Why so much Short Sale info on this San Francisco blog?

Why are we talking about Short Sales so much on this San Francisco Real Estate blog?

Short Sales appear to be more advantageous to just about everyone involved vs. Foreclosure. We've got a top 10 reasons on our web site, but here are a couple of main reasons we ALL should care about:

1. Short Sales tend to be better for your neighbors:
* in a Condo building the sooner you can get a HOA dues paying member in, the better for everyone. Yes Short Sales take a long time, but have you read my "Shadow Inventory" article yet? And did you know you can do a Short Sale without making one late payment (a new rule at many banks like BofA). A great idea if you want to protect your credit as much as possible.
* in Foreclosure junior liens are wiped out. I've heard varying opinions on this, but my understanding is the REO lender does not need to make up for the foreclosed owner's missed payments.
* just about anything can be negotiated in a Short Sale, including getting the new buyer or the lender to pay for some or all of the missed HOA payments.
* in Single Family homes you avoid empty homes that could attract crime and vandalism

2. Short Sales protect values FAR better than Foreclosures.
* per the BofA Portfolio Manager, Short Sales net the bank 12% to 20% more on average than Foreclosures. This is due almost entirely to what a Short Sale sells for vs. a Foreclosure. Part of the value difference are the damage often caused by out going home owners or by vandals to vacant homes.

There are many advantages for the Owner/Seller... the above two talk about advantages to the rest of San Francisco home owners. We ought to encourage Short Sales over Foreclosures when ever it makes sense.

More Short Sale info here:
Short Sale FAQ
Short Sale Advantages
Side by Side comparison Short Sale vs. Foreclosure

Short Sales in California - Schwarzenegger's take

Schwarzenegger says "I'll be back", or rather that the Legislature needs to bring back a new bill that extends Debt forgiveness on Short Sales. As one article put it "foreclosure city" if Californians are made to pay taxes on "phantom income". The Fed has the 2007 Mortgage Debt Relief Act which is good through 2012, so you're good on your Federal taxes if you qualify. But currently some CPA's are recommending people who sold "short" should file an extension on April 15th and hope that Schwarzenegger and the Legislature get it together before the final October deadline when you have to file.

Here's the paragraph from the Schwarzenegger press release letter:

I asked you to send me legislation that protects homeowners from being taxed on “short sales” when they are forced to sell their home for less than they owe on their mortgage. Instead you are sending me a bill that uses these homeowners as leverage to increase tax penalties for businesses. Send me a clean bill that protects homeowners from this tax immediately, and I will sign it.

Apparently the provision Schwarzenegger so detests is one where companies or individuals who file for refunds fraudulently would be penalized if discovered. Gee, sounds onerous. Thanks Governator for holding up a much needed law because an included law irks you.

Also in the press release is his request for an extension of the $10,000 new home tax credit. His belief is new housing should be built which puts construction workers back to work. I don't know much about the rest of the State's real estate markets, but I don't see how California really needs more new homes when so many sit empty due to foreclosure. But California government completely lost at sea.... what else is new?

3 tips for delaying foreclosure

Need more time to get that Short Sale to go through? Or to come up with the money to get current on your loan? 3 tips for delaying foreclosure video:


The "Ask for the note" strategy is being billed by some as a way to prove the lender doesn't even own your home. As always, if it sounds too good to be true, it is. If you wonder out loud "why isn't everyone doing this" it's probably because it isn't true and doesn't work.

Also, "remind the bank" that they lose 30% more in a foreclosure vs. a Short sale is dumb. This is one EVERYONE does ALL OF THE TIME. If you say it too, they'll probably hold the phone 3 feet from their ear and not bother to listen to what you really need to talk about.

Finally, these are delaying tactics. They won't stop foreclosure.

One tip from us.... print out your credit reports and scores NOW when your credit is still good. You'll be able to prove to future landlords, employers and others that you were a good credit risk until you got caught up in a bad investment. www.AnnualCreditReport.com is the government's site. Don't use the ones advertised on TV unless you want to be sold a bill of goods and spammed relentlessly.

2010 "the year of the short sale"

Jim Klinge or "Jim the Realtor" in San Diego is one of my favorite real estate bloggers at www.bubbleinfo.com. In this Financial Times article he says ".... 2010 will be the year of the short sale".

The article goes on to say that "Wells Fargo is holding seminars to teach real-estate brokers how to conduct short sales. Citigroup created a unit to expedite short sales..." and "BofA has hired additional staff to handle the increased volume, which is running at about double the level of a year ago. “Short sales are growing faster than REOs [real estate owned transactions] and that’s a new development,” said Matt Vernon, a BofA executive recently named to a new position of overseeing short sales."

I think the above all remains to be seen since the first part of Jim the Realtor's quote was "...2009 was the year of the loan modification" and frankly while there were all kinds of programs and efforts, loan mods have largely been colossal failures. But that's for another post.

Ritz Carlton rental - same stack as Short Sale

San Francisco's Ritz Carlton at 690 Market - one rental, one Short Sale.

Yesterday I wrote about the new Short Sale listing at one of San Francisco's most prestigious addresses - 690 Market #2201 asking $1,588,000.

Today I got an email from a colleague advertising #2301 asking $6,900 in rent.

According to the NYTimes Buy vs. Rent tool the unit would need to sell for $1.1 million for Buying to be better than renting within 15 years with a 5% interest rate. Those $2,425 HOA dues are probably the reason.

Short Sale at Ritz Carlton San Francisco

690 Market St #2201, San Francisco - The Ritz Carlton, San Francisco with a $1,588,000 Short Sale.


Per tax records it sold for $2,173,000 in December 2007. For over a year now they've been trying to sell it at lower and lower prices... $2.295M when they started, and $1.899M for about a month before it was taken off the MLS. But don't get too caught up in the price... if you can't afford the $2,425 monthly HOA fee don't bother :)

Foreclosures Alternatives Consultant

Short Sales in San Francisco, a Foreclosure Alternative.

I don't give too much credit to designations, but by earning the "Foreclosure Alternatives Consultant" badge below I'm just letting people know of one area I'm focused on. I can't help much with loan modifications, or deed in lieu of foreclosure, or other foreclosure alternatives, but I can help you with a San Francisco Short Sale (selling your home with your lender(s) agreement to take a loss because the sales proceeds won't pay for the loan and all transaction costs.

For more info check out my site's San Francisco Short Sale FAQ and San Francisco Short Sales Advantages pages.

311 Marina Blvd - video walk thru

Not my best video effort.... but pause or go slowly to see various rooms within 311 Marina Blvd. The biggest key here - NO YARD. Notice on the ground floor where the car is parked outside - that's where a yard would normally be found


When I was there, there seemed to be buyers chomping at the bit. But personally I'd be wary of taking this project on without having a yard.

Dear Tishman/Infinity - PLEASE take my name off your list

Oh wait, I didn't sell one unit at The Infinity, so my name isn't on this list. Phew!


San Francisco's Infinity - two high rise condo towers and a "tree top" building - are now reporting over 600 sold condos at 301 Main St (365 units), 333 Main St (66 units), 338 Spear St (285 units), a total of 716 units.... so at least 84% sold out.

Unfortunately 715 of the 716 appear to be under water already. The one that isn't under water is 301 Main St #9E because it's been re-sold as a Short Sale.... from $867,000 to $607,000 or a 30% drop in 18 months.

So WHY on earth did anyone buy at the Infinity when they saw this exact thing happen at the Beacon, The Palms, The Watermark and on and on?

Apparently when I wrote 1 year ago about my "new car theory", this past year everyone thought that some how the Infinity would be different. Unfortunately, as soon as you drive ANY new car off the lot it depreciates in value. Tomorrow, the Infinity will be a used car. So why not wait and buy a re-sale?

Speaking of resales, here is 1 in each of the 3 Infinity buildings:

301 Main St #19A - resale at $835k in Oct '09 - meanwhile per the SFGov property tax site the tax basis is $897,531 which is what I think it must have sold for 9 months earlier in Jan '09. That's a 7% drop AFTER the market had already crashed in late 2008.

333 Main #7B - resale in Nov '09 at $760,000 - original sale based on tax records appears to be $819,000 back in March '08. If that's the case I think the seller got lucky, and the buyer bought too "new" of a car, er, condo.

338 Spear St #5D - resale Dec '09 at $815,000 - original sale April '09 was $795,000. Good news right? Up $20,000... but the original buyer probably spent close to $50,000 to sell it, and not including their original closing costs realized a $30,000 loss, NOT a $20k gain. Plus add 8 months of $754 HOA dues and property taxes and my guess is that it probably cost the original buyer close to $10,000 per month to live in their "new car" condo.

Meanwhile, 301 Main #9E and it's 30% drop Short Sale in Dec '09 is more like it. A 30% drop is about what I expect for all Infinity units, including the above re-sales, if they try to re-sell again anytime in the next couple of years. Too bad they didn't buy then... when I hope to have my name WAY UP that list.

If you need to Short Sell your condo - please use the Short Sale Request Form for a free evaluation of your situation and likely success of Short Selling.

311 Marina Blvd - $1.8 million Short Sale

Short Sales in San Francisco are moving up in price. 311 Marina Blvd with what appears to be over $3 million in loans (not $3.5 as I was guessing in the below video), hit the San Francisco MLS as a Short Sale asking $1.8 million. Video walk through to come.
This just a peak at the location and exterior. Pardon the verbal mistakes