I Want To Short Sale My Palo Alto Home, Now What?

If you find yourself in the position of having to sell your home and it is not worth as much as you owe, you may be wondering what you should do. I am assuming here that you have either been turned down for a loan modification or have to move because of divorce, job transfer, or other circumstance.

So you have to sell. Here is what you should do.

FIND A REALTOR

1.  You can not do this on your own. The banks will want the home to be extensively marketed and you can not do that as a FSBO. Since the lender will pay the real estate commissions that should not be a concern.

2.  Gather your financial information. You will need 2 years tax returns, 2 months bank statements form all accounts, 2 months statements from all investment accounts, profit and loss for 2 years from any self employment.

3. Fill out a financial statement which shows all your income and expenses

4. Write a hardship letter which explains why you need to do a short sale

5. Make your home available for showings and open houses

6. Keep your financials updated every month and give the bank everything they ask for

7. Accept the best offer you can get on the property

8. Be PATIENT

If you have any questions about short sales in San Mateo or Santa Clara County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E.  01191194

Marcy Moyer Keller Williams Realty Palo Alto, Ca. Specialist in Short Sales and Trust and Probate Sales

Mountain View Lenders are Taking A Long Time For Approvals

The real estate market has been very active in Palo Alto and the surrounding areas this year.  It is not unusual to have a well priced home have multiple offers. When this happens naturally the buyers want to make their offers look as attractive as possible with short contingency periods.

At the same time lenders are under increasing pressure to provide the best rates and terms and in short time frames. 

Here is where the problem arrises.  If a lender has very competitive rates there will be a lot of business clogging up the pipe line.  More files mean slower approval processing times. Your mortgage broker may promise a 14 day approval, but the underwriter has not made that promise and frequently will deliver.

Even when the file is reviewed in time for a 14 day contingency they may say it is approved and then list 25 + conditions that need to be satisfied.

So what does the buyer do?

1. Ask for a realistic contingency period. If there are going to be 4 week-end days or some holidays in the contingency ask for business days, not calendar days.

2. Once preliminary approval is given look carefully at the conditions.  If these are things which are easy to provide and do not pose a risk of rejection then it is probably safe to remove the contingency.  These would be things like providing documentation of your college diploma, or rent checks from the previous 12 months.  If the condition is not one you are sure of, like the seller needs to provide proof that the additional square footage the appraiser found was added with a permit, and you do not have a copy of the permit then it may not be safe to remove the contingency.

3. If you are not comfortable that the loan will be funded then ask for an extension.

The seller may not want to give it to you if they think they can do better with a back up offer, but if you lose the house there will be another one.  It is not a good idea to lose your deposit if the loan can not be funded.

The most logical way to solve this problem is for sellers and their agents to realize that lenders are taking a long time right now and not look at an offer with a 10 day loan contingency as being better than one with a 21 day contingency, but unfortunately that is often not the case.

If you have any questions about buying or selling homes in Santa Clara or San Mateo counties, please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E.  01191194

Marcy Moyer Keller Williams Realty Palo Alto, Ca. Specialist in Short Sales and Trust and Probate Sales

East Palo Alto Short Sales: Watch Out For Rental Restrictions

There is another conflict brewing between investors and first time home-buyers, and this time the home buyers may win. In the more affordable areas of the Silicon Valley distressed properties, ie short sales and reos have been popular with investors and first time buyers. Many would be owner occupiers lose out on great opportunities to investors who have all cash.  Since condos are the least expensive properties, have the fewest maintenance issue,  and tend to bring in more rent per dollar spent they are popular with investors. Coupled with the more restrictive lending practices on condos, many bay area developments are now in a position where the number of owner occupied units has fallen to a critical level. Owners of these properties are having trouble refinancing and buyers trying to get loans are being rejected by the lenders.  As a result, many complexes are starting to pass new HOA regulations limiting the number of rentals allowed in the condo development.

These restrictions can be a double edged sword.  If they occur in a building where the delinquency rate on the HOA dues is too high then a buyer will not be able to get a loan anyway and it will effectively cut off all sales.  In the future when the market has settled down the rental restriction could put a damper on future sales.  However, if they are not instituted it may become impossible for anyone but investors to purchase in some condo complexes, which in itself will lower values not to mention make things harder for the first time home buyer. It will also make it impossible for current homeowners to ever refinance in some of these buildings.

I do not have the answer here as to what is right or wrong here. I can only give some advise on what to do if you want to purchase or sell a condo and want to get the information about potential rental restrictions.

1. Ask your agent to find out if the HOA docs are available yet.  If it is an reo they most likely will not be and a

short sale very likely not

2. If the docs are not available before you make an offer ask your agent to ask the listing agent for the number of the HOA management company

3. Call the management company and ask about any current or contemplated rental restrictions

It is not that hard to find out and can save a lot of time and possibly money.

If you have any questions about short sales in San Mateo or Santa Clara Counties please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E.  01191194

Past Due Palo Alto HELOCS Can Be Sent To Collection Agencies

If you are an owner of a home with a second loan that is a Home Equity Line and you are having trouble paying your mortgage you should do something about it right away. I know you have probably heard that banks are taking up to 2 years to foreclose so you have plenty of time, but there is a dirty little secret in the mortgage world.  HELOCs are not entirely like traditional mortgages, they are more like credit cards. If you do not pay your first mortgage your lender needs to find a way to collect the money or take your home back. However, with a HELOC the lender can turn the account over to a collection agency, get some money for it right away, and you are left to deal with the debt collector.  

This can become a potential problem if you decide that your best option is a short sale. If you decide to sell your home as a short sale it is often easier to negotiate the payoff to the second if it is still owned by the bank, rather than the collection agency. The bank sold to a collection agency for pennies on the dollar, and would be more likely to let you go for the amount that the first lender offers.  By the time it goes to collection that entity had invested money and will expect to make a profit by getting a settlement larger than what they paid. If you cut out the middleman (in this case the collection agency) it should be cheaper.

So, if you can not pay your mortgage, don't just stand there, DO SOMETHING.  Whether is is going for a loan modification, refinance, or short sale, get started earlier rather than later. It will be less stressful in the long run, and generally much less complicated.

If you have any questions about short sales in the Silicon Valley please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E.  01191194

Almaden: San Jose OPen Sat 1-4 It's Gorgeous!

Gorgeous Large Almaden Home With Union Schools	$949,000.00
1523 Oak Canyon Dr, San Jose, CA 95120 26 Photos 5 Bed, 3.0 Bath 2760 SF Tour # 2556279   This beauty on a 7,405 sq ft lot has it all: 5 bedrooms, 3 baths with a full bedroom and bath downstairs, separate family room, separate dining room, pergo floors, and lush landscaping in a very quiet and presigious location. For more information, please contact: Marcy Moyer DRE#01191194 Keller Williams  Palo Alto, CA 650-619-9285 650-619-9285 Cell 650-560-6290 Fax Information supplied by sellers. Deemed reliable, but not guaranteed.

Gorgeous East Palo Alto Short Sale West of 101

Gorgeous Condo in Secure Building	$125,000.00
480 E Okeefe St #209, East Palo Alto, CA 94303 7 Photos 1 Bed, 1.0 Bath 542 SF Tour # 2567413   This beautiful condo on the west side of 101 features a remodeled kitchen and bath. There is covered parking as well as gusest parking. The building has electronic gates as well as a locked front entrance, on site laundry room, and an elevator. Don't miss this great opportunity. For more information, please contact: Marcy Moyer DRE#01191194 Keller Williams  Palo Alto, CA 650-619-9285 650-619-9285 Cell 650-560-6290 Fax Information supplied by sellers. Deemed reliable, but not guaranteed.

When the Silicon Valley Rental Market is Tight, Do NOT Haggle on Price

In addition to being a full time realtor for sales, I also have rental properties myself, and help a few clients rent out their investment properties.  Right now rentals in the Silicon Valley are hard to come by. There are many more potential renters than there are available homes.  Rentals that allow pets, or that are close to universities are especially popular.  So if you are trying to rent one of these properties here is a little hint: Don't try to get the price lowered when you can see that you are in competition with many other parties.

I have a rental property in Santa Cruz that is close to the university. The students who had been there for 3 years left and so I had a rare opening. 1 day on Craigslist produced 6 potential groups of students who wanted to rent.  One of the groups included 2 very cute and obviously bright female students.  After viewing the home they asked me to lower the rent by $200 a month. I politely declined and rented it to another group.

The next day they got back to me and asked if it was still available. This was probably their first time looking for rentals and I hope they learned a lesson.  It may be ok to bargain for a commodity that is in overabundance, but don't do it when the product is scarce.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E.  01191194

Marcy Moyer Keller Williams Realty Palo Alto, Ca. Specialist in Trust and Probate Sales

Menlo Park Probate Short Sale: Why Bother?

The question of whether to short sell a home in probate used to be rare, but now unfortunately it is not. There are estates where the owner dies, owes more than the house is worth, and a decision needs to be made by the Personal Representative (executor) as to what to do.

My opinion, try it. If it is in the best interest of the bank/investor to short sell rather than foreclose they will do it. If it is not, they won't and will take it to foreclosure.

So who benefits if the home is sold as a short sale?  Well the realtor for sure.  The commission is paid by the bank.

However, if the attorney's fees are put on the HUD1 statement (the statement saying who is paying for what and who is receiving what money) the bank may pay them.  Also, the payment to the personal representative can go on the HUD1. This would make it worthwhile for the Personal Representative to try and do the short sale.  This can be very handy if the representative is a Bank or Professional Fiduciary. 

The heirs do not get anything out of a short sale so it does not matter to them if the property is foreclosed or sold short, but it does matter to the neighborhood.  A vacant foreclosed home brings the other homes around it down, while a short sale is cared for by the realtor and even if vacant is not abandoned.

So should you bother?

I think so.

If you have any questions about probate or short sales, please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E.  01191194

Marcy Moyer Keller Williams Realty Palo Alto, Ca. Specialist in Trust and Probate Sales