Sad but True (true story)    You might find the ending a happy one.

Terry (not her real name) called our office in tears.  Her home was going on the county steps, the following day, to be sold to the highest bidder in a trustee sale.

She did have a little cash in the house in the form of equity.  Not Fair!

Not a fun call by any measure.    After living there for 25 years and raising her family, the lender was foreclosing.   Not a rare story…I know.

This put the whole office in a buzz to solve Terry’s problem.  I called my cash investors, others called attorneys.    My ‘ace in the hole’ investor was in Europe the other was unable to put it all together in such a short time.

It was looking dire by the end of the day.

The only solution turned out to be bankruptcy…according to legal council!  That’s not what this story is about though.  This was the only way to halt the foreclosure and allow Terry some time to get a grip.  After all, she raised her kids in this home, had no job prospects and was on the verge of a serious breakdown.

She needed to hit pause.

Terry was not devoid of responsibility and I won’t defend her position.   She just needed help.

So, the only alternative was bankruptcy.  The search began for an attorney to embrace Terry and get the ball rolling.   This was done in an attempt stop the snowballing effect!  One found,  we began to focus on solutions.

Move ahead a few days….

Terry hired us to meet the required ‘sale of the home‘ that the Trustee ordered.   This is where it went haywire AGAIN!  The Trustee said he had the legal authority to choose and hire a Realtor.  Well, his Realtor was preparing to sell the home for a ridiculously low price (about $100K low).   Leaving Terry with nothing!  The Trustee’s agent claimed his price was based on his ‘expert opinion‘, the current market and the home’s condition.

Not so fast mister!  We appealed to the Judge that this agent was out of his gourd.  Providing some strong fact based data, we were granted the job to sell Terry’s home.  Sorry Mr. Trustee‘s agent (and Mr. Trustee)!

The home was in bad shape, for sure.  The kitchen cabinet doors were falling off, the Master Bath was in need of a Hazardous Materials Team and the yard more resembled a Jungle than a forest meadow with curb appeal.

We jumped in with both feet.  Providing labor, guidance, advice and, in some cases, a late night shoulder for Terry to cry on.

The home sold in 10 days.  The offer was great and provided Terry with $90,000.00 dollars after expenses.

We make money doing this, right?  In this case there was little money left over after all the hours and effort.   It wasn’t what I earned that was rewarding, it’s what I learned…..

I work with the best group of ‘people’ in the world!  They’re not your typical, robotic, scripted salespeople who only look out for themselves…they’re real people – that care!

I almost  forgot the best part.    Once Terry began to see the light at the end of the tunnel she gained enough confidence and piece of mind to secure a great job!

Terry has a bright future on the horizon!

note:  this solution is not for everyone there are short sale and other options to consider

This Video (below) is proof many homeowners in all areas are at risk of scammers, including San Jose homeowners.  When you ask for help selling your San Jose House, remember, if it sounds too good to be true..Then it probably is!

There are no ‘Magic Wand’ solutions if you find yourself against the wall with your mortgage.  Using common sense and a applying pragmatic approach is still the best and most effective way to determine whether you should sell your Los Gatos home or buy a smaller more affordable house in San Jose.

A good rule of thumb is to obtain 3 professional opinions and weigh them one against the other.   The first solution may not be the only solution and… Watch This Video!

Wow!  These are my 3 picks of the weekend for Los Gatos Homes for sale.  New Home Buyers will find they have all the best things to offer.

Some lucky folks are going to be new homeowners in Los Gatos!

Great prices and locations are just the beginning.   17250 Pine St.Los Gatos is a short sale,  I know,  Yuk.  Not really!  Look what the fundamentals look like…

Schools: Great!  Location: Great!  Price: Amazing!

Use ‘the proper strategy and be prepared for a few bumps’ is the bargain hunters code. One may be a foreclosure one a short sale, however what would expect a bargain to look like?

Los Gatos is a tough area to find affordable homes and these 3 are a step in the right direction. Preparing for an opportunity equates to good luck, right?

The 2nd homes for sale in Los Gatos is 15175 El Gato and the 3rd house for sale in Los Gatos that I see as a great first time buyer pick is 228 Calle Marquerita.

Buying a short sale can feel like riding a rollercoaster or worse,  falling out of one?  Scary if you don’t know the short sale process!

Actually, rollercoasters scare the dickens out of me.  I like the idea of knowing what the outcome of something is going to be.  This is where buying a shortsale and riding a rollercoaster  share a similarity.  You never know what’s next!

They are both exciting and both can be frightening.

Changing the course of a rollercoaster, to reduce the scare factor, is impossible, however  you can make that rollercoaster short sale purchase like a ride on the Teacups at Disneyland.

The Teacup ride strategy to short sales should go like this….

• Screen properties for their potential to gain a short sale approval.
• Commit to the process.
• Prepare for a flexibility.
• Hire a Realtor proficient in Distressed Properties and Short Sales.

I think I like tea.

• Screening the properties, for their ability to gain a short sale approval, is a bit like having to do the maintenance inspection to be certain the rollercoaster is safe before you squeeze yourself into the seat.

Just last week I showed a very nice short sale house and the listing agent said they had a 3rd party negotiator. I thought.. great!  Only to learn the agent would not disclose the 3rd party.   Big red flag!   Obviously a ruse that would come back and make the buyer spill their tea.

You need to learn how many banks are holding the mortgage lien(s), which bank(s) and how far upside down are the current owners.   What is the mindset of the seller… Angry, Relieved?   Using these factors  an equation can be arrived at to grade short sales.

Committing to the process is as simple as buckling into the seat.  Once you have screened out the bad properties be prepared for surprises and commit to finding resolutions and making compromises .   Be certain this is what you want to do before you move forward and commit yourself  to the entire process.

Preparing for flexibility simply means you should not set a date certain to move from your current residence.  This is especially important if you are employing a moving company.

You wouldn’t plan to eat lunch at 12 noon and then ride a rollercoaster.  You would leave your lunch plans flexible to prevent a big mess.  Be flexible.

Select a range of dates for your move and make allowances with your landlord or your current home sale.  This will save a ton of stress and related problems.

If you have hired a competent lender you will have additional flexibility in your loan terms, loan lock and room to increase your approved loan amount should it become necessary to pay unforeseen expenses.  A huge problem with short sales in San Jose.

Hiring a multiple listing Realtor, who has extensive short sale experience, is what most buyers fail to do and learn of their error far too late to overcome their mistake.  Kind of  like getting on a broken rollercoaster.

If your short sale of choice is listed with an inexperienced agent,  it will make little difference how good your Realtor is.  This is a huge factor in any short sale equation.

Your Realtor should also have experience in working with a number of different banks,  have proven skill overcoming pitfalls and implementing solutions for those that are unexpected.    Successful short sale listing and selling experience is an absolute must!   If one  says to you  ” I can do it,  it’s easy.”…

….Find another amusement park.

Knowing what documentation to ask of the listing agent, to give you confidence you have committed to the right home purchase, and providing you with a  clear understanding of the progress of the sale, is an important part of your Realtor’s job.

Without this level of  experience and clear communication you will feel like you are on a non-stop rollercoaster.

So what will it be, an exciting ride on the Teacups or a risky rollercoaster ride?

Here is a long list of short sale FAQs and tips to hire a multiple listing realtor.

You’ll find the following Los Gatos property a great value.   An affordable short sale house in Los Gatos….

17250 Pine St, Los Gatos

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• Why 2010 Could Be the Year of the ‘Short Sale’  blogs.wsj.com)

• buying a short sale
  

An attractive short sale Home for sale in Los Gatos is getting a lot of attention this week.   When a Million Dollar property is listed for under $800K that will happen.  Above Hi 17 the noise may be an issue for some or the old oil heating system, but a great price nonetheless.  Built in 1915 the character is built in.

first time buyer credit

Gov short sale guide

That FHA mortgage looks like a winner for San Jose home buyers and Los Gatos home buyers.   Low Down Payment,  Great Interest Rate!  What more could you ask for?  A short sale?

Well, not much, obviously or , at least,  hoping is not going to change the new rule.   The upfront costs are going to be a bit higher.

To get that Low Down Payment and Great interest Rate you are going to be required to….

• Pay an upfront mortgage insurance premium of 2.25 percent of the total loan amount, up from the current level of 1.75 percent. A borrower taking out a $200,000 mortgage would pay a $4,500 fee, for example, rather than the current fee of $3,500. Borrowers will still be able to wrap these fees into the total amount borrowed. FHA officials also plan to ask Congress to increase the maximum annual premium that FHA can charge.

So, they may get more expensive.   This will  reduce the number of buyers who can qualify.   There’s more…the credit score benchmarks are changin too, further decreasing the number of buyers a home seller will be able to market their home to.

• Need a credit score of at least 580 to qualify. Many FHA lenders already require a higher score, but there had been no standard requirement across the program. Borrowers with a score lower than 580 will need a down payment of at least 10 percent.

Maybe this is what we should expect all things considered.  I want to remind you a HUD approved lender is not like any other and the more experienced they are, the better your chances of a quick approval and subsequent closing.

Yes, you can buy a short sale in Los Gatos or a house in San Jose that is listed for sale as a short sale.  Interesting concept.

Do you own a HUD-FHA financed home, and need to do a Short Sale? Here is a summary of the requirements to perform an FHA-insured HUD shortsale or “Pre-Foreclosure” Sale:

1. You must be delinquent 31 days or more delinquent at the time of sale.
2. You must list the property with an un-related Licensed Real Estate Broker
3. You must actively market the property for four months (up to six).For the first 30 days of marketing, the short sale lender Read the rest of this entry »

Q:  Short Sale definition.  What is a Short Sale?

Answer: In ”short”, a shortsale is when the lender agrees to settle the debt owed on the property for less than the full amount of the debt. In most cases “Settled” means the lender writes off the debt. You usually will receive a 1099 after a short sale for the amount of debt forgiven. The bank is agreeing not to go after you for the money they lost by filing a deficiency judgment in the future. The exception is the HELOC loan where they reserve the right to file a default judgment.

Answer: If you have a heavy asset portfolio that would cover the amount above the home’s value then the answer is likely to be no.  Each case is different and would be better answered after a professional review to help learn how to short sale.

Answer:  There is a lot of misinformation on the internet about this. A short sale is recorded on your credit report as “debt settled for less than the amount owed”.  In plain English, this will result in a relatively minor hit to your credit compared to a foreclosure or late payments on your mortgage. A short sale will affect everyone’s credit differently. The more established your credit, the less of an impact it will have on your score.

If you stop making your mortgage payments for 4 months, regardless of whether you do a short sale or not, 4 months of missed mortgage payments will have a significant negative impact on your credit.  A short sale will drop your credit 100 points or more.

If you are already behind on your payments, you have already incurred the majority of the hit that a short sale will have on your credit.  Moving forward with a successful short sale will insure that your debt is settled with your lender.

However, if you are current on your payments and can stay current throughout the short sale process, you will save your credit to a large extent.