шаблоны joomla 1.7

I recently had someone inquire about buying a Long Island short sale property, and he wanted some tips and advice. For those who don’t know what a short sale is, it is when the seller of the property anticipates that the property will sell for less than the mortgage notes being held against it. Short sales started popping up in the Long Island marketplace with regularity in 2008 because of the decline in market values, and since then, have spread like a cancer. With the beating the real estate market has taken recently, it’s a fairly common situation now.

Since the short sale is now so prevalent, I figured I’d share my experience with everyone, since it could benefit a lot of people. Here are my short sale purchase tips, in no specific order:

• In a short sale the deal is still negotiated with the homeowner with his or her agent. The listing agent or sellers attorney is really the key to the transaction. If the paperwork in a short sale package is incomplete the entire process will go no where. I am finding that there are a lot of Realtors trying to do short sales with no real experience.However, once you come to terms in your negotiation, the signed offer is sent to the bank holding the note to get their approval. They, the bank may take months to accept, reject or counter the offer already agreed upon. A strong offer in a short sale has NO CONTINGENCIES, offers a significant amount in down payment (LTV), preferably cash deal, quick close, and accept in as is conditions.
• The asking prices Realtors offer Long Island short sales for are somewhat based on comparable sales. However the home is worth less than the mortgage note the homeowner is on the hook for, and, as I mentioned previously, it’s the bank that’s calling the shots now, not the home owner. The fact that the homeowner has no equity at stake gives them the freedom to advertise a price that is very aggressive, in order to get a great deal of interest and multiple offers.
• Back in the mid 2000s, if you brought a fully qualified offer at list price for a home with no contingencies on the contract, and there were no competing bids, that house was pretty much yours. Now, since the list price is very aggressive, and the person who is selling the house doesn’t call the shots on the deal, a fully qualified offer at list price doen’t means a thing. It’s all up to the bank whether your offer will be accepted.
• Despite the fact that your fully qualified, no contingency offer doesn’t mean what it once used to, you pretty much have to bring one anyway. The bank is going to do its best to force the buyer into an ultimate “caveat emptor” situation with no wiggle room to get off the hook.

Understanding the points above, it behooves the buyer of a property that is being sold short to plan ahead and expect a drawn out process. Consider the following…

• If you are looking to buy a Long Island home and have a short contract-to-closing timeframe in mind, the short sale might not be for you. The bank probably has a huge backlog of short sales to work through, and as I mentioned above, they’re just not set up to handle these transactions expeditiously.
• If you have need to sell a property in order to buy the short sale, sell your property before even considering the short sale purchase, since the bank isn’t interested in your home sale or home close contingency.
• Once you’re ready to submit a contract on a Long Island short sale property, have a thorough home inspection done by a trusted, qualified, and licensed home inspector. Since you’re probably going to have to come up with a no contingency offer, you have to get your inspection done up-front.

And finally…

• Make sure you have a real estate attorney who has experience handling Long Island short sales. The process can be very intensive, and the contract is most likely not going to be a standard real estate contract a Realtor is accustomed to dealing with.
• Understand that you are going to contract subject to a 3^rd party (the bank, investor and often a mortgage insurance company) approving the short sale
• If you have a Realtor assisting you with purchasing a home on a short sale basis, and they aren’t providing you with the kind of tips and insights in this article, IMO, perhaps it’s time to find a new Realtor.
• If you think you might owe more than your home is worth and need to sell, make sure the Realtor you hire has lots of experience with Long Island short sales.
• There are opportunities for buyers in the Long Island short sale inventory, although it takes patience.

This entry was posted on Thursday, October 29th, 2009 at 10:06 am by erik.reilly and is filed under Buyer Information, Investment Property, Seller Information, 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.