Many short sellers are worried about buying their next home or where they would move if they sell their current home due to financial hardship.  Now, you have one more option- you can short sell your current home and move to a new home after short sale.  “No”, it is not something illegal or “bail and buy” program.  It’s the new loan program for short sale sellers.

Like other loan programs, this newest loan program has their own criteria and not all short sellers qualify for this program. Some of the guidelines are:
– Minimum FICO Score should be 640+
–  No late payment for the last 12 months
–  3.5% minimum down payment ,Gifts are ok!
–  Cannot buy your next home for more than the original home loan

If you are in bay area and having financial hardship and planning to sell your current house then give me a call to see if you qualify for another home as soon as you sell your current home.  I can help you to sell your current home and buy your next home. 

Even if you had sold (short sell) your house 12 months ago and you are paying your rent on time and meets the above criteria, then you may qualify for this new program so that you can move to your new home sooner rather than waiting for years to buy your new next home, just give me a call to see if you qualify for this newest loan program.  You can reach me at 510-366-9405.

I wish all my readers a Merry Christmas and keep sending me your feedbacks on my blog and referrals who would like to do short sale anywhere in bay area (east bay, south bay, north bay or west bay area).

In this market, everybody is looking for better deal but which one is a better buy? Is it short sale or REO? When different types of homes are available, it’s better to educate yourself as a home buyer with these types of homes.

In my close by east bay area office (Fremont, Newark, Union City & Hayward), as of today (11/10/09), there are 666 homes are available for sale, out of 223 homes are short sale, 110 homes are REO and 333 homes are regular sale. So, you can see that short sale homes are available more than REO and I’m sure some of the homes under regular sale are also candidate for short sale but the owners/agents are trying to sell as regular (35% of regular home sales are on market for more than 2 months with no offers because of higher list price).

Well, all these types of homes have their own advantage and disadvantages, you have to select which suits best your needs and budget.  Here are some of the important things to know:

REO Homes:
Price is the one of the biggest attraction factor, most of the bank owned homes list at way lower than the market price to attract multiple offers. Most of the buyers think that bank owned homes are available at cheaper price but due to multiple offers, it sells at higher price and most of the time it sells at market price. But if you are cash buyers then you can negotiate a cheaper deal.

Condition: It’s always “As-Is” sale, that means the bank will not fix any repairs if there’s any problem. You have to be careful before you buy, do your inspection before removing any conditions, some of the REO homes are really in bad condition due to vacant for long time before it list by the bank and sometime the previous owner had already took out all the appliances, holes in wall and not well maintained.

Time: You can get the ratified contract from bank in a week or so and closing is as normal as other sales.

So, if you are a cash buyer and can fix small things by your own then you can get a good deal in REO homes.

Short Sales Homes:
Price is one of the attraction in short sale also, the owner wants to sell it and avoid foreclosure, the bank also wants to sell it to avoid additional cost of foreclosure and the buyer also gets at bargain price, so its win-win situation for everybody. In short sale, bank looks at their net profit, how much they can get from this sale and if their investor is satisfied with the net profit and seller is ok with the banks approval(if there’s no unusual terms & conditions), then the buyer can get a good deal.

Condition: it will be As-Is sale, that means neither seller nor bank will fix any repairs if there’s any, but most of the homes are in better condition because owners are still there and they maintain they property. Well, you can see some of the homes are vacant also, where you may find, it is not maintained like cleaning, landscaping, pool(if any) and other common things, but still the condition is better than REO homes.

Time: This is where most of the home buyers get frustrated because sometimes it takes 2-3 months and if the listing agent is not experienced in short sale then it may take more than 6 months also with no answer from bank after they submit the offer.  This is one of the biggest reasons why home owners should work with an experienced short sale agent.

So, even if you are not cash buyer, you can still bid for short sale homes but needs little bit patience to wait for the approval from lender to get your dream home.

I hope this will give you some ideas on what to look for on these REO or short sale homes. If you have any questions, please don’t hesitate contact me at 510-366-9405. Thanks for reading! Have a great day!

Good News for Buyers! The tax credit for 1st time home buyer has been extended until April 30th of next year (2010).  I heard this will be the last extension from the Congress, so those who are thinking of buying a home, take advantage of this tax credit!!

This new tax credit will qualify more buyers who weren’t qualified in the last program due to their higher income.  First time home buyers who file their tax as single can claim their full tax credit($8,000) if their income is less than $125,000 and the income limit for married filing joint return is $225,000. 

Buyers who file their tax as single can claim their partial tax credit if the income is between $125,000 and $145,000 and for married filing jointly, the income is between $225,000 and $245,000. 

For repeat buyers, who have been residing the primary residence for five years out of the last eight years and if they are purchasing as a primary residence, then they may be eligible for $6,500.

The eligibility period starts from November 6, 2009 to April 30,2010, so those first time home buyers and repeat buyers(criteria as mentioned above) purchase between these dates will qualify under new tax credit. The purchase price to qualify for this tax credit is less than $800,000.

So, what are you waiting for? If you are thinking of buying a home then take advantage of this tax credit and the best part is you don’t have to repay this credit unless you sell within three years after purchase.

At this time, you can good a deal in buying a home whether it’s a short sale or regular sale, go find out your best home in the best price range and remember always work with a good realtor who can find out a good deal for you.

If you are in bay area and would like to know more about this tax credit or have any question then don’t hesitate to stop by my office or call me at 510-366-9405, I would be happy to assist you.

Now-a-days you can see that most of the listings are short sales. Those who are looking to buy, can get a good houses and sometimes below market price.

Here are 11 things about buying a short sale home in California, which might help you to buy short sale listings in this market:

1. Educate Yourself About Short Sale:

You need to know more about short sale and difference between short sale and other sales (regular sale & reo sale). Whether it’s the right buy for you or not. If you want to buy as soon as possible and cannot wait couple of months then short sale is not the right choice to write an offer. But if you can wait couple of month then look for short sale homes also in your search criteria and ask your agent to show short sale listings also.

2. Get Pre-Approval:

This is important whether you are writing offer to short sale or other type of listings. Pre-approval will make your offer stronger and gets higher priority than others who are submitting without pre-approval. So, make sure you are pre approved with a good lender before your home search.

3. Time Frame:

It takes time to know the final approval from the seller’s lender after you submit your offer, may be 1 month, 3 months or more. You need to have patience to wait that long for your dream home.

4. Offer Acceptance:

Even though, seller accepts your offer, doesn’t mean that your offer has accepted and you can move forward with that offer. Once you submit the offer, the seller’s agent forwards to the seller’s lender for final approval. The lender may accept it, reject or counter back to you with their price based on their own appraisal price.

5. Other Liens:

If other liens like HOA, tax liens and others where the seller owes to those lien holders , could also be a hindrance to the final approval of the sale. Most of the time, bank approves to pay all the liens but sometime they don’t, in that case either the seller or buyer or both needs to contribute to get that good deal.

6. Writing Offer:

Write a good offer based on the market value, don’t think that it’s a short sale, you can write a ridiculously low offer and bank will accept it. No, once you submit the offer, bank will also do their part by ordering appraisal to check the market value. They compare the appraisal value with your offer price. If you really like the house then write your best offer so that you can have higher chance of getting that house. Now, write only for those houses which you really like and not all short sale listings.

7. Check Listing Agent:

Check whether the agent representing the seller has experience in short sale or trained /certified agent in short sale, this shows that the agent can handle the short sale correctly from the beginning itself from submitting the package to getting approval from the lender. If the buyer side agent is also experienced is short sale then that would be a plus point to the buyer.

8. Follow up:

You need patience, once you submit your offer, don’t call your agent every other day for the status. The lender takes time depends on their work load to order appraisal or BPO (Broker Price Opinion) to determine the market value. This process itself sometime takes 30 days and another 30 or more days for final approval. But make sure, you ask your agent to follow up with the listing agent every other week or so for the latest update if any.

9. Backup Offers:

If you really like the house and somebody already wrote an offer, then ask your agent to submit a backup offer, if they are accepting the backup offers because sometimes the first buyer may walk away from the deal due to long waiting period or due to some other personal reasons.

10. Terms & Condition:

All the short sale listings are “As-is” sale, but that doesn’t mean you have to buy a house without any inspections. You have the right to do all the inspections but the seller will not fix anything if there’s any repair. It depends on you whether you are satisfied with the inspection reports and repairs(if any).

11. After Approval:

After getting the approval letter from the lender then work on to remove your contingencies(inspections, loan approval) and submit your initial deposit to the title within the specified time so that you can close the escrow on time and move to your home.

Buyers, you can get a deal with a short sale, but it comes at a price. If you have the time and the patience you could be rewarded handsomely.

If you are in East Bay (Fremont, Newark, Union City, Hayward) or near by areas and looking to buy a house, then let me know, I would be glad to assist you. You can reach me at 510-366-9405.