alto (25)

Palo Alto Probate Home

This is a question I get asked all the time. When an owner has passed and has rental property should the heirs sell the Palo Alto probate or trust home with the tenants in place, or wait until the lease is up?

 

While most years I would say wait until the tenants are gone but with the uncertainty of how interest rates will affect prices and what will happen to a Palo Alto market that has already shown signs of slowing, even with very tight inventory, the answer is not clear cut.

 

Sell Palo Alto Probate or Trust Home With Tenant: Pros:

 

  1.      Palo Alto school Priority 1 Registration goes from Jan 12 thru Feb 15th. That is the best chance of getting your child in the school closest to you. There is always a space in a Palo Alto school for a resident, but getting the one closest to you is best obtained if you are a resident during this period. Selling with tenants in a  Palo Alto probate rental may allow the buyer to get a leg up on school registration for the next year.
  2.      Interest rates are lower now than they will be next summer, or even in March and maybe Feb. A 3 million dollar Palo Alto probate home has a very good chance of having a loan on it so the less a buyer has to pay for the mortgage the more they can afford for the home. For every 1 point increase in interest rates there is a 10 % increase in payment.
  3.      The inventory is very low and the Palo Alto housing is market still active. It is unknown what will happen as the year goes on. The market could go down as interest rates go up, or if there is a natural disaster, a world event, or terrorist attack.
  4.      Some people who buy Palo Alto homes in Probate or Trust early are happy to rent the house out until the end of the school year because they do not want to move until school is out if they are relocating.

 

http://www.marcymoyer.com/trustandprobatesaleshttp://www.marcymoyer.com/trustandprobatesales With a Tenant Cons:

 

  1.      Harder to show house
  2.      You will not be able to make interior upgrades or stage with a tenant in place so it may depress the price somewhat
  3.      The tenant may be messy or say inappropriate things to potential buyers which could depress the price.
  4.      If the tenant does not have beautiful furniture the professional pictures will not look as good.

 

Sell Palo Alto Probate or Trust Home After Tenant Lleaves Pros:

 

  1.      You can have the interior painted, wood floors refinished, new carpet, and any other cosmetic upgrades you want that will help bring in more money.
  2.      You can professionally stage the property and the photos will look much better.
  3.      Much easier to show the house and have open houses which bring in more people and help bring in a better price.

 

Sell Palo Alto Home in Probate or Trust After tenant leaves Cons:

 

  1.      Interest rates will be higher which will depress the price. It is unknown by how much because it also depends on how the stock market is doing, most likely for Apple, Google, Facebook, and Linkedin.
  2.      If there is a trade war with China tech stocks could be hurt more than other sectors. This would make less money available for down payments for most of the buyers in the area.
  3.      If the dollar continues to be strong foreign investors will be much less likely to be buying homes in Palo Alto.
  4.      The best time to sell a home in Palo Alto in from Jan thru early June. The second best is the fall. If the tenants are out in June and the home is prepared in July and Aug and on the market in Sept you have missed the best time, but may get the second best time, but only by waiting until Sept to put home on market.

 

So as you can see the answer is not clear. No one can say for sure what will happen to the real estate market in 2017. If you are in this situation now it is probably a good idea to add your own Pros and Cons to this list to get a feel for what may work best in your situation.

 

If you have any questions about selling a home in Probate or Trust please feel free to contact me.

Marcy Moyer

Keller Williams Realty

Specializing in Probate and Trust Sales

650-619-9285

marcy@marcymoyer.com

www.marcymoyer.com

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Palo Alto Ca Short Sale/Bank Owned Round Up

In Palo Alto from Jan 1, 2012 until June 30, 2012 there were:

1 closed short sales

3 closed bank owned homes

Total sales during this time period were 284

Total % Short Sales: .3%

Total % REO Sales: .9%

Total Percentage  Palo Alto Distressed Properties: 1.2%

1.2% of all Palo Alto sales being distressed properties is not enough to even comment on. The price of homes have in Palo Alto is now up to pre 2008 prices in the $2,500,000 price range and the homes over $2,500,000 usually do not have loans that are a very high percentage of their value so anyone who is having financial problems can generally sell and be made whole. So if you are looking for a bargain, look outside of Palo Alto.

If you have any questions about short sales or foreclosures in Santa Clara County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

Marcy Moyer Keller Williams Realty Palo Alto, Ca. Specialist in Short Sales and Trust and Probate Sales

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In East Palo Alto  from Jan 1, 2012 until June 30, 2012 there were:

36 closed short sales

20 closed bank owned homes

Total sales during this time period were 96

Total % Short Sales: 37.5%

Total % REO Sales: 20.8 %

Total Percentage  East Palo Alto Distressed Properties: 60.7%

60.7% of all East Palo Alto sales being distressed is enough to still have major effect on the overall market. However, as inventory is still so low unless these homes are truly physically distressed, which is more common with bank owned homes at this level, it probably will not have a long lived effect. It is interesting to see there are almost twice as many short sales as bank owned sales which has also happened in other cities. 

If you have any questions about short sales or foreclosures in San Mateo County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

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Redwood City Distressed Property Watch

It's the end of the year so time for the round-up of distressed property sales in Redwood City. So here's what happened:

 

Single family and condo townhomes 2011:

Total sales:  553

Short Sales: 91

REO:           49

Distressed sales as a percentage of total sales: 25.3

Compare to 2010

Total sales:   600

Short Sales:   93

REO:            78

Distressed sales as a percentage of total sales:  28.5

 

My conclusion:

The percentage of distressed properties in Redwood City is a little lower in 2011, 25.3% as compared to 2010, 28,5%. This is dues to a 40% decrease in REO sales in 2011. It will be interesting to see if the rumored release of REO inventory actually happens, and increases the percentage in 2012, or if the econmy picks up and helps people afford their homes.

If you have any questions about short sales or bank owned homes please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E.  01191194

Marcy Moyer Keller Williams Realty Palo Alto, Ca. Specialist in Short Sales and Trust and Probate Sales

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Palo Alto Distressed Property Watch 2011

It's the end of the year so time for the round-up of distressed property sales in Palo Alto. So here's what happened:

 

Single family and condo townhomes 2011:

Total sales:  590

Short Sales: 13

REO:           9

Distressed sales as a percentage of total sales: 3.73%

Compare to 2010

Total sales:   563

Short Sales:   8

REO:            6

Distressed sales as a percentage of total sales:  2.5

 

My conclusion:

The percentage of distressed properties in Palo Alto are not enough to make a difference in the market value of homes. There was an increase in both short sales and REO in 2010 over 2011, but again, not enough to make a big difference. Palo Alto has so far managed to escape the trauma of very many people losing their homes. The same can not be said about many surrounding neighborhoods.

If you have any questions about short sales or bank owned homes please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E.  01191194

Marcy Moyer Keller Williams Realty Palo Alto, Ca. Specialist in Short Sales and Trust and Probate Sales

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Why Does Bank of America Keep Rejecting Me?

I was starting to feel like the last player picked in dodge ball. The rejections were really hurting, especially since there was never any reason given. Just messages saying your supporting documents were rejected. Oh the pain!

I finally got a really nice B of A negotiator on the phone today who gave me a simple explanation, the buyer's proof of funds were downloaded as a web page instead of being a PDF of the originals, and the current policy is only original statements are accepted, no web page screen shots.

I guess I should not be surprised. Just yesterday I got an e-mail from PNC saying the same thing. They needed the original October bank statement, not the one that was downloaded from the internet. At least PNC did not tell me I was rejected.

So if you want to keep your ego in tact while doing a short sale with Bank of America or PNC, be sure and give your Santa Clara County short sale agent original bank statements (which you may need to order from your bank if you are paperless), or see if you can download something that does not say web page on the screen. And be sure and ask your agent to get original bank statements for the buyer's proof of funds. There may be other banks requiring that now as well, but these are my two latest encounters.

If you have any questions about buying or selling short sales in San Mateo or Santa Clara County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E. 01191194

Marcy Moyer Keller Williams Realty Palo Alto, Ca. Specialist in Short Sales and Trust and Probate Sales

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One of the best things that has happened to short sales in the last couple of years is the on line platform for processing a short sale. There are several platforms in use, but Equator is one of the more popular ones, and is the one used for Bank of America and Wells Fargo Short Sales. So, instead of your agent having to fax all the documents, usually several times, the short sale documents are uploaded as PDFs onto the Equator web site. In order to keep the process moving forward Equator will assign a task to be fulfilled by the agent, like uploading an offer or financial documents onto the website. Once the task is assigned they will give you a fixed number of days to upload the requested documents. This number of days is the same, no matter when the task is assigned. So if it isa 2 day task and it is assigned on a Friday, it is due Sunday, period.

So my latest Bank of America short sale assigned me the task of uploading the signed offer on Friday, with a due date of Sunday, which happens to be Christamas.

And that is why this Palo Alto short sale agent is cheerfully working Christmas Eve. 

Enjoy your holidays!

If you have any questions about buying or selling short sales in Santa Clara or San Mateo County please feel free to contact me!

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E. 01191194

Marcy Moyer Keller Williams Realty Palo Alto, Ca. Specialist in Short Sales and Trust and Probate Sales

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East Palo Alto short sale

 

There is another conflict brewing between investors and first time home-buyers, and this time the home buyers may win. In the more affordable areas of the Silicon Valley distressed properties, ie short sales and reos have been popular with investors and first time buyers. Many would be owner occupiers lose out on great opportunities to investors who have all cash.  Since condos are the least expensive properties, have the fewest maintenance issue,  and tend to bring in more rent per dollar spent they are popular with investors. Coupled with the more restrictive lending practices on condos, many bay area developments are now in a position where the number of owner occupied units has fallen to a critical level. Owners of these properties are having trouble refinancing and buyers trying to get loans are being rejected by the lenders.  As a result, many complexes are starting to pass new HOA regulations limiting the number of rentals allowed in the condo development.

These restrictions can be a double edged sword.  If they occur in a building where the delinquency rate on the HOA dues is too high then a buyer will not be able to get a loan anyway and it will effectively cut off all sales.  In the future when the market has settled down the rental restriction could put a damper on future sales.  However, if they are not instituted it may become impossible for anyone but investors to purchase in some condo complexes, which in itself will lower values not to mention make things harder for the first time home buyer. It will also make it impossible for current homeowners to ever refinance in some of these buildings.

I do not have the answer here as to what is right or wrong here. I can only give some advise on what to do if you want to purchase or sell a condo and want to get the information about potential rental restrictions.

1. Ask your agent to find out if the HOA docs are available yet.  If it is an reo they most likely will not be and a

short sale very likely not

2. If the docs are not available before you make an offer ask your agent to ask the listing agent for the number of the HOA management company

3. Call the management company and ask about any current or contemplated rental restrictions

It is not that hard to find out and can save a lot of time and possibly money.

If you have any questions about short sales in San Mateo or Santa Clara Counties please feel free to contact me.

 

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E.  01191194

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A few days ago short sale sellers in California got great news!  Governor Brown signed a bill which prohibits lenders and investors of junior loans to pursue a deficiency judgment on most approved short sales.  First lien holders are already prohibited from deficiency judgments, but second mortgages and HELOCS were not previously exempted. As of July 15th, they are included. So, if a bank approves your short sale, then they have to give up all rights to going after the borrower for any deficiencies. So if the second lender says they will take $6000 for an $85,000 HELEC, that is all they get. After close they can not come back to the borrower and say we still want more money.

This is great news for short sale sellers in Santa Clara and San Mateo Counties.  Certain exceptions apply if the bank can prove fraud, but for most sellers, this is the last piece they need to be able to transition out of their homes and have a chance to start over.

Since California has had such a large percentage of homeowners who owe more on their homes than they are worth, and of those people there are always going to be those who need to sell, this is a welcome relief for huge numbers of homeowners.

If you have any questions about buying or selling short sales please feel free to contact me!

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E. 01191194

Federal Government Disclaimer (MARS): 1. You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance we obtain from your lender [or servicer]. If you reject the offer, you do not have to pay us. If you accept the offer, you will have to pay us commission as agreed to in listing contract for our services.
2. Marcy Moyer of Keller Williams Realty is not associated with the government, and our service is not approved by the government or your lender; and 
3. Even if you accept this offer and use our service, your lender may not agree to change your loan.

Marcy Moyer Keller Williams Realty Palo Alto, Ca. Specialist in Trust and Probate Sales

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It's time again. Curious about how many distressed properties there really are in Palo Alto?  Despite what you may be reading these are the homes for sale or sold on MLS as Short Sales or Bank Owned.

Sold: 

Short Sales: Single Family Homes  3

Short Sales: Townhome or condo:  2

Bank Owned: Single Family Homes  2

Bank Owned Townhomes or Condos  4

 

Active:

Short Sales:  Single Family Homes  1

Short Sales Townhomes or condos   1

Bank Owned Single Family Homes   0

Bank Owned Townhome or Condo    1

 

Pending Sales:

Short Sales: Single family homes  2

Short Sales: Townhomes or condos 1

Bank Owned  Single Family Home  0

Bank Owned Townhome or Condo   1

As you can see the number of distressed properties for sale is continues to be extremely low. This small number of short sales and reos are not enough to have a major impact on the market as they do in many other markets.

If you have any questions about short sales or bank owned properties please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E. 01191194

 

Federal Government Disclaimer (MARS): 1. You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance we obtain from your lender [or servicer]. If you reject the offer, you do not have to pay us. If you accept the offer, you will have to pay us commission as agreed to in listing contract for our services.
2. Marcy Moyer of Keller Williams Realty is not associated with the government, and our service is not approved by the government or your lender; and 
3. Even if you accept this offer and use our service, your lender may not agree to change your loan.


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How is a Palo Alto Short Sale Different From a Regular Sale

 

A short sale is not the same as a regular sale and the differences are very significant. It is not a simple process and if you are buying or selling a short sale you should be working with an agent who knows what her or she is doing.

 

In a short sale the seller owes more on the home than it is worth. The seller needs to ask the lien holders if they will accept less than the amount owed to them.  There can be one or more lenders, and there can also be liens from other places, tax liens, personal loan liens, etc.  Every lien holder has to agree to agree to take less, and the first lien holder gets to say how much they are willing to give to the other lien holders. If everyone can come to an agreement then the sale can proceed.

 

Certain rules apply:

 

1.     The house is sold “As Is”

2.     Disclosures are the same as in a regular sale.

3.     The water heater needs to be strapped and smoke detectors are required.

4.     The home goes on the market and one or more people can make offers on the property.  The seller accepts one offer, and that offer is sent to the first lien holder for approval.  All other offers and any subsequent offers can be back up offers, but they are not supposed to be sent to the bank unless the accepted offer drops out.

5.     The buyer must include a proof of funds for the down payment, a pre-approval letter, and if the first lien holder requests it, their social security number.  They must not have any relationship to the seller.

6.     The first lien holder will look at the seller’s financial information and the strength of the buyer’s offer and determine if they will accept, reject, or counter the offer.  They also determine how much money they are willing to give to any other lien holders to settle the debt. This can take anywhere from a few weeks to a few months.

7.     Once the first lien holder has made a decision they put it in writing and the seller and buyer have to accept the terms of what the first lien holder is offering.  If everyone agrees and there are no other liens then the sale can proceed.

8.     The buyer has their contingency period, gets a loan, and closes escrows.

9.     If there are other liens the same process occurs for those loans.

 

If you have any questions about buying or selling a home in a short sale please feel free to contact me.

 

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E.  01191194

Federal Government Disclaimer (MARS): 1. You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance we obtain from your lender [or servicer]. If you reject the offer, you do not have to pay us. If you accept the offer, you will have to pay us commission as agreed to in listing contract for our services.
2. Marcy Moyer of Keller Williams Realty is not associated with the government, and our service is not approved by the government or your lender; and 
3. Even if you accept this offer and use our service, your lender may not agree to change your loan.

 

Marcy Moyer Keller Williams Realty Palo Alto, Ca. Specialist in Trust and Probate Sales

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Deaths in families are always hard. They can bring out both the best and worst in a family. There is often a combination of sorrow and a bubbling to the surface of many past, and normal family rivalries and childhood issues. Every estate must have an executor and this executor can be anyone the owner of the estate appoints if the estate has been put in trust. If there is no trust but there is a will and the will names an executor that person must be affirmed by the probate court.  If there is no will the probate court will asign a personal representative.

As a realtor who has been fortunate enough to list many homes in trusts and probates I have found that the ones that go the smoothest are those where a trust department at a bank has been named the executor. My experience has been that when a trust department handles an estate:

1.  Everything is done in a fair and impartial manner. No one gets to help themself to some personal and sometimes valuable effects that were not specifically left to them. Everything is divided according to the terms of the trust or will.

2.  No one is left to do the many many hours of tedious work needed to dispose of the estate leaving them resentful and/or exhuasted. A professional does that.

3. There are laws which govern how an estate is settled. They must be followed or there can be financial consequences.  Trust departments are experienced in following these laws and doing things properly.

4. Sometimes estates are to be distributed over time instead of in a lump sum. When this happens trust departments are in a good position to hold the money and distribute it in accordance with the terms of the trust or will.

5.  Trust departments charge money. It will cost your heirs money to have a bank settle an estate, but it may be worth it to have things done properly and keep peace in the family.

 

If you have any questions about selling a home in a trust or probate please feel free to contact me:

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E.  01191194

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The first quarter of 2011 has net seen a lot of activity of distressed properties in Palo Alto.  Here’s the update:

 

1.     Sold foreclosures: 1 single family home  4 condos

2.     Active and pending foreclosures: 0

 

1.     Sold short sales:  1 condo

2.     Active and pending short sales:  5 single family homes and 1 condo

 

Total Homes sold in first quarter:  156 (combined single family homes and condos)

 

 

 

The percentage of distressed properties in Palo Alto is still very low compared to most of the country with almost no foreclosure activity.  However, there are a few short sales, and for those willing to wait out the escrow period they can be a good deal.

 

 

If you have any questions about Palo Alto short sales or Palo Alto foreclosures, please feel free to contact me.

 

Federal Government Disclaimer (MARS): 1. You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance we obtain from your lender [or servicer]. If you reject the offer, you do not have to pay us. If you accept the offer, you will have to pay us commission as agreed to in listing contract for our services.
2. Marcy Moyer of Keller Williams Realty is not associated with the government, and our service is not approved by the government or your lender; and 
3. Even if you accept this offer and use our service, your lender may not agree to change your loan.

 

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E.  01191194

Marcy Moyer Keller Williams Realty Palo Alto, Ca. Specialist in Trust and Probate Sales

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Arms Length Transactions in Silicon Valley Short Sales Is It Too Onerous?

When a seller sells their home as a short sale, most lenders  will make everyone, the buyer, the seller, and the agents sign and notarize an Arms Length Transaction document. This states that the sellers and buyers do not know each other, are not related, and the seller will never again, EVER, live in the house , or ever make any profit off of the sale of the home. They can never rent the house or ever buy it back from the new owner.

The intention of this rule is obvious. The banks do not want to sell a home for less money than is owed on it and then have the seller get the benefit of being able to own the home for less money than they originally promised to pay for the home. I am not going to take sides here on whether the seller or the bank has the moral high ground on this. I am just going to say that the banks have made a decision that it is in their best interest not to reduce principal on most loans, but allow a short sale with new owners instead.

In addition to not being able to buy back the house for less money, or have a friend or relative buy the house for less money, the seller is also not allowed to rent the house, ever. This is where I start to have a problem. Some  banks have been allowing foreclosed owners to stay in the homes as renters which makes a lot of sense. The house does not get stripped or destroyed and the renter has a relationship with the house which will help preserve the home’s value.  So why can’t a seller rent from the new owner in a short sale? Many of these sellers do not have money to move and except for HAFA short sales or an occasional generous bank they are not given moving expenses.  It may be hard to find a place to rent after having some credit hits from missed mortgage payments or high credit card bills due to trying to keep up with the mortgage. It seems like an onerous rule to me, and one that does not directly benefit the bank anyway. Why should the bank care who the next owner rents to, especially if the original bank no longer owns or services the note?

And most importantly, what is wrong with a little humanity? Why can’t families stay in their familiar surroundings, keep their children in the same schools, have the same neighbors? Isn’t is enough punishment to lose your home, your equity, and your savings?

What do you think?

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E. 01191194

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Why Is A Palo Alto Escrow Like a Teen Romance?

The beginning of a Palo Alto escrow is like the beginning of a teenage romance, everything is perfect. You have found your soul mate and all promises are meant to be kept.  You never dream that your heart will ever be broken. It doesn't matter that one party is a jock and the other an intellectual, one is a Democrat and one a Republican, or one likes to party and the other is a vegan. And then reality sets in. I don't think I have to go into gory detail.  Well, sometimes an escrow is like that but hopefully your escrow will have a better track record than a teenage romance.
 
One way to help things along is to not set yourself up for failure. If you are a buyer or buyer's agent do not expect to get a loan approval in 15 days if you do not have every document into the lender ahead of time. If you are a seller or seller's agent and accepted an FHA loan do not try to make the buyer get approval in 15 days.  If the seller does not get inspections ahead of time do not tell the buyer they have 7 days for property contingencies and then start yelling because the property inspector says there is something wrong with the foundation and they need more time for an engineer to look at it.
 
Bottom line, do not set yourself up for failure by blowing a gasket over unrealistic time frames. Try to make them realistic to begin with so that the parties can succeed rather than fail.
 
Marcy Moyer
Keller Williams Realty
marcy@marcymoyer.com
650-619-9285
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Do You Care About Your Children?

I am not a lawyer or an accountant so please do not construe this as legal or tax advice. However, friends do not let friends leave their estates to probates, so let’s just say I am your friend.
 
Trust Sale in Palo Alto
As a realtor who specializes in Probate and Trust sales, it does not matter to me whether the estate is being probated, or passed down through a trust.  But it does matter to the heirs, especially now that the estate tax will kick in after a million dollars starting in January, unless Congress  and the administration change it. How likely is that?  They can not even agree to have dinner together so changing the estate tax exemption any time soon is unlikely.
 
So as of Jan. 1, 2011 when you die your heirs can get the first one million dollars of your estate tax free, but anything above that will be taxed at 55%.  So let’s say you have a home that is worth 1.2 million and a mortgage of $700,000. The estate will be valued at 1.2 million not $500,000 which is the equity. If you have your estate in trust you can set things up to help reduce the taxes owed. Even if you do not have a mortgage on your home, if you have a home in Palo Alto you are very likely to have an estate worth over a million dollars because of the value of your home.  You will probably benefit by talking to an estate lawyer to help structure things to get the most tax free money for your heirs.  I can give you names of some excellent estate attorneys if you need a referral.
 
Marcy Moyer
Keller Williams Realty
marcy@marcymoyer.com
650-619-9285
D.R.E. 01191194
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MP+Cavendish+Law+Wills+and+Probate.jpg

My sister in law as executor of the estate just sold my mother and father in law’s house. She chose a realtor who lived in the neighborhood who also was an reo realtor without a lot of reo inventory right now. (Not an unusual situation) She turned out to be the perfect agent for the job because of her REO background. She took a home that was filled to the brim with things that no one in the family wanted, had it cleaned out, trashed out, secured, on the market at an aggressive price, and sold in 2 weeks. I couldn’t have done better myself, except I would have staged it, but that is a separate story.

 

Getting a probate or trust sale ready for market is very similar to an REO. When a homeowner dies his or her personal property must be disposed. Things of value need to be appraised for tax purposes and are distributed accorded to the terms of the will, or in the case of no will sold and the money distributed according to state law. There is often much left over that is not of value and someone needs to trash the home out, much the same way as an REO home is trashed out. This job is often left to the realtor. The home will almost always be vacant, and again the realtor will need to make sure it is secure.

 

While probates and trusts do have some differences in the technicalities of sale from an REO, many of the disclosure exemptions are the same. The executor is exempt from the transfer disclosure, the seller’s questionnaire, the smoke detector requirement, and signature on the natural hazard report, but not exempt from providing the report. If the realtor knows anything about the property he or she does have a duty to disclose anything that is material.

 

Homes that are sold through probates or trusts are very often not perfect. There may have been a death on the property or there could have been many years of deferred maintenance when the owners got older. They may even have been left empty for a period of time while the owner was in assisted living or a nursing home. Like an REO property the realtor must make adjustments to the suggested price based on these issues which are common to both kinds of sales. (Generally the death on the property is not found in REO properties, but it can happen.)

 

The other big similarity is that both REO homes and trust or probate homes have to be sold. They are not owned by people who have the luxury to test the market and sell if they get the price they want. They need to be sold, either to settle an estate or in the case of an REO to mitigate a loss. As a result they are a wonderful opportunity for a buyer to get a home at a great price or a realtor to get an assured sale. Both sides win in these types of sales.

 

So why the comparison? If you are an REO realtor and add probates and trusts to your repertoire then many of the skills you have learned are very useful. If you are an investor it is a good place to look when REO inventory is not getting you everything you want. If you are an end user buyer these homes are worth exploring because of the motivation of most of the sellers.

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Why Don't Banks Act Rationally in a Short Sale?

Why do some short sales get approved, and others rejected?
 
Why do some short sales with loans from the same bank get approved while others don’t?
 
Why do some short sales with loans by the same bank in the same developments get approved while others are denied?

 

Keep your short sale from derailing with these tips.

 
The world of the short sale is changing on a daily basis, and what you know today will be different tomorrow. The rules change, the players change, the documentation changes every minute.  There is, however, one constant: you do not always know whether a short sale will close or not.
 
Two years ago only about 5% were closing, now that number is more like 50%. Still, it's quite risky for buyers and sellers to get their hopes invested in a successful short sale when the odds are 50/50.  There are some things you can do to help insure the process has the best chance of closing.
 
In general if the following are true then the chances are better:
 
1.     The realtors on both ends know what they are doing and have the time, energy, and resources to follow up to set expectations appropriately.  The buyer can not be in a hurry!
 
2.     The fewer the liens the better. One loan is best, two loans with the same bank is second, two loans with two banks third, two loans with other liens such as taxes are probably not going to work out.
 
3.     The short sale process was started before a notice of default was filed.
 
4.     The buyer is well qualified.
 
5.     The home is owner occupied.
 
 
None of these things will guarantee a positive result, but they help.  The biggest problem in the short sale process comes from third parties who are not the bank, but either investors that purchased the loans like hedge funds, or insurance companies who insure the loans for the banks (not mortgage insurance for the borrower).
 
These entities can derail a short sale, and it is not possible to know if they exist, or what they will say before the process begins, unless of course you are dealing with a bank approved short sale--but that is a different story.  So the lender may appear to be Bank of America or Chase, but the investor who put up the money maybe someone else and if so they have to agree to the price and terms.  Or sometimes the second lender will get more money in a foreclosure and will not agree to release the lien.  When this happens, what appears to be an irrational move by the bank, may have nothing to do with them.
 
These are a few of the reasons why seemingly illogical things often happen in the world of short sales.
 
Marcy Moyer
Keller Williams Realty
DRE  01191914
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Last year I predicted that Palo Alto will see more short sales in the future. Well, the future is now so what is happening? There are currently 2 short sales on the market, 5 in escrow, and 6 closed in the last year. This isn't a huge number, but certainly more than we saw in the early part of the century. There's a lot of chatter in the media about how the government is giving banks and homeowners incentives for short sales, and how banks save money by allowing short sales, but does that help the typical Palo Alto underwater seller?


The short answer is no. There is not a lot of help for owners with jumbo mortgages.

The long answer is maybe not.

Here is what I have learned in the last year. It may not be the whole picture, as this world of what happens at the banks, hedge funds, and mortgage insurance companies is not transparent--but I have been involved in short sales and have studied them a lot.

If you are one of the few owners who has one loan then the chances of a successful short sale are much higher. The bank will lose less money than with a foreclosure and will be more inclined to approve your sale. This is assuming you have a verifiable hardship. However, even people with only one loan may run into road blocks if the bank has investors who own pieces of that loan,( frequently hedge funds) and if they don't feel the offer on the house is good enough for them they may derail the sale.

Ok, so what if you have 2 loans, but they are both with the same bank. Again, this is usually easier than some of the other scenarios, but not a guarantee. The bank may be willing, but the investors may not be.

Third scenario, you have 2 loans with 2 different banks. First bank offers second bank 3-10K to allow short sale. The theory is second bank will get nothing if there is a foreclosure. Second bank can have 3 reactions.

1. Co-operate because they get nothing if there is a foreclosure.

2. Play hardball because they know the first bank will lose more money if they foreclose.

3. Not cooperate because they have insurance on the second loan and will get more money if the first bank forecloses and they get paid 25% of their loan from the insurance company as opposed to the 1-5% they are being offered by the first lien holder. In this scenario the first bank is probably not losing too much because borrower has very little equity to begin with since they borrowed on a second or equity line.

4th scenario: In addition to a first and second loan there are other liens against the house including tax or business or personal loan liens. In this case a short sale is almost impossible to accomplish and it is not worth anyone’s time.

So as you can see this is a complicated process and not for the faint at heart. Since many of the loans on Palo Alto homes are jumbo, there are a lot of hedge fund managers out there making decisions about markets in which they may not have enough information. Added to that is the growing resentment against borrowers who are opting for a strategic default or foreclosure because the asset (their home) has depreciated so much they don't feel it is a good investment strategy to hold onto it.

It will be very interesting to see how many attempted short sales actually go through in the next year.
Marcy Moyer
Keller Williams Realty
650-619-9285
Twitter

*photo courtesy of South Florida Short Sales

Marcy Moyer Keller Williams Realty Palo Alto, Ca. Specialist in Trust and Probate Sales

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Do You Want to Buy a New Car?

OR: What Hurts More, A Short Sale or One Where There's Still Equity But You Have Lost A Lot
 
This morning my husband opened up an envelope with information about his stock options. He looked at me and said, “Do you want to buy a new car?”
 
My answer was of “Of course not.” He then explained we'd just lost $50,000 in value from his stock options.
 
My response? “Don’t be so greedy.” 
 
We are both working, our mortgages are almost paid off on the house and rental properties, and the stock options are like dessert, nice but not essential. However, it was painful to him to lose that much money on paper.
 
It made me think of my latest clients.  Some have lost all equity and if they have to sell it will be a short sale. By the time they get to me it is gone, and they do not seem to be concerned about the price as much as the process.  Others who are losing equity when they sell seem to fall into 2 categories: those who are grateful to be able to sell and those who are fighting for every penny and do not seem to see the value in taking an offer to make a sale if it means losing a little more money.
 
If you are a buyer then your life will be much easier if you can find one of the former sellers. If you are working with a seller who is emotionally invested in every penny they are losing it will be a much more difficult sale.
 
If you are a seller it is important to clearly understand your goals when putting a home on the market. If you only want to sell at your price, then if your price is market value, you may get it. But if your price is above market, it won’t sell. Period. 
 
The most difficult part once you understand your financial choices is overcoming the emotional ties to a particular number.  If you want 1.5 million and you only get 1.4 million and life can go on, can you let go of your emotional attachment to to 1.5? If not, this may not be the best time for you to sell.
 
It is no different if you want 400K and you can only get 380K.  If your life can go on with a lower price and you need to sell, you may have to eat the emotions.  If you are just testing the market, don’t bother. In this environment you will fail. If you focus on your need and not your want you will get to your goal of selling a house much quicker and easier.
 
Marcy Moyer
Keller Williams
650-619-9285
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