Living Well in San Mateo » San Mateo Short Sales Information

Are All Short Sale Buyers Cash Buyers?

Rebecca Williamson — Tue, 20 Apr 2010 16:00:32 +0000

How Do Buyers Finance Short Sales?

In our last post, we showed you how buyers financed bank owned homes in San Mateo County. This post, I’d like to talk about the differences in how San Mateo County home buyers purchase short sales, or pre-foreclosures.

Fewer All Cash Buyers in the Short Sale Market

Savvy San Mateo real estate investors who have cash have realized the challenges surrounding purchasing short sales. As we showed you in the bank owned homes segment of the San Mateo real estate market, 31% of bank owned homes are purchased with all cash. In the short sale market, only 16% of homes are purchased with all cash.

Why are Investors More Interested in Bank Owned Homes?

Buying short sales is a very uncertain process. Though we have one of the highest success rates in the country (at around 30% of all short sales listed closing escrow), short sales are still loaded with a lot of uncontrollable variables and take months to sort out. For more information about these variables, check out a previous post, Why San Mateo Short Sales Fail.

Some Truths About San Mateo Short Sales

We’ve written a whole series of posts about short sales and why they are so problematic for buyers. One of our most popular is the Truth About San Mateo Short Sales.

Short Sales Take Much Longer to Close Escrow

Of the 391 bank owned homes that sold in San Mateo County in the last 6 months, they were on the market for an average of 56 days before they accepted an offer and were in escrow for 35 days (this is the number of days between when an offer was accepted and when the property sold).

Of the 339 short sales that actually sold in San Mateo County in the last 6 months, they were on the market for an average of 104 days before accepting an offer and were in escrow for 98 days. Remember, these figures do not include the short sales where the seller accepted an offer and the bank took 8 months to come back to the buyer and say no. These figures ONLY include the short sales that actually closed escrow.

Short Sale Buyers Need Loans

As you can see in the chart above, 84% of buyers purchasing short sales in San Mateo needed financing of some sort. Most cash buyers have decided to put their money in the bank owned market and go for the more sure thing.

Remember, Not all Short Sales are Good Deals

Some of these homes you see on the market as a “short sale” were purchased at the height of the market. One property in Belmont I saw listed for sale last summer at $725,000 as a short sale was recently taken back in foreclosure and was recently listed on the market for $650,000. Keep in mind, the single family home market in Belmont has been inching up for the past several months, so last summer this house was definitely not a $650,000 house. However, the owner had it on the market as a short sale for $725,000. Buyers who thought all short sales were good deals would’ve been sold a bill of goods here.

Planning on Buying a San Mateo Short Sale?

If you’re planning on buying a short sale in San Mateo, we’d suggest you do as we do and ask these 15 Questions Before You Make an Offer on a San Mateo Short Sale. With the answers to these questions, you’ll be able to get a much better idea how likely your chances of a successful outcome will be.

Need a Buyer’s Agent? Call Us…It’s Free!

Did you know buyer representation is free to the home buyer? That’s right! The buyers agent’s fee is paid by the company that lists the property. So, it costs you no more to be represented by your own agent.

Thinking of going through the listing agent to save money on commission? Don’t bother! They usually won’t refund you the money and they have a fiduciary duty to get the seller the most money possible. Sounds more to me like going that route could cost you money. Besides, you wouldn’t hire the other sides attorney if you got sued would you?

Call us at (650) 655-2500 or email us at info@LivingWellinSanMateo.com to schedule a no obligation consultation.

Search San Mateo Short Sales

Enjoyed this Post? Why Not Subscribe?

If you have enjoyed Living Well in San Mateo – san mateo real estate, please subscribe to our RSS feed.

Raymond Stoklosa, Chela Stoklosa and Rebecca Williamson are Realtors with The RayChel Realty Group specializing in Santa Clara and San Mateo Real Estate.

Are Agents Required to Present Short Sale Offers to the Lender?

Raymond Stoklosa — Thu, 18 Feb 2010 15:00:08 +0000

An angry, frustrated San Mateo home buyer wrote in this question:

My agent tells me he cannot demand that my short sale offer be presented to the home owner’s lender. I thought all offers have to be presented.

Do All Offers Have to Be Presented?

That’s a great question and it reflects a widespread misunderstanding held by the public in general and many real estate practitioners as well.  While contract law and agency law overlap in this area, there are general legal principles and certain practices applicable to this question.  Here are the basics:

The Listing Agent for the property owes their fiduciary duties to the home owner (borrower)…Not the lender.

All offers must be presented to the home owner (borrower)…Not the lender.

The decision to accept, reject or counter a buyer’s offer is the sole and exclusive right of the home owner (borrower)…Not the lender.

Home Owner Chooses Which Offer to Submit to their Lender

Once the home owner elects to accept an offer, only then is the accepted offer forwarded to the lender.  The lender is merely a 3rd party “approver” of the contract and it is not a party to the contract.  The lender simply has the right to reject or accept the offers that the home owner brings forward, and has no obligation to agree to accept a reduced pay off.  The lender’s decision is a voluntary effort to mitigate their potential losses.  The lender answers a business decision: Where will we lose less money; short sale or foreclosure sale?

What is a Short Sale?

A short sale is the home owner’s voluntary attempt to avoid a foreclosure.  The home owner has the option – if not the ability – to sell the property and pay off the debt in full as agreed; then the lender would have no right to approve the sale.

Listing Agent Does Not Work for the Lender

The Listing Agents must act in the best interest of their client only, and the client is the home owner (borrower)…Not the lender.  It’s simply not possible for the agent of the home owner to be compelled to work for the lender who is not the agent’s client.

Looks Like We Have a Bit of a Conflict of Interest

Does the phrase conflict of interest come to mind?  Remember, the lender is acting in its own self interest, and not those of the home owner.  Clearly, the lender’s interests are obviously adverse to the home owner because the lender is in the process of or threatening to foreclose on the home owner.  You can’t get more adverse than attempting to take away the borrower’s home.

What is a Short Sale Listing Agent’s Job?

The Listing Agent must do everything legally possible to protect the borrower and advocate for the borrower’s position.

Buyer’s Agent Can Only Demand Offer Be Presented to Home Owner

Forcing an agent to present all offers to the home owner’s lender would constitute a breach of the agent’s fiduciary duty to the home owner.  The Buyer’s Agent has absolutely no right to demand that the buyer’s short sale offer be presented to the lender.  The Buyer’s Agent does, however, have the right to demand that the short sale offer be presented to the owner of the property.

Home Owner Not Obligated to Present Any Offers to their Lender

And, the home owner has no obligation to present all short sale offers to the lender which means the Listing Agent has no obligation to present the short sale offer to the lender either.

Short Sales are Complex and Legally Fraught with Pitfalls

A short sale is simply a negotiated, arm’s length, fair market value sale in which the lender agrees to accept less money than the outstanding balance of the home owner’s loan.  Confusion about the roles and responsibilities of the parties to each other can lead to wrong headed decision making and costly legal problems.  Short sales are complex, complicated and legally fraught with pitfalls.  Be careful who you choose to represent you.

Considering Purchasing a Short Sale?

Call us at (650) 655-2500 or email us at info@LivingWellinSanMateo.com to schedule a no obligation consultation. We’ll help you decide whether or not short sales will fit in your home buying plan.

Search San Mateo Short Sales for Sale

Enjoyed this Post? Why Not Subscribe?

If you have enjoyed Living Well in San Mateo – san mateo real estate, please subscribe to our RSS feed.

Raymond Stoklosa, Chela Stoklosa and Rebecca Williamson are Realtors with The RayChel Realty Group specializing in Santa Clara and San Mateo Real Estate.

11 Most Common Reasons Short Sales Fail to Close Escrow

Raymond Stoklosa — Mon, 15 Feb 2010 02:11:49 +0000

San Mateo Short Sale Reality – Can Take 3-9 Months to Complete IF they Close

Short sales occur when the homeowner sells a San Mateo home for less than the mortgage balance owed with the lender’s approval and their agreement to accept a short payoff.  A short sale may be the right solution – but not the only solution – for homeowners who are unable to make their mortgage payment due to a personal hardship, such as, job loss, divorce, serious illness or medical expenses and involuntary employment relocation that significantly depletes the borrower’s assets.  However, many home owners and home buyers are not prepared for the challenges or the process which can take 3-9 months to complete.

One Common Factor in All Successful San Mateo Short Sales

One factor is common to all successful short sales: Hardship.  Without a documented hardship, the homeowner has no chance of getting the short sale application approved by the lender.  There are other reasons why short sales fail.

11 Most Common Reasons Short Sales Fail to Close Escrow

Here are some of the common reasons why so many San Mateo short sales do not close escrow.

Ill-prepared or inexperienced real estate agents

Required documents missing or incomplete

Parties don’t follow offer-to-close time-line

Purchase Contract does not meet investor’s guidelines

Mortgage Insurer requires seller sign promissory note

Junior lien holders will not approve the short sale

Appraisal issues

Processing delays

Foreclosure process too far along

Purchase price too low

Seller not engaged or responsive

Reputable Resources for San Mateo Homeowners Facing Foreclosure

Today, it is illegal for any person or company to charge money in advance to do a loan modification or promise the homeowner to avoid foreclosure.  There are several reputable resources to help homeowners understand their options when they can no longer make their mortgage payments.  If you find yourself in need of a loan modification for your San Mateo home, I suggest contacting the Neighborhood Assistance Corporation of America (NACA) to discuss their Home Save Program which is nationally recognized as the most effective solution for homeowners with an unaffordable mortgage.  For more information, visit www.NACA.com or call their office at (510) 652-6622.

Need to Sell Your San Mateo Home for Less than You Owe?

We go into much more detail during our How to Sell a San Mateo Home You Can’t Afford Webinar. For the date of our next webinar, check out our San Mateo Home Seller Education Schedule page or click on the Sign Up button below to be taken to the sign up page of our next webinar.

Sign Up

What’s Your San Mateo Home Worth?

The best way to find out how much your San Mateo home is worth is to compare your home to recent homes sold in your neighborhood. With some basic information about your home and your email, we can send you a detailed market report for your neighborhood that includes selling prices of your neighbor’s homes. To sign up, click the “Your Home’s Value” button below. View a sample market report here.

Your Home’s Value

Looking to Buy a San Mateo Short Sale?

Check out our San Mateo Buyer Representation page to learn a little bit about how we work and how our Buyer Representation Program is All About You! Then call us at (650) 655-2500 or email us at info@LivingWellinSanMateo.com to schedule a no obligation consultation. We’ll help you come up with a game plan to get your San Mateo short sale purchase approved.

Search San Mateo Short Sales

Enjoyed this Post? Why Not Subscribe?

If you have enjoyed Living Well in San Mateo – san mateo real estate, please subscribe to our RSS feed.

Raymond Stoklosa, Chela Stoklosa and Rebecca Williamson are Realtors with The RayChel Realty Group specializing in Santa Clara and San Mateo Real Estate.

How Markets are Affected by Foreclosures

Raymond Stoklosa — Wed, 20 Jan 2010 16:00:28 +0000

The Tale of Two Markets

The local real estate market – any market area – is really the story of two categories of homes. The first is the traditional, conventional market of homes for sale, and the second is the distress marketplace of homes owned by people in the midst of a financial crisis. Foreclosure markets move through their cycle at a much faster rate than the traditional real estate market. A period of intense activity can change abruptly and a period of virtually no activity can suddenly spike to an intense level. In either event what you believed to be true last month may no longer be factual today.

One Distress Sale Can Force Home Values Down

As I have written in previous blogs, it is the “6 Dreaded D’s” – death, divorce, disease, drugs, denial and da job – that affect foreclosure activity. It only takes a few distressed sales to force prices lower even in the best neighborhoods. In a condominium complex this is especially true where 1 or 2 distress sales can significantly suppress values in a complex affecting everyone hoping to sell or refinance.

The Bottom Can Only Be Seen in the Rear View Mirror

Active, pending and sold data from the Multiple Listing Service (MLS) no longer provides a comprehensive view of the local market activity. Foreclosure sales fill the void in the data spectrum by showing what the other half of the real estate market will pay for comparable property. Investors armed with cash and the ability to act promptly is seeking immediate cash flow returns. They are not praying that appreciation turns their purchase into a steal of a deal.   To a buyer looking for a home to live in it is about much more than cash flow, it’s more about finding the right home for the family…and schools…and safety. Those are two different playing fields with different rules. Regardless of how deep the foreclosure market falls, the bottom of the market will settle at the point when affordability returns and investors can purchase rentals with a positive cash flow. For most people, that point will be discovered in the rear view mirror.

Don’t Fall for Infomercials and “Below Market Rate” Schemes

Monitoring foreclosures can provide a preview into the real estate market just ahead. Foreclosure data is free and abundant; knowing how and when to use that data is not. Many foreclosure data resources either directly or by implication convey the message that consumers don’t need Realtors in a foreclosure market. They tout fabulous promises they you can buy a 4 bedroom, 2 bath, single family home in excellent condition for less than your rent payment. The truth is that if you pay 50 cents on the dollar for a home, it’s probably worth 50 cents.

Leave Buying at Trustee’s Sale to Professionals

Finally, buying at the Trustee’s Sale should be best left to the professionals who have the money, resources and minds-set to navigate in the arcane arena. Consumers should not buy foreclosures without the guidance of a qualified REALTOR or foreclosure professional. An opinion learned the hard way.

Search San Mateo Foreclosures for Sale

Enjoyed this Post? Why Not Subscribe?

If you have enjoyed Living Well in San Mateo – san mateo real estate, please subscribe to our RSS feed.

Raymond Stoklosa, Chela Stoklosa and Rebecca Williamson are Realtors with The RayChel Realty Group specializing in Santa Clara and San Mateo Real Estate.

Foreclosure Market Realities and What’s Ahead for San Mateo

Raymond Stoklosa — Tue, 19 Jan 2010 15:00:06 +0000

Foreclosures Will Always Be a Reality

The prevalence of the “6 Dreaded D’s” – death, divorce, disease, drugs, denial and da job – ensure that foreclosure will always be an element in the lender/borrower relationship. Foreclosure is a consequence of real people in distress experiencing one of life’s brutal low points. For the home owner, it never feels like a good choice and often foster feelings of failure.

What Good Does it Do to Post Notice of Defaults in the Newspaper?

Foreclosures – Notice of Default and Notice of Trustee Sale – are recorded and posted for all the public to see at the County Recorder’s Office. Does any good result in these postings? I think not. The borrower knows he or she is in default and can lose their home. The lender knows since it is the lender who initiated the foreclosure process. Why should every nosy neighbor, scam artist and hustler have this information readily available to exploit those desperate for hope?

Affordability is More Critical than Appreciation

These people who often say they would rather drop dead than lose their home are truly desperate. Much of their distress is self-inflicted and compounded by denial to be sure. It seems that regardless of how long the borrower has been in foreclosure, they are always broke. If more people would understand that affordability is more critical than appreciation maybe the rate of foreclosures would decline.

Foreclosure Affects Everyone – Rich and Poor

Foreclosure affects the rich and famous as well as the invisible poor. Foreclosures occur in good neighborhoods and bad ones, in times of economic boom and bust too! For home owners a short sale is preferable over a foreclosure which is much less damaging than a bankruptcy.   Still recent surveys have shown that almost half of the loan modifications completed 12 or more months ago are already in arrears. Go figure.

What’s Ahead for San Mateo Real Estate? More Foreclosures!

It’s likely that we will see more foreclosures coming. A 2nd wave of Adjustable Rate Mortgages (ARM) are scheduled to re-set or re-cast beginning about May, 2010, and a 3rd wave is scheduled for early 2011. Surely, many of these borrowers unable to make their new, higher mortgage payment will fall into foreclosure. If home values continue to fall, short sales will become more prevalent.

Tune in next time to learn how markets are affected by foreclosures.

Search San Mateo Foreclosures for Sale

Enjoyed this Post? Why Not Subscribe?

If you have enjoyed Living Well in San Mateo – san mateo real estate, please subscribe to our RSS feed.

Raymond Stoklosa, Chela Stoklosa and Rebecca Williamson are Realtors with The RayChel Realty Group specializing in Santa Clara and San Mateo Real Estate.

Buying Foreclosures is Not a Get Rich Quick Scheme

Raymond Stoklosa — Fri, 15 Jan 2010 21:45:39 +0000

Beware: Foreclosure Industry is Full of Scammers

As long as humanity has the “6 Dreaded D’s” – death, divorce, disease, drugs, denial and da job – foreclosure will be a part of the lending landscape. As long as we have people in distress, we will have people willing and eager to take advantage of them. The foreclosure industry is ripe with hucksters, con-artists, and charlatans pitching their no money, no credit, no job, no problem version of get-rich-quick. These grifters are equal opportunity exploiters; they prey on the unfortunate in financial distress who has hit one of life’s potholes, and the gullible, naïve dreamers who blindly believe in the visions of wealth portrayed by the scammers.

Buying Foreclosures is Not a Get Rich Quick Scheme

Buying foreclosures is not a quick and rich scheme, and even the most astute foreclosure pros rarely buy at “50% below market” as the seminar experts claim. In fact, virtually every foreclosure pro will admit to at least one costly mistake. Yet, the word foreclosure implies a bargain – and all buyers without exception want a bargain – and despite the admonitions to the contrary a great majority of buyers hold to the belief that all foreclosure are bargains. Given that mind set, most foreclosure buyers -and want-to-be buyers – are speculators gambling on future appreciation. The true foreclosure professionals are investors who look for cash returns they can realize today. True foreclosure pros acknowledge that sometimes the best deal is the one they didn’t buy.

Tip: Seek Representation when Buying Foreclosures in All Stages

There are three stages to buy foreclosures, and without question the most dangerous way is also potentially the most profitable. For the right person, buying on the “court house steps” at the trustee’s sale auction is an excellent place to find a great deal and a bad one as well. But, buying at the trustee’s sale auction is best left to those who can absorb a mistake and still come back to play again. However, there is no reason why you cannot team up with a pro.

Search San Mateo Foreclosures

Use the map below to search San Mateo County bank owned homes and short sales.

Enjoyed this Post? Why Not Subscribe?

If you have enjoyed Living Well in San Mateo – san mateo real estate, please subscribe to our RSS feed.

Raymond Stoklosa, Chela Stoklosa and Rebecca Williamson are Realtors with The RayChel Realty Group specializing in Santa Clara and San Mateo Real Estate.

Own a Home You Can’t Afford?

Raymond Stoklosa — Mon, 07 Dec 2009 22:05:18 +0000

Own a San Mateo Home You Can’t Afford?

Do you own a San Mateo home you can no longer afford?  Do you owe the bank more on your mortgage loan than your home is worth?  Are you facing the risk of foreclosure and fear your credit rating will be irreparably damaged?

One of Your Options is a Short Sale

If so, it’s important to understand what options are available to you.  One of your options, but certainly not the only one, may be a short sale.  A short sale is a fair market value, arm’s length, sale in which your lender agrees to accept less than you owe the bank.  Simply, the owner owes more money against the property than the property can be sold for in today’s market.  Before jumping on the short sale option band wagon, it’s critical to determine the probability of selling your home short.

How to Improve Your Chances of Getting a Short Sale Approved by Your Lender

While the short sale solution may sound like the answer to your dreams, it requires that all of the players in this game are aligned.  Here are some of the issues that can improve the chance of your lender approving a short sale:

You have a real hardship (e.g. job loss, health problems, divorce) and can prove it.

Your home is marketable and does not have debilitating deferred maintenance.

After calculating all selling costs, there remains enough money to pay all junior lien holders 10% of their note

If you can contribute some cash or sign a promissory note for some portion of the balance owed.

You have 2 or more loans on the property with same lender

You can provide all required documentation necessary in a timely fashion

If a Notice of Default has been recorded, your lender will allow ample time to complete the sale.

You are not in bankruptcy or taking steps to file bankruptcy.

How to Sabotage Your Chances of Getting an Approved Short Sale

Here are some issues that can diminish the chance of your lender approving a short sale:

You do not have a legitimate hardship as defined by the lender.

You have equity in the property.

You are presenting current on your loan payment.  (Note:  If you are current on your loan payments do not stop making payments)

Your property has been trashed and needs substantial rehabilitation.

You are in bankruptcy.

You recently completed cash out refinance.

You cannot or will not provide full documentation for your hardship.

You have private party liens and judgments outstanding.

A Notice of Default has been recorded and your lender will not give your time to sell.

You or your real estate agent priced your home dramatically under market value.

There May Be More Approved Reasons Specific to Your Situation

The above summary is for general information purposes only. It is not by anyone’s measure a comprehensive list of conditions identifying who can or cannot successfully sell their home with a short payoff option. If it sounds like a short sale may be right for you, get legal advice first. Know all of your options and then decide.

Want More? How to Sell a Home You Can’t Afford Webinar

We go into much more detail during our How to Sell a San Mateo Home You Can’t Afford Webinar. For our next class, check out our San Mateo Home Seller Education Schedule page or click on the Sign Up button below to be taken to the sign up page of our next webinar.

Sign Up

How Much is Your San Mateo Home Worth?

To get a quick idea how much your home is worth in today’s market, use our San Mateo Home Valuation tool by clicking on the “Your Home’s Value” button below. With your email and a few details about your home, we’ll send you a detailed, neighborhood specific market report. View a sample market report here.

Your Home’s Value

Need to Sell Your San Mateo Home?

If you need to sell your San Mateo home, check out our Stress Free Home Listing Marketing Program that is proven to sell your home for top dollar, fast. Then, call us at (650) 655-2500 or email us at info@LivingWellinSanMateo.com to schedule a no obligation consultation. We’ll help you sell your San Mateo home fast so you can move on with your life.

Enjoyed this Post? Why Not Subscribe?

If you have enjoyed Living Well in San Mateo – san mateo real estate, please subscribe to our RSS feed.

Raymond Stoklosa, Chela Stoklosa and Rebecca Williamson are Realtors with The RayChel Realty Group specializing in Santa Clara and San Mateo Real Estate.

U.S. Treasury Dept Announces New Short Sale Guidelines

Raymond Stoklosa — Fri, 04 Dec 2009 21:33:52 +0000

Troubled San Mateo Home Owners Get Welcome News!

Changes announced this week (December 2, 2009) by the U.S. Treasury Department impose new guidelines designed to make processing some San Mateo short sale transactions go more smoothly.

New Guidelines for Processing San Mateo Short Sales

The new guidelines state:

The property must be the home owner’s principal residence.

The home owner must be delinquent on the mortgage or close to defaulting.

The loan must have been made before Jan. 1, 2009, and be for less than $729,750.

The borrowers’ total monthly mortgage payment must exceed 31 percent of their before-tax income.

Sellers Can Now Receive Money from the Government when Selling their San Mateo Home

Under the government’s new plan, borrowers will receive $1,500 from the government for selling their San Mateo homes for less than the amount of their mortgages. Mortgage servicing companies will get $1,000 for each completed short sale. Second-mortgage lien holders can receive up to $3,000 of the sales proceeds in exchange for releasing their liens. Investors who hold the first mortgage can collect up to $1,000 from the government for allowing these payments. Under previous programs the seller (borrower) was prohibited from receiving any money at close of escrow.

Best News for San Mateo Home Owners – Sellers Must be Fully Released from Future Liability

Now the best part…Borrowers who complete a San Mateo short sale under the program must be “fully released” from future liability for the debt, according to the guidelines. That’s welcome news coming at a time when many junior lien holders were pursuing homeowners for the unpaid balance of their loans long after the San Mateo short sale was completed. San Mateo home owners can now get closure on one of life’s unpleasant events.

Need to Sell a San Mateo Home You Can’t Afford?

We recently did a webinar for San Mateo home owners who can no longer afford their homes. View the slides here.

Interest in Attending our Webinars and Classes?

If you’d like to attend an upcoming webinar, visit our Class Schedule page for a schedule of our upcoming programs.

You can also call us at (650) 655-2500 or email us at info@LivingWellinSanMateo.com to schedule a free, no obligation consultation to learn how we may be able to help you get an approved short sale for your San Mateo home.

How’s the Market in Your Neighborhood?

Click on the “Your Home’s Value” button below to get a neighborhood market report with just your email, some basic details about your home. View a sample market report here.

Your Home’s Value

Call us to Schedule a Free, No Obligation Consultation

Call us to schedule a no obligation consultation at (650) 655-2500 or email us at info@LivingWellinSanMateo.com. We understand just how uncertain and frustrating owning a San Mateo home you can’t afford can be and we’ll help you put it behind you and move on with your life. In the meantime, you can check out our Seller Representation Page to learn about our Stress Free Home Listing Marketing Program that is proven to sell your San Mateo home fast.

Enjoyed this Post? Why Not Subscribe?

If you have enjoyed Living Well in San Mateo – san mateo real estate, please subscribe to our RSS feed.

Raymond Stoklosa, Chela Stoklosa and Rebecca Williamson are Realtors with The RayChel Realty Group specializing in Santa Clara and San Mateo Real Estate.

Why San Mateo Short Sales Fail

Raymond Stoklosa — Sat, 14 Nov 2009 01:59:07 +0000

Selling Your San Mateo Home When You Owe More than it’s Worth

As unemployment worsens and the recession runs its ugly course, short sales have become a fact of life for many San Mateo home owners who have hit one of life’s pot holes. If you’re upside down on your San Mateo mortgage loan – owe the bank more money than your home is worth – getting rid of the house you once loved is the key to getting back your peace of mind and rebuilding your damaged credit. You’ve heard that finding a buyer who will pay fair market value for your devalued home, and at the same time, getting the bank to agree to accept less money than it is owed is the solution.

Most San Mateo Short Sales Fail

But, is it as simple as that? Of course, the answer is NO. Most San Mateo short sales fail, that is, the bank does not agree to accept a short pay-off as payment in full which satisfies the homeowner’s debt. Ultimately, when the homeowner fails to cure the outstanding delinquency, these San Mateo homes are foreclosed upon and become bank owned homes for sale, or REOs. These REO homes are listed and sold on the traditional resale market usually through the MLS.

Which Begs the Question…

All of which begs a question that I’ve been asked many times: Why do San Mateo short sales derail?

Why Do San Mateo Short Sales Derail?

Here are some of the reasons from different perspectives:

Seller

The number one reason why San Mateo home sellers are turned down by their bank (lender) is they cannot document a genuine hardship. Job loss, income drop, divorce, serious illness or death are considered worthy hardships. Showing hardship is the one issue common to all approved San Mateo short sales.

Other reasons, such as, your San Mateo home is worth less than what you paid for it or you just don’t want it anymore are not hardships. Or, if the seller is not willing to sign a promissory note required by the bank to make up for the difference between what they owe and how much they can get for your home in today’s market.. Or, the seller does not allow access to their home. You have to show it to sell it.

Junior Lien Holder

The San Mateo short sale cannot close escrow if the junior lien holder declines to accept less than owed. Sometimes, junior lien holders prefer to take their chances by foreclosing on the property. A junior lien holder may require the seller to sign a promissory note as well. If the seller refuses, the sale is canceled.

Mortgage Insurer

Private mortgage insurers have a position of risk and often require the seller to sign a promissory note to cover their lost. Most sellers simply want to walk away and rid themselves of any further obligations. Unless the seller agrees to sign the note, the San Mateo short sale will not close escrow.

Buyer

The property may not appraise for the agreed upon purchase price, or the buyer’s loan application may be rejected which would result in a failed transaction. Buyers must be pre-approved and have easy access to their financing. Or, during the lengthy processing period the buyer gets cold feet, or finds another more acceptable San Mateo home and cancels the purchase.

Property

If there are clouds on the title, the rights of ownership cannot be conveyed because title insurance is denied.

List Price

If the list price is too high, buyers won’t buy. If the list price is too low, the bank will reject the price. Remember, short sales are sales approved by the bank for Fair Market Value for less than debt owed.

Processing Delays

A San Mateo short sale is a process driven transaction. If paperwork is missing or unsigned, delay is inevitable. A complete, well documented short sale proposal package is critical to the success of a San Mateo short sale request.

Have a San Mateo Home You Can No Longer Afford and Need to Get it Sold?

Sign up for our webinar on Thursday November 19th at 6pm to learn How to Sell a San Mateo County Home You Can’t Afford. For more information visit our How to Sell a San Mateo Home You Can’t Afford page. To sign up, use the “Sign Up” button below.

Sign Up

Looking to Buy a San Mateo Short Sale?

Check out our San Mateo Buyer Representation page to learn a little bit about how we work and how our Buyer Representation Program is All About You! Then call us at (650) 655-2500 or email us at info@RayChelRealtyGroup.com to schedule a no obligation consultation. We’ll help you come up with a game plan to get your San Mateo short sale purchase approved.

Search San Mateo County Short Sales

Enjoyed this Post? Why Not Subscribe?

If you have enjoyed LivingWellinSanMateo – san mateo county real estate, please subscribe to our RSS feed.

Raymond Stoklosa, Chela Stoklosa and Rebecca Williamson are Realtors with The RayChel Realty Group specializing in Santa Clara and San Mateo Real Estate.

Webinar: How to Sell a San Mateo County Home You Can’t Afford

Rebecca Williamson — Mon, 02 Nov 2009 22:37:37 +0000

In our next webinar, we’ll be presenting a consumer protection class for San Mateo County home owners who have hit one of life’s pot holes and can no longer afford their homes.

Does this Sound Like You?

You are upsidedown on your mortgage.

You owe the bank more than your San Mateo County home is worth.

Your mortgage payment has gone up and you can’t afford it.

You’re in default on your mortgage loan and facing foreclosure.

If a job loss, serious illness, divorce or death of a spouse or significant other turned your life into a mess, this webianr is a must. Before you have another sleepless night, watch our webinar and learn the truth about San Mateo County short sales and get your life back in order.

Topics Discussed Include:

What it takes to get a short sale approved and closed in San Mateo County.

Why so many San Mateo County short sales fail – so you won’t waste your time chasing a fantasy.

Why San Mateo short sales allow you to rebuild your credit faster and are preferable to a foreclosure.

What your lender requires and expects from you during the short sale process.

Point out what you can realistically expect in the short sale process – without exaggeration.

Who are the players in the San Mateo County short sale process and what are their roles?

What Realtors® can and cannot do to help you.

Join us for a very informative webinar that may give you a new start on life and the peace of mind that’s been missing. This webinar is free to attend and private.

When’s the Next Webinar?

Our next program will be held on Wednesday December 2nd at 6:00pm.

How Do I Register?

To register for this no hype, educational webinar, click on the Sign Up button below.

Sign Up

How Do I Access the Webinar?

When you sign up our webinar system will email you a link to use to sign on at the scheduled time. This webinar can be accessed through any computer with internet access. A phone line is not required as you’ll be able to listen to webinar on your computer’s speakers. We’ll have our phone lines open before the webinar to help anyone with log on problems.

Enjoy this Post? Why Not Subscribe?

If you have enjoyed LivingWellinSanMateo – san mateo county real estate, please subscribe to our RSS feed.