Trustee's deeds can only be compared to other trustee's deeds due to the fact they are transferred without repair or warranty, including title issues, and occupancy issues.
I do believe that public sites such as Zillow, Trulia and Redfin have their benefits to consumers who are interested in Real Estate.
However, using them to find current home values is not an accurate way to find "Fair Market Value", or "Recent Sold Comparables", (the amount property will sell for with a willing buyer and a willing seller).
Trustee's deeds are on public sites as traditional sales however.....Trustee's Deeds are not typical sales, they are used at the last stage of the Foreclosure process to:
1. Transfer Title to the highest bidder at auction
- Without clear title, {no title police provided to the new buyer}
- Must be a cash purchase
- No inspection contingency
- Taxes and HOA fees due
- No repairs
- No property facts disclosed
- May include occupants that may have a lease in place or tenants that may need to be evicted, undisclosed repairs with no warranty expressed or implied.
2. Transfer Title back to the lender if the property does not sell at auction.
When looking for the value of real estate, many buyers are turning to public real estate sites to find out what other buyers are paying for similar real estate that is for sale. This is a great theory as "Recent Sold Comparables", are what bank hired appraiser use to place a value on property.
The problem is that "recent sold comparables", are inaccurate on public real estate sites, like Zillow because Trustee's Deeds are mixed in with Grant Deeds.
Public sites use Trustee's Deed Recordings as recent sold comparables which confuses consumers who are looking for recent sold comparables to use as a basis for purchasing real estate.
I find this the most difficult issue for consumers to understand as they believe that all sales are equal and "sales", which are really "recordings of transfer deeds", on the public sites are the same as a purchase transaction. Buyers who are searching on public sites for recent sold comparables will not find accurate information. Realtors have access to and pay for recent sold comparables that show the details of the transaction, such as how the property was sold and if any concessions were given to the buyer from the seller.
Here's the problem and if you get nothing else from this post realize this:
-
Trustee's Deeds are transferred and recorded without: Clear Title, meaning that there is no warranty against delinquent unpaid taxes, delinquent HOAfees, liens, repairs, inspections or any of the other precautionary items that go with a standard residential real estate purchase when the California Residential Purchase Agreement is used.
-
Properties that are transferred using a Trustees Deed are less valuable, because properties that are foreclosed upon can have liens, tenants, hidden and undisclosed repairs and that's why they are sold for a lesser amounts.
-
Trustee's Deeds, are completely different from Grant Deeds that transfer property in a Real Estate Transaction where there is a willing and able buyer and a willing and able seller!
In a standard real estate transaction where the California Residential Purchase Agreement is used, the buyer will most likely not have to pay for:
- Delinquent property taxes
- Delinquent homeowners association fees
- Termite report and section one repairs
- Government mandated repairs or lender repairs
All of these things add value to a property and property that is merely transferred without all of these added items when a Trustee's Deed is used make a property that is transferred less valuable than a property that has these items included.
Trustee's Deed Facts- A Trustee's Deed does not include a willing seller. Trustee's deeds are used to transfer title to a new owner who pays cash at a trustee's sale, or to transfer the property back to the lender or bank when a home is foreclosed upon due to non-payment of the note. Then the lender can sell the property and get some of their money back. Trustee's deeds do not even guarantee possession of the property. If there is a tenant in the home, the lease - if there is one, goes with the property and if there is no lease but occupants in the property those tenants may need to be evicted.
In California, when it comes to the foreclosure process, homes that are foreclosed upon due to the owner not making payments, are handled by a trustee who attempts to sells the property at an auction. There is no court involvement in this instance. If the property does not sell at the auction it becomes a "Bank Owned Home" and the property is transferred via a Trustees Deed back to the bank and the trustee's deed is recorded in the county in which the property is located transferring title to the foreclosing beneficiary (Bank), allowing the sale of property to recover their debt.
Trustee's Deeds look like regular sales on Zillow, Trulia, Redfin but with all of the liens, warrent-less condition, and other issues, that reduce the value of these properties making these properties transfer for much less, because they are not standard sales, that a consumer who is using the residential purchase agreement buys property with.
Also, When a Trustee transfers a property to the original lender, any junior lenders are completely wiped out.
Example: Tax Rolls show a first trust deed of $240,000 and a second trust deed of $75,000 both recorded on December 27th, 2006.
Ask a Realtor to find recent sold comparables for you directly from the MLS. How a property is sold is important also. If there were "seller concessions, given to the buyer", the price can seem inflated. Real estate agents pay for and belong to the MLS and have access to the most accurate information.
Jane Grant Southwest Real Estate Telephone: 866 621-0155
FACEBOOK, LinkedIN, U-Tube, Twitter, Trulia
Contact me for information regarding Real Estate in Southwest Riverside County. My office is in Temecula, and I specialize in selling homes in the Murrieta and Temecula, Wine County, De Luz, La Cresta, Bear Creek, Murrieta, Wildomar and Menifee, Canyon Lake, Canyon Hills, Lake Elsinore areas! Anywhere in Southwest Riverside County and North San Diego County.
Broker of Record- DRE 01109492
Southwest Real Estate, Inc.
Telephone: 866 621-0155
Temecula Homes For Sale
Riverside County Homes For Sale
Comments(15)