Due to the challenges and extended time-frames associated with buying short sale and foreclosure properties, many home buyers who entered into contract on or before April 30th to take advantage of the federal home buyer tax credit are concerned escrow may not close before the June 30th deadline. I can tell you that I have several short sale listings with offers from hopeful first time buyers wanting that tax credit that have not been approved just yet...
As a result, the US House of Representatives just approved HR 5623 yesterday that will extend the deadline to close until September 30th, 2010. Under this legislation, buyers still have to be in contract as of April 30th, 2010 - so if you are a buyer that was not already in contract by that date, this amendment does not affect you. Per the federal tax credit guidelines, qualified first time home buyers could qualify for up to $8,000 and repeat purchasers up to $6,500. The bill will now go back to the Senate for approval, before reaching President Obama's desk for final approval...keep your eyes open for the latest! This is NOT a done deal!
Wednesday, June 30, 2010
Thursday, June 24, 2010
Anyone want to be on the FOX 40 News?
If anyone is interested in appearing on the Fox 40 news, a reporter just contacted me to ask if I knew of anyone who is suffering a loss of income and equity in their home in this economy, but instead of walking away - has made certain sacrifices to keep their home (e.g. gotten roommates, turned off cable TV, started recycling, etc)...call me at 916-342-1372. He needs someone willing to appear on camera and be interviewed this afternoon.
Wednesday, June 23, 2010
New Listing - 792 Lake Front Drive, Pocket / Greenhaven / Sacramento 95831
Amazing 3 bed, 2.5 bath, 2,846sf Bridgeview / Riverlake home in the Pocket / Greenhaven area! You will love the stunning lake views from nearly every room, spacious layout, high ceilings, lots of storage space, serene backyard. Don't wait! Offered at $369,000, subject to lender approval of short sale. For more photos and additional detail, please visit http://792lakefrontdrive.com/.
Saturday, June 19, 2010
When in Louisville...visit the local Association of Realtors?
Tuesday, June 8, 2010
New Listing - 2929 Candido Drive, Sacramento / Natomas, CA 95833
Adorable 3 bed, 2 bath, 1,127sf Natomas home on .12ac! You will love the light and bright open layout, high ceilings, gourmet kitchen, attached 2-car garage, large backyard, and shed / outbuilding for extra storage! Offered at $117,000, subject to lender approval of short sale. For more photos and additional detail, please visit http://www.2929candidodrive.com/.
Monday, June 7, 2010
Sacramento Short Sale Tip Numero Uno - Ask your agent for references...
In the greater Sacramento area, short sales are extremely common. If you have followed my blog for a while, you may have read my recurring series of posts entitled "Erin's Sacramento Short Sale Experiment" where I compare the statistics and trends for the volume of short sales in some of Sacramento's different neighborhoods.
For those of you who are not familiar with short sales, it is the sale of a house for less than the amount that is owed to the bank/mortgage company. Occasionally, homeowners find themselves in positions in which they must to sell their home, but the reality is that their property is worth less than what they owe the bank...perhaps they did a "cash-out" refinance?...perhaps they bought at the peak of the market with 100% Financing? Many banks will agree to accept the proceeds of a short sale and forgive the rest of what is owed on the mortgage when the owner cannot make the mortgage payments. By accepting a short sale, the lender can avoid a costly foreclosure, and the owner is able to pay off the loan for less than what he owes.
I field dozens of calls each week from prospective sellers looking for information regarding the possiblity of doing a short sale...In the last couple years since short sales have really become prominent, I have successfully negotiated and closed 20+ short sale transactions for both buyers and sellers. These are extremely complicated transactions...if you are looking for a short sale agent in Sacramento, I have a key suggestion for you: GET REFERENCES. There are many agents who have obtained "certifications" (basically a piece of paper that states they sat through an online class about short sales) and proclaim themselves to be "short sale agents" but have never actually closed a short sale transaction.
A few myths about short sales:
1) "The seller must stop making payments on their loan." Not necessarily. I have negotiated several short sales where the seller has not missed any payments, and were not in default. In those instances, we were able to prove that future default was imminent and that the seller was trying to be proactive with the short sale.
2) "The seller is in foreclosure." Not necessarily. It is possible to have missed payments and not be in full-blown foreclosure. Generally most lenders will not file a formal "Notice of Default" until the seller is 90 days or more late. MANY lenders are so back-logged with past-due accounts that they literally do not have the manpower to file a NOD in a timely manner. Also, due to certain government programs, legislation, and generally just the mass numbers of homeowners in distress due to economic conditions, many lenders do not pursue filing a NOD until they have exhausted other attempts to allow the homeowner an opportunity to go through the process of an alternative to a foreclosure (for example, a short sale).
3) "Buyers will not want to make offers on short sale property." Not true. Occasionally buyer's agents are reluctant to represent offers on short sale property. Often times, listing agents will take on short sale listings when in reality they have no knowledge base or skill set to successfully negotiate the lower payoff. A shrewd buyer's agent will call the listing agent and make sure they are competent to complete the process, and then submit an offer. Also, because of the high concentration of short sale listings in certain areas, really in this day and age buyers do not have much choice but to consider attempting to purchase a short sale listing.
4) "Financial hardship is the only reason a lender will accept a lower payoff." Not true. There are many potential reasons a lender will allow a lower payoff. One such example is that the seller must relocate for some reason, such as to care for a sick relative, or due to employment requirements. Other examples include divorce, illness or injury, the birth of a child, death of a family member, etc. Of course the short sale lender will want some sort of proof of these circumstances.
5) "A short sale where there is a first mortgage and a second mortgage will not be approved." Not true. While this scenario requires diligent negotiation and tends to add complication to the transaction, many 2nd mortgage holders will accept as little as $1,000.00 in lieu of a full payoff. I have even successfully negotiated and closed short sales with three separate mortgage loans.
6) "A short sale means that the escrow period will be short." Generally no. Depending on how much negotiation can be completed in advance, a typical timeline for lender approval can be 2 weeks - 2 months. Once the lender approves the lower payoff, escrow is opened and the transaction timelines proceed from that date.
7) "Short sales are a bargain!" Banks do not give property away. They base approval on recent sales comparables, and actually retain the services of a local agent to perform a BPO (aka, Broker Price Opinion). While I do believe it is possible to get a lender approval for a property a few percent under its market value, purchasing at "wholesale" is just not reality under most normal circumstances.
8) "The seller of the property can make money from the short sale." Not true. The lender will REQUIRE that the seller nets $0 from the sale. Additionally, most lenders will require that the transaction be at "Arm's Length" - meaning that you can not sell it to a family member or business associate. No form of "enrichment" of the seller will be acceptable.
9) "The mortgage lender is the seller in a short sale transaction." Nope, the homeowner is still the seller! While the mortgage lender(s) must ratify the transaction and agree to lower the payoff so that the seller can sell, the lender is not a party or principal to the actual transaction. The purchase agreement is between the buyer and the seller.
10) "Once I get an offer on my short sale and submit it to the bank, I can stop showing the home to other buyers." This is not something I would advise a seller to do. Buyer offers on short sales are frequently withdrawn for one reason or another. Occasionally the short sale will take so long to negotiate that the buyer's circumstances may change (change in income, family, etc.) and they may decide not purchase the home. Many buyers will continue to look at other homes even after an offer has been accepted on a short sale listing. I do not personally condone this practice, but other agents encourage their buyer clients to do so. In light of this, it is a good idea to continue to show the home so all the seller's eggs are not in one basket.
These are just some of the common questions and assumptions I get from both buyers and sellers regarding short sales. In reality, most people (buyers, sellers, and even some real estate industry professionals) do not have a clear understanding of what they are and how they work. I have successfully negotiated short sales in the past for seller clients. If you are facing the reality that you have to sell your home, and you owe more than its current market value, I may be able to assist you with this transaction. I welcome your call.
More Information Regarding Short Sales in Sacramento
Find Out the Market Value of Your Home Here
Sign Up for Instant Notifications of the newest Listings via email
For those of you who are not familiar with short sales, it is the sale of a house for less than the amount that is owed to the bank/mortgage company. Occasionally, homeowners find themselves in positions in which they must to sell their home, but the reality is that their property is worth less than what they owe the bank...perhaps they did a "cash-out" refinance?...perhaps they bought at the peak of the market with 100% Financing? Many banks will agree to accept the proceeds of a short sale and forgive the rest of what is owed on the mortgage when the owner cannot make the mortgage payments. By accepting a short sale, the lender can avoid a costly foreclosure, and the owner is able to pay off the loan for less than what he owes.
I field dozens of calls each week from prospective sellers looking for information regarding the possiblity of doing a short sale...In the last couple years since short sales have really become prominent, I have successfully negotiated and closed 20+ short sale transactions for both buyers and sellers. These are extremely complicated transactions...if you are looking for a short sale agent in Sacramento, I have a key suggestion for you: GET REFERENCES. There are many agents who have obtained "certifications" (basically a piece of paper that states they sat through an online class about short sales) and proclaim themselves to be "short sale agents" but have never actually closed a short sale transaction.
A few myths about short sales:
1) "The seller must stop making payments on their loan." Not necessarily. I have negotiated several short sales where the seller has not missed any payments, and were not in default. In those instances, we were able to prove that future default was imminent and that the seller was trying to be proactive with the short sale.
2) "The seller is in foreclosure." Not necessarily. It is possible to have missed payments and not be in full-blown foreclosure. Generally most lenders will not file a formal "Notice of Default" until the seller is 90 days or more late. MANY lenders are so back-logged with past-due accounts that they literally do not have the manpower to file a NOD in a timely manner. Also, due to certain government programs, legislation, and generally just the mass numbers of homeowners in distress due to economic conditions, many lenders do not pursue filing a NOD until they have exhausted other attempts to allow the homeowner an opportunity to go through the process of an alternative to a foreclosure (for example, a short sale).
3) "Buyers will not want to make offers on short sale property." Not true. Occasionally buyer's agents are reluctant to represent offers on short sale property. Often times, listing agents will take on short sale listings when in reality they have no knowledge base or skill set to successfully negotiate the lower payoff. A shrewd buyer's agent will call the listing agent and make sure they are competent to complete the process, and then submit an offer. Also, because of the high concentration of short sale listings in certain areas, really in this day and age buyers do not have much choice but to consider attempting to purchase a short sale listing.
4) "Financial hardship is the only reason a lender will accept a lower payoff." Not true. There are many potential reasons a lender will allow a lower payoff. One such example is that the seller must relocate for some reason, such as to care for a sick relative, or due to employment requirements. Other examples include divorce, illness or injury, the birth of a child, death of a family member, etc. Of course the short sale lender will want some sort of proof of these circumstances.
5) "A short sale where there is a first mortgage and a second mortgage will not be approved." Not true. While this scenario requires diligent negotiation and tends to add complication to the transaction, many 2nd mortgage holders will accept as little as $1,000.00 in lieu of a full payoff. I have even successfully negotiated and closed short sales with three separate mortgage loans.
6) "A short sale means that the escrow period will be short." Generally no. Depending on how much negotiation can be completed in advance, a typical timeline for lender approval can be 2 weeks - 2 months. Once the lender approves the lower payoff, escrow is opened and the transaction timelines proceed from that date.
7) "Short sales are a bargain!" Banks do not give property away. They base approval on recent sales comparables, and actually retain the services of a local agent to perform a BPO (aka, Broker Price Opinion). While I do believe it is possible to get a lender approval for a property a few percent under its market value, purchasing at "wholesale" is just not reality under most normal circumstances.
8) "The seller of the property can make money from the short sale." Not true. The lender will REQUIRE that the seller nets $0 from the sale. Additionally, most lenders will require that the transaction be at "Arm's Length" - meaning that you can not sell it to a family member or business associate. No form of "enrichment" of the seller will be acceptable.
9) "The mortgage lender is the seller in a short sale transaction." Nope, the homeowner is still the seller! While the mortgage lender(s) must ratify the transaction and agree to lower the payoff so that the seller can sell, the lender is not a party or principal to the actual transaction. The purchase agreement is between the buyer and the seller.
10) "Once I get an offer on my short sale and submit it to the bank, I can stop showing the home to other buyers." This is not something I would advise a seller to do. Buyer offers on short sales are frequently withdrawn for one reason or another. Occasionally the short sale will take so long to negotiate that the buyer's circumstances may change (change in income, family, etc.) and they may decide not purchase the home. Many buyers will continue to look at other homes even after an offer has been accepted on a short sale listing. I do not personally condone this practice, but other agents encourage their buyer clients to do so. In light of this, it is a good idea to continue to show the home so all the seller's eggs are not in one basket.
These are just some of the common questions and assumptions I get from both buyers and sellers regarding short sales. In reality, most people (buyers, sellers, and even some real estate industry professionals) do not have a clear understanding of what they are and how they work. I have successfully negotiated short sales in the past for seller clients. If you are facing the reality that you have to sell your home, and you owe more than its current market value, I may be able to assist you with this transaction. I welcome your call.
More Information Regarding Short Sales in Sacramento
Find Out the Market Value of Your Home Here
Sign Up for Instant Notifications of the newest Listings via email
Thursday, June 3, 2010
California SB 1178 Passes Senate - would extend "Anti-Deficiency Protections" to homeowners with refinanced loans...
The California Association of Realtors is sponsoring SB 1178. This legislation seeks to extend "anti-deficiency protections" to homeowners who have refinanced "purchase money" loans and are now facing foreclosure. Today the state senate passed this legislation by a vote of 30-4.
Generally speaking, a loan taken on a residential property at the time of purchase is subject to provisions that afford a homeowner protection against personal liability for the difference between the value of a foreclosed property, and the original amount owed on the mortgage to the lender.
A loan that is refinanced generally does not afford a homeowner the same protection, and can be subject to "recourse" from their mortgage lender for the loss the lender suffers on that loan.
Still not law yet, but this was an important step...
Generally speaking, a loan taken on a residential property at the time of purchase is subject to provisions that afford a homeowner protection against personal liability for the difference between the value of a foreclosed property, and the original amount owed on the mortgage to the lender.
A loan that is refinanced generally does not afford a homeowner the same protection, and can be subject to "recourse" from their mortgage lender for the loss the lender suffers on that loan.
Still not law yet, but this was an important step...
Wednesday, June 2, 2010
Sacramento County - Property Tax Assessment Appeal Process for Tax Year 2011
I got a call today from a very nice man who had found an older posting on my blog from last year regarding filing an appeal application with the Sacramento County Assessor's office to request a reduction in his property tax assessment based on declining home values.
For clarity, the Sacramento County Assessor's office is NOT yet accepting appeal applications for fiscal year 2010-2011 until the revised valuations are released next month, in July. This timeline is slightly different than last year...don't forget, we are in the middle of an election cycle. Ken Stieger is retiring, and Kathleen Kelleher (current assistant Sacramento County Assessor) is seeking election to his seat.
Every year I get questions from many confused Sacramento tax payers regarding the property tax assessment appeal process. PLEASE BE AWARE - there are many scams regarding fee-based "services" that promise to lower your tax assessment...do not fall victim to one of these scams! When the new values are released in July, they will reflect the value of the house as of January 2010....several months ago. I promise I will post information regarding how to request an appeal of your property tax assessment when it becomes available!
For clarity, the Sacramento County Assessor's office is NOT yet accepting appeal applications for fiscal year 2010-2011 until the revised valuations are released next month, in July. This timeline is slightly different than last year...don't forget, we are in the middle of an election cycle. Ken Stieger is retiring, and Kathleen Kelleher (current assistant Sacramento County Assessor) is seeking election to his seat.
Every year I get questions from many confused Sacramento tax payers regarding the property tax assessment appeal process. PLEASE BE AWARE - there are many scams regarding fee-based "services" that promise to lower your tax assessment...do not fall victim to one of these scams! When the new values are released in July, they will reflect the value of the house as of January 2010....several months ago. I promise I will post information regarding how to request an appeal of your property tax assessment when it becomes available!
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