House Hunting - Short Sales

I have been so busy lately, that I haven't had enough time to post.  That is great for business, but not great for blogging!

Several of my clients are looking at short sales and foreclosures.  In the market right now, there are a lot of them out there.  Many buyers don't know the difference between the two, and I thought it would be worth it to take the time to explain the difference.  Today let's focus on Short Sales. 

Short Sales

In a short sale, a house is typically in a preforeclosure state.  The owners have gotten behind on their mortgage, or owe more than what their house is currently worth.  The decide to work with a real estate agent to try to sell the house before it goes into foreclosure. 

These homes can be in disrepair.  Sometimes they are vacant, sometimes they are still occupied.  What the house is listed for, is going to typically be the amount owed to the bank, or a fair market value that is less than what is owed to the bank, hence a "short" sale. 

The owners of the home are still the ones to make the decisions.  They can accept or reject offers, but ultimately it is the bank that must decide if the price is going to be enough to satisfy the debt.  Because you are working with not only a seller but bank officials at each step, a short sale can be slow.  I have heard of them closing in relatively quick time frames when a home owner is already working with the bank towards a short sale, and I have heard of people waiting 15 months and still not having a short sale closed. 

If you have a timeframe in mind where you need to move, or you have a home of your own to sell before you can buy, you might want to reconsider these kinds of sales.  Also, in a short sale, the bank is the one paying commissions and fees, so typically these homes are sold in "as is" condition.  Keep in mind that a seller who can't pay their mortgage isn't going to have the cash to put a new roof on the house.

If you are interested in short sales, make sure you are working with an agent, and make sure you have patience.  A short sale is different than a regular arms length transaction.  The negotiating you are doing might be with the bank, or you might put in an offer that gets flat out rejected.  Depending on the bank who holds the mortgage, there may be different rules for offers, and different time frames for what is a normal time to respond.

Short sales can be a good deal for the buyer.  The bank often is willing to work with a reasonable offer and to forgive the debt because if they don't sell the property and it goes into foreclosure, there is often more money they would lose in that process.  Also, once a property goes into foreclosure and is sold at a Sheriff's sale, the bank frequently ends up buying the property back.  It then can sit from anywhere from 6 months to 2 years before the bank will relist the property as a foreclosure, often for less than they could have gotten from the short sale.

Not all owners will choose to go the short sale route.  Beware the listings on Zillow or other public websites of homes that are Pre-Foreclosures - they are often not for sale yet! 


 





 

Bad MLS Photos

Just a silly break today.  I have been collecting bad MLS photos to post, but since they were all from my local MLS, I felt a little guilty posting them. 

But, I ran across a link to a property that was listed at $340,000, and I couldn't help but notice that at that kind of price point, you might want to be a little more careful with your listing photos.  Can you spot the sloppy mistakes? 

 

Original MLS listing

If your house is being photographed by your Realtor you can help.  Clean off the counters.  Put away the cleaning products.  Straighten your desk.  Put the trashcan somewhere else when they are taking the photos! 

And Realtors. . .look at what is going to be in the picture before you take it.  Just say no to sloppy photography!

Get your Home's Exterior Ready for Spring!

Here in Northeast Ohio, Spring is finally in the air.  The weather is warmer, the grass is greener, and the leaves are coming back to the trees.  If your house is on the market, it is time to spruce it up for the Spring buying season.  Enjoy that nice weather and get outside for some spring cleaning!  

Here are some tips to get you started, whether you are selling or just getting that spring cleaning burst of energy.  

• Spruce up your front door.  Wash the door, polish the hardware, give it a new coat of paint if you can.  Make sure your home looks fresh and inviting.  
• Clean up your flowerbeds.  It's time to get the dead leaves out of there and some spring flowers in as soon as you are able to.  
• Bring your patio furniture back out.  Even if you don't plan on using it, buyers want to picture themselves in your backyard.  Think about it.  Especially if you are at a first time homebuyer price point, you might have buyers that have been living in apartments or condos with small yards.  Your backyard needs to look like their oasis!
• Wash down your driveway and your porch, getting rid of extra salt and dirt from the winter.  
• Check your roof for loose shingles and clean out your gutters.  
• Organize and sweep out the garage.  Put away those snow shovels, sleds, and salt and park your lawn mower in a prominent spot.  It's Spring!

Photo Credit - Me, 2008

Article inspiration - 18 Ways to Prep Your Home's Exterior for the Spring Market by Charlene Storozuk.