What exactly is a “Short Sale”?

Redding, CA Short SaleI just wanted to take a moment to discuss a SHORT SALE as many people that we encounter in the Redding area have no clue what it actually means. 

A “short sale” is when someone who owns a home (financed by a bank) is allowed to sell the home for less than the current amount owed on the property.  The bank needs to approve the amount of payoff that is “short” of the amount that is owed to them and this is where the name “short sale” comes from. 

The misconception is that ANYONE can do a short sale just because the home is worth less than they paid for it.  This is very untrue and Realtors should be discussing this with potential homeowners looking to do a short sale on their home.  Banks now are reviewing possible short sale homes to determine if the seller actually qualifies to sell the home short. 

So how can a home and the seller “qualify” for a short sale?  Each bank varies.  This being said, the general rule is that the seller needs to show a “hardship” through a letter in which they disclose their situation that has led them to HAVE to sell the home now instead of waiting out the market.  Some hardships include loss of job or medical problems and the seller should present actual proof of the hardship with the Short Sale package.   In addition to a hardship, some banks are reviewing the original loan package from when the buyer purchased the home to ensure they didn’t exaggerate their income/decrease expenses when they originally purchased (which is actually lender fraud and some areas considered “grand theft”).  You should also be prepared to provide past tax documents and statements of current income/expenses to support your need to sell now. 

For more information on Short Sales contact Clint & Mindy Cronic, The Cronic Group of Real Estate Professionals GMAC at 530.227.0345 or via email at contactus@sellingredding.com.

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Bottom-line Home Sellers

Over the last few weeks it has become apparent that many of the sellers out there have reached their bottom line at which they can/will sell their home for. We’ve written more offers lately with the response from the seller nearer to full price only because they can’t (or won’t) go any lower. What this means is that these sellers are willing to wait out the foreclosure/REO/short sale market until better selling conditions exist for them if they don’t have to sell. If you want one of these homes you may pay a higher price, that is just the bottom line.

What does this mean to buyers? If you are looking at one of these homes (where sellers don’t have to sell) you may have to either up your price to get the home of your dreams or hold out yourself and hope market conditions continue to decline and that particular seller eventually changes their mind and decides to sell. Remember buyers, not everyone with their home listed on the market “HAS” to sell. If you are trying to get a deal (and there are plenty out there in the Redding area right now) you may want to keep shopping through the inventory until you find a seller that will accept your offer. After talking with some of our sellers that don’t have to sell, their response is that they will just “wait out” the foreclosure and REO market. Since they don’t need to sell, if the right buyer comes along then negotiations will happen but someone has to want their home not just “steal” it as some sellers are saying.

This doesn’t mean, however, that all homeowners are inflexible. Many out there are ready to make a deal but you have to write an offer to get it reviewed. Don’t be afraid to make an offer if you are interested and be sure to negotiate as high as you can go initially if there are multiple offers on the home so you don’t miss out on the opportunity if you really want the home.

If you are buying now be prepared to make a few offers on different homes (if you aren’t looking for your “dream home” but would rather find a good investment), be pre-approved with a lender so when you do see a new home come onto the market you are ready to purchase and work closely with your agent to ensure they are out there looking for you as well.

If you need assistance please call us at 530.227.0345 or visit the real estate portion of the blog to search the entire MLS. Remember, we’d be happy to assist you with any of your real estate needs, just let us know! Clint & Mindy Cronic, Real Estate Professionals GMAC

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Redding Real Estate Market Statistics 5/24/08

Residential Listings:  There are 1,856 active listings and another 356 listings that are pending (in escrow)…up from 1,702 a little over a month ago!  Year-to-date during 2008 we have had 676 listings that have sold (closed escrow), during April 2008 we had 163 escrows closed and so far in May we have had 122 sold listings.  Overall statistic for the year 2007: there were 2,140 listings that sold (closed escrow) and were recorded in the MLS database.  

home_page_house Redding Real Estate Market Statistics 5/6/08

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