Loading ...Coming Up Short? Not This Time
September 12th, 2007 by Tyler | 207 views |
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Loading ...“Are you kidding me?” These are the words coming from an astonished outraged neighbor.
“That’s right; I just sifted through the inventory and found the best deal,” said the overzealous new homeowner.
As everyone knows right now, if you’re looking to buy a home, you have as good a chance to find what you’re looking for more than ever. There is so much inventory on the market right now and since it’s a buyer’s market, there is room for negotiation. In the case of the overzealous new homeowner, he scored a home through a short sale. Because of the short sale, he was able to get the house at an incredible price. Not only did he get a great deal but it’s one of the prime locations in the area. For those of you that don’t know what a short sale is, it means the lender is accepting less than the total amount due. The seller for some reason cannot continue to make the payments and instead of destroying their credit, they apply for a short sale.
Personally I know the seller that had to basically give his house up because of other reasons and it burns him to know that this overzealous homeowner got such a great deal. Don’t let what you hear in the news shy you away from purchasing a home if you’re thinking about it, you may miss out BIG time.
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This entry was posted on Wednesday, September 12th, 2007 at 12:45 pm and is filed under Buyers Market, Buying a Home, Real Estate, Short Sales. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
September 12th, 2007 at 11:23 pm
Yes short sales can be great opportunities, however, the buyer must be patient because many times the short sale process takes months to close. The listing agent also plays a part in making sure the seller’s lender has all the necessary paperwork. Short sales are great targets for investors and buyers not in a rush to move.
September 12th, 2007 at 11:35 pm
I bought a short sale that had about 30k in equity. I fixed and flipped it in 8 weeks for a 112k profit! I plan on doing a few more this year- foreclosures and short sales- take advantage of the market while its here.
September 15th, 2007 at 12:15 pm
So what happened with your friend? What kind of deal did he get?
September 17th, 2007 at 11:06 am
Dean,
My friend is the one who had to sell the house. Right now he is searching for a home.
September 17th, 2007 at 4:54 pm
ah i see, does a short sale adversely effect your credit rating? When you have sell your home for less than what you owe, do you still owe the bank the difference? Would you be able to buy another home? I know a few people who have considered the option
September 18th, 2007 at 11:51 am
Dean,
A short sale does not usually affect your credit rating. In fact, the reason for a short sale is to not ruin your credit, but rather to preserve it. If you sell the home for less than what you owe, the bank decides on amount based on paperwork(taxes, pay stubs, income) that you submit to them. The amount is typically less than the amount owed. Usually, you will have to sign a promissory note and pay back the amount over a number of years. You will still be able to purchase another home since your credit is not affected. It is a great idea if you’re headed to foreclosure.
September 18th, 2007 at 12:11 pm
A short sale is a lot better than foreclosure. In the end, paying back the bank 25K over 10 years and keeping a good credit history is a lot better than foreclosing, your credit goes to the toilet and now you pay double for anything you buy on credit (if you can or still have credit). A big mistake people make is not talking to their note holder. I have clients that call on the brink of foreclosure and when I ask them if they have called their bank to discuss different payment options, most of them are avoiding their calls instead of picking up the phone and calling the bank. I have another client here in Virginia that had a 2 year arm. It is now adjusting and he can’t make the payments. He is trying to find renters to rent the room but he is having a hard time finding worth while renters so he called the bank to discuss this with them. Sent them over his income documentation which clearly shows he can’t afford the new payment. He also sent them a letter of explanation with his intentions of renting out the rooms in order to pay the mortgage. Well, the mortgage company is giving him 6 months of forbearance on the mortgage. See, he called the bank and talked to them and he negotiated with them. He has 5 more months where he is saving money, trying to find renters and restructuring his finances.
September 18th, 2007 at 4:04 pm
Jeff,
What happens after your client’s forbearance period is up? Are the 6 months of payments tacked onto the mortgage? Also, if your client’s rate is adjusting, then when the 6 months are up, is he going to try to refinance and put money down to cover the difference? Or is he planning on doing a short sale?
Just a few questions because I know people in similar situations…