While studying for the CDPE I came accross this information regarding some of the consequences a seller faces when they have a property foreclosed vs. a successful short sale.
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Issue |
Foreclosure |
Successful Short Sale |
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Security Clearances |
This is the most challenging issue against a security clearance outside of a conviction of a serious misdemeanor or felony. If you have a foreclosure and are a police officer, in the military, in the cia, security or any other position that requires a security clearance in all most all cases the clearance will be revoked and the position may likely be terminated. |
A short sale on its own will not challenge most security clearances
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Current Employment |
Employers have the right and are actively checking the credit regularly of all employees who are in sensitive positions. A foreclosure in many cases is grounds for immediate reassignment or termination |
A short sale is not reported on a credit report and is therefore not a challenge to employment |
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Future Employment |
Many employers are requiring credit checks on all job applications. A foreclosure is one of the most detrimental credit items an applicant can have and in most cases could challenge employment. |
A short sale is not reported on a credit report and is therefore not a challenge to employment |
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Deficiency Judgment |
In 100% of foreclosures the bank has the right to pursue a deficiency judgment. |
In some successful short sales it is possible to convince the lender to give up the right to pursuit a deficiency judgment against the homeowner. |
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Future Fannie Mae Loan Primary Residence |
A homeowner who loses a home to foreclosure is ineligible for a Fannie Mae backed mortgage for a period of 5 years. |
A homeowner who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed mortgage after only 2 years. |
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Future Fannie Mae Loan Non-Primary |
An investor who allows a property to foreclose is ineligible for a Fannie Mae backed investment mortgage for a period of 7 years. |
An investor who allows a property to short sale is eligible for a Fannie Mae backed investment mortgage after only 2 years. |
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Future Loan -Any Mortgage Company |
On any future 1003 application, a borrower will have to answer yes to question C in section VIII that's asks "have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years". This will affect future rates and approvals |
There is no similar question regarding a short sale. |
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Credit Score |
Score may be lowered anywhere from 250 to over 300 points. Typically it will affect the score for over 3 years. |
Only late payments on mortgage will show and after sale mortgage will be reported as paid or negotiated. This will lower the score as little as 50 points if all other payments are being made. A short sales affect can be as brief as 12 - 18 months. |
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Credit History |
Foreclosure will remain as a public record for 10 years or more. |
Short sale is not reported on a credit history. There is no specific reporting item for "short sale". The loan is typically reported as paid in full, settled. |
After numerous false starts I am cautiously optimistic that the new owners of the Sunriver Village Mall are on to something.
The new owners operate on an all cash basis...they paid cash for the mall and will pay cash for the improvements. In other words no debt to service. That is a big plus in this economic environment.
They will be injecting $4-$5 MILLION into the existing mall over the next 18 months starting IMMEDIATELY. These funds will be used for badly needed repairs and maintenance, new landscaping and signage, demolishing buildings that are long past salvageable and remodeling many of the existing buildings.
The new owners seem to be taking a more conservative and realistic approach to rebuilding our mall. In other words, lets fix and improve what we have first and go from there. I think they will find the community more open to this kind of strategy as opposed to the over the top redevelopment proposal from the previous mall owners.
Lastly, the owners indicated that there would most likely be a residential component to the overall redevelopment plan but that would come later. I think its a good move on their part to start making immediate improvements and then incorporate mixed use/residential into the overall plan. There is nothing like forward progress to get people bought in and on board!
For more detail go check out their latest Powerpoint presentation at:
http://www.villageatsunriver.com/redevelopment.html
Lets get straight to the million dollar question; "How is the Central Oregon real estate market doing?" Well, that is a good question and the answer is...it depends. It depends on whether you are looking to buy or sell and what part of Central Oregon you are referring to.
If you are looking to buy property in Central Oregon you are in luck. 2008 is one the best buyers markets we have seen in a very long time. Total sales volume and the total number of sales are down significantly across Central Oregon from the peak years of 2005/06. That is good news for buyers; inventories remain high and there is a great selection of homes for sale in all price categories. Inventory levels for Central Oregon as of June 6, 2008 range between 16 and 23 months depending on location. Add low interest rates to the mix and the fact that many sellers and developers are willing to negotiate and you have a great opportunity to find the right home at the right price.
The average sales price for homes across the region are also down significantly from 2006/07 peak levels and in many cases continue to fall. Through the first quarter of 2008 average sales prices were down an average of 10.26% compared to the first quarter of 2007. The exceptions are the Sunriver and Three Rivers South markets which recorded quarter over quarter price increases for the same time period. According to 2007 Multiple Listing Service data, Sunriver also had the highest Average Sales Price and the lowest Average Days on Market in Central Oregon for 2007. Unlike the Bend, Redmond and La Pine markets, Sunriver is a resort community and predominantly a second home market. The Three Rivers South market encompasses everything in between Sunriver and La Pine to the south.
Of course there is always a flip side to high inventory levels and falling prices. If you are looking to sell property in Central Oregon, these market conditions create more of a challenge. The average number of days it takes to sell a property has been steadily increasing over the last several years. For example, in Bend the average days on market has increased from 120 days in 2005 to 185 days in the first quarter of 2008. This trend is similar across all of Central Oregon. The most important thing to remember is to make sure your property is priced in accordance with the market.
Check out the latest market statistics at Central Oregon Association for realtors for the 1st quarter of 2008.
As always I am readily available to answer your real estate questions in Central Oregon.
How can I make sure a home is in compliance with all SROA CC&R's before buying a property?
Make sure your agent requests that any offer is contingent on an SROA inspection of the property. Additional info is available at the SROA website
A special SROA Inspection Addendum should be included with any offer to buy Sunriver property.
How is this market affecting Sunriver?
Like the rest of Central Oregon, Sunriver is being affected by the market slowdown. However when compared to the Bend, Redmond and the La Pine markets, Sunriver home prices are still going strong.
Despite the fact that sales volume and the number of sales transactions were down considerably in the first quarter of 2008, Sunriver still maintained year over year gains in median sales prices. According to 2007 MLS data Sunriver also had the highest Average Sales Price and the lowest Average Days on Market in Central Oregon for 2007.
Sunriver is predominantly a second home market so it is not affected in the same way as other markets.
As promised another section in my blog regarding owning a vacation rental. We left off with a question regairding property management companies and their fees.
Another option is the Independent Owners Program
Q Can I rent the property myself? How?
A - You can market the property (VRBO.com, Craigslist.net) and manage reservations yourself and then hire you own maid and handyman to clean and maintain the property for you. This scenario may NET you the most but may be more problematic unless you live close by and have a reliable maid/handyman i.e. what happens when the furnace breaks at midnight?
Another option is to hire a property management company to manage the check in check out process, housekeeping, and maintenance for a fixed fee and you manage the marketing and reservation part of the business. This scenario might ensure a higher level of service, more peace of mind AND save you money.
RE/MAX Sunset Realty does offer this service (Independent Owners Program). It costs $75 per month plus maids fees and whatever maintenance fees are incurred.
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We are active Real Estate agents/investors and focus primarily on 2nd home and vacation home properties in Central Oregon. If you are considering buying or selling in Sunriver please give us a call.
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
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