Archive | August, 2011

Short Sale Homes

August 12, 2011

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In this article we will touch on a couple things regarding short sale homes. Some may be looking for information about buying a short sale while others may be looking for information about the condition of short sale homes. First we will talk about buying a short sale; this will be short because we recently wrote an article dedicated to the subject of buying a short sale.

If you are interested in information regarding buying a short sale then follow this link. Buying A Short Sale

Now if you’re wondering more about the general condition of a short sale then you should not be too concerned. These homes are mostly treated the same as any other on the real estate market. One small difference is that in a normal non short sale home transaction any repairs needed would be completed before closing on the property. In a short sale this may not always be the case. It’s typical for the buyer to be issued a credit to complete the repairs themselves instead of the seller finishing the repairs. It’s also not unusual for no credit to be issued and you the buyer will be asked to take on the financial burden of completing any repairs.

Most short sale contracts will include an ‘as-is’ clause shielding themselves from liability if major issues show up in the future. When writing up the contract you should allow yourself to withdraw from the deal if major problems show up. The banks are generally unwilling to lower their asking price even if problems arise.

While it’s very possible to get yourself a nice home below market value you must be careful when purchasing short sale homes. Purchasing a short sale is a lot like buying a used car; you don’t always know what you are going to get once you get it home. Always work with a short sale expert who can guide you the entire way and steer you clear of any pitfalls.

If you are looking for short sale homes listings then we may not be much help to you in your search. I would recommend you take a look at this site which may be able to get you going in the right direction.

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Short Sale Definition

August 9, 2011

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So you’ve heard the term ‘short sale’ but you aren’t exatcly sure what a short sale consists of. Well we are happy to explain the short sale definition for you today. Short sale is a rel estate term for when the homeowners sells their home for a loss. This requires negotiating with your lender because they ultimately are the nes who have to sign off on the deal. You cannot sell in a short sale without your lenders permission.

The way the housing market is these days many people are opting to sell their homes in a short sale. The banks/lenders are allowing the homeowners to sell instead of taking on even more foreclosed properties. Normally your lender will only allow you to sell in a short sale if you are behind in your payments and facing foreclosure. You would also be required to write up a hardship letter explaining why you should be allowed to sell your home for a loss. We have a nice write up on writing a hardship letter here on our site if you need some help writing one.

While most who opt to sell in a short sale are already facing foreclosure this doesnt always have to be the case. This can also be used before you get into trouble if you are being proactive about yopur housing situation. This doesnt mean that you can just sell for a loss anytime you want, you would need to be on the path to trouble. You are just being more proactive than others who wait until they are facing foreclosure. An example would be if you lost your job with little prospects for a new one in the near future.

Right now is a great time to sell in a short sale since the government is forgiving all taxes owed on the amount of debt forgive. In brighter times you would be required to pay tax on any amount of debt your lender forgives. It’s always best to work with a short sales expert who knows how everything works. You don’t want to end up paying any money to your lender or paying more taxes than you should. It’s a bit more complicated than a normal real estate transaction.

We hope our short sale definition helps answer your questions. If you would like another take on the subject please visit wikipedia to read what they have to say.

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Buying A Short Sale

August 8, 2011

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If you are interested in buying a short sale then be prepared for a potentially very long wait with lots of little issues to contend with. The term short sale is a bit of a misnomer because in reality nothing is short about a short sale. So what are some things to keep in mind when deciding to buy a short sale?

    • The asking price of the home is normally set by the seller/agent. This can create a problem for you later on down the road because the LENDER always has the final say in the asking price of the home. The agent/seller may set the price low to attract interest but then once it’s sent on to the lender for final approval they may balk and increase the price.

 

    • If you submit an offer on a short sale that the lender feels is too low they may not respond or respond very slowly. Since the lender is not always aware of how much the seller is asking they may feel your offer is simply too low. This can create problems for you, the buyer, if the seller is not operating in good faith.

 

    • Don’t set your heart on getting the property. As we mentioned nothing is short about a short sale so its best to remember that you may change your mind on this property once you are 3 months into the process and it feels like its not moving fast enough. Stay optimistic but continue looking at other properties.

 

    • If you decide to pursue a short sale ask how many loans the seller has taken out on the property. It’s obviously easier to work with one lender instead of multiple lenders. Remember the LENDER always has final say when approving a short sale. The fewer lenders the better.

 

    • If you see a short sale listed as anapproved short sale this means the seller has been given the green light by their lender and will have an approved selling price. This can speed things up significantly.

 

    • When purchasing a short sale its important to understand that the home may be lacking in repair. The responsibility is placed upon the buyer to handle all repairs and a credit may or may not be issued to cover the repairs. This is just simply the cost of purchasing a home below its market value.

 

  • If the lender gives approval on the short sale you MUST close on time, there is no leniency. Normally in a more traditional home sale some leniency is provided for last minute adjustments/issues. This is not the case when it comes to short sales. This is why it’s so important to be working with a reputable short sale real estate expert so that no last minute hang ups ruin your transaction. Lenders have little patience when it comes to short sales so be extra prepared.

While buying a short sale can be great it is also more difficult. If you prepare yourself for a long ordeal and hire the right broker to help you along you should be fine. Just be prepared to walk away if you feel its taking too long.

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