Short Sales
The words Short Sale and Foreclosure have became very popular in the last year or so. The turn in the real estate market has taken many by surprise, even Greenspan the former FED chief. Oregon has done significantly better than most states but there are plenty of homes and homeowners going into foreclosure or soon to be there.
A Short Sale can save the homeowner from a foreclosure on their credit. A foreclosure can show as one of the most damaging blemishes on your credit. A short sale doesn’t mean you are irresponsible or not deserving of prosperity. It can be the result of an unwise decision, bad timing or unfortunate life events. The main cause of bankruptcy is medical bills.
If you or someone you know need help understanding the options to foreclosure email or call me. Below are some typical questions about Short Sales.
What is a Short Sale?
- Usually the homeowner is in default with their payments.
- The seller owes more money than a buyer would give them for their house.
- They ask the bank to take less than what the seller owes.
Why would a bank take less than what the seller owes?
- The foreclosure process can be expensive with lawyers fees, upkeep and their own Realtor fees.
- When the bank owns a property they usually have to set money aside equal to that amount which means they aren’t making interest on that money.
- In declining markets the bank doesn’t know if they where the prices will be after the foreclosure.
How long does it a Short Sale approval take?
- It can take 2 weeks to 1 year but 40 days seems to about average and it is a bumpy ride. An organized short sale package and diligent work with the bank are the key. Every bank is different and understanding how they work will save time and a deal.
Is a Short Sale the only option to foreclosure?
- No, it is one of the last options. There are about 9 options to avoid foreclosure, which is the goal, avoiding foreclosure. If you can make a loan modification with the bank or payment arrangements then that will be better. Arranging a short sale is better than a foreclosure and that is where I can help.
Short Sales sound like a good way to buy a cheap house?
- They can be. If you would like to get a free daily email of short sale properties, email me at mike@mikecandoit.com with the area, price range and other criteria and I will set up this service for you at no obligation.
Summary of Short Sales
If you can’t make your payments and the bank won’t make arrangements or modifications to your loan and you are facing foreclosure then a short sale could save you.
The process can be long and arduous and it will help to have someone on your side who can help you through the process.
When a short sale is arranged, the bank pays the Realtor fees, so it is no cost to you.
Below is a map-based search of all the short sales in the Portland Metro area.
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It's not your house its the price, its the price, its the price….
I am a cash buyer looking for 6+ months. I am considering keeping my money and continuing as a tenant. I can not understand the mentality of a seller who still expects to make a 10 to 30 % return in this market. I have watched two homes on which I offered a low but fair price go into short sale 50 to 100K under my initial offer. In both cases the sellers were in denial. I could have gotten them out comfortably w/ a little profit even. Now that I have watched these fall under my estimate I'm not sure I am still confident in making an offer on anything. I think these homes may now be underpriced but I am not sure. By pricing high even in the threat of foreclosure these sellers are driving the market even lower. B/C most likely (eg priced high) they will go into foreclosure and the bank will dump it on the market well under value, driving area values even further down. Realtors now is the time to have a reality check w/ your sellers. This is not a time to have delusions of grandeur… instead sound business sense is in order. A cash buyer is a good measure in this market, if I am not willing to pay your price, do you really think banks under the new credit lending guidelines will?
It’s not your house its the price, its the price, its the price….
I am a cash buyer looking for 6+ months. I am considering keeping my money and continuing as a tenant. I can not understand the mentality of a seller who still expects to make a 10 to 30 % return in this market. I have watched two homes on which I offered a low but fair price go into short sale 50 to 100K under my initial offer. In both cases the sellers were in denial. I could have gotten them out comfortably w/ a little profit even. Now that I have watched these fall under my estimate I’m not sure I am still confident in making an offer on anything. I think these homes may now be underpriced but I am not sure. By pricing high even in the threat of foreclosure these sellers are driving the market even lower. B/C most likely (eg priced high) they will go into foreclosure and the bank will dump it on the market well under value, driving area values even further down. Realtors now is the time to have a reality check w/ your sellers. This is not a time to have delusions of grandeur… instead sound business sense is in order. A cash buyer is a good measure in this market, if I am not willing to pay your price, do you really think banks under the new credit lending guidelines will?