Pacita Dimacali

When I bought my first home, the sage advice at that time is that my house payment should not be more than 1/3 of my salary. I must admit, it was manageable.

Years later, on another home, my payments were half my salary. And that was a real struggle. It gave rise to being "house rich but cash poor."

So you should determine what your lifestyle would be if half your salary goes towards a house (factoring in your tax deductions). What can you give up, what can you live with? Look at what your monthly payments would be --- is it do-able? Will you still be able to build up a savings as a reserve account for emergencies, including repairs to the house?

Good luck.... - Sat Nov 8 2008, 20:36

There are so many things you can negotiate between buyer and seller. Inspections, city/transfer taxes, government compliance, closing costs, etc.

With REOs, however, there's very little negotiating room, since most REOs would be AS IS sales. Typically, there would no inspections and other disclosures. So the onus is on the buyer. One REO specified that they would agree to have a pest inspection "ordered" (but not paid for by the bank),and if active termite inspection is found, the bank will pay to treat (spray) the area for a cost acceptable to the seller (bank).

Some REO Banks will pay for title insurance if the escrow is opened at the bank's preferred title company.

You cannot "have" the seller pay for anything...you can request, but cannot mandate. You can negotiate, just as the other party can choose not to grant your request. - Sat Nov 8 2008, 20:28

When you say you have a buyer, are you handling the short sale yourself? If so, why? The lender/banik will assume the responsibility for selling expenses including commissions, back taxes, etc. but they will have to approve the short sale, and that will take time. Although you as the seller may accept an offer, if it doesn't meet the bank's requirements, they can turn that offer down.

Have you already received a notice of default, and when? The clock starts ticking from that moment

Notice of Default. Foreclosure proceedings start with a Notice of Default (NOD). The document is recorded at the request of the lender by the trustee and is recorded in the county in which the property is located. The recording of Notice of Default gives "Constructive Notice" to the public.

After the recording of the Notice of Default, in the state of California, the borrower and junior lien holders are given proper notification and the borrower has 90 days to bring their account current. This period is referred to as the Reinstatement Period.

Notice of Trustee Sale. If the borrower does not reinstate their account within the 90 day period, the lender will authorize and instruct the Trustee to record the Notice of Trustee Sale (TS)

5 Business Days Before the Sale Date. Right to Reinstate expires.

After 21 days of the recording of the NOS, a foreclosure sale can take place at public auction. The property may be sold to a third party bidder or revert back to the lender for a specified amount. - Thu Nov 6 2008, 23:21

Writing a description of a house is difficult so listing agent may use words that may mean the same, but are different so as not to be repetitious. Good condition, average, well-maintained probably mean the same.

So if a property is described as "average" it probably means that it is like many other homes of that age, that are maintained properly. What makes a property well-maintained? For starters, if there are no signs of cracks or peeling paint. No broken windows. Yard has grass and is green.

If it had gone extensive renovation and upgrades, it will probably be described as being in great or superior condition as opposed to a similar house that has not been improved in the same way. - Thu Nov 6 2008, 23:11

Believe it or not, it sold for $42K, and it closed escrow on Oct. 28, 2008.

The lender foreclosed on this property for $279K in 2006. How much this property will appreciate is a matter of time and how the area develops. But at $42K, this appears to be a good deal for the buyer. How much can one spend building a house like this?

Good luck with your search and may you find a good deal, too! - Thu Nov 6 2008, 22:55