Mountain House CA Real Estate
Solving The Foreclosure Crisis One Homeowner at a Time
QUESTION: Just out of curiousity Joshua, are banks becoming more cooperative with short sales? Also, what is your opinion of how quickly homes are selling in Mountain House, and are buyers still being edged out by cash investors?
ANSWER: Great questions!
As of right now, there are currently 25 Active Short Sales in Mountain House. This figure does not include Condo's and does not include short sales that are not active (pending, contingent etc).
Of these 25 Active short sale homes, they have sat on the market for an average of 73 days. The number of days on the Market may not be very accurate as this number has a few key factors that make it. Some of the homes may have owners who listed their home for short sale, however they had no intentions on leaving anytime soon and therefore had their agent keep them in the house as long as possible; this would obviously push the short sales days on market much higher.
There are also situations where the home owner is in a modification period and uncertain if he/she will be approved, they too list their home for sale at the same time and play both sides of the fence if you will, until one decision is made; again their agent may prolong accepting or presenting an offer to the seller keeping the seller in the home longer and their again pushing the short sale days on market higher then should be.
The average short sale usually takes 90 days from start to finish. This again varies from bank to bank and also depends on the agent; is he/she CDPE certified or has he/she been well trained in short sales? These factors play a critical role in getting the short sale approved and escrow closed. Their are also situations where the bank just takes a while and ultimately we are at the mercy of the bank.
If you look at the average of the 25 Active short sales right now, days on the market it is 73. Remember, this is an average and some of these homes sit for well over 90 days (average of what a short sale should take) due to the above factors.
I do feel as though banks are cooperating more with short sales and my wife and I are able to work vey well with the banks when negotiating, price, closing cost help, etc. If you find yourself in a situation where you need to have great representation from an agent, I always tell my clients to ask for a resume...why wouldn't you? We do work for you and are indirectly being paid from you!
Mountain House is full a great Realtors, of course Treasure Molina my wife, myself, Angel Lamb, Drew Jacobson and Gevon Polgar are all outstanding! I would trust any of them to do a great job!
Remember, short sales are easy to manage, they need a Certified agent who understands short sales, and hopefully a local agent who knows Mountain House Market! Your agent can review your situation and sale your home according to your situation!
QUESTION: Thanks Joshua. What about buyers being edged out by cash investors? What is your advice to home buyers who are competing with a cash buyer to make the home buyers offer more appealing?
ANSWER: As far as buyers being edged out by cash investors? Yes and No is my answer.
Remember, real estate used to be all about presentation! Meaning, get the offer, write it as quick as you can and present if first in hopes to ensure your offer becoming accepted first. This was known as the 90/10 rule, 90% presentation and 10% preperation.
Today, the market has changed drastically! Yes we have a ton of investors who are purchasing homes in Mountain House and using cash to do it. I can not speak for all of the Realtors in Mountain House, however I can tell you that for me, my buyers do not lose to cash offers.
There are usually three types of buyers that dominate the market; FHA buyer who puts 3.5% down. Banks like FHA because the market has more FHA loans now then ever, however the bank still sees a 3.5% down buyer as a little risky since not much money is being invested. The fear is that if times get tough the buyer who puts several thousand down will walk away from their mortgage because not much was invested.
The second type of buyer is the conventional buyer who places 20% down. A conventional buyer will usually always wipe out an FHA buyer.
The third type of buyer is the cash buyer! This buyer usually wipes out the FHA and the Conventional.
Now, important to know. In a short sale situation, the cash buyer is usually an investor and may not stick around for the 90 days...most short sale listing agents will not accept a cash offer as a primary buyer due to the bad reputation of the cash buyer walking away early. Another important note...when the bank finally receives their money from the close of a short sale escrow, the money is wired to the bank and the bank gets cash. Again, an all cash buyer is the same to the bank as an FHA or Conventional loan because the bank gets all proceeds wired to them and is deposited in full as cash.
Today, the most important thing to know is that we are now 90% preperation and 10% presentation. If your agent does not prepare for your offer, or the sale of your home and does not put 90% effort into preperation, you will almost always lose on your offer to a cash buyer or a conventional loan and most times will not have a successful short sale because the preperation was not done.
QUESTION: Just thought of one more question. In your opinion, if one could amass a larger down payment, say 30 or 40 percent instead of 20%, would that put one on more level footing with the cash investor? Just trying to strategize.
ANSWER: Great question, two part answer.
1.) We already know the cash investor may not stick around; you already have the advantage if your 'agent' does the preperation needed to point this out in your offer.
2.) Putting down more than 20% is not necessary even when competing against an all cash offer. The reason being is that the bank selling the home will get all cash when your loan is wired in. To them, every deal is an all cash offer. My opinion, save your money, only offer the 20% and keep your cash as cash is king! (Queen too...lol)
3.) The best strategy you can do is to have your agent prepare your offer. There are three steps that an agent must do when 'preparing' an offer. If these three steps are done then you have a 99% chance of beating out all cash buyers everytime!
I know you are probably wondering what the three steps are...I would love to tell you, however I hope you can understand that I sell real estate full time and I do have buyers that may be looking at the same home you are. If I give my success away to you, then I very well will lose income; the income that supports my family. I also have to take care of my buyers and ensure they get the homes we offer on. There is nothing more frustrating to a buyer then writing several offers and getting several declines. It's kind of like the rat in the wheel that goes nowhere...however some buyers go nowhere, they just go nowhere really fast. I work smarter to avoid this for my buyers.
Best advice I can give you is to have your agent prepare for you! Forget about presenting more money...remember, that is not following the preperation rule but falling back into the presentation rule.