News for Granite Bay, CA - Friday July 10th, 2009 9:41am
Granite Bay Real Estate - Sellers Market or Buyers Rule? Well, maybe not. Not if the property falls under the category of distressed property. Distressed property usually needs far more than a paint job, at least, that's true, or has been up to now in Granite Bay's Homes for Sale market. Property is considered distressed if it has been foreclosed by the lender or the owner is seriously late in making payments or the property is upside down.

In defining a "Sellers Market", we usually find a faster moving inventory with prices generally increasing and the Seller more clearly in control to determine the outcome of any successful effort to purchase. Buyer's tend to pay more (often times more than property might be listed for). Many of the buyers contingencies are either eliminated or greatly reduced. The time for removal of contingencies is shortened.

In a Buyers Market, buyers tend to have greater control of the time frames and also many of the terms and conditions in the contract tend to favor their wants. Sort of a flip of what is found in the "Seller's Markets". In a "Buyer's Market", buyers typically pay less than they might in an active "Seller's Market" and usually have a larger selection of properties to choose from. So what then describes "today's market"? in "today's market" we are seeing the lender in control - with a large number of distressed property sales. Distressed properties being those where the owner is either in default of keeping the mortgage current or has already been foreclosed upon. When a property has been foreclosed by a lender, it is called Real Estate Owned ( REO ). When a property owner wants to sell a property for less than is owed on the property, it is referred to as a Short Sale.

To further describe the difference in distressed properties, in a Short Sale the owner of the property remains the Seller and in the REO, the lender is the new owner and the differences between a short sale and REO can be striking. In the short sale, the lenders key role is to approve taking a loss in the amount owed on the trust deed or the mortgage. When the mortgage is late usually for 3 consecutive pay periods, the lender can file a notice of default. In a short sale, if the owner files documents with the lender explaining the financial distress that is causing the late payment and wants to sell the property, the lender may opt to consider a purchase offer on the property that is short of what is owned combined with the costs of sale. It is a judgment call of the lender since they have the right to file a default notice and if the owner can not correct the default amount, the lender can foreclose. The lender has specific times frames it must follow in this regard. The Buyer as well has a specific amount of time to cure the defaulted payments with any penalties. Lenders have been encouraged by the government to stall the foreclosure process and help slow down the excessive number of foreclosures that have taken place over the last couple years on the defaulting loans. Lenders involved in distressed properties are clearly in charge to determine if they will accept even the highest offer on the property. In the case of short sales, they can either accept writing off the short fall of the outstanding trust deed or opt to continue the foreclosure process.

Of late, lenders are becoming much more realistic in understanding that short sales are costing them less than they would have to write off as a bad asset in a foreclosure. REO's close in the shortest possible time period of property sold in Granite Bay. In short sales, there is most often a serious lag time (often months) before the lender even agrees to the process. Today with the greater influence of government encouraging banks to accept the short sale process sooner rather than later, we will most likely see the short sales process refined and the time frames for approval to be lessened. For more about Buying and Selling Granite Bay Real Estate, visit our website www.TheBollumTeam.com. There will find many tools to guide you in the process.