Short Sales and Foreclosures
SHORT SALES AND FORECLOSURES
What is a short sale?
A short sale is the sale of home that is being sold for less than or equal to the amount owed on the mortgage. A short sale provides a way for the homeowner to sell their home without going into foreclosure. Lender approval is always needed in order to do a short sale. Though the homeowner, or, seller, may accept an offer from a buyer, this does not mean that the lender will. Typically the homeowner will need to be 3 months (90 days) behind in their mortgage payment, placing them into default status. This is the point where the homeowner can contact the bank and ask for permission to do a short sale, provided the home’s value is less than current market value. For a buyer, a short sale could mean purchasing a home they otherwise may not have been able to afford, however, short sales can take a very long time to close. A home being sold on a short sale may or may not have property disclosures and is almost always sold in “as-is” condition. A thorough home inspection is always recommended. A typical short sale can take anywhere from 45 days to a year to close with a response time ranging from 3 days to 3 months. Pay close attention to whether the status of a short sale is “potential” short sale or “lender approved” short sale. This will make a huge difference in your wait and response times. Potential means it is not yet approved and the process may not have even begun yet. Be sure to have your agent check with the listing agent to see how far along they are in the process. A lender approved short sale has full lender approval and all documents have been submitted by the seller.
If you are a seller with additional questions or if you are looking for help in doing a short sale CONTACT US.
If you are a buyer looking to purchase a short sale or have additional questions regarding short sales CONTACT US.
What is a foreclosure?
Simply put, a foreclosure takes place when the previous homeowner defaults on their mortgage and the lender takes the property back in an effort to resell it. Foreclosures are usually priced at or below market value in an effort to sell quickly. These types of properties can provide amazing opportunities for buyers but they are not without risk. Most bank-owned foreclosures are vacant and may have been vacant for some time. This means that the utilities have been turned off and the home may or may not be properly maintained. Property disclosures are not available for foreclosures as the lender has never lived in the home and has no knowledge of its condition or prior maintenance. These homes are almost always sold in “as-is” condition. A thorough home inspection is always recommended. If you are financing a bank owned property, you will need to turn the utilities on in your name for all inspections and they will need to remain on until the appraisal is complete.
For more information on foreclosures CONTACT US.