Short Sales Are Here to Stay!

The number of short sale listings on the South Lake Tahoe mls has been on the rise, and many buyers are now giving short sale transactions a chance. Out of the 519 single family homes on the market in South Lake Tahoe, 75 are listed as short sales. Currently 32 of the 75 short sale listings in South Lake Tahoe are in escrow.

With so many homeowners in trouble or upside down on their mortgages, lenders are now realizing that short sales can be a better option than foreclosure. According to Sean O’Toole, founder and CEO of ForeclosureRadar“While many complain that lenders are foreclosing too aggressively, and others claim a wave of foreclosure sales is imminent, the data actually shows that lenders are doing everything possible to delay foreclosure. The reality is that we have very few homeowners being foreclosed on when viewed as a percentage of those scheduled to be foreclosed on, delinquent, or upside down on their mortgage.”

Although lenders are taking short sales seriously, the process is still far from seamless. The time that it takes to get an approval on a short sale is one of the biggest challenges that we are facing. It can take from as few as a couple of weeks to over 6 months to get an approval or to have a negotiator assigned to a short sale file. This time can be cut down by having a real estate agent with experience in short sales. It is extremely important to submit a 100% complete short sale package so that the lender will take your file seriously!

So far this year there have been 158 single family homes in South Lake Tahoe that have been reported as sold on the the mls. WIth only 13 out of the 158 homes (8%) sold as short sales, the number of short sale closings is still relatively low. Now that there are 32 short sales in escrow, it will be interesting to see how many of them close in the next few months.

With so many homeowners upside down in their mortgages, it will be essential for lenders to continue to streamline the short sale process. Now that buyers, sellers, and lenders are realizing the benefits of short sales, short sales are here to stay!

Short Sale Listing in South Lake Tahoe Just Sold!

It is possible to close escrow on short sale listings in South Lake Tahoe! Here is a recent example: My wife Jill and I just closed escrow on a short sale listing located at 1069 Carson Street. Jill and I represented the buyer on this short sale transaction.

1069 Carson Street is a 3 bedroom, 1.75 bathroom, 1254 square foot home with a garage. This house was remodeled, had a newer 50 year roof, and was in great condition. The asking price was $275,000. Our  offer was less than the asking price and was accepted by the seller. After only 3 days the bank gave us a counter offer of full list price, and our buyer agreed to the terms.

From the day that we submitted our offer to the day of closing escrow took 56 days. 56 days is a little longer than the average escrow period of around 45 days, but was rather quick for a short sale.

Here are some pictures of 1069 Carson from the South Lake Tahoe mls

There is currently a lot of competition between buyers looking for deals on foreclosures. In order to avoid getting into a bidding war on a bank owned foreclosure, take a look at some of the short sale listings that are available. Currently there are 36 available single family short sale listings on the South Lake Tahoe mls. There are 18 short sale listings that are currently in escrow in South Lake Tahoe.

So far this year there have been 8 short sales that were reported as sold on the South Lake Tahoe mls. The average sales price for the sold short sales was $451,912, the average price per square foot was $221, and the average days on the market was 143.

If you decide to make an offer on a short sale listing, be prepared that it may take some time for a response from the lender. There have been responses from lenders in as quick as a couple of days to as long as a many months. Some short sales can definitely be worth the wait!

If you would like to see a list of short sale listings in South Lake Tahoe, contact Brent and Jill and we will send you a list. Please let us know if you have any questions regarding Short Sales in South Lake Tahoe, South Lake Tahoe real estate, or homes on the South Lake Tahoe mls, call us today!

South Lake Tahoe Short Sale Listing!

If you are looking to invest in South Lake Tahoe real estate, make sure to take a look at this fantastic short sale opportunity!

913 Lake Tahoe Blvd. Offered at $529,000

Short Sale Listing in South Lake Tahoe!

• Custom built in 2006
• Sunny 12,342 square foot lot
• Priced at only $185 per square foot!
• Viking stainless steel range
• Custom granite counter tops
• Maintained in mint condition
• Short sale subject to banks approval of a short sale

If you are in the market for South Lake Tahoe real estate and would like to set up an appointment to view this short sale listing in South Lake Tahoe, contact South Lake Tahoe real estate agents Brent and Jill Johnson today!

Short Sales in South Lake Tahoe

For those of you that have been following the South Lake Tahoe Real Estate market, you know that foreclosures have been accounting for a large percentage of our current escrows and recent sales activities. Currently 12 of the 44 single family homes in escrow are foreclosures. On the other hand, there are only 3 short sales in escrow out of the 33 short sale listings on the South Lake Tahoe mls. With the changes that are happening with lenders and short sales, the number of foreclosures may soon be decreasing, and the number of short sale listings may be on the rise.

A short sale occurs when a homeowner owes more on their property than the property is actually worth, but the bank agrees to accept less than is owed as “payment in full”, in an effort to avoid the foreclosure process. A short sale is a great option to foreclosure for a homeowner because the homeowners credit will not be damaged nearly as much. In most short sale cases, the only damage to the homeowners credit will be the delinquent mortgage payments that will eventually fade off of the credit report. It is important to make sure that the lender reports the loan as “Paid in Full.”

With the recent changes to the Mortgage Forgiveness Debt relief Act, the debt that is forgiven on the first mortgage is no longer taxable as long as the house was your primary residence. If the house is not your primary residence, the IRS considers the amount of the loan discount taxable income.

 Why would a bank want short sale a property and accept less than they are owed?

• Foreclosure is expensive for the bank and averages about $14,000 to $20,000 dollars.
• Banks are required to hold 3 to 5 times the amount of any foreclosure properties held as assets in reserves. If a bank forecloses on a $500,000 house, they are required to have an additional $1,500,000 to 2,500,000 in reserves that they cannot lend out and make money on.
• With the new stimulus package, banks are now getting a bonus from the government for closed short sale transactions.

Banks are now realizing that short sales can be a better option than foreclosure for both themselves and the homeowners, which is why we may be seeing more successful short sale closings in the future.

A bank will not just approve a short sale because the homeowner owes more that the home is worth. In order for a homeowner to qualify for a short sale they must meet certain requirements.

• In most cases the homeowner must be behind on payments (Countrywide requires that you are 90 days behind on payments).
• Homeowners must be able to prove that they have a legitimate hardship such as a loss of a job, divorce, illness, decrease in income, or increase in expenses.
• There must be little or no equity in the home.

The homeowner must provide the following documents to the listing agent, who will provide them to the lender:

• Authorization to release information
• Hardship letter
• Financial worksheet
• Listing agreement
• Two years tax returns
• Two months bank statements for all accounts
• Two pay period pay stubs

Although lenders are now realizing that short sales may be a better option than foreclosing on the property, short sales are still far from easy. Lenders are overloaded with thousands of short sale packages. It can take up to a couple of months to get a response from the lender.

It is very important that the listing agent is a short sale transaction has knowledge in short sales. Real estate agents who submit a complete short sale package are much more likely to get assigned to a loss mitigator and potentially get approved. There are also cirtian things that a real estate agent can do to help expedite the approval process, such as making sure that the loan number is on the top right and the bottom  of each and every page of the short sale package. Being able to contact the loss mitigator and keeping in communication with them regarding the transaction is another difficult but important job of the listing agent. Ultimately it is the listing agent who the buyer and the seller will be relying on to facilitate the short sale transaction.

Why would a buyer want to purchase in a short sale listing?

Short sales are consistently listed at 5% less than the current market value. Going through the short sale process may take more time, but it may be worth it for the buyer.

When looking at South Lake Tahoe Real Estate, do not avoid looking at short sale listings. There may be less competition over the short sale listings than the foreclosure listings, and you may get a great deal on a house!

If you would like a list of short sale listings in South Lake Tahoe or foreclosure listings in South Lake Tahoe on the South Lake Tahoe mls E-mail Brent and Jill Johnson. If you have any questions about South Lake Tahoe real estate or about South Lake Tahoe mls listings, please contact us today!

South Lake Tahoe Foreclosure Listing

Foreclosures in South Lake Tahoe are still keeping the attention of home buyers seeking deals. 2691 Genoa is a recent foreclosure that is listed for $189,900. Before being foreclosed on, this house was listed for $275,000 and then reduced to $200,000 as a short sale.

2691 Genoa Ave.

• 2 bedrooms and 1.5 baths
• Convenient in town location
• 768 square feet
• 7700 square foot lot
• Potential to add bedrooms and a bathroom in the un-finished attic

Although home prices are down, many foreclosure listings and short sale listings in South Lake Tahoe are selling quickly and receiving multiple offers. If you are interested in purchasing a short sale or a foreclosure listing in South Lake Tahoe, make sure that you visit my current foreclosure listings in South Lake Tahoe link daily. I update the foreclosure list daily with any new listings, price reductions, and pending sales.

For more information regarding foreclosures in South Lake Tahoe, the South Lake Tahoe real estate market, or properties on the South Lake Tahoe mls, please contact Brent and Jill Johnson today! Thanks for reading my South Lake Tahoe real estate blog!