Here’s your proof: two great offers on Columbus, it is now in escrow.  Two offers from on two different homes that are outstanding values for my buyers and now…… (drum roll, please)

5022 Reynard in Glendale!  At $449,000 this should get a lot of attention.  It is completely remodeled with lots of style and soul and it is on a quiet cul-de-sac located high above Foothill Blvd off of Lowell.

I’ll be open Sunday, 1 – 5 PM.

We're sorry, but we couldn't find MLS # 12159299 in our database. This property may be a new listing or possibly taken off the market. Please check back again.

Part of an ongoing video series where Glendale real estate agent Kendyl Young answers a home seller’s frequently asked questions.

I want FREE Updates of Homes Sellers Frequently Asked Questions (FAQ)

Previous Home Seller’s FAQ

• How Long Will It Take to Sell My Glendale Home?
• Can the Buyer of my Glendale Home get a Loan?
• Should I Sell my Home First or Buy First?

What is a short sale?

A short sale means that the homeowner can’t sell the home for enough money to pay off the bank. Therefore, the bank must agree to take less money than they are owed – or foreclose on the property

Why would the bank do this?

Often, it is less expensive for the bank to accept a short sale rather than to foreclose. A foreclosure takes longer (and time is money), the property is often trashed by the departing occupant and the home is ultimately sold to a wholesale buyer at a deep discount.

That being said, it is never a sure thing for a bank to authorize a short sale. All parties involved have to convince the bank that

1. The home owner will walk away an d let the bank foreclose if they don’t get short pay approval
2. The prospective buyer is qualified and bone fide
3. The offer is the best the bank will likely see

It often takes a bank 2-4 months to approve a short sale.

Why bother buying a short sale?

There are too few homes on the market to ignore short sales all together.  The home has often been neglected or has major renovation that is incomplete. There is often, though not always, one major factor inhibiting it’s potential resale value such as small yard, poor location or hard to fix floor plan problems.

However, there are gems along the way and a smart buyer who has taken the time to learn the inventory can really scoop a deal.

How do I find a short pay property?

There is the hard way and then there is the easy way. The easy way is to find an agent who has short sale experience and ask him or her to notify you of short sales on the MLS. The more specific you are about area the better results you are likely to get from the agent.

The hard way takes a lot of time and dedication on your part, but is likely to lead to better results in the long run. There are a number of paid subscription services that will tell you what homes are in default on their payments. This means that the homeowner has missed some mortgage payments but hasn’t been foreclosed on. These homes are your prime candidates for a short sale.  However, since they are not listed, you will need to do all the legwork to find out what the seller will do and to help them get qualified to get short sale approval.

Now I’ve found it, what do I do?

Get a pro to help you.  The next step is not for the novice and I strongly urge you to move forward with an agent experienced with short sales or an attorney. Not all home owners are going to qualify for a short sale and you must determine, first, if the home you want is one on which the bank will negotiate.

Do the research. But, let’s assume that it is. Have your professional determine how much is owed to one or more banks. This will tell you what you can offer. For example, if there are 2 banks, you’ll probably deal with the second bank. If the first bank is owed $500,000 and the second is owed $100,000, you know the second will not approve anything under $500,000 – they will be wiped out.

Write an offer.  Next you will submit a written offer. Include a strongly worded pre-approval letter from your lender and a copy of a decent earnest money deposit check. You will submit it to the seller first, to get their approval, but the real approval comes from the bank. Once the seller signs the offer have your agent submit the offer, the pre-approval letter, copy of the earnest money check and a list of comparable sales that supports your offer. Remember, the bank needs to understand that your offer is a better deal than going through a foreclosure.

Give them a deadline.  If you don’t, they will linger forever. I’ve had banks take up to 8 weeks to approve a short sale and it was sheer hell on everyone. The banks seem a little smarter this time around, but I make sure that the deadline is clearly communicated and that my buyer is truly willing to walk away after the deadline. I typically give banks 2 weeks, but every situation is unique.

There you go.  I never said it would be easy, but it is possible.  Like any good deal, you need to do the legwork and be patient.

Good Luck!

My regulars know that I have been playing “What’s my Price” on this cute Glendale home for sale.

In the original post I told you all how to set a home’s price, and I shared all of the specific information I used for this Northwest Glendale home.

You all took a survey and I posted the results: 42%  felt the sales price would be between $675,000 and $700,000.

The sellers and I sat down with the results and the information and chose a pricing strategy designed to overcome the buyer’s fear of a short sale.  We also wanted the potential buyer to focus on the amazing backyard and prime location and less on the condition of the home.

The sellers chose an event price strategy- $599,000, and I immediately started helping buyers and agents understand our strategy and the facts we used to establish value.

Did it sell?

It was a whirlwind 10 days.  While I knew that 1446 Cleveland was a very desirable home, even I was surprised by how popular the home became!  We received offers almost immediately, with entreaties to stop marketing the home and accept the offer right away.

Event pricing is becoming a more common price strategy.  Here are some of the best practices that I observe in great buyer’s agents:

1. Call the listing agent to find out the ideal scenario for the seller
2. Give the listing agent a brief statement that tells why their buyer is best suited to that scenario (NOT, “my buyer is well qualified”.  That is a given)
3. Find out what the listing agent will and will not do and when
4. Follow up with the listing agent to see if there are any changes

That’s nice.  Did it sell?!

Opps, sorry.  I was distracted.  Yes!  In the end we received 10 offers, a few below list, many within $5k of list and a few were a lot higher than list.

The buyers that came in with the higher offers were all very motivated and knowledgable about recent sales in the area.  They understood the value this house represented to them and they made offers accordingly.

The terrible truth is that one buyer is really happy and several more very disappointed.

But wait! You didn’t tell me how much!

I really can’t do that until we close escrow. If everything goes well we will close escrow in about three to four months- but a lot can change in that time period.

Stay tuned to this Bat Channel and I will update you whenever something significant happens.

Well, keep in mind, the game was about picking the SALES price- not the list price.

Last week I gave you the results.  42% of respondents thought the sales price would be closer to $700,000- that’s amazing and awesome! And, if this was an equity sale (not short sale or bank foreclosure) I would totally recommend listing the home near that price.

However… this is a short sale and buyers have heard negative stories about these types of transactions.

My listing needs to be irresistible.

So, I present to you, 1446 Cleveland.

Simply Irresistible.
Situated just below Kenneth Rd, this high style home is being offered at an amazing price. The dramatic living room features high ceilings, batch elder fireplace and large picture window. Both master and main bath are remodeled and the generous family room leads to an entertainer’s dream backyard with patio, lawn and beautiful pool. Central AC and copper plumbing are also featured. With over 1900 legal SF per the owner, on a 9500 sf lot, this is a home that will turn heads.

Offered at $599,000.  Open House October 23, 2-5 PM

This is an outstanding opportunity and there is the real possibility that it will attract offers above the list price.  After all, you all felt the value was considerably higher!  Stay tuned as I keep you guys informed of what happens as the story unfolds.

Will this home get the attention I think it deserves?  Will it get more than one offer?  What will the bank do?  Questions answered as it happens- I can hardly wait.

Show of hands, who thinks pricing a home is easy? Who thinks it is only something a professional should do? Who thinks Realtors manipulate price for their own selfish gain? It’s ok to raise your hand, no one is looking.

In this Set the Price game, I am going to put YOU in the driver’s seat. I’ll give you the facts on a home that I am putting on the market and the comparables that I used to analyze price.

I want you to consider all the facts and take the survey – what price do you think this home will sell for?

The Chart

This chart sums everything up for easy comparison.  The link below each property image will take you to a full photo album of all the property photos

	1446 Cleveland	1451 Cleveland	1331 Spazier	1342 Cleveland
Link to Photo Set	1446 Cleveland Photos	1451 Cleveland Photos	1331 Spazier Photos	1342 Cleveland Photos
Status	Subject Home	In Escrow	Sold	Sold
Price		$595,000	$670,000	$695,000
Bedrooms	3	2	3	4
Baths	2	1.5	2.5	3
Square Foot	1941	1482	1800	2051
Lot	9420	7860	8200	6550
Features	Pool, family room, master suite, Covered patio and grassy yard	Permitted bonus room off garage, fruit trees	Architectural details, large grassy yard	Pool
Condition	Remodeled baths, updated kitchen, AC	Some updates, but largely original condition.	Complete restoration and remodel. AC	Complete remodel for profit. AC
Location	Just below Kenneth Rd.	Across the street from subject	Several blocks away, slightly less desirable location	One block down from subject
Pluses and minuses	Fabulous curb appeal, fabulous backyard with pool	Needs remodeling. Bonus room is very nice.	Condition is superior, backyard is very plain	Extra bedroom and bath, condition is superior, pool takes up the entire yard

The Subject Property

1446 Cleveland is a stunning English Tudor home located just below Kenneth Rd.  It is filled with architectural detail and has a true Master Suite, Family Room and large yard with pool. This home is a short sale and likely to sell for less than a “normal” sale.

The Comparables

1451 Cleveland is just across the street. This largely original condition home has been well maintained and is light and bright. There is a nice, permitted, bonus room off the garage.This home is in escrow, list price is $595,000 and the sales price could be that or it could be less.

1331 Spazier is chosen because it is similar in size and architectural detail. It is sold at $670,000. This home is restored and remodeled and has a lovely, though plain,  backyard, no pool. The neighborhood is slightly less desirable.

1342 Cleveland is one block below our subject home. It was a foreclosed home that had a complete make over by investors and sold for profit. It sold for $695,000.  It was highly remodeled but lacks a family room and the pool takes up the entire yard.

Survey Says!

So here’s the fun part. Choose the price range that you think reflects the eventual sales price. Remember, the subject home is a short sale, so don’t forget to factor that into your price.

If you are a sci-fi geek- and I know many of you are, you might understand the parallels between Arther Dent from the Hitchhikers Guide to the Galaxy and today’s distressed homeowners.  While I do not claim to be the Distressed Homeowner’s Guide to the Short Sale Process, I can get you started with some huge “Do Not”s.

Do It Yourself

Homeowners that don’t seek out a professional are foolish.  A professional provides options for homeowners specific to their situation and educates them on the different programs available for them.  What kind of profesional?  Avoid any “specialist” that charges an upfront fee or guarantees a result.  A lawyer, mortgage professional or Realtor skilled and experienced in short sales is a good place to start.

Do Nothing 

I also call this “Pulling Ostrich”.  Facing financial hardship is incredibly difficult and it is far easier to close your eyes and hope for a miracle.   However, every week those lotto numbers do not hit, is one week closer to foreclosure and a complete loss of options.  Financial hardship is a little bit like cancer- if you catch it and treat it early enough, your chances for survival are much better.

I’ll Get Around to It

Procrastination is almost worse than denial.  A procrastinator knows they are in trouble, knows they should do something, but assumes there is enough time to do something tomorrow.  The end result is the same- foreclosure and a complete loss of options, but the stress level is far higher then straight up denial.

Not Considering A Short Sale 

The myths and misinformation around short sales is truly astonishing.  Whatever reasons you have for not trying a short sale, they are probably wrong.  A foreclosure is the most damaging event your credit status can encounter – worse than bankruptcy. By avoiding foreclosure, you will likely be able to resume normal borrowing (car loans, credit cards, consumer goods and such) relatively quickly.

Pride over Practical

You are a proactive type.  You are facing your problems square on and you are going to attempt a short sale.  The number one mistake I see is wanting to save your pride and listing the home too high.  Unless you have a small hope of selling high enough to pay off all your loans,  there is no reason for this!  You are simply prolonging a difficult process.

My recent short sale client, Georgette Cooper, agreed to tell her story on video because I thought this could help many others in her situation. I think that if you see her honest sharing you will know that you are not alone, you are not a bad person and there is hope.

It is a fair question.  There are benefits to a buyer when they buy a “regular” or what we now call an “equity” sale.  A non-distressed homeowner has often maintained the home better- both on the surface and “under the hood”, and there are more complete disclosures available to the buyer.  Bank owned and short sale transaction can be very frustrating for the buyer.  In these transaction the bank is the seller, and banks have little regard for what is fair or right for the buyer.  The average homeowner, however, is more likely to respond to a buyer’s concerns.

In fact, all things being equal, today’s buyer would absolutely prefer a regular sale.

And there’s the rub.  All things being equal.  The normal homeowner believes their home is worth MORE than a distressed sale.  So- let’s look at the numbers, shall we?

Since the beginning of this month 18 homes have entered escrow in Glendale.  Of those, 45% (8) were either bank owned (REO) or a short sale.  However, only 12% of the homes on the market are in some sort of distress.  Buyers are buying the distressed homes way more than the normal ones.

So… if you are a normal equity seller and you actually want to sell you can’t ignore the distressed listings.  You are competing with these homes and you must price accordingly.  Your home is worth more if  it is has more upgrades or is in better condition.

Here is the solemn truth.  Only 35% of the homes that come on the market will sell.  The rest will eventually give up.  Price is not the only thing that sells a home… but you can’t ignore the competition.

This is a great article about the tax implications of short sales and foreclosures. You can read the original article HERE. (Hat tip to Tracy King for finding the information)

Over the past few years, millions of Americans have faced the pain of foreclosure, and many are still navigating the frustrating process of short sales to sell their homes. Each ordeal comes with a long list of hardships, but most people ignore tax implications – until the end of tax season. The IRS rules are too complicated to rush it in April before the tax filing deadline, but help is here (and maybe some good news too).