mortgages buyer agent – Short Sales: A Real Estate Opportunity for Sellers in Need by Nora Hall

The Home Buyer’s Agent of Ann Arbor helps their home buyers save thousands on their mortgages.

Property Selling Basics: What is a Short Sale?

According to the National Association of REALTORS (NAR) website a short sale is “a sales transaction in which the seller’s mortgage lender agrees to accept a payoff of less than the balance due on the loan.” (1) This happens when the seller is unable to satisfy the amount owed on the home because of dropping home value. Once the transaction is complete the lender agrees to forgive the rest of the debt not paid by the transaction.

Advantages for all parties involved are possible when a short sale is handled correctly and with an experienced real estate professional. First, the seller is able to avoid having a foreclosure on their credit. These types of transactions affect credit but not to the extent that full foreclosure can. Second, the buyer generally gets a home for a better price than it would have been available for in the past. Third, the lender is able to recoup a majority of what is owed on the mortgage. All in all this can create a “win-win” situation everyone feels positive about.

Real Estate Checklist: How to Know a Short Sale is the Right Choice

It is important to remember that even if there are benefits this is NOT a normal property transaction. It can take as long as 30-60 days just to get a short sale contract accepted when dealing with a bank or other lender. This type of property purchase is NOT the best choice for buyers if any of the following apply:

-The sale of the home must happen quickly. For instance, if a homebuyer just sold a home in order to purchase the new one and they must be in their new home within 45 to 90 days a short sale is not a good option.

-A down payment cannot be provided in cash and the buyers have issues with qualifications or financing. The lender will have faith that the new owners can pay the entire mortgage when secure financing is in place.

-Repair credits and repairs in general are valuable to homebuyers. Essentially when buyers complete a short sale they have agreed to purchase the property “as is”.

-Homebuyers are planning a “do it yourself” purchase. This kind of transaction is complex and requires the assistance of an experienced professional. Short sales are only completed when every detail of the transaction is handled correctly and all demands of the lender are met.

Short Sales Require Plenty of Patience and Reliable Real Estate Expertise

Often advantageous, the way to ensure success is to hire trustworthy, experienced professionals. Most importantly homebuyers need a qualified agent with experience in these transactions. An agent with experience with these transactions will be able to show you available short sale homes, negotiate the price and clearly communicate with the lender. Home buyers will also want the expertise of a real estate attorney familiar with short sales. According to the NAR website only 2 of every 5 short sales are approved by the lender. (2) Title Officers are also helpful during these exchanges. A title search provides the information necessary to avoid any problems later on in the transaction.

Experienced professionals can help short sale buyers and sellers avoid rejection by lenders and any dissatisfactory terms. Success can be achieved when trained professionals facilitate the transaction.

Resources:

(1) http://www.realtor.org/library/library/fg335 (A. Siudzinski, Senior Information Specialist)

(2) National Association of REALTORS http://www.realtor.org/rmosales_and_marketing/handoutsforcustomers/handouts/short+sales+tips+for+buyers

About The Author

Nora Hall is a real estate agent in Asheville and has a marketing background that allows her to offer exceptional service to both home buyers and sellers. She specializes in homes for sale in Asheville and WNC mountain properties. For more information on Asheville real estate, homebuyer and seller tips, and access to the local MLS visit http://www.norahall.wordpress.com.

Should I Get Prequalified When Buying A Home?

Why get prequalified and then preapproved for a mortgage before you begin your search for a home? Because there are people who will benefit from your preapproval: You, your Agent, and the seller from whom you eventually buy a home!

You: The most important beneficiary, of course, is you. One of the most common questions we get from users of this site goes something along the lines of “Please let us know how much house we can afford.” We’re stumped! Why? There are simply too many variables–credit history, income, debt, special mortgage programs and variations in qualifying guidelines between different mortgage types–to answer that question. The only sure way of getting the question answered is through prequalification. The mortgage prequalification step is a relatively simple one, but it is an important one. It begins the process of formally applying for a mortgage, and it gives everyone involved–especially you–a clear sense of the direction they should be headed.

Your Agent: By knowing what your financial parameters are, your Agent can spend more time looking for houses that “fit” and less time pursuing dead ends. No matter how much you might want a 4000 square foot home for $275,000, if your qualifications say $125,000, your qualifications say $125,000. When it comes to mortgages, “yes, but” doesn’t carry much weight!

The Seller: Want to strengthen your bargaining position? Get prequalified. Want your offer to stand out in a case of multiple offers for the same house? Get prequalified. Look at it from the seller’s perspective. If you had 2 offers on the table for your house, one from a fully prequalified buyer and the other from an “I’ll get around to that soon” buyer–to which offer would you devote the most attention? Even if the prequalified buyer’s offer was $1000 less, would you take the chance on the buyer that perhaps may not be qualified? When it comes to a seller evaluating offers, “a bird in the hand…” definitely applies.It is important to remember that the amount of mortgage you will qualify for is the maximum. It is the amount that the lender feels you can afford, but it is not necessarily the amount that you want to pay. It sometimes is advantageous to be conservative here. For example, if you qualify for a $100,000 mortgage and you have $15,000 available in cash for
1000
downpayment and closing costs, you are qualified to buy homes with a maximum selling price of $115,000. So as to not push yourself to the limit, you may want to look at homes that sell in the $100,000 to $110,000 range. Too many buyers simply rush off to the $115,000 level and some find themselves strapped when it comes time to purchase necessary items (such as draperies, additional furniture and lawn and garden tools, for example) or when they forget to factor in increases in monthly expenses (for example utilities and maintenance and repair costs).

Your local real estate agent or buyer’s agent should be able to refer you to a professional local lender who can prequalify you in preparation for purchasing a home.

By: Chris Hurd

Article Directory: http://www.articledashboard.com

Chris Hurd represents buyers of Burlington Vermont real estate. Chris has 28 years of experience living in the Burlington area which uniquely qualifies him as your perfect partner to identify choice Vermont and Lake Champlain communities and properties of all kinds.

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