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South Lake Tahoe Short Sales: A Primer for Investors (Pt Five)

February 22nd, 2010 categories: For Buyers, For Sellers, Foreclosures, Lake Tahoe Real Estate, South Lake Tahoe Statistics, South Lake Tahoe, CA, short sales

South Lake Tahoe Short Sales: The OfferThe Offering Strategy really depends on the property involved.

This is the fifth of an eight-part series on short sales. Think of it as coming from the point of view of the home buyer / investor, although the short sale process is the same for the South Lake Tahoe seller as well.

The definition of a short sale is simply this: it is the sale of real property at a price that is below the amount owned on the property.

It should be noted to all potential South Lake Tahoe buyers that the short sale process varies somewhat from lender to lender, sometimes substantially; that a successful short sale purchase can be a tedious, uncertain, time consuming process. Not all offers on short sale properties meet with success, to be certain, and it is not uncommon here in South Lake Tahoe to find multiple offers on attractive, reasonably priced short sale homes.

(current South Lake Tahoe, CA short sale summary and statistics here)

Step One: The Property Evaluation (here)
Step Two: The Short Sale Application (here)
Step Three: The Hardship Letter (here)
Step Four: The Short Sale Package (here)
Step Six: The Lender's Short Sale Decision (here)
Step Seven: Negotiating with the Lender (here)
Step Eight: The Closing (here)

 Part Five : The Short Sale Offer and Purchase Agreement

We counsel our buyer investors who want to make an offer on a South Lake Tahoe short sale to focus on their offering strategy primarily, and then secondarily on the offer agreement itself.

Offer Strategy:
We certainly know what has happened statistically with short sales prior to today, but the truth is the best offering strategy is always based on the situation of a particular property itself, rather than any trend or condition that has happened previously.

Knowing the trends and conditions is nevertheless helpful to making the best informed, most comfortable buying position possible, but we use such as a guide, rather than a rule. We ask our buyers to consider the same.

In general, here's a few things we ask our buyers to consider before offering on a South Lake Tahoe short sale (see chart in article here):

  • The average difference between the original list price and the median sold price of all South Lake Tahoe short sales in the last 180 days is $129,610 (24.6%)
  • The difference in the median sold price of a short sale is $10,500 lower than that of a sale of a non-distressed house (2.8%).
  • The difference in the average sold price of a short sale is $78,813 lower than that of a non-distressed house (16.5%)
  • The price reduction off original list price is $38,505 more than that off a non-distressed house (42.3%)
  • The short sales takes 83 more days to sell
  • The short sale is $38 lower in price per square foot.
  • The short sale is 28 square feet larger.
  • The shot sale is 3 years newer.

The Short Sale agreement isn't much different that our usual agreementThe Agreement:
Usually the short sale purchase agreement is the same as the usual real estate purchase agreement that is used here in South Lake Tahoe. Sometimes however a particular lender may have their own "approved" agreement that they use. In any event, the major components of any agreement are:

  • Signatures by competent parties
  • Contract in concert with current state laws
  • Legal description of property
  • List of items to be included or excluded from the sale
  • Inspection contingencies and defined deadlines for them
  • Title research and discovery of possible liens or encumbrances
  • Document delivery schedule and the written obligations of both parties

Step One: The Property Evaluation (here)
Step Two: The Short Sale Application (here)
Step Three: The Hardship Letter (here)
Step Four: The Short Sale Package (here)
Step Six: The Lender's Short Sale Decision (here)
Step Seven: Negotiating with the Lender (here)
Step Eight: The Closing (here)

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This entry was posted on Monday, February 22nd, 2010 at 1:57 pm and is filed under For Buyers, For Sellers, Foreclosures, Lake Tahoe Real Estate, South Lake Tahoe Statistics, South Lake Tahoe, CA, short sales. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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