Search Granite Bay homes | [under $100,000] [$100,000s] [$200,000s] [$300,000s] [$400,000s] [over $500,000] | Granite Bay condos | Granite Bay multi-family (2-4 units) | Granite Bay apartment buildings (5+ units) | Granite Bay JUST LISTED homes & condos | Granite Bay homes built since 2005 | Granite Bay vacant lots & land | Granite Bay commercial properties | Granite Bay foreclosure listings | About Granite Bay foreclosures and REOs
Explore Anatolia | Antelope | Arden | Auburn | Carmichael | Citrus Heights | Curtis Park | Davis | Del Paso Heights | Downtown Sacramento | East Sacramento | El Dorado Hills | Elk Grove | Fair Oaks | Galt | Gold River | Granite Bay | Greenhaven | Laguna | Land Park | Lincoln | Meadowview | Midtown Sacramento | Natomas Park | North Highlands | North Natomas | North Sacramento | Oak Park | Old Sac | Orangevale | Rancho Cordova | Regency Park | Rio Linda | River Park | Rocklin | Rosemont | Roseville | Sacramento | South Land Park | South Natomas | Southport | South Sacramento | Tahoe Park | The Pocket | UCD Med Center & Elmhurst | West Sacramento | Woodlake
Home-Buying 101: Short Sales explained
Friday, August 1, 2008
Searching the MLS for a home in the Granite Bay area lately? If so, you've probably noticed a large number of homes listed as short sales (they may be referred to as active short sale or short sale contingency or even just "AS" or "ASC")—and they're often some of the lowest priced homes in any given neighborhood. Here are some of the most common questions I get:
Q. What is a short sale?
A. The term "short sale" is used to refer to a property being sold for which the seller owes more than it will sell for in the current market. This is more common in neighborhoods that have seen significant price declines since the peak of the market in 2005, but any seller can end up in a short sale situation if they've borrowed more money against the home than it's currently worth (such as when a home owner has borrowed money and "overimproved" a home for the neighborhood it's in).
Q. How do short sales work?
A. Short sales work like this: a seller has a financial hardship (death of a spouse, loss of a job, job transfer, hospitalization, or sudden change in monthly mortgage payment) and needs to sell a home. Because they owe more than the home is worth, the seller is requesting that the bank(s) that they have a mortgage through accept less than they're owed. Most banks won't even entertain the notion of a short sale if there aren't any buyers ready to purchase the home for the current market price so, as part of the process, the seller puts the home on the market and begins accepting offers. The seller will typically accept the best offer and submit it to the bank for approval.
Q. Are these deals too good to be true?
A. The short answer is: Yes, in many cases these deals are too good to be true. Many home sellers who are in a short sale situation are selling because they're falling behind on payments or are in preforeclosure. For this reason, they're feeling a lot of time pressure to get the home sold before a bank forecloses, so they price the home lower than anything else in a neighborhood to just try to get offers to submit to the bank(s). This leads to multiple offers but doesn't guarantee that the bank will accept whatever sales price the seller accepts. The seller doesn't usually care what the home sells for because he or she won't be making any money on the sale.
Q. Do banks really go for this?
A. Sometimes. No bank is ever eager to accept less than they're owed because they're losing money in the process, and banks aren't in the business of losing money. Of course in many cases the alternative is foreclosing on a home, and that can be a lengthy, expensive process that results in the bank owning a property—and banks are often even less eager to own the home so may be willing to negotiate if they see that it's in their best interest.
But there are some big challenges when buying a short sale. For instance, unlike a foreclosure where the bank owns the property free and clear and can sell it for whatever price they want, in a short sale situation there may be other parties with a financial interest in the property. If a seller has experienced a financial hardship, there may be unpaid taxes, utilities, or contractors who've done work and are seeking payment—and any of these can result in liens against the property. In a short sale, the seller MUST prove to the bank that there is a financial hardship that requires the home be sold and all parties must agree to accept little or no payment and sign off on the sale of the property. Add to this the fact that there may be a second mortgage that will likely be completely wiped out and it becomes challenging getting everyone with a financial interest to authorize the sale. This is often a grueling, months-long process that can ultimately be for nothing if one or more parties deny the short sale request, and this is a major reason why a lot of homes that are listed as short sales eventually come off the market and reappear later as bank-owned REO properties.
Q. What do the terms active short sale and short sale contingent etc. mean?
A. An active short sale is just another way of saying that the home is active on the market as a short sale. A home listed as short sale contingent means that the seller has accepted an offer and submitted it to the bank. Until the bank responds (and this can take months), the listing agent is obligated to continue to market the home as "for sale". Once the bank has accepted an offer, then the property will be marked as "pending" and the normal escrow period begins.
Q. I've called several times about a home that's for sale online and the agent keeps telling me it's already sold. Why is it still showing up online?
A. In the Sacramento area, if a property is being sold as a short sale, until the bank accepts one of the offers that has been submitted the listing agent is required (by the rules of the local MLS) to identify it as short sale cont and it will continue to appear online on searches because the home isn't yet technically in escrow. While this may seem confusing, your Granite Bay REALTOR® can help you figure out the status of properties you're interested in.
To summarize, when you see a property for sale that's listed as a short sale this means you should expect a much longer than average escrow period (so don't plan on buying a short sale if you're on a tight timeline), a counter offer on price from the bank (even if the seller has accepted your price), and the possibility that the bank will reject the short sale entirely. If you can find a great home that's either a traditional sale or a foreclosure (also called an REO), consider going with these options first. Good luck and happy house-hunting!
More questions about short sales or other homes? Give us a call at (916) 444-7577 today!
Labels: Anatolia, Antelope, Arden, Carmichael, Citrus Heights, Curtis Park, Del Paso Heights, Downtown, East Sac, El Dorado Hills, Elk Grove, Fair Oaks, Gold River, Granite Bay, Greenhaven, Home-Buying 101, Laguna, Land Park, Lincoln, Meadowview, Midtown, Natomas Park, North Highlands, North Natomas, North Sac, Oak Park, Orangevale, Pocket, Rancho Cordova, Regency Park, Rio Linda, River Park, Rocklin, Rosemont, Roseville, Sacramento, South Land Park, South Natomas, South Sac, Southport, Tahoe Park, UCD Med Center, West Sac, Woodlake, Woodland
Tag this post: del.icio.us | Digg it | reddit | Yahoo MyWeb | Google | StumbleUpon | Add to Technorati Faves
posted by Rob McQuade @ 1:50 PM,
, links to this post
I want you to use this website...
Monday, July 21, 2008
...even if you don't use my services!
I've designed these websites to be useful and usable—and I really want you to find the information (or property) you're looking for. To that end, I'd love to hear what you think. I'm constantly adding and updating the website, including new relevant info and resources. Even if I haven't blogged in a few days, I'm usually adding a new feature here and there (thanks for the feedback on the ZIP Code search tool at the left of each page, Margaret!)... But is it the type of info you want? And what else would be helpful?
Please let me know what you think. I'm listening and working to build the best, most easy-to-use Sacramento area real estate website I can. Judging by the great phonecalls and emails I'm getting it's working. But I'm not here to rest on my laurels!
Fifteen seconds of (real estate) fame
A few weeks ago I was fortunate enough to meet with the fine folks at Trulia (a real estate industry website used by a lot of consumers to find properties for sale—though it's not nearly as good as my websites! ;-D)to shoot a video with Brett Crosby at Google Analytics for other real estate industry professionals. It probably won't be of interest to you (it's a bit nerdy, I confess I'm a "real estate nerd"), but you can check out the video below. It was even picked up by ActiveRain (another industry website that many consumers use)
Oh, and if you decide you'd like some help with your Sacramento real estate needs, my team and I are absolutely here to serve you—just ask! -Rob McQuade -- (916) 444-7577.
Labels: Anatolia, Antelope, Arden, Carmichael, Central, Citrus Heights, Curtis Park, Del Paso Heights, Downtown, East Sac, El Dorado Hills, Elk Grove, Fair Oaks, Gold River, Granite Bay, Greenhaven, Laguna, Land Park, Meadowview, Midtown, Natomas Park, North Natomas, North Sac, Oak Park, Orangevale, Rancho Cordova, Regency Park, River Park, Rosemont, Roseville, Sacramento, South Land Park, South Natomas, South Sac, Southport, Tahoe Park, UCD Med Center, West Sac, Woodlake
Tag this post: del.icio.us | Digg it | reddit | Yahoo MyWeb | Google | StumbleUpon | Add to Technorati Faves
posted by Rob McQuade @ 7:17 PM,
, links to this post
"Buy and Bail" is Mortgage Fraud
Wednesday, June 18, 2008
A Sacramento homeowner was recently quoted in the Wall Street Journal talking about her plans to purchase a "second home" and then let her current home—purchased in November 2006 for much more than similar homes are currently selling for—fall into foreclosure.
"I can find the same exact house as what I live in right now for half the price."But this practice, referred to in the mortgage market as "buy and bail", is considered by many in the real estate industry to be mortgage fraud. Fannie Mae, established in 1938 as a government agency but now a privately-held lending institution that provides financing to most of the nation's largest home mortgage lenders, is tightening regulations to prevent these abuses of the system. Individual lending institutions are reviewing their own lending practices and underwriting requirements and are watching for borrowers that are at risk of engaging in buy-and-bail.
Legitimate borrowers planning to take advantage of the current sluggishness in the real estate market to buy a second home or move-up property can expect tighter loan standards and will likely need to produce additional evidence.
Thinking about renting out your current home and moving up to something better? Here's what your lender will probably request from you:
- Supporting evidence to back up the claim that the current home will be rented out, including a signed lease agreement;
- Proof of income to support principal, interest, taxes, and insurance on both the current residence and the new property being purchased;
Labels: Anatolia, Antelope, Arden, Auburn, Carmichael, Citrus Heights, condos, Del Paso Heights, El Dorado Hills, Elk Grove, Fair Oaks, Galt, Gold River, Granite Bay, Lincoln, Meadowview, Modesto, Natomas Park, North Highlands, North Natomas, North Sac, Oak Park, Orangevale, Rancho Cordova, Regency Park, Rio Linda, Rocklin, Rosemont, Roseville, Sacramento, South Natomas, South Sac, Southport, Stockton, Tahoe Park, UCD Med Center, West Sac, Woodland
Tag this post: del.icio.us | Digg it | reddit | Yahoo MyWeb | Google | StumbleUpon | Add to Technorati Faves
posted by Rob McQuade @ 3:04 PM,
, links to this post
New! Search homes and condos quickly by ZIP Code
Saturday, May 31, 2008
Now you can quickly and easily search by ZIP Code with just a click! It's easier than ever to pull up homes and condos in your preferred ZIP Code by simply clicking the » By ZIP Code NEW! link under Quick Property Searches from the menu at the left. You can scroll through the list of available ZIP Codes in Sacramento, Placer, Yolo, and El Dorado Counties to bring up a convenient list of the first 200 homes and condos for each ZIP. And, as always, you can get news listings matching ALL your search criteria sent to your email inbox daily by clicking on the link under Resources for Buyers.
Labels: Anatolia, Antelope, Arden, Auburn, Carmichael, Citrus Heights, Curtis Park, Davis, Del Paso Heights, Downtown, East Sac, El Dorado Hills, Elk Grove, Elmhurst, Fair Oaks, Galt, Gold River, Granite Bay, Greenhaven, Laguna, Land Park, Lincoln, Meadowview, Midtown, Natomas Park, North Highlands, North Natomas, North Sac, Oak Park, Orangevale, Pocket, Regency Park, Rio Linda, River Park, Rocklin, Rosemont, Roseville, Sacramento, South Land Park, South Natomas, South Sac, Southport, Tahoe Park, UCD Med Center, West Sac, Woodlake, Woodland
Tag this post: del.icio.us | Digg it | reddit | Yahoo MyWeb | Google | StumbleUpon | Add to Technorati Faves
posted by Rob McQuade @ 10:42 PM,
, links to this post
NEW! Granite Bay foreclosures available online
Sunday, April 20, 2008
This is a quick update: I just added a new link to Granite Bay foreclosures, now you can view bank-owned and REO properties in Granite Bay and other areas, including Antelope, Arden, Carmichael, Citrus Heights, Curtis Park, Davis, Del Paso Heights, Downtown Sacramento, East Sacramento, El Dorado Hills, Elk Grove, Fair Oaks, Gold River, Granite Bay, Greenhaven, Laguna, Land Park, Lincoln, Meadowview, Midtown Sacramento, North Natomas, North Sacramento, Oak Park, Orangevale, Rancho Cordova, Rio Linda, River Park, Rocklin, Rosemont, Roseville, Sacramento, South Land Park, South Natomas, South Sacramento, Tahoe Park, the UCD Med Center, the Pocket, West Sacramento, Woodlake, and even Woodland.
Foreclosures (also called REOs or bank-owned properties) represent some of the best deals in the local real estate market. Still not sure how to buy a foreclosure property? You can and review a glossary of terms, plus request additional info and get new foreclosure listings as they become available.
Labels: Anatolia, Antelope, Arden, Auburn, Carmichael, Central, Citrus Heights, Curtis Park, Davis, Del Paso Heights, Downtown, East Sac, El Dorado Hills, Elk Grove, Fair Oaks, Galt, Gold River, Granite Bay, Greenhaven, Laguna, Land Park, Lincoln, Lodi, Meadowview, Midtown, Modesto, Natomas Park, North Highlands, North Natomas, North Sac, Oak Park, Orangevale, Pocket, Rancho Cordova, Regency Park, Rio Linda, River Park, Rocklin, Rosemont, Roseville, Sacramento, South Land Park, South Natomas, South Sac, Southport, Stockton, Tahoe Park, UCD Med Center, West Sac, Woodland
Tag this post: del.icio.us | Digg it | reddit | Yahoo MyWeb | Google | StumbleUpon | Add to Technorati Faves
posted by Rob McQuade @ 9:52 AM,
, links to this post
