Short Sales

So what ARE short sales???
Simply, these are properties in the "preforeclosure" state. The owner has stopped paying the mortgage... and the bank has served notice that they are in the "foreclosure process". Because there are SO MANY foreclosures currently, the amount of time it takes for a bank to actually foreclose on a property can be anywhere from 6 months to over a year! Previously, it could have been 3-6 months. Which means... the owner can work WITH the bank during that time to try and sell the property. IF a seller's mortgage is MORE than fair market value, and they can prove financial hardship, the bank agree to a short sale. For example: If you bought the house for $250,000, it is your primary residence, and it is now only worth $175... and you can't make those monthly payments any longer... this process may be the right choice.(

ADVANTAGES???

1. OWNER SAVES CREDIT... at least a little. While a foreclosure will most likely RUIN someone's credit for 7+ years by demolishing their score by 250+ points or more and rendering it impossible to buy another house or similar large purchase for a long time... a short sale will only temporarily devestate the score by 75-150 points and only for 1-2 years. Of course this will vary, but these are the estimates currently reported by those having gone through the process. However,if the property is your investment property (NOT your primary residence)... chances are a short sale won't work.

2. GREAT DEAL potential for a buyer! Asking prices are generally on the low end of fair market value, and sometimes buyers buy with a little equity in hand (a great thing!).

ARE YOU AN OWNER AND NOT SURE WHAT IS BEST FOR YOU... SHORT SALE OR FORECLOSURE? CHECK OUT THIS CHART THAT OUTLINES THE BENEFITS AND CONSEQUENCES!

Click Here for Short Sales vs Foreclosures!

CLICK HERE... SHORT SALE LISTINGS! STEALS 'N DEALS!!

DISADVANTAGES???

1. MAY TAKE FOREVER! Banks are working on heavy overload these days... and a good majority of these deals are NOT closing! Offers are being presented to the banks, and banks are leaving them sitting on their desks until time runs out and either the buyer has moved on out of complete frustration, or it's been so long the property goes to the courthouse steps anyway.

2. MAY NOT BE A GOOD DEAL AFTERALL! So many people bought at the height of the market, took out HELOC loans (borrowed against the equity of their property) or refinanced to a point where they owe WAY MORE than the property is currently worth. In these situations, banks want to recoup the most they can from the money owed. For the short sale buyer, it is critical they do their research and ask lots of questions. Money could be owed to numerous banks AND other lienholders. If there is more than one mortgage on the property, prepare for the process to be long and arduous. If you really want the house, and aren't desperate - stick it out. It might be 6-9 months but they CAN close successfully!


STILL WANT TO LOOK FOR A GREAT 'SHORT SALE' DEAL?

1. Work with a licensed, experienced Realtor. It doesn't cost anything for the buyer OR seller! And you'll be sure to navigate the system much better than doing it alone. If they are experienced agents within the short sale process, they will already have set up a team with a great (experienced)negotiator and closing agent to make the deal go much smoother and take the frustration and angst away from the buyer and seller.

2. Research, research, research! Make sure you (with the help of your Realtor) do all the needed Market Analysis reports needed for each property, and research all the tax records and other public records - everything possible - to gain the best understanding possible of the owner's financial situation, how much they owe and to whom, etc. THIS will give you the best indication of how much to offer, and if that offer will be attractive to the bank or not.

3. Be patient yet diligent! While conventional closings (time between putting an offer in and actually "closing") are typically done in 30 days... short sales can range from 60-120 days easily. But don't make the mistake of simply putting an offer in and waiting. Because you'll NEVER buy that property! Calls should be made periodically, and work needs to be put in. The majority of that work will be done by your Realtor... but some of it will need to be done by you, the buyer, as well.

WHAT IF THE PROPERTY YOU WANT GOES TO THE COURTHOUSE STEPS AND IS FORECLOSED ON ANYWAY????

What to do! Simply, this property now becomes an "REO" (bank-owned) property. The bank is now the owner, and they will either decide to list it for sale with a Real Estate company, or may chose to rent it out. Generally at this point the bank has an even higher amount they want to get from the sale of the property, now that they've incurred additional legal fees for the foreclosure proceedings... so the price is higher than if they were to have settled on selling with a short sale before the foreclosure.

(which of course is mind-boggling to learn that in fact MOST short sales are left by the banks to sit until they collect so much dust they are indecipherable... and the banks simply incur those legal fees and now OWN the property outright that they didn't want in the first place! We of course hope that one day soon banks will realize they could save a whole lot of money by hiring people in the short sale departments that actually CARE about doing their job well... and perhaps we'd see our major lenders slowly start doing better in this economy? - but I digress...)

So if you have the time and patience to put in... you could get a GREAT DEAL!!!

Submit the below form and let us know what you're looking for and where. We'll get back to you within 24 hours with a list of properties that match your search criteria!

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