Rain throughout the weekend combined with Sunday football seems to have slowed the shopping this weekend. Buyers are not in a hurry as they have demonstrated for the past two years. The streets of Channelside were quiet and although I had an open house at one of my lisitngs at 205 N 12th Street, visitors were limited. This is a gorgeous property though and the people who saw it were impressed! If you are looking this is actually a loft that was featured on HGTV "Rezoned" on August 1, 2007. Worth seeing! This unique property is very valuable and being sold below market for a quick sale. It is worth a lot more!
Short sales are everywhere and buyers have the opportunity to take advantage of the unique opportunity to buy a home for less than the seller owes the bank!
I will be posting short sale information often to allow others to learn about this important opportunity available to both buyers and sellers.
A short sale is an arrangement in which the seller approaches their mortgage lender and notifies them that they wish to sell their home but it is not worth what their loan balance is. This situation arises frequently when home owners who recently took advantage of the low interest rates and refinanced their homes just before the market started to soften and the property values decreased. It is common these days for a homeowner to owe more than their home would appraise for and it is wise for these homeowners to wait out the slow market until they can recover the value in their property.
There are always circumstances that force a homeowner to sell their property even in the worst market. Relocation, rising interest from Adjustable Rate mortgages, increases in taxes, illness, losing a job, and many other issues can force a seller to sell their home at a time that is not conducive to their making any money on such a transaction. It is in this situation that a seller may be forced to sell their home and they discover that their home is not worth the money they owe on it.
If a seller is faced with this situation, they can approach their mortgage holder and ask for consideration to sell the house for its current value and to take less for the payoff. This type of arrangement generally involves a good amount of paperwork and proof to the lender that there are extenuating circumstances.
The bank will request the following information from the homeowner applying for a short sale approval:
Approval from the lenders for short sales:
1. Hardship letter – the sadder the better – Death, lost jobs, sickness
2. Recent bank statements showing no income
3. Last 2 years tax returns or some kind of financial statement even from a CPA
4. Listing Agreements
5. Comparable Market Analysis for each property
6. Current pictures – if any have been vacant showing sign of distress is good too.
7. HUD statement from a title company for estimated closing costs
Much of this is accomplished by hiring a licensed Real Estate Professional. Someone who knows this type of transaction is best - but the opportunity is there to sell a home for less than it is currently mortgaged for.
If you would like to know what consequences are of doing a short sale and how it effects the seller's finances, please check back soon!
Have a great day!
Denise
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