Matthew Zgonc, Realtor, CFS, CVS

Many people are in the situation where their home is actually worth quite a bit less than what they purchased it for. When they bought the home, they were told that refinancing it would be no problem and that they did not have to worry about the bubble bursting in that particular market. This type of thinking is what is causing the foreclosure crisis throughout the Central Valley of California and other parts of the nation. Now that the President has passed a law eliminating the taxation of short sales as income, a short sale is a very viable option if you are selling a home and can't afford your payments.

The key thing with a short sale is to be proactive. Contact your company as soon as you realize that you cannot continue to afford the payments and have them send you a short sale packet. In addition, you are going to need a Realtor to complete this transaction. In order to do a short sale transaction, you must have an arm's length transaction in California, meaning that it cannot be a For Sale By Owner transaction, nor can you sell your own property.

Once you have got the packet and chosen a Realtor, then you must have them send a notice of authorization for the agent and the escrow officers to be able to contact the bank regarding your situation. Without this, the bank will refuse to talk to anyone but the borrower.

Then be prepared for the long haul. It can take 30-90 days for banks to approve or disapprove of a short sale, with most ranging between 45-60 days. In order for them to approve it they need both a listing contract (the seller) and a purchase contract (the buyer). Without these, the bank will not comment about the status of your short sale.

Once the short sale is approved, most banks want a very quick closing, usually in 15 days. So be prepared to move quick. If you are unprepared you could miss the window of opportunity to sell this property. Please remember as an owner, you will not see any proceeds from the property, and it could act as a foreclosure on your credit report. Some things to consider before doing a short sale.

If you have any questions regarding short sales or anything else regarding real estate, I would be more than happy to help you.

Matthew Zgonc

ERA Village ONE RE

209-614-3103

www.buysellmodesto.com

In this time of crisis, where many people are losing their homes there are many terms that people need to understand. They also need to understand all their options, before just turning their home over to the bank.

Preforeclosure: This occurs when you get the first letter from the bank stating that you missed a payment. When dealing with a traditional 30 year loan, then you have 90 days before you receive this letter. If you have a subprime loan, then you will receive this letter after 37 days.

Notice of Default: This is the letter from the bank stating that you have missed payments and that you are in default of the terms of your loan. From this letter, you have 90 days to restructure payments or sell the house, before an auction date is set.

Notice of Auction Date: This is the letter from the bank stating that your home will be auctioned off in 31 days. It is at this point where people try to start selling their homes, or asking about short sales.

The Auction: Will generally occur at the County Clerk's office steps. However it may vary depending upon which state or area that you live in. It could actually be on the courthouse steps.

Options: If you are in the unfortunate circumstance of being in any of the above situations, then you need to consult your options. There are a few options out there.

1. As soon as you realize that you are going to fall behind in your mortgage payment, or that you cannot afford the home, then put your home up for sale immediately. By doing this you can negotiate a short sale with your bank and/or you can submit a deed-in-lieu of foreclosure.

2. Short sale: This is the option where the bank agrees to take a lesser amount for the property. The difference between the two amounts is generally forgiven by the bank.

3. Deed-in-Lieu of Foreclosure: This can only be done if your home has been for sale for at least 90 days with an agent. Putting your home up yourself, will not help you for this option. You will sign over your interest to the bank, and will generally show up better than a foreclosure on your credit report.

4. Restructure Payments: The bank will generally want to work with you to change your payments, so that they do not have to go through the foreclosure process. Talk to the bank and don't ignore them. It costs them too much more money to go through a foreclosure than it is to renegotiate the terms of the loan.

This can help some people save their homes and at least will help them understand the things to expect throughout this process.

Matthew Zgonc

209-614-3103

www.buysellmodesto.com

This is just a word of advice to consumers out there regarding short sales. Many people are encountering the following situation. You make an offer and the agent issues a counter-offer, which generally means that your offer has been accepted and that the escrow process has started. However, don't be quick to make that assumption when dealing with short sales. In the short sale process the bank is the one that decides whether or not to accept the offer. If another offer comes in prior to the bank accepting yours, then the bank can and will accept whichever offer is larger. I have heard of situations where clients got all the way through the escrow process, to where funding was to occur, only to learn that the house was sold to someone else at the last second to a party with the highest bid.

Short sales can be a good investment, but I just want consumers aware of the traps that can be associated with them.

For all your real estate needs,

Matthew Zgonc
209-614-3103
www.buysellmodesto.com

Many people know the Central Valley in California is the foreclosure capital of the nation, currently. You can go down any block and see REO properties left and right and can tell they are such by the front lawn. In this area, almost 40% of the loans that were made two years ago are in some stage of the foreclosure process.

I have seen a few news articles that show that the turnout to the foreclosure workshops have been larger than expected. Having been through a foreclosure in the past, I know that this process is a very stressful situation that families are going through. The fact families are wanting to learn about how to prevent foreclosures is good, and I would strongly recommend attending one of these workshops as a consumer if you are in a situation like this.

The radio stations in the area are recommending to people just walk away from their homes and try to find somewhere else to live rather than doing a short sale or trying to work something out to the bank. People are listening to this advice and in some situations this may be the best thing to do, but at least people can find out about the alternatives to this.

For more information contact:

Matthew Zgonc
209-614-3103
www.buysellmodesto.com

There are many people out there that see houses for sale and want to buy a home, but do not totally understand the process to obtain one. They call the Realtor whose home is for sale, but have no idea where to really begin.

The first thing a person needs to do is to obtain pre-approval. This not only speeds up the process for the acquisition of the property, but also lets a person understand the amount of home that they can purchase. There is no sense for a person to look at a home for $500,000 when they can only obtain a home for $250,000. That way they do not fall in love with a house that they cannot afford to purchase.

Next, find a Realtor. Feel free to shop around. Find a Realtor that will listen to your needs and wants and show you the types of houses that you want to purchase and within your price range. There are lots of properties within all price ranges, so don't feel you have to stretch your budget to make a purchase.

Find a house. Don't fall in love with a house. Be willing to walk away from a house, if the bidding gets too high for it. This way you will be able to find another house that meets your needs without causing a payment that will destroy your lifestyle.

Finally, understand the escrow process. Read your loan paperwork. Understand your Good Faith Estimate and do not accept a bait and switch if the loan company tries that. Consult your Realtor or an non-partisan loan expert if necessary. Understand at the close of escrow that there are fees that need to be paid, called closing costs. Usually these fees are 3% of the price of the house. These fees will be shown on the escrow closing statement.

If you still have questions about the process, ask your Realtor. There is no such thing as a stupid question, when it comes to purchasing a home. All your questions need to be answered, so that you understand everything that is going on. Make sure your questions are explained thoroughly so that it meets your satisfaction. Otherwise, look around for a different Realtor or loan agent.


Matthew Zgonc
www.buysellmodesto.com