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South Lake Tahoe MLS

Short Sales In South Lake Tahoe

Short sales are becoming more and more common across the country. A short sale occurs when a lender agrees to accept less than what is owed on the property as payment in full. Short sales have become common due to the decrease in home values, and the popularity of low and no down loans during the recent real estate boom.

Here is an example of an active short sale on the  South Lake Tahoe MLS:

                                                                                         mohican1.jpg

1835 Mohican

This home was listed previously for $1,199,000. This is a five bedroom, three and one half bath, three car garage, 3300 square foot home.

This home was recently re-listed for $769,000 as a short sale, and soon after sold for $780,000!

One thing to know about making an offer on a short sale is that your offer may take weeks or even months to get a response from the bank. If the seller and the listing agent have done their job, and submitted a complete short sale package to the lender prior to listing the home, this time period should be shortened. If the seller and the listing agent have not contacted the bank and have not submitted a short sale package, I would be wary of wasting your time with an offer.

A short sale can be a beneficial situation for every one involved. The seller will be getting out from under a payment that he or she can no longer afford, the buyer may be purchasing the home below the current value, and the bank will not have to foreclose on the owner.

The down side to a short sale is that the seller will be damaging their credit score and the bank will be loosing money on the loan discount. Another possibility with short sales is that after a long wait for lender approval, your offer may be declined, and you will have wasted valuable time in this buyers market.

 Here is Wikipedias definition of a short sale:

Short sale (real estate)

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 This article needs additional citations for verification. Please help improve this article by adding reliable references. Unsourced material may be challenged and removed. (September 2008)

In real estate, a short sale is a sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold.[1] In a short sale, the bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor. This negotiation is all done through communication with a bank’s Loss mitigation or Workout department. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender, sometimes (but not always) in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale. Many Short Sales leave a deficiency balance for which the Mortgagor / Borrower is still liable. In 99% of all cases it is not a settlement-in-full. A deficiency balance will remain while the mortgage broker, real estate agent / broker, loan officers, title and closing agents retain their profit. No regulatory agency governs this hybrid transaction.

Extenuating circumstances influence whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market and the borrower’s financial situation.

A short sale typically is executed to prevent a home foreclosure. Often a bank will allow a short sale if they believe that it will result in a smaller financial loss than foreclosing. For the home owner, advantages include avoidance of a foreclosure on their credit history and partial control of the monetary deficiency. A short sale is typically faster and less expensive than a foreclosure. In short, a short sale is nothing more than negotiating with lien holders a payoff for less than what they are owed, or rather a sale of a debt, generally on a piece of real estate, short of the full debt amount. It does not extinguish the remaining balance unless settlement is clearly indicated on the acceptance of offer.

Short sales are common in standard business transactions in recognition that creditors are not doing debtors a favor but, rather, engaging in a business transaction when extending credit. When it makes no business sense or is economically not feasible to retain an asset, businesses default on their loans (called bonds). It is not uncommon for business bonds to trade on the after-market for a small fraction of their face value in realization of the likelihood of these future defaults

July South Lake Tahoe Real Estate Review

July was a smokey month in Lake Tahoe due to the wildfires that were burning throughout California. South Lake Tahoe Real Estate was not exactly “smoking”, but the activity showed  improvements over previous months.

According to the South Lake Tahoe MLS, there were 39 single family homes that closed escrow in July, up from 29 in June.

Out of the 39 closed escrows, seven houses were bank owned foreclosures, and one house was a short sale.

The average sales price was $479,392 and the median sales price was $395,000.

The lowest priced home was a foreclosure at 2133 Helen Ave.,which was a fixer-upper which sold for $175,000. The highest priced sold home was 1890 Meadow Vale Dr. which was a newer home that sold for $1,150,000.

There were 33 new single family escrows reported on the MLS that were opened in July. Out of the 33 new escrows, five are foreclosures and six are short sales.

The average home price for the new escrows is $549,309, and the median home price is $452,000.

The least expensive home is 3404 Freel Street for $174,900, and the most expensive new escrow in July is 550 Lucerne Way in the Tahoe Keys.

Condos in South Lake Tahoe did not show much improvement in July. There were three condos were sold, and four condos that went into escrow. 1390 Ski Run unit #6 was the only condo that was reported as a short sale.

Activity on lots in South Lake Tahoe was as slow as condos with only three sold and one new escrow. Lots with allocations in the county have lost the value of their allocations. Allocations used to increase the value of the lot up to $90,0000. Now the wait for a El Dorado County Building Allocation can be less than one year!

Buyers for Real Estate in South Lake Tahoe are continuing to target foreclosures, short sales, and under priced homes. This just magnifies the importance of sellers pricing their homes correctly to get them sold in this buyers market.

Foreclosures In South Lake Tahoe

                               Here is a Current list of Active Foreclosures on the South Lake Tahoe MLS.

                                                                                         2638 Lipan

864 San Fransisco Ave. $425,000

2638 Lipan St. $479,900                                                    

1980 Mojave St. $244,900

733 Zuni St. $340,000

7872 Tamarack Ave. $189,900

2734 Knox Ave. $250,000

3705 Montreal Rd. $360,000

3514 Blackwood Rd. $452,000

3475 S. Upper Truckee Rd. $349,900 in escrow

2737 Springwood Dr. $385,000 in escrow

2508 Cold Creek Trail $429,900 in escrow

2477 Lupine Trail $462,500 in escrow

2682 William Ave. $199,000 in escrow

2587 Kubel Ave. $249,900 in escrow

1027 Stockton Ave. $254,900 in escrow

2645 Knox Ave. $294,750 in escrow

2255 Inverness Dr., Tahoe Keys $399,000 in escrow

2244 Inverness Dr., Tahoe Keys $409,000 in escrow

2133 Helen Ave. $190,000 in escrow

Short Sales In South Lake Tahoe

Short sales are becoming more and more common on the South Lake Tahoe MLS. A short sale is when a homeowner owes more on their home than the home is worth, but their bank agrees to accept less than what is owed as “payment in full” to avoid the foreclosure process.

A lender may be willing to cut their losses with a short sale to avoid the costly and time-intensive foreclosure process.  Most lenders must to have five to six times the value of their foreclosure properties on their books. This further reduces the amount of money the lender can loan out and earn interest on. Lenders would rather have that money working for them!

In order for a homeowner to qualify for a short sale they must prove that they are having a legitimate hardship. The lender will want to see a letter stating what the  hardship is. The homeowner must have little or no equity in the home, usually less than 8%. Some lenders will require the homeowner to be behind on payments. Other items lenders require are the last two months bank statements on all accounts, pay check stubs, authorization to release information, and the last two years tax returns.

When purchasing a short sale in South Lake Tahoe there are some important things to remember. Once your offer is accepted by the seller, the bank could take weeks to respond. This can be very frustrating for buyers, not knowing if they will be getting the house. In most cases, short sales will be “as is” sales. The sellers probably will not have enough money to make any repairs that the buyers may ask for, and the lenders usually will not do any work. In many cases, the  hassles can be worth it financially!

It is important to be knowledgeable about the short sale process so that when you write an offer on one you know what to expect. There are some great short sales and foreclosures on the South Lake Tahoe MLS. Take a look at my website bjohnson.idxcentral.net/blog to search the South Lake Tahoe MLS for some of these deals!

May South Lake Tahoe Real Estate Review

Real Estate in South Lake Tahoe traditionally picks up speed when the weather warms up, and May was no exception. According to the South Lake Tahoe MLS, there were 31 single family home sales in May, up from 20 in April.

Foreclosure sales were down again from 11 in March to 4 in April, and only 2 in May. After talking with a couple of foreclosure listing agents in my office, they both agree that the foreclosure inventory will continue to decrease through the summer. The decrease in foreclosure listings should help the existing inventory get more attention from home buyers.

There were 37 single family houses that went into escrow on the South Lake Tahoe MLS in May. The highest priced house is 9120 South Lane for $9,950,000 in Meeks Bay. There were a couple of houses that were priced very attractively, 3504 Rocky Point(foreclosure) and 649 Seneca (my listing), that I am not surprised went into escrow quickly.

Lots in South Lake Tahoe have remained about the same as last month. There were 4 lots that sold, and 3 that went into escrow in May. There were two lots with allocations that sold for under $100,000!

Condos in South Lake Tahoe saw the most activity in May that they have seen all year. There were 7 closed condo sales, and 6 more that went into escrow.

Over all the South Lake Tahoe Real Estate market is still not what it was in the last few years, but is continuing to show improvements. Could this be the bottom? Only time will tell…

April South Lake Tahoe Real Estate Review

April home sales in South Lake Tahoe saw a significant decline compared to March home sales. There were 20 single family homes in South Lake Tahoe that were sold in April, compared to 34 homes sold in March. Out of the 20 sold homes, only 4 were foreclosures compared to 11 last month.

The reason that there were only 4 foreclosures sold in March is because the amount of foreclosures coming on the market in South Lake Tahoe has been going down. There are a lot of buyers targeting these foreclosures, and  the reduction in foreclosure inventory may be one of the  reasons for the reduction in home sales in April.

The lease expensive home sale in April was a foreclosure at 1667 Choctaw which sold for $235,000. On the upper end of sales was 1323 Keller, which sold for $1,200,000.

According to the South Lake Tahoe MLS, there were 25 houses that went into escrow in April, 5 of which are foreclosures. There are now 51 single family homes in escrow in South Lake Tahoe.

Lot sales are still stagnant in South Lake Tahoe.  There was only one lot sold in April, which was in the Angora fire area. There were three lots that went into escrow, including a great view lot on Cornice for $349,000.

April activity on Condos in South Lake Tahoe was similar to March. There were only two condos sold, and four condos went into escrow.

I expect the South Lake Tahoe Real Estate market to show a slight improvement in May. Conventional loan interest rates have just dropped back down to around 6%, and summer is just around the corner.

There are a lot of home buyers that are on the fence about buying. These home buyers are trying to time the market, and to buy at the “exact bottom”. The problem with this strategy is that by the time the signs of the recovery of the real estate market are there, such as increasing pendings and sales, those buyers will have missed the bottom completely!

For all of those buyers out there, think long term!!!