Peter Narodny | Marin Real Estate

Short sales and foreclosures are the latest buzz words in the industry and whether you are a buyer or seller it is important to understand what they mean before jumping in. A short sale is a transaction in which a lender allows the real property securing the loan to be sold for less than the remaining mortgage amount due and accepts the proceeds as full payment of the loan. A lender may accept a short sale when the borrower is in severe financial straits and market conditions make a short sale the best choice to mitigate the lender's damages. This saves the lender the costs of foreclosure and the borrower avoids having a foreclosure on his or her credit report.

If you are a homeowner and for a myriad of reasons, are now in the situation that you can't make your mortgage payment and/or the value of your home is now below the amount of the mortgage(s), you have several choices. Depending on the nature of your hardship you may want to first consider the following before deciding on selling:

1. Loan modification: Talk to your lender and see if you can get a modification of terms which will ease the burden. There are many factors that will determine the loan's eligibility for modification. One of the sites that may be helpful is: http://makinghomeaffordable.gov/eligibility.html
2. Tax reassessment: If the value of your home has dropped you may want to apply to have it reassessed. This will ease some of the burden.
3. Talk to an attorney: Get advice and understand your rights and obligations from an attorney and/or accountant who is qualified to address all of the options and financial consequences. Be sure you consult the attorney before you sign anything sent out by the lender.

It is also important to understand the difference between a recourse and non-recourse loan. A non-recourse loan is one where that in the event of a default, the property is all there is to satisfy payment. The lender cannot come after you for the balance of an uncollected amount. A recourse loan is where you can be personally liable for any amount above what is collected in a short sale. A foreclosure may be a preferred option since it could require judicial proceedings for collection which would be unlikely. Again, consult your attorney for advice. He may even advise bankruptcy. A purchase mortgage is typically non-recourse while a refinance or a second line of credit may be a recourse loan.

Here is the determining question: Do you want to do whatever you can to keep the home or do you want to sell it and move on?

For more help with short sales check out our Short Sale Help section.

The two biggest factors that determine whether a home sells or not in this market are Pricing and Motivation. Never has the professional experience and knowledge of the agent you choose to represent you been more important in getting your home sold. They are the ones that will not only give you the right advice and guidance in accurate pricing, but also give you honest feedback as to whether your motivation - your reason to sell now - is authentic enough to put your home on the market now or just wait.

This is a buyer's market which means the buyer is looking for "a good deal". In the last market, emotion played a huge part in whether a buyer would submit an offer on a home. In this market, they also need to be assured that they are making a sound financial decision. Are you the seller, looking for the maximum price now or the maximum price possible? In this market they are the same, meaning the maximum price and minimum time are the same strategy, but getting the maximum price now doesn't mean getting the maximum price possible. In a seller's market with prices going up, one can price their home at the maximum price possible since a rising market can sometimes forgive an overprice on a highly desirable property. That strategy is a huge mistake in this market.

Given the amount of choices a buyer has and the belief that home values still have a way to settle before the bottom is reached, it is imperative that you stand out as a home with better value than the other choices that are available. We understand that buyers are placing themselves in the future and sellers are placing themselves in the past when it comes to pricing. It is important to price your home ahead of the market. When everything is priced the same the buyers become uncertain about value, but when they find a comparable home priced ahead of everyone else, they will jump on it. The overpriced homes help the well priced ones to sell and sellers need to understand that a home has the most value when it first hits the marked. After viewing a home that a buyer sees has value, the first question is "How long has this home been on the market?" If it has been on for a while then buyers will either make a low offer or just wait for a price reduction. Buyers see everything that comes up, either because of their agent or on line and they have a sense of what's fair value and what's not, and if they don't sense value in your home they just won't show up. When you sell and put on the buyer's hat, you will be doing the same.

Time is not your friend when it comes to selling. Yes you can wait until prices come back to where they were two years ago but it could be a long wait of several years. We do see a leveling off in the coming months of Marin prices unless the banks unload a ton of foreclosures as many have predicted, but even then, it is going to be a long climb back up and as that happens, you can bet on an increase in interest rates. A 2 to 5% interest jump can mean a huge difference in payments, especially if one is in the home for many years.

So what's the bottom line? If you have any need, either personal or financial, to move out of your home, don't wait. Call a professional Marin Realtor who is going to help you make the right decisions regarding pricing and getting the home ready to maximize that price. He is going to walk you through "value pricing" the home whereby you make the market instead of chase it.

No one would call the current status of the California real estate market good, but it is showing improvements. The median price of southern California is still a 35.8% drop from last year. However, California real estate is slowly making a comeback. From January of this year through December, qualified first time home buyers will get a tax credit of $8,000 or 10% of the cost (the lesser of the two) of the home. This tax credit can also be used to contribute to the down payment, which is a primary reason the sales of homes have increased for the third consecutive month. Low mortgage rates and reasonable home prices are also strong contributors to the increase in sales. Fortunately, Marin County is taking advantge these temporary benefits.

Compared to the other counties of California, Marin is showing that it can stay active in these slow times. There were 187 homes sold in May of this year compared to the 103 sold in January. These improvements aren't tremendous, but noticeable. Potential buyers are realizing that these Marin prices will not last for long, and it shows with 27% of all listings pending. The market today may not be favorable, but it is optimistic.

Google released their real estate search engine about a year ago but on Monday they took a huge leap toward becoming one of the web's most trafficked real estate search engines.

On Monday, Google Maps published an article: Improving Real Estate Search on Google Maps. In it they have discussed some enhancements that improve the entire site. They have added more markers on the page and also a more intuitive search interface.

What does this mean for Marin Real Estate?
We feel that Google's real estate search does serve a purpose. It is nice to view listings in Google's familiar "Maps" interface and it is fun to see how many listings are available in your area but, like Zillow and Trulia, Google Real Estate search is still limited by the data it receives. Google, like most Real Estate search engines relies on "feeds" to get current listings, not on an MLS database. It would simply be too expensive for Google to pay every MLS company in the world for access to their information so as a result the data can be flawed or out dated.

We recommend checking multiple sources and not using just Google. Our Advanced Marin Real Estate search engine is linked to Bareis MLS in Marin County which is the same data that most realtors use when they are doing diligence for their clients.

Even with all of the real estate search technology that has bombarded buyers in the past few years, nothing substitutes a professional local Realtor. Why? Check out the "How to Choose a Marin Realtor" section of our site for more answers.

Press Release: Information received since the Federal Open Market Committee met in April suggests that the pace of economic contraction is slowing. Conditions in financial markets have generally improved in recent months. Household spending has shown further signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit. Businesses are cutting back on fixed investment and staffing but appear to be making progress in bringing inventory stocks into better alignment with sales. Although economic activity is likely to remain weak for a time, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability.

The prices of energy and other commodities have risen of late. However, substantial resource slack is likely to dampen cost pressures, and the Committee expects that inflation will remain subdued for some time.

In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. As previously announced, to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. In addition, the Federal Reserve will buy up to $300 billion of Treasury securities by autumn. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Donald L. Kohn; Jeffrey M. Licker; Dennis P. Lockhart; Daniel K. Troll; Kevin M. Wars; and Janet L. Yelled.

- via: http://www.federalreserve.gov

- Peter Narodny is a Leading Marin County Realtor: www.marinrealestate.net