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How The Shadow Inventory Affects Wilmington, DE Home Sellers

Thursday, December 29, 2011

by Katina Geralis

As your Wilmington, DE real estate agent, I’m asked about the outlook for our Wilmington real estate market. One of the reasons it’s hard to pin down is the presence of our shadow inventory. Every time a home comes through the shadow inventory and hits the market, it can negatively affect the values of the homes around it.

What is the shadow inventory? Simply put, it consists of homes with defaulted mortgages that will eventually go through foreclosure and hit the real estate market.

Estimates place about 2 million homes in the national shadow inventory. This number is a moving target, because as homes go through foreclosure and get sold on the market, the shadow inventory goes down. But it can also be increased if more loans turn sour. Or, if loans that were previously brought current via loan modification, fall behind again.

This is why economists look closely at the number of “new defaults” that are reported by lenders. If we want to see the light at the end of the tunnel, loans have to stop going bad. While this is easier said than done, we’ve seen some progress lately. Banks have stepped up their modification and short sale processes to try and prevent foreclosures. Between this, and some improvements in the economy, it’s hoped that the shadow inventory will shrink.

How are we sitting in Wilmington? By current industry estimates, clearing our shadow inventory could take 72 to 120 months. Why so long? The foreclosure process in Delaware isn’t quick. Each foreclosure can take from 200 days, to a year or more, to be completed. It depends on the volumes, court schedule, and whether or not the homeowner is contesting the foreclosure.

On the bright side, the Mortgage Bankers Association reported that new defaults in the 3^rd quarter of 2011 were down by 7.99%. This is good news, because combating the shadow inventory is like dealing with a forest fire; half the battle is keeping it from spreading. A lower default rate now, means a smaller shadow inventory later.

My job as your Wilmington, DE real estate agent is to find ways to sell your home no matter what is pressuring the Wilmington real estate market. If you are struggling with your mortgage, or you simply need to sell your home in order to move on to another opportunity, I can help.

My experience in Wilmington, DE short sales and Wilmington, DE foreclosure sales make me uniquely qualified to handle this market. If you need to sell your Wilmington home, or if you have any questions, contact me. I will be here for you.

Wishing you the best for 2012,

Katina Geralis
Wilmington, DE Real Estate Expert
Keller Williams Realty
Wilmington Real Estate
Wilmington Homes for Sale
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Five Things To Know About Your Wilmington, DE Appraisal!

Thursday, December 15, 2011

by Katina Geralis

It’s one of the most dreaded parts of any Wilmington, DE real estate transaction. The appraisal is a cause of anxiety for many people who are looking to buy or sell a home. Although they can oftentimes be a more irritating part of any real estate transaction, an appraisal is necessary for determining the value of a home. Even the most seasoned Wilmington, DE homebuyers or sellers have most likely experienced issues with an appraisal. They’re ever-changing due to changes in the law, and there isn’t a whole lot you can do about it. You just have to be cooperative and be as prepared as possible for the process.

As a Wilmington, DE real estate agent, I have been through my fair share of appraisals. I use my knowledge and experience of the local real estate market to prepare my clients for what they can expect during this phase of their transaction. Along the way, I have discovered that there about five things that buyers and sellers should know before going through an appraisal on their Wilmington, DE home:

Appraisals may take longer than you think. Many home buyers and sellers think that appraisals take a couple of days, but in reality, they could take a couple of weeks. This is due to appraisal laws that state that your mortgage broker can’t hire their own appraiser. Instead, a third party appraisal management company has to be brought in. The involvement of another party may slow down the appraisal process, but it also ensures that you’re getting an accurate value on your home, as they don’t feel the need to please the mortgage companies with their estimate.

They cost a lot of money. Appraisals can cost several hundred dollars. The average price can range from $400-$500, due to the inclusion of a third party in the process. This is an expense that many home sellers and buyers in the Wilmington, DE area don’t take into account during the transaction, and it’s an important one. The extra $500 could make a difference, so make sure that you plan for it financially.

The outcome could be frustrating, and you need to be prepared. While the appraisal is an incredibly important part of a real estate transaction, it can also be frustrating, as the outcome typically benefits either the buyer OR the seller, not both. If the price is a bit higher than it should be, according to the appraiser, then that obviously benefits the seller. Similarly, a lower appraisal estimate would benefit the buyers more than the sellers. As a Wilmington, DE home buyer or seller, it’s important to be prepared for either outcome and factor that in to your decisions about the transaction.

Sellers should be involved in the appraisal process. Don’t work in your garden or catch up on your errands when the appraiser comes to your home. Make it clear that you’re going to be present from start to finish to answer any questions that they may have about the home. Let the appraiser know of any upgrades or repairs, and be sure to point out details that you think may add worth to your home. Features such as granite countertops can often be missed by appraisers, and they can add value, so you’re going to want to make sure that those little details are accounted for.

Be aware of the rules. Contrary to popular belief, appraisers are allowed to speak to your Wilmington, DE real estate agent. It’s also required that your appraiser be familiar with your area so that they can put the most accurate value on your home. Being aware of these things ahead of time will help you catch any red flags that could come up, such as bringing in an appraiser that is unfamiliar with your neighborhood.

As a Wilmington, DE homebuyer or seller, preparedness is the best way to ensure that your appraisal goes as smoothly as possible. These five tips will help you know what to expect from the process, and it lets you know what aggravations may come your way ahead of time. While the appraisal is possibly one of the least-desirable parts of a real estate transaction, it is also a necessary one. My many years of experience as a Wilmington, DE real estate agent has allowed me to gain the knowledge needed to fully prepare my clients for this aspect of their transaction.

If you have any questions about the Wilmington, DE real estate market, please don’t hesitate to contact me. I’d love to help you out in any way I can. I hope to hear from you soon! Have a great day.

Katina Geralis
Wilmington, DE Real Estate Expert
Keller Williams Realty
Wilmington Real Estate
Wilmington Homes for Sale
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Can I Get a Mortgage After My Wilmington, DE Foreclosure?

Thursday, December 1, 2011

by Katina Geralis

Going through a bankruptcy, foreclosure or short sale is heartbreaking, and for many people in this economic climate, it is a reality. One of the biggest fears of Wilmington, DE homeowners who begin to go through financial hardship is that if they go through one of these three processes, then they won’t be able to ever own a home after the fact. This is not true. You can be a homeowner again. All it takes is two qualities: patience and hard work.

It’s not impossible to buy a home in Wilmington, DE after suffering from a financial hardship, but in order to do so, you will have to clean up your credit and wait for a certain amount of time after the foreclosure, short sale or bankruptcy. As a Wilmington, DE real estate agent who specializes in foreclosures and short sales, part of my responsibility is to reassure my clients that this isn’t the end: they CAN become a homeowner again. It is also my job, however, to let my clients know exactly what they need to do to accomplish this after suffering from a Wilmington, DE foreclosure or short sale. Here are just a few of the more important things they’ll have to keep in mind if homeownership is the goal:

You’re going to have to wait awhile. Those who have suffered a financial hardship in Wilmington, DE could wait anywhere from 1-7 years after the fact before getting a home loan. If you went through a bankruptcy and have a spotless subsequent credit history, then you may have to wait only one year. If you went through a Wilmington, DE short sale or foreclosure and are looking for a conventional loan from Fannie Mae or Freddie Mac, you will most likely have to wait 7 years. In between are 2, 3, and 4 year timelines that all depend on extenuating circumstances surrounding the foreclosure or short sale.

Make sure your credit stays clean. If you miss even one credit card payment after losing your home in a foreclosure or short sale, then you are pretty much ruining your chances of getting a loan in a shorter time span. Make every credit card payment on time and show signs of stable employment. The more spotless your credit is after financial hardship, the more willing banks will be to get you your loan in a shorter time frame.

Consult an expert. Shortly after going through your Wilmington, DE foreclosure or short sale, you need to make sure that you consult a mortgage or loan expert for advice. They can give you a realistic time frame for when you can expect to be a homeowner again, and they’ll also tell you what steps that you need to take before it’s possible to get a loan again. As a Wilmington, DE real estate agent, I know several people in the industry that can help counsel you on a strategy after your foreclosure or short sale.

None of these steps are easy to take, but they are necessary if you want to become a Wilmington, DE homeowner after losing your home in a short sale, foreclosure or bankruptcy. As a Wilmington, DE real estate agent, it is part of my job to help distressed homeowners in the area figure out the appropriate plan for their financial situation and get them on the right track. I also need to help advise them on what steps to take to mend the damage caused after a foreclosure or short sale.

If you have any questions about Wilmington, DE short sales or foreclosures, don’t hesitate to contact me! I’m happy to lend a helping hand and listening ear for anything that you may need. I’d love to hear from you.

Katina Geralis
Wilmington, DE Real Estate Expert
NextRE Team
Wilmington Real Estate
Wilmington Homes for Sale
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