Posted by Carmen Isais
A short sale is, simply put, the sale of a home where the proceeds of the sale are less than the amount still owed on the house. Say a home has a fair market value of $400,000, but the amount owed on the property is $475,000…. should that house go to market the current owners wouldn’t receive enough money from the sale of the home to cover the indebtedness and would therefore be “short” the cash to pay the bank.But, what about Davis short sales?
Where are they?
By large, the short sales and foreclosed properties we have in Yolo county are predominately in the cities of Woodland and West Sacramento. Why this is, is perhaps a matter for debate. In general I can safely say it boils down to resources, both financial and otherwise. I have out of state clients, for instance, who purchased Davis property less than three years ago when the California real estate market was at an all time high. This home was purchased for a child who attends U.C. Davis, but now he has graduated and has moved to Oregon. The Davis home is now vacant and they want to sell. The home was originally purchased for almost $600,000. But, today the property might only resell in the high $400,000.
I break this news to them, and while they are disappointed, they decide to wait. Why? Simply put, they can afford to. The cost to them and their credit outweighs the financial burden of carry two mortgages. This sort of luxury is not very common and in any other case they family would be forced to sell via a short sale.
Now, the above is hardly a thorough explanation of what is happening in the Northern California short sale market, but instead serves as an example of why Davis real estate investing is different.
Do we see short sales in Davis? Yes, in any market short sales and foreclosures occur everywhere. But, due to the very small numbers of these type home sales in Davis, we are unlikely to see Davis home auctions and the like. In real numbers, there were a total of 13 short sales and foreclosed property for sale in Davis last year.
While notices of defaults due occur more often, these situations are usually quickly remedied by a traditional home sale or by the owner’s outside resources.
I receive weekly updated lists of served notices of defaults in Davis, Woodland, and the surrounding area. If you, or someone you know, is interested in learning more about short sales, foreclosures or NOD’s, don’t hesitate in contacting me directly at 530.601.1003.
While our neighbors in Woodland, and West Sacramento have not been as fortunate, the Davis real estate market has yet to see many foreclosures. Last year, nearby areas saw REOs in the hundreds, but Davis had a whopping 13 REO’s and short sales combined in 2007. Why the Davis real estate market is different is the topic of another blog entry.
This top ten list came across my desk from the good people at Realtor Magazine, and I thought it odd that California country living wouldn’t have at least made favorable mention.
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