Short Sales

You Ask, We Answer: Understanding the Real Estate ‘Short Sale’ and How This Process Works

September 5, 2014 by admin

You Ask, We Answer: Understanding the Real Estate 'Short Sale' and How This Process Works A short sale is something that occurs when a homeowner is not able to make the mortgage payments on time due to a financial hardship. Instead of foreclosing on the property after one or more missed payments, the bank may agree to allow the homeowner to turn the home over to the bank, which will sell it to as close to market value as possible.

Here’s what you need to know about how short sales work and what circumstances might call for one.

Step 1: The Homeowner Provides Information To The Bank

The first step in the short sale process is for the homeowner to submit an information package to the bank. The homeowner will provide information such as the reason for the short sale, an authorization letter allowing the real estate agent to talk to the bank, and a financial statement. In addition, the seller may need to provide an HUD-1 statement as well as a list of comparable homes in the area.

Step 2: The Buyer Makes An Offer

Once the house is put on the market, a buyer can make an offer just as he or she would on any other home. The seller will then have the opportunity to accept any offer that he or she receives from a prospective buyer.

Step 3: The Bank Makes A Decision About The Offer

Once the seller accepts an offer to buy the home on short sale, the seller is responsible for sending information about the sale to the bank. Before the sale is finalized, the bank must approve the buyer’s offer. It could take as little as two weeks or as long as 120 days for the bank to approve the offer.

However, not all short sales are immediately approved. The seller’s bank bank might decline the buyer’s offer for one reason or another. A bank may decline a short sale offer if the bank negotiator thinks the house is worth more than the buyer’s offer or if the seller violates a clause in the short sale agreement – such as moving out of the property and violating a clause that states only owner-occupied properties are eligible for short sale.

Buying a home that is being sold as a short sale requires patience and an ability to move at the bank’s pace. Working closely with an experienced lender or mortgage broker may make it easier to get through the process without a lot of hassle or drama.

Florida Takes Top Foreclosure Slot For September 2012

October 12, 2012 by admin

Foreclosures : September 2012

Foreclosure volume continues to slip.

According to foreclosure-tracking firm RealtyTrac, in September, the number of foreclosure filings nationwide fell 7 percent from the month prior, and fell 16 percent from September 2011.

RealtyTrac defines a “foreclosure filing” as any of the following foreclosure-related events : (1) A default notice on a home; (2) A scheduled auction for a home; or, (3) A bank repossession of a home.

September’s 180,427 foreclosure filings mark the lowest monthly total in more than 5 years. It’s a signal that the U.S. housing market is in recovery, while also reflecting the success with which banks and homeowners have found alternatives to the foreclosure process, including the short sale.

Based on data from the National Association of REALTORS®, short sales now account for 45 percent of “distressed” home sales nationwide/ As recently as April, the percentage of short sales was just 39 percent.

Other noteworthy statistics from the September 2012 foreclosure report include :

Default Notices fell 12% between August and September 2012
In Q3 2012, quarterly foreclosure filings fell for the 9th straight quarter
The average time to foreclose on a home rose to 382 days nationwide, the highest since early-2007

In addition, in September, Florida posted the top foreclosure rate nationwide for the first time since April 2005.

Foreclosure starts moved higher in the Sunshine State for the 11th straight month and bank repossessions are now up 23 percent as compared to September 2011. 1 in every 318 Florida homes received some form of foreclosure filing last month.

The national average was 1 in 730.

Whether you’re a first-time home buyer or an experienced one, homes in various stages of foreclosure have allure. They tend to be sold cheaply as compared to non-distressed properties, for example. However, buyers should look beyond just the “list price”. Foreclosed homes are often sold as-is which means that homes may be defective and uninhabitable.

This would render the home un-lendable, too, for buyers using bank financing.

If you plan to buy a foreclosed property , therefore, be sure to engage an experienced real estate professional. The internet can teach about “how to buy a home”, but when it comes to writing contracts and inspecting homes for defects, you’ll want to have an experienced agent on your side.