town or city together. If this isn't possible, take pictures of your new home, the schools your kids will attend, a nearby park, and anything else that would be interesting to them.  

Make a scrapbook containing pictures of your pre-move home, friends, and other mementos of your life together.  

Call the principal of your children's schools, and try to set up a meeting with their teachers or, if they're in junior high or high school, guidance counselor. The new school may even be able to give you names of students in your child's class who live near your new home. If so, you may want to drop by to meet them and their families before you move in.  

Try to line up some activities in which your child can participate after the move: a sports team, music lessons, art classes, a scouting troop. Not only will activities like these keep your children involved; they'll also help them to feel like part of a group - an important aspect of settling in. Try to sign up for more than one activity in case one falls through or doesn't go well.  

If you can, try to meet families in your new neighborhood before you move. Being familiar with people when you move in will help your children feel more at home.  

DURING THE MOVE:
Remembering What's Important  

Throughout the move, stay as upbeat and calm as you can; a good plan makes this possible. Your own mood will impact other family members, especially babies, who are particularly sensitive to their mother's feelings. With older children, it's important to be honest about some of the uncertainties you have, but also to be generally optimistic about the move and the positive ways it will affect the family.
Involve your kids in the packing. Older kids can put their own belongings in boxes, and kids of all ages will enjoy decorating the boxes containing their things. Doing so will also make finding your children's things easier once you're at the new house!  

Try to stick to your routines. Have meals at the same times as always. If your kids nap, encourage them to lie down at the usual time. Keep to the normal bedtimes.  

Don't pack things that your children treasure. Take special blankets, beloved stuffed animals, favorite books, and other prized items in a separate bag or box that you can bring with you in the car or on the plane when you go to your new home.  

Help your children say good bye to the important people in their lives. For their friends, a pizza or make-your-own sundae party is a fun way to celebrate the friendship. An album or poster with photos of good times together will add to the celebration. If your children are comfortable, encourage hugs at the end of the party. With neighbors or other special adults, you may want to set up a time to stop by and say good bye as a family.  

Expect the unexpected: few moves go smoothly, anticipate trouble (predict it!) and have a positive, "can do" attitude.  

AFTER THE MOVE:
Getting Settled 

Don't spend too much time unpacking - at least not right away! Sure, the essentials are important to unload and you want the house to feel settled. But wait on the less important stuff. In the first few days, take time to enjoy your new home with your family. Take walks. Check out local restaurants and take-out spots. Introduce yourselves to your new neighbors. Spend time at the park.  

Be on the look-out for neighborhood kids, and help introduce your children to them. If it's comfortable for you and your children, invite some of the neighborhood kids over for pizza or a video.  

Let your children have some input in planning on the new house, especially in choosing things to buy for their rooms. Even if you don't follow through on their ideas, it's important to listen to what they think. Be tactful if you choose another option, and let some decisions be entirely up to them - for example, the placement of their bed or the color of the rug or paint in their bedroom.  

Get involved: church groups, synagogues, YMCA and activity clubs, etc. enable socializing. If a couple of months have gone by and your child seems unusually troubled, ask a doctor, guidance counselor, or principal if you need a referral. Signs that your child may need help: unusual academic difficulty; ongoing irritability; trouble with peers; changes in sleep or eating habits; a generally despondent mood. Give them time, this behavior can last for 4-5 months for teens.  

Above all, listen. Try to be there when your kids get home after the first day at their new schools, even if it means having to leave work early that day. Regularly ask how things are going, and take time to listen. Sometimes kids have a hard time opening up; spending relaxed time together may help them to bring up whatever is on their minds.  

For children and adults, it takes time to feel at home. With your understanding and patience, your children will be reassured that, after a while, things will get easier; everything won't feel so new; and that home is, after all, wherever the family is.
For more information on moving with children and moving in general, see the book Smart Moves: Your Guide through the Emotional Maze of Relocation by Nadia Jensen, Audrey McCollum, and Stuart Copans. Smith & Krauss. To order a copy for $16.95, call 1-800-895-4331. The ISBN is 1575250861. 

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Declutter 15 Minutes a Day - 5 Great Tools That Make it Easy! 

Your home is filled with clutter of all shapes and sizes. This is why you are unable to keep it clean. You have too much STUFF. All we ask is that you set a timer and spend 15 minutes a day decluttering. That's it. Anyone can do anything for only 15 minutes, even if you have to break it down into 5 minutes segments. These are the five tools we give you to help you declutter and also make it fun for you! When you get the e-mail reminders/checklists from FlyLady, try them yourself. What do you have to lose (besides clutter LOL!)?  

The 27-Fling Boogie 

We do this assignment as fast as we can. Take a garbage bag and walk through your home and throw away 27 items. Do not stop until you have collected all 27 items. Then close the garbage bag and pitch it. DO NOT LOOK IN IT!!! Just do it. 

Next, take an empty box and go through your home collecting 27 items to give away. Suze Orman taught me this in her book, The Courage to be Rich. This will change the energy in your home and bring about good feelings. Every time I do this I feel better and my home is becoming decluttered in the process. As soon as you finish filling the box, take it to the car. You are less tempted to rescue the items. Rule of thumb: if you have two of any item and you only need one, get rid of the least desirable. I also sing a wonderful song as I am doing this fun job: "Please Release Me, Let Me Go" as sung from the stuff's point of view. 

The Hot Spot Fire Drill 

Here is a problem that we all have and continue to struggle with - Hot Spots. What is a hot spot? 

A hot spot is an area, when left unattended will gradually take over. My favorite analogy is of a hot spot in a forest fire, if left alone, it will eventually get out of hand and burn up the whole forest. This is what happens in our homes. If left unattended, the hot spot will grow and take over the whole room as well as making the house look awful. When you walk into a room, this is the first thing you see.  

CLUTTER ATTRACTS CLUTTER! 

Do you have areas like this that continue to grow if left alone? Does the rest of the family see this as a place to put things when they do not want to put them where they belong? It is our job to nip this in the bud! Get rid of that pile, find the surface underneath and stop this Hot Spot from becoming a raging clutter inferno! Watch for the Hot Spot fire drill reminder - then try it - it works!  

The 5 Minute Room Rescue 

This is a reminder to spend just 5 minutes clearing a path in your worst room. You know this area of your home: the place you would never allow anyone to see. Just 5 minutes a day for the next 27 days and you will have a place that you can be proud to take anyone! 

Visit www.FlyLady.net
 

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