Short sales are popping up all over the Central Coast of CA due to the recent housing boom/bust. Many buyers are interested in these properties because they offer the possibility of today’s prices without the frenzy of the bank owned bidding process. Short sale buyers should keep the following in mind when shopping for a short sale (pre-foreclosure) home.

1) You will wait for a short sale. Unless that short sale seller has an “approved” short sale, you will spend a good deal of time closing a short sale deal. In Santa Maria, the epicenter of foreclosure activity in the Central Coast market, there were 157 closed short sale listings in 2008, and the average days on market was between 5 -6 months. Many buyers get tired of waiting during that process, but a few that find the right property will wait as long as it takes, and the patience of some buyers is being rewarded.

2) There is intense competition to be the first offer once a short sale hits the market. Or, if one buyer gets tired of waiting, there can be another scramble to be the replacement buyer for that short sale property. Given the wait time on short sales, some buyers simply look past them when shopping for a home and instead turn to bank owned properties. But there are many others who are ready and waiting to jump on the next short sale listing. Short sales tend to be in better condition than foreclosures as often sellers are still living in them; as a result they haven’t been vandalized or neglected like much of the foreclosure inventory.

2) Short sales may be priced low, but the bank may counter your offer even though the seller has accepted it. There are not a lot of properties on the market at the prices that buyers want to pay — bank owned properties get snapped up quickly and with a great deal of competition (there were 15 offers on the last bank owned property I bid on for a buyer). Short sales tend to be priced aggressively given that the seller’s main aim is to obtain an offer (any offer) that will trigger their bank to begin negotiations. However, the bank has the final word on a short sale, and they will order a broker price opinion, and/or an appraisal to ensure that the offer they accept is in line with current market prices.

3) Even though a short sale is on the market as “active” the seller may already have an offer presented to the bank. Short sales agents handle their listings differently, some are market “contingent,” i.e., an offer has been accepted as contingent upon bank approval. Contingent listings continue to be presented as available on our local MLS. Other short sale listing agents instruct their sellers not to sign any offers, leave the listing active, and submit any and all unsigned offers to the bank for approval. As a result of the extended wait time for bank approval, short sales sit on the market as available, while waiting on bank approval.

4) You should consider the likelihood of success when writing on a short sale. How many loans are on the property? If there are more than one, are they with the same lender? Are any of the loans insured? Does the seller have other liens? Has the seller filed bankruptcy? Is the seller also pursuing a loan modification with the lender? Has the lender already completed a broker price opinion or appraisal? Has the lender previously approved another offer on the property? All of these factors should be considered so that you as the buyer have a realistic picture of whether the short sale will likely happen.

I specialize in helping people buy and sell foreclosed properties. If you are interested in shopping for Central Coast short sales, I can send you a list of them. Just send me an email at tni@MintProp.com, or give me a call at (805) 878-9879. You can also search for Central Coast short sales three different ways on my websites: BuyCentraCoastForeclosures.com, BuySantaMariaForeclosures.com, CentralCoastRealEstateSearch.com.

Tni LeBlanc, JD, M.A, e-PRO
Broker/Owner, Mint Properties
(805) 878-9879, tni@MintProp.com
www.BuySantaMariaForeclosures.com
www.BuyCentralCoastForeclosures.com
www.CentralCoastRealEstateSearch.com

*Based on the information from the Central Coast Regional MLS. Neither the Association, the Multiple Listing Service, or Mint Properties guarantees or is in any way responsible for its accuracy. Data maintained by the Association or its MLS may not reflect all real estate activity in the market.

Many Santa Maria - Orcutt CA home owners who have the equity to sell without a short sale are trying to wait this market out. Sellers who have to sell due to job relocation, loss of income, or divorce don’t have that luxury, and the market is currently flooded with difficult to buy homes (short sales and foreclosures). Further, many of the foreclosed homes need a good deal of work beginning with carpet and paint and ending with significant repairs sometimes intentionally caused by the defaulting homeowner. Newer homes tend to have fewer fix up issues but almost all are short sales or foreclosures as they were built and sold during the local housing bubble from 2002 - 2006. Consequently, homes maintained by “regular” owners stand out like diamonds in the rough.

My question to those who are waiting is — what are you waiting for? Are you waiting for the market we saw in 2004-2005 to come back? We now know that those prices were made possible by irresponsible lending and fraud. There was no magic that made prices go up so rapidly, it was based on irresponsible lending and it would take a return of that environment to bring those prices back. Otherwise how would first time home buyers with a 580 credit score qualify to purchase a $500,000 tract home? Incomes in this area have not gone up exponentially and are not expected to increase significantly in the near future; so now that lenders again care what people actually earn, why would we return to the type of lending that made those prices possible? So, if your home is currently valued at 2001-2002 pre-boom prices and you would like to sell, why would you wait to sell?

Many property owners do not want to sell during what they perceive to be a buyer’s market. Don’t be mistaken — it is a buyer’s market; however, there is not a lot to buy. I have plenty of buyers waiting for the type of property they are interested in to be listed. With 50% of the Santa Maria -Orcutt market in short sale, and many buyers turning away from short sales due to the long wait period, and many others burned out from bidding on foreclosures (REOs), there are still excellent opportunties for realistic sellers to capitalize on today’s market conditions.

For example, recently I listed an estate sale property and garnered 4 offers in less than a week by pricing it in line with the current market and effectively advertising the superior condition of the home. The offer we accepted was over the list price and had a significant down payment. Todays buyers in the Santa Maria and Orcutt CA market are primarily looking at price but they are also looking at availability and condition; if a well-maintained property can be obtained without the bank owned / foreclosure, highest and best bidding game, or the short sale waiting game, buyers are very interested. Realistic sellers can captitalize on today’s market conditions of low interest rates and the low availability of ready to buy houses in the Santa Maria - Orcutt market by listing their home at today’s prices.

If you would like a market analysis of your Santa Maria or Orcutt home, send an inquiry to www.SellMySantaMariaHome.com. Or give me a call at 878-9879 to set up an in person evaluation of your property.

Tni LeBlanc, JD , M.A., e-PRO
Broker/Owner
Mint Properties
(805) 878-9879
tni@MintProp.com
www.iLoveSantaMaria.com
www.YourMonthlyMint.com
www.SellMySantaMariaHome.com
www.SantaMariaRealEstateSearch.com

*Based on the information from the Central Coast Regional MLS. Neither the Association, the Multiple Listing Service, or Mint Properties guarantees or is in any way responsible for its accuracy. Data maintained by the Association or its MLS may not reflect all real estate activity in the market.