Short Sale Myths


Short Sale Myths A short sale can be an excellent solution for homeowners who must sell and owe more on their homes than they are worth. Unfortunately, a number of myths about short sales have developed, and it is important to understand the reality of this process should you find it meets your current needs.

Myth #1 – The Bank Would Rather Foreclose than Bother with a Short Sale

This is one of the most common misconceptions. The reality is that banks do not want to foreclose on your property because the foreclosure process is incredibly costly. Banks, investors, and even the federal government have all publicly stated that if a person is qualified for a short sale, the deal needs to be considered. Overwhelmingly, banks receive more on their investment through a short sale than a foreclosure.

The qualifications for a short sale include:

                1. Financial Hardship – There is a situation causing you to have trouble affording your mortgage.

                2. Monthly Income Shortfall “You have more month than money.” A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.

                3. Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.


Myth #2 – You Must Be Behind on Your Mortgage to Negotiate a Short Sale

While this may have previously been the case, today lenders are looking for verifiable hardship, monthly cash flow shortfall, or pending shortfall and insolvency.

If you meet these three requirements and believe that you soon may be unable to afford your mortgage, act immediately. Any delay could limit your options. Do not wait until the countdown clock to foreclosure has started and you have even less time left.

Myth #3 – There is Not Enough Time to Negotiate a Short Sale Before My Foreclosure

This is a myth that probably hurts homeowners the most. Many do not realize that foreclosure is a process, and that there is time to make decisions that may result in better outcomes.

The foreclosing party—in most cases a lender—can stall a foreclosure up to the final day of the process. Today, many lenders will stall a foreclosure with as little as a phone call from you explaining that you are trying to sell, and almost all lenders will stall a foreclosure with a legitimate contract. For real estate professionals who understand foreclosures and short sales, there is time available until the foreclosure process is complete.

Myth #4 – Listing My Home as a Short Sale is an Embarrassment

It is understandable to have reservations about letting the world know that you owe more on your home than it is worth. However, according to recent estimates, one out of five homeowners in the U.S. is in the same situation. You are to be congratulated for admitting you need help, taking action, and finding a professional who can work with you toward a solution.

With recent estimates showing 40-60% of U.S. sales will be short sales or foreclosures, you are not alone.

Continue reading Short Sale Myths

Question; Will the value of houses ever go above where they are now?

The following  is my response to a zip code specific question on Trulia. The zip code 95403 covers a large portion of the north west quadrant of Santa Rosa. I’m posting it here because the basic premise can be transferred to any area of low to mid priced homes in good neighborhoods that exerienced rapid equity growth brought on in part by a slew of well Continue reading Question; Will the value of houses ever go above where they are now?

First Time Buyer Tax Credit; Okay…I’m going to keep hammering this one home until the very end. …it’s THAT important!

The $8000.00 First time home buyer tax credit is set to expire on Nov 30th, 2009. This is the date you will need to CLOSE ESCROW if you wish to claim the credit. With escrows taking at least 30 days to close…and often more, you should have an accepted offer in escrow no later than October 30th , 2009…and that’s pushing it. With many escrows taking 45 days to close, the best scenario Continue reading First Time Buyer Tax Credit; Okay…I’m going to keep hammering this one home until the very end. …it’s THAT important!

Thanks to Eileen Morelli for joining me on the show.

I had a great time hosting the show this morning and couldn’t have asked for a better guest. Eileen ‘s insight into this market from her vantage point as the managing broker at Keller Williams Realty… not to mention her 30+ years  in Sonoma County Real Estate, was a real treat.  Eileen, spoke of  her recent experiences with buyers, sellers and agents and how everyone seems to be a little more up-beat these days.  I’d have to say I’ve noticed that shift as well.  Speaking of “Shift”, Eileen offered a few copies of Gary Keller’s book “Shift” during the show, and had at least 5 or 6 voicemails by the end of the show.  Congratulations to those agents who are ready to change the way they look at this market.  A great KW quote…”It’s not about the Market, It’s about YOU”

Keller Williams Open House Extravaganza…Sunday, September 20th.

Keller Williams Realty Open House Extravaganza;    This ongoing event has really picked up steam. Visitors who fill out a card at one or all of these open homes are eligible for prizes(which seem to be getting better each month)….not to mention access to great agents and some great available properties.  Below is a list of all Keller Williams Open Homes today. Continue reading Keller Williams Open House Extravaganza…Sunday, September 20th.

This weeks show has a “voice” all its own.

Allison Norman is primed and ready to go for her solo debut as the guest host of Mike Kelly’s radio show, “The Real Estate Hour” 9-10 am on Sunday 1350am,

I’ll be talking to one of my favorite people; Team Leader of Keller Williams Realty, Sonoma County; Eileen Morelli. We’re going to talk about why Keller Williams is going so strong in THIS market….what Keller Williams Realty has to offer its agents….and how that benefits buyers and sellers. Plus Eileen’s take on where this market is going, from her vantage point as a managing Broker with 140+ sales associates. Eileen has been around Sonoma County Real Estate as long as Mike has. I’m looking forward to picking her brain 😉

Slow Food! Join our movement to protect endangered FOOD! Heritge Turkeys,vegtables,Legumes! All good Food Stuffs!


Help Us Grow the Movement–Join Slow Food USA

and help us turn the momentum from our Time for

Lunch campaign into legislation that protects our

children’s health.

 In September, any first-time donation to Slow Food USA will make you a member.

As a member, you will:

  • Get connected to your local chapter, made up of people who care about food, agriculture, health and the environment.
  • Get invited to local, regional, national and international events that celebrate good, clean, fair food.
  • Receive member-only discounts on select events and publications.
  • Become part of a growing movement that is changing the way America eats!

Over 55? Want to keep your old Property Tax payment when buying a new home in SONOMA COUNTY? Read on! Prop. 60 and 90


Since its passage, Proposition 13 prohibits property tax increases until property ownership is changed.

PROP 60 If either spouse is over age 55 (when the old home is sold), this proposition allows a replacement of a primary residence with a new home of equal or lesser value (but see below for some exceptions on how to buy MORE house and stay within the guidelines!) within the same county and transfer of the Prop 13 assessed valuation from the old home to the new property.  This is allowed once in your lifetime, and a spouse who has done it before ‘taints’ both spouses.

PROP 90 allows counties to elect to accept transfers of Prop 13 values for moves from other counties when a primary residence is replaced with a less expensive (but see below) home. If you are over 55 and move into a county which accepts Prop 90, you may take your old, lower Prop 13 value, regardless of from which county you move. Continue reading Over 55? Want to keep your old Property Tax payment when buying a new home in SONOMA COUNTY? Read on! Prop. 60 and 90