As more homeowners find themselves underwater -- owing more on their mortgage than their home is currently worth -- and unable to make the monthly mortgage payments, many are turning to short sales, which allows a homeowner to sell their home for less than owed on the mortgage. With the lender’s approval, home buyers can purchase properties in desirable neighborhoods and at favorable prices.
MAKING SENSE OF A SHORT SALE:
Even though values have increased over the past year, many homeowners nationwide are currently underwater. In some areas, especially those hardest-hit by foreclosures that have experienced the greatest price declines, more than 50 percent of homeowners would owe more than their home is worth if they sold today.
Unlike foreclosed properties, which may be run-down and vacant for many months, short-sell properties are likely to be better maintained as many owners may still live in the home.
In a short sale, the homeowner must receive approval from the lender before the sale of the property can proceed. With many lenders overwhelmed by short-sale transactions, it can take between two and six months to execute.
Working with Richard, who has experience with short sales, can help both sellers and home buyers during the transaction. A seasoned Agent will be able to serve as the mediator between the seller and the lender and lead to a successful transaction, while a buyer’s agent can help with offers, counter offers, home inspections, closing, and more.
It is important to remember that although the seller may be anxious about selling the property and willing to accept any offer, it is ultimately up to the lender to determine if, and at what price, the property can be sold. Therefore, home buyers should work closely with their Agent to submit a realistic offer.
Buyers should ask the lender to pay for some, if not all (up to 3% of sales price), of closing costs as part of the contract. The contract also should specify that the buyer will not conduct an appraisal or inspection of the property until the offer is approved. This added guarantee can protect home buyers from spending money on a home they may not purchase.
Sellers, there are no cost to you for listing and selling the property. In some cases, the Seller may qualify for relocation assistance funds. Call for more details.
Credit, Legal and Tax Advice - Sellers need to be aware that a short-sale may have credit or legal consequences and may result in taxable income to the Seller. Sellers are advised to seek advice from an attorney, certified public accountant or other expert regarding such potential consequences of a short-sale.
Call Richard for more information.
CA BRE 01712086