by Jennifer | Thursday, 3 March, 2011
If you want to sell your house, and the amount you owe plus the costs of sale are more than it’s worth, then you will be faced with the choice of attempting a short sale or bringing in the cash to close. Despite the fact that San Francisco home values have held up much better than in other areas, this was the case for about 30% of my business in 2010. So if you find yourself considering either of these scenarios, you are not alone.
If you are in the position to upgrade your home or investment property, it can be a great choice to sell a lower value property at a loss and obtain a more valuable property. This is called trading up in a down market and it makes sense because x% off a lower price is less than x% off a bigger price. But for those who are faced with the need to simply exit the market entirely due to job change, job loss, divorce, a mortgage they can’t pay or neighbors they can’t live with, the market being down does not have the same silver lining.
If you have the cash to bring in, the process is the same as a straight-forward, normal sale, albeit more painful. In some cases, you can even write the loss off your taxes. If you don’t have the cash, though, you will need lender approval and a good explanation of hardship to get the short payoff approved by the lender. The forgiven debt is considered potentially taxable income by the state and federal governments. The good news is that under the Mortgage Debt Relief Act of 2007, the Feds are not collecting taxes on mortgage debt forgiven in 2007 through 2012 up to $2 million for a couple filing jointly and that under the Conformity Act of 2010, California is doing the same for debt forgiven up to $500,000, with partial tax relief up to $800,000 of debt forgiven. Especially with San Francisco’s fairly low value declines, these exclusions will protect most people needing to sell their homes short in our market. Continue Reading…
by Jennifer | Saturday, 23 January, 2010
At a rate of about one property every 2.5 minutes, bank owned properties are going, going, gone…the tuxedo clad, high energy, “auction assistants” are coaxing bids out of a poker faced crowd.
I am indeed sitting on the floor because it is a full house here at the Doubletree Hotel “grand” ballroom off Arden way in Sacramento at the REDC auction you can find out more about at www.auction.com. Most properties seem to be selling for between 3 and 4 times the opening bid, which is still a good deal if you believe the “previous values” listed on the program.
In my market, very, very few properties have gone to this type of auction. If, however, you are interested in Sacrameto real estate, there’s plenty here to choose from. There’s even a slightly tempting 19 acre parcel in Oak Run where my good friends Tom and Wendy live.
About 20% of properties for which the gavel comes down are being reauctioned a few minutes later for reasons of the buyers failure to qualify or prove funds to close. This qualification takes place at a bank of laptops at the far end of the ballroom. A number of the properties are proclaimed “sold, pending seller approval.”. I’ve been told this means that the bank which owns the property has 14 days in which to approve or reject the deal as the reserve was not met and that about 80% of these actually proceed to closing.
My client is hoping to buy a bank owned property in Tuolomne county that he already tried to buy twice through a normal mls sale. Both times the bank rejected the deal. We are going to be up toward the very end of the auction-only about 25 more properties to go. Wish us luck!!
(Oak Run parcel just sold for 17,500 for 19.8 acres.)
by Jennifer | Monday, 28 July, 2008
Many of you ask about foreclosure activity and opportunities in our market. I answer that I rarely see them in San Francisco itself And as reported this week on sfgate.com per DataQuick: of the 18,516 notices of default recorded in the Bay Area in the 2nd Quarter, only 418 were in SF — that’s about 2.2% of the total. Of all the Bay Area counties, SF also had the lowest year to year gain in defaults: 62.6%.
They estimate that approximately 78% of those receiving notices of default will be foreclosed upon with “22% emerging from the foreclosure process by catching up on their payments, refinancing or selling.”
The entire article is here: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/07/22/BUE511T63B.DTL&tsp=1
Sfgate now has a search engine for Bay Area foreclosures, updated weekly, which can be searched by county, city or zip code: http://www.sfgate.com/webdb/foreclosures/
If you have questions about a distressed property, or you have a friend who needs to buy or sell, please get in touch and I will be happy to use my experience with short sales and foreclosures to work!
