You would think with all the government incentives and help for homeowners in trouble there would be a huge improvement in the real estate conditions for Tracy and the Central Valley in general.  However, the stats just don’t bear this out.   Prices have dipped just recently and inventory has grown as indicated in the trulia stats below.  Overall, business has been volatile during the last two quarters, but as compared to the record we had in 2009, where every indicator was improving we have a long way to go. 

Being a bedroom community of the Bay Area, we are increasingly dependant upon jobs in the Bay Area and gas prices, both of which have not been particularly favorable of late.  Not matter how many incentives the government dishes out, there doesn’t seem to be any cure until or unless dependent relationship with the Bay Area improves. 

Tracy Home Sales

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What you need to know about short sales in the Tracy/Central Valley Areas

To the unsuspecting, short sales can be a very rude awakening and boggle the mind of the average buyer of real estate.  The really bizarre thing about short sales is that the buyer has really very little to do with how the sale goes.  Buyers are accustomed to being a central part in the real estate transaction – not so in a short sale transaction.  As a matter of fact, most of the issues affecting a short sale have little or nothing to do with the buyer. 

It’s the seller’s financials and the banks relationships that are so much more critical in the eventual outcome of the short sale transaction.  Some of the things you can do in the beginning of the process to help increase your odds of having a successful close of escrow include; asking how many loans are against the property, as more than one loan can put you at a disadvantage because there are a greater number of obstacles to get in your way, also ask whether or not the seller’s loan was insured, as this can make a difference in the outcome, and finally, ask about  the success track record of the listing agent, as that  can make a big difference if the listing agent has not successfully closed a short sale transaction previously. 

Here are the things you need to know

Short sales can take a long time – from just a few months to over a year.  There is nothing short about a short sale other than what the bank gets out of the transaction.  The reason they are called “short sales” is because the bank is getting “shorted” on the amount of money they are getting at close of escrow.  This in itself means there is little or no incentive for the lender to make things click along.  Many buyers become disillusioned after they get into contract to buy a short sale, thus making it even more difficult and lengthily. 

Many buyers go into a short sale transaction thinking, “oh well, we can buy something else if we find a better deal along the way”.  This kind of thinking by itself causes problems because you have so many buyers changing their minds and not following through.  It is not unusual for the listing agent to receive approval for a buyer and then find out the buyer has already gone on to another purchase. 

The price you end up paying may be different than the original offering price.  In many cases it can be actually lower than the price the buyer was originally willing to pay, and sometimes that price can be higher than the buyer was originally willing to pay.  Be sure your agent does some homework and find out what the property will most likely appraise for once the lender orders an appraisal.  Making a bad offer can often cause tremendous delays and even prevent the transaction from closing.      It is better to be realistic from the start than going through all of the waiting just to find out you never had a deal that could be closed. 

Sometimes it may be better to find a short sale where there have already been several buyers.  By the time you get into the transaction much of the shuffling may have already been done and you might be the big winner.  It is not uncommon for a buyer to step into a transaction after several buyers have fallen out, only to find out the approval has already been given and the buyer needs only to do get their loan and close the deal. 

Don’t expect a counter offer from the seller as you most often would in a normal transaction.   The seller doesn’t care about the offer price because he/she is not getting anything out of it anyway.  Most lenders prohibit the seller from receiving any funds from the transaction at all.  That is why it is so important to know what the comparables will be at the time of the appraisal.  On any given day you can find a buyer who will accept just about any price for a property- that doesn’t mean you can get the lender to approve the sale.  Remember, the lender is the one who is going to come up “short” on the deal – that is why they call it a “short sale”.

Also remember, don’t get too caught up in all the hoopla about the lender and the process – you will still need to get inspections and investigations, and therein lies the tricky part.  The way to avoid this quagmire is to be sure your agent allows plenty of time in your contract for you to get your inspections after approval and before closing.  Generally, once you get the seller’s lender to approve the transaction, you will need to get inspections and remove your contingencies, and then get your loan in place for the closing. 

For more information about short sales visit SHORT SALES, or contact your trusted real estate agent.

Questions & Answers for Tracy & the Central Valley

Q. What is happening in the Central Valley for social activities?

A. Calendar    Chamber of Commerce      Events  

Q. What is the weather like in Tracy and the San Joaquin County?

A. Central Valley Weather

Q. What are the demographics of the Central Valley?

A.  Central Valley Demographics with crime and school statistics

Q. Where can I find Bank Foreclosures and Short Sale Properties?

A. Bank Foreclosures and Short Sales in the Central Valley  

Q. How can I find a Realtor to work with me?

A. Pick-Agent

Q. What is a Loan Modification and do I qualify for it?

A. Making Home Affordable Program

Q. What is a Short Sale?

A. Home Affordable Foreclosure Alternatives Program (HAFA)

Q. What type of tax credit is available for me?

A.  Tax Credit Matrix

Q. Do I qualify for a tax credit?

A. Tax Credit Chart

Q. What is the Making Home Affordable Program?

A. Making Home Affordable Program

Q. What about the new $10,000 California Tax Credit?

A. $10,000 Tax Credit AB 183