Overview 
(The First of Four Installments)

Short sales are useful, difficult, complex and, the good news, evolving: In Marin, from January through April 2010 there were 94% more closed short sales of single family homes than for the same time in 2009.

The homeowner’s perspective
When a property is upside down (the mortgage amount is greater than the value of the home) or the owners are in financial difficulties (job loss, income shrivel or medical bills) they have a variety of options. Identifying these options and helping the homeowner make the necessary choices is the bailiwick of the real estate agent, accountants and attorneys.

Short sales (where the lenders agree to lose money) can be a helpful tool for homeowners who want to get on with their lives and minimize damage to their credit. As my favorite uncle used to say, “Remember, when times get tough survivors hunker down and look ahead and victims look back.”

While short sales are difficult and complex, done with the requisite perseverance and attention to detail, they do go through.
More on the homeowner’s situation in Part II.

The bank’s perspective
First the government rolled out the unsuccessful Home Affordable Refinance Plan (HARP), then the Home Affordable Modification Plan (HAMP). Less than 10% of the estimated 4 to 5 million homeowners ‘under water’ were helped by these programs.

Banks are not very happy about losing money. Now, with the advent of the Home Affordable Foreclosure Alternative (HAFA) program, the banks are being encouraged to avoid the more costly foreclosures and participate in short sales.
More on the banks in Part III.

The buyer’s perspective
Buyers interested in taking advantage of the market opportunities in these trying times need to differentiate between the short sale (bank approval needed) and bank owned properties (called REO’s). The short sale properties often take many, many months from offer acceptance to close of escrow while REO properties may close escrow very quickly but are often offered at surprisingly pleasing prices.
More on the opportunities for buyers in Part IV

Recognizing that there is a huge amount left unsaid in this posting, please let me know what questions it raises for you, what you’d like to know and on what issues you’d like more information.

My questions for you: Are you reading this for edification? Are you personally in a position to consider a short sale? Do you have a friend or family member struggling with a loan modification who needs more information? Call me at (415) 257-2039 or email me at tverkozen@fhallen.com.

Successful Short Sales in Marin County
Part I – Overview
Part II – Short Sales from the Homeowner’s perspective
Part III – Short Sales from the Bank’s perspective
Part IV – Short Sales from the Buyer’s perspective

Posted by:  Tom Verkozen