Friday, February 19, 2010
Rental Scams Issue Date: February 18, 2010
Thursday, February 18, 2010
About The Money And Home Owner Associations
ABOUT THE MONEY AND HOA'S
If you are thinking of investing in a condominium, you should read this article.
EVERY HOMEOWNERS ASSOCIATION RECEIVES LETTERS AND COMPLAINTS REGARDING THE FINANCIAL STATUS OF THEIR ASSOCIATION. While Boards have tried to explain the "why's and wherefore's" in various communications, it still keeps coming up.
The question usually has something to do with "Where does all the money go"; or "I'm not paying for someone else's responsibility". Both of these statements are entirely understandable. While blaming everything on the economy is getting old and seems to be the scapegoat, it is entirely the problem at hand.
Unfortunately "fair" doesn't enter the picture when discussing the affect on everyone. In plain language, there are many Associations that have multiple units which have gone into bankruptcy and/or foreclosure. How does that affect you as a homeowner? Answer: These units have not paid their monthly assessments (sometimes referred to as 'dues') for in some cases as much as a year but operating money has to come from somewhere.
To protect the Association as much as possible, legal fees are encountered on top of the lack of collecting the monthly amounts. It is easy to see, the deficit adds up very quickly. In fact, for many Associations, this has totaled in the hundreds of thousands of dollars that is not collected for operating expenses. (Banks do not have to pay back-owed monies in a foreclosure situation so that income is lost by the Association and that's that.) This results in an absolute reduction in monies available to conduct and maintain the Association. In addition, certainly no deposits can be made to the Reserves (savings) for future projects.
There is often the statement made, "I'm not paying for someone else's responsibility". However, in order to maintain the value and health of a complex, all carry the load. When you own a condominium, you own a percentage of the community for which you are responsible. While the statement expresses feelings we all have, owning a portion of the entirety puts the burden on all. The remaining owners in good standing are in the position of carrying the load… or if not, becoming one of the statistics as a foreclosure, bankruptcy or lien.
So when the question is asked, "Where does all the money go?", the inference that "all the money" which is being collected by the Association is more than adequate, which is simply the opposite: It is not enough to pay all the operating expenses, which are usually cut to the bare bones, nor enough to continue to set money aside for a rainy day also known as 'Reserves", not to mention improvements.
A Board has a fiduciary responsibility of maintenance and safety within the community. When assessments are considered necessary, it is in order to perform those duties on behalf of all homeowners. The alternative is to allow a community to run down, and in so doing, everyone loses property value.
If you are considering the purchase of a condominium, it would be prudent to attend an open Board Meeting, review a full year of financial statements, request copies of six months' minutes, and review the current Reserve Study. You may want to inquire as to the total number of units that are in default. All of these documents should be made available to you once you enter escrow and your approval should be a contingency of the purchase. Once you are a homeowner and a member of an association, you may want to consider running for a position on the Board to be a part of the decision-making.
Friday, February 5, 2010
Foreclosure Vs. Short Sale
FORECLOSURE VS. SHORT SALE
KNOW THE DIFFERENCES BEFORE TIME RUNS OUT
The subjects of foreclosure and short sale often are used in real estate-related conversations as if interchangeable. Nothing could be further from the truth. If you now find yourself in default or headed for it, it’s crucial you know the differences and the impact each scenario may have on your future.
For instance…
- Did you know there are some employers who will terminate an employee who experiences a foreclosure?
- Do you know how long each of these processes will stay on your record and how badly your credit rating will be affected by each?
- Do you know that in some cases, if your employment depends on a security clearance, there is a strong possibility the security clearance will be revoked in the case of foreclosure?
These are very serious matters.
You are urged to review the attached comparison showing the potential outcome in the case of foreclosure vs. a short sale. It is easy to see that a short sale will most often have the least damaging impact on your future. However, time is of the essence as it takes a rather long period of time to negotiate and successfully conclude a short sale. In simple language, if it appears to you that you no longer can hold onto your property, don’t waste time. It is important not to let precious time get away from you.
You owe it to yourself to know the differences; the facts.
Century 21 Adobe Realty agents are knowledgeable and experienced in accomplishing successful short-sale transactions. Won’t you let our professionals guide you through each step?
For detailed comparison of the potential outcome of a short sale vs. foreclosure take a look:
As discussed, options are available to homeowners. I found the following chart at impact your sales now and it was published by the Depressed Property Institute.
One thing I would point out to you regarding deficiency judgments at the bottom of the page. My knowledge is that California uses a non judicial foreclosure process and deficiency judgments do not apply. Having said that, I am not an attorney, nor do I give legal advice. Please seek the advice of a legal or tax professional.
I should point out that the Distressed Property Institute has a disclaimer to the effect that they do not guarantee the accuracy nor will they assume any responsibility for this document. I think this is an informative guide but I would be remiss if I did not encourage you to seek legal counsel as to the recommendations or consequences in this document.
(Consumers are urged to consult legal counsel regarding all legal matters and a tax professional regarding tax matters.)
(Source: Distressed Property Institute)