It seems to be the questions that everyone is asking right now.
What is going on with the real estate market? Are homes selling right now?
I am happy to report that I have good news! After a sluggish winter it seems that the buyers are ready to spring into action. There has been a pent up demand which has driven a late spring market into action.
Single & multi family homes are the best sellers with condo sales lagging behind. Condo sales are still slow due to bank financing issues. Even though this is good news, home prices are still declining at this time. There is a high property inventory which is keeping home prices down at this time. Another reason for declining home prices is the fact that there are still many foreclosures and short sales affecting our local real estate market.
Today I am going to talk about short sales. Everyone wants to know what a short sale is.
You probably hear it all of the time, your friends & family telling you that you should buy a short sale or foreclosure, because you will get a great deal. Sometimes you can get a great deal and other times it can be more than you bargained for.
Short sales, despite the name, have always taken a very long time to process. That is because the short in short sales refers to a shortage of money and not time. Short sales are sales in which the seller’s proceeds will be less than his outstanding mortgage debt. Buying a home via short sale allows a property owner to sell their home for less than what is owed on the mortgage with the lenders approval.
Why would the seller want to go through this process? For the homeowner a short sale can be a lifesaver compared to having your home foreclosed on you. This is still a distressing situation as you will end up losing your home with only $1500 to show for it. However this process enables the seller to leave with some dignity, hopefully less stress and taking a lesser hit on your credit scores, than taking the foreclosure route.
For the home purchaser, short sale homes can be a deal, but aren’t likely to be a steal. It is very common for a seller of short sales to receive offers that are extremely low in relation to asking price. The offers must be approved by the bank that holds the loan. This can take a very long time as many banks only review one bid at a time and can take up to 10 days to respond. At that time you can submit a new offer, but the cycle repeats itself until all parties are in agreement. If the property is not an approved short sale, then it can take up to 6 months or longer to close. Many buyers walk away at this point, due to frustration and not being informed right at the start from their real estate agent. It is vital that you work with an experienced professional realtor especially when working with short sales or foreclosed properties.
Get your financing in order. The banks are tough customers when it comes to a purchaser submitting a bid on a short sale. Currently the response to any properties that are underpriced in our market place is a bidding war. Yes, a bidding war still happens with properties that priced below market value. There are investors out their right now looking for properties that they can either flip or rent out until the housing market turns around. Make sure that your money is in order and if you have cash to pay for the property then you are in the driver seat. Cash and a quick closing will make it easier for you to negotiate a great price with the bank. If you don’t have cash, then you must have a pre approval in place with a lending institution. Without this in hand, it will be difficult to make the process work for you.
Our team at Bondi Realty has the experience in the market place working with short sales and foreclosures. If you have any questions regarding today’s article please contact us at 203-899-9990.
Betty Bondi
Bondi Realty Group LLC