Tuesday, May 19, 2009

What is a Short Sale?

With so many homes available for sale in the Ramona Real Estate market why would someone deal with making an offer on a short sale?
Well. I can tell you there may be numerous reasons why. Maybe you fell in love with a particular home and it happens to be a short sale, or maybe the price is just too intriguing to pass up. In any case if you are thinking of buying a short sale you may want to read this first.
A home that is sold prior to a foreclosure sale, if the bank agrees with terms and price of offer and one that is “short” of a full pay off. ( You owe more on house than its worth in today’s market basically). Note: You may not need to be in arrears on your house payment to ask your bank to short sale, they also look at hardship and other factors.
· HOW LONG WILL IT TAKE? The process could take anywhere from 60-120 days (or more) depending on the banks involved and other factors such as negotiating abilities, whether or not there are 2 mortgagees to approve the sale, and other factors.
· IF I MAKE AN OFFER AND WE OPEN ESCROW DOES THAT MEAN IT’S ACCEPTED? Not necessarily. What happens is once the buyer and seller agree on price and terms, the offer must now be submitted to the mortagee(s) for approval.. There is not a valid acceptance until banks approv, since they are they entity that will agree to the loss.
· WHAT ARE SOME PROS? Pros for the buyer may be a great price and you still receive the CA required disclosures on the home. Pros for seller is if you have to move and cannot rent your home maybe the bank will agree to take a loss. However, a word of caution, check with your attorney & CPA because there may be legal and tax implications on a short sale.
· CONS? The possible legal and tax implications are up there on the list, however since each situation is different, it may make sense for you, but just check with your attorney anyway. The other con I have seen is since many of these homes have been abandoned there may be a lot to fix.
· WHERE DO I GET A LIST OF SHORT SALES FOR SALE? Call Regina # 760.788.0721

So,I hope I have not scared you off by now.
I am not saying don’t buy a short sale, that will be your and your bank’s decision if they close on it, but I am just saying look at the whole picture, know the possibilities of what could happen and don’t get your heart set on it until the bank agrees, which could take some time and in many case a flat out rejection of your offer.
While buying a short sale may not be for the faint of heart, and it may have many ups and down in the process, I have seen many really nice short sale homes close escrow successfully, especially this year. So if you see one you like just gather all the information you can and then decide.

Copyright©2009 Regina Flores

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