When looking for Outer Banks Short Sale properties you need an experienced Realtor to help guide you through the process. Not all Short Sales are the best deals on the market. We are only a handful of Realtors on the Outer Banks to earn the National Association of Realtors Short Sale & Foreclosure Certification. Put our experience and knowledge to work as your Foreclosure and Short Sale Buyer's Agent.
Short Sales Explained
Real estate short sales have become more common in the tough housing market of the last few years. If you’ve been house hunting over the last year, chances are you’ve run across at least one piece of real estate classified as a short sale. A short sale is one where the net proceeds from the sale won't cover the total mortgage obligation and closing costs. The seller is hoping to complete the sale before they lose the home to a foreclosure. This sale can partially salvage the homeowner’s credit rating and lift the stress of large mortgage payments. This is good for the seller as a short sale is less dramatic for them as it will typically not hit them on their long term credit as much as a foreclosure. A foreclosure means the seller won't be able to buy a home for much longer than a short sale as their credit is hit harder. Usually, the seller has started the process with their mortgage lender by sending in required paperwork. Then, they wait for an offer or several offers.
Why would the mortgage lender do such a thing? They do it because they want to sell the home as quickly as possible to avoid losing any more money from the nonperforming loan. The mortgage lender also wants to avoid foreclosing on the home, because that means they will have to manage and sell the property (or pay somebody to do that for them). So the real estate short sale is a way to get the loan off their books quickly, without having to go through the extensive process of foreclosure, real estate auction, etc.
Short sales can be a great opportunity to find your new home at a competitive price. They can also be a major headache that lasts for months. It is important to have a good understanding of the many factors that lead to a successful deal; or hire someone who does.
Your offer will be written along with the various documents that you acknowledge the property will be sold in "As Is" condition. You will also be informed that the seller will not be making any repairs or be receiving any monies or paying any out of pocket expenses. Most likely the seller will not be disclosing any past repairs or changes made to the property. What does this mean to the buyer? You are probably buying a property for less than the same home would sell for if it was not a short sale so you can expect a bit more out of pocket repairs and a property that is not in "top notch" condition. Some sellers that simply want to make this process as painless as possible and get an offer prior to a foreclosure so they maintain the property beautifully. This is not typical, most sellers are distressed and have vacated the property and have left it a bit in disrepair.
In short sales, the bank has all the power, and each one has a different idea of what the most appealing buyer is. One bank may prefer buyers with large down payments while another just wants the highest price. Most buyers want to know if the bank will give a lower price for an all cash offer. This is difficult to predict; buyers will not know until they make an offer.
In many cases, short sales are not "short." You must have patience and fortitude, this process is not a sure bet and it can be a long wait. You cannot be emotionally tied to this investment. If you absolutely need to be placed in a home within the next month or two you should consider a bank owned or individually owned property.
Your offer gets faxed into the mortgage company along with a copy of the HUD and your proof of financing the property. Most mortgage companies are flooded with so many that waiting to get a response can vary anywhere from just a week or so to several months. Not only are you waiting to hear if they are even going to consider your offer you also may be competing with other offers that are either on the table or come in during the wait process. Sometimes you have no idea that you are not the only offer in or whether or not the mortgage company is prepared to take the lesser amount owed.
Make low ball offers at your own risk. Remember the mortgage lender is typically unaware of the seller-set price during a short sale. When low ball offers arrive, they are often rejected, with little or no feedback for the prospective buyers. It may also take a considerably long time to hear back even on good offers due to the sheer volume of transactions lenders are overwhelmed with these days.
Assuming your offer has been negotiated and accepted the mortgage lender will then give a time-frame in which you MUST close by and the contract will become null and void if not closed by that date. Now is the time for you to do your due diligence and get a home inspection! Do not forego the inspection, you need to know the extent of the condition of the property before the end of the inspection period is over and you are now at risk of losing the earnest deposit if you do not move forward and close on the property.
You need to have your own representation with a real estate professional that has knowledge and a successful track record with short sales. They can be complex deals with their own rules and etiquette, and require knowledge of what's reasonable and customary. My team successfully closed over $2.7 million in distressed property sales in 2009.
Let us help you navigate your short sale buying opportunity, for a successful closing!
Click on the link below for a complete list of Short Sale Properties located on the Outer Banks:
Always Expect Success,
Hugh "Scooter" Willey