What is a Foreclosure?

In today's market, buyers are looking for the "killer deal", and I am constantly finding clients who want to purchase a home that is a "foreclosure".
I understand their point of view and respect the fact that they are looking out for their best interest or at least they think they are. One of the problems with this strategy arises from the fact that many people don't clearly understand what a foreclosure is, they use the term to refer to everything from a Short Sale to a property sold at Auction or an REO.
So what are the differences?
A foreclosure is a legal process in which, real property is sold to satisfy a public or private debt for which the real property has been pledged as security.Usually this happens against the wishes of the owner.
This process begins with the Notice of Default (and it varies according to local state law) but if not resolved it will end in what is called at a Trustee Sale (also called Auction)
When the property ends up belonging to the holder of the note (lender) it is called an REO (real Estate Owned). And many times it is then given to a Listing agent to be put on the market for sale.
The fact that a home might be in a foreclosure process does not necesarily mean it is currently on the market or that it will be sometime soon, in many cases, homeowner solve their delinquencies and that is the end of it.
It is also important to point out that depending on whether you are buying a property at a Trustee Sale, an REO, Short Sale etc, make sure that you are working with reputable agents that can guide you through the process, the are very different from each other and each has its own time-lines, requirements and implications, it is always important to know what you are getting yourself into before you begin.
Lastly I mentioned the Short Sale. Basically it is when your property is worth less than the total mortgage you owe on it. If you want to sell your home in this situation it will have to be approved by the lenders and there might be a tax implication for the seller of such property.

There is a lot to talk about on the subject if you have any questions contact me.

Have a GREAT weekend!

Rina Podolsky
rina@my858realtor.com
www.my858realtor.com

Remember if you are thinking of buying or selling a home I would like to apply for the job!

Carmel Valley Real Estate Market February-March Snapshot

Here is the activity in the 92130 area from February 09, 2009 to March 09, 2009.

Active Listings

• Total- 291
• Attached-86
• Detached-205

Pending Listings

• Total-67
• Attached-36
• Detached-31

Sold

• Total-25
• Attached-8
• Detached-17

HIGHEST

• Sale Price : $3,400,000
• Sale Price per Square Foot: $504
• Days On Market: 354

LOWEST

• Sale Price: $223,500
• Sale Price per Square Foot: $246.48
• Days on Market: 0

AVERAGE

• Sale Price: $747,906
• Price per Square foot: $350.57
• Day on Market: 55

New Listings : 108

FORECLOSURE ACTIVITY

There are 155 registered filings with the county out of which

• 25 Auction stage
• 101 Preforeclosure stage
• 29 Bank Owned Properties

Making sense of this numbers requires some in depth analysis. It is important to keep in mind that part of the spike in preforeclosed properties has something to do with the fact that due to the current process to renegotiate a loan requires the property owner to be in default on their mortgage. This also helps when the homeowner is considering selling their home but will need to be approved for a short sale.

It is interesting to see that:

-Out of the 25 properties in the Auction stage of the process, only 6 are detached properties, 1 appears as recently sold and 2 are pending sales.

-Out of the 29 Bank Owned properties, only 8 are detached properties.

-Out of the 101 preforeclosed properties exactly half of them are detached, 6 appear as currently pending.

-Out of the 29 Bank Owned Properties 4 are already pending 2 have recently Sold and at least 15 are not being listed at this point.

The fact that the current inventory has risen can be explained in part because of the natural cycle of the market, as we approach spring more people will list their house for sale. But it is also important to note that there has been a slight decline in the number of properties sold as compared with the 2 previous months. I believe this is due in part to tough lending practices that kept getting tighter. All the recent changes and incentives enacted by congress in recent weeks will be reflected in future closings, we can actually see some positive changes in the number of pending properties that actually went up slightly from previous months.

One more interesting fact that is hard to get data on is the fact that some of the latest sales from what I have seen myself and heard from many top agents, have been multiple offer negotiations.

Please feel free to contact me if you have any questions or if you would like to buy or sell a property in the San Diego area, I will be happy to help.

Best,

Rina Podolsky

858-692-1244

Note: All data has been taken from Sandicor MLS deemed reliable but not guaranteed by author