Some good news regarding changes to Short Sales in California

On July 15, 2011, California Legislature enacted a new law protecting homeowners and investors against deficiency liability after a short sale in California. This law only applies to single family homes and 1-4 units. This change applies to every California upside-down homeowner who refinanced since they purchased their home, and every upside-down investor that purchased or refinanced a home or 1-4 units.

Previous to this new law, if the owner refinanced his home or the property was an investment(1-4 units), the owners were on the hook to pay the deficiency if the lender decided to sue them for it. The term deficiency means the difference between what is owed on the loan(s) and what the lender(s) receive(s) as payoff.

The only caveat regarding this new law is if you happen to have a second on the property.  In that case the Seller must get in writing that the second lender agrees to not pursue a deficiency judgement against the Seller before closing the transaction. It is highly recommended that you consult your C.P.A. or a real estate lawyer to determine whether this works for each Seller.

In addition, the lenders benefit greatly by keeping the owners in the property while it is being sold as a Short Sale. The owners’ credit will be effected for a shorter period if they choose to sell their property as a Short Sale as opposed to having a foreclosure on their record. See the following page for up-to-date comparisons of waiting periods for Bankruptcy, Foreclosure and Short Sales. Also, it is best to consult with your C.P.A. to confirm the impact of choosing to go ahead with a Short Sale.

This is the time to start looking at Short  Sales in Sonoma County. Short Sale homes and investment properties are homes and condos that the owner has missed a minimum of two  bank payments.  Hopefully, once the owner has missed two payments, he or she should enlist a realtor to see about selling the home before the foreclosure is final. The owners  market the homes in hopes of selling them before the bank forecloses on the home. In addition, the homeowner’s credit  is less effected by a short sale property than a foreclosed property. Therefore, it behooves the owner to try to complete a short sale as soon as possible.

Short sale homes run the full gammit of prices from $200,000 to the millions. Today  I ran all the Short Sales in Sonoma County for all homes that are currently in Short Sale status from $200,000 to 2 milion. There are currently 669 available homes and condos in Sonoma County.

Short Sales in Sonoma County

Once the Short Sales are listed, you have the opportunity to bargain for the homes. At this point,  the Buyer has the opportunity to look at the property. The Buyer actually ends up dealing with Bank or Savings and Loan which owns the First mortgage and perhaps the Second mortgage as well. The owners often do not realize that they are not in the driver’s seat anymore.  The Banks are the ones that decide to accept an offer or reject it. The drawback from Short Sales is that the Buyer must be prepared to wait several months to complete the deal. It is exasperating to deal with the Banks, however,it is worth the wait when the Buyer gets the house at a greatly reduced price.

Why look at  Short Sales?

The obvious reason is that the price is so much cheaper than a regular sale where there isn’t any problem with delinquent loans. The owners of regular houses do not want to address the huge depreciation in their property as reflected by the hundreds of thousands less in asking price on REO’s and Short Sales. It is very difficult to explain to current property owners that their home prices have followed the REO’s and Short Sales down in pricing. Therefore, it is much easier to look at realistic pricing of  Short Sales!

Playing the Game of Short Sales

I refer to the Short Sale Experience as much like a game. The property isn’t sold until the lenders decide to accept the offer. The property owner has no input into the agreed price between the buyers and the banks. The banks can wait and extend the period when they are accepting offers. And in addition, if your offer is accepted, the bank can accept another offer that is better than yours. The bank has the right to take a better offer even  if the property is listed as CC, Contingent-Show. Therefore, I recomment that we look at properties that are listed as CC because you too can pump the last price that was offered.

669 Short Sales Available in Sonoma County on December 21, 2008

My proposal is to list my favorite homes on my blog that I select  to entice prospective Buyers to call me and see these excellent buys in Sonoma County. You can Google me to see my background in Sonoma County and the articles that have been written about me in the Press Democrat. I also have built two custom  homes from the ground up and I am familiar with the costs to remodel homes with my list of trusted contractors. My full name is Sheila H. Giovan and I can be reached at 707 495-4356 mobile phone. I am associated with Healdsburg Sotheby’s International Realty at 409 Healdsburg Avenue, Healdsburg.

Making your own Search for Short Sales

Also, you can run a search for yourself on my winecountryranches.com which you can name the exact areas that you are interested and the price. It is tied to the MLS(Mutliple Listing Service) and therefore is updated to that moment. It is an ideal way to search for properties that meet your criteria.

I have lived in Sonoma County for over thirty four years. I am very knowledgeable about  Sonoma County. I have a passion for the beauty and uniqueness of this area of California. I look forward to working with you if you decide to look at these great bargains!

One last thought, how long will these REO’s and Short Sales last? At this time the Press Democrat is still publishing daily lists of homes to be auctioned at the court house steps. Until these postings of delinquent property owners stop, we will be seeing more Short Sales and REO’s to look at and buy at greatly reduced prices.