GINA B. GOOD / PVT Seminar attendees sign in at the short sale real estate course in the foreground while broker Lisa Bond, left, and attorney Monica Centeno chat in the background. Advertisement

Two community short sale seminars were hosted Saturday by real estate professions at the Basin Avenue campus of Great Basin College.

A short sale is selling short of what is owned on the mortgage.

"One of the things we have noticed over the last several months in Pahrump is that our listings have changed dramatically to short sales," said iRealty sales agent and broker Lisa Bond. "We recognize there is a big change in the type of housing inventory. Buyers will probably be dealing with short sales."

Bond explained that in today's market, "You can buy a house for about half of what it costs to build a new house."

That means homeowners who want to sell their homes must work with their banks and mortgage companies to establish their eligibility to sell their home for less than is owed on their notes. In some cases, holders of second mortgages will also consider a short sale.

Monica T. Centeno, who worked in the mortgage industry before becoming an attorney, told seminar attendees that after a foreclosure, a bank has six months to pursue (i.e., sue) a homeowner for what is owed on the mortgage. However, a second mortgage holder has six years to pursue a former homeowner for any deficiency. "That's a long time to be waiting for the other shoe to drop," she said.

"Nobody gets paid in a short sale," said Centeno.

The most important item to write into the contract of a short sale between a homeowner and a mortgage holder is that the financial institution will not come after the homeowner at a later date for the remainder of the mortgage amount that is not covered in the sale of the home.

Bond agreed with Centeno, saying "If you are selling your house for far less than what you owe, as the seller, you will not leave the sale with any money because you are short the amount of money you owe."

There are also considerations such as closing costs to consider.

"Some banks will satisfy the debt, but there could be tax liabilities involved," Centeno said. Home sellers must contact their tax consultant in a short sale to protect themselves.

Centeno answered attendees' questions about bankruptcy home sales, credit scores, assumable loans (there aren't any) and answered questions such as: Must a homeowner have late mortgage payments to qualify for a principle reduction.

"Our goal is to provide information to sellers, buyers and agents," said Bond. "The real estate market is so volatile now ... Agents also need to keep up to date. We are the experts in the community, but as Realtors, we can't go beyond our scope of licensing."

Bond believes the more informed the buyer and seller are, the less confusion there will be surrounding sales of homes in foreclosure and due to bankruptcy.

"You will not get financing for another home until four years after a bankruptcy," said Centeno. "After a foreclosure, you can get financing in five years" if your income qualifies and you have kept current on bills. "A short sale can be valuable," she added. "You can get home financing in just three years after a short sale."

While the short sale process for sellers can take months to complete, giving buyers numerous reasons to back out or just buy another home, Centeno said, "A lot of banks are getting more on board with the process."

Bond works with Cow County Title Co. to keep the business and expertise in the community. She said most people are so attached to their homes, they are not realistic when it comes to its value, or lack thereof, in today's market.

"It doesn't matter what amenities you added," she said. "Your cherry wood cabinets, travertine floors and granite counter tops don't count for much ... You could have all new appliances and every conceivable upgrade, but it just doesn't matter."

Attendees at the seller's seminar were shaking their heads in dismay when Bond told the group of about 20 that "it doesn't make a difference how much money you put into your house." She said landscaping adds no value in an appraisal "because it can die." Rock landscaping, on the other hand, can add to an appraisal because it is considered permanent.

According to Bond, overpricing helps the competition sell a home because it sends interested buyers to other properties and extends the time a home is on the market.

"An overpriced home takes more time to sell and usually sells below market value. An overpriced home won't be appraised at the higher value, which will further delay a sale," said Bond.

In answer to a question about selling the home to a relative, Bond said a short sale "has to be at arm's length, it cannot be sold to a relative, not even when that relative has cash."

Bond has been selling homes in Pahrump since 2003. She teaches the 90-hour real estate pre-licensing class for the state at Great Basin College.