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Tips for Buying a Short Sale Home
These days many people have to sell their homes in hurry either because they cannot afford the payments, they lost their job and need to move soon, or maybe due to a divorce or other personal reason. Whatever the case, this means the sellers usually sell their home using a short sale which means the process will go faster. If you see a home you like but it is a short sale, you may have questions about it. Here are some tips for buying a short sale home to help put your mind at ease.
Ask your Syracuse real estate agent for advice
It is the job of a real estate agent to know all about what goes into the buying and the selling of a home, no matter what kind of sale it might be. They are a great resource for any questions you may have and may even be able to help you along the way.
Find a House You Like
With your real estate agent, look for a home that is short sale, it may be advertised or have a big price reduction letting you know that it may be a short sale property. It may that a bank has to approve the sale before it can be sold.
Make an offer
Making an offer on a short sale home may seem easy, but there are a few things that you should know. If the owner has the house listed at a certain price, but they paid a different price and the house was appraised at a certain price, it is important to try to meet the appraised price. You will need to get the seller and the seller’s bank’s approval before the home can be sold. This may take several different offered prices.
Get as much information as possible
If a house is a short sale, it is important to talk with your real estate agent about getting as much information as possible. This way you can make the best offer or counter offer possible. See if your agent can talk with the owner to find out more information or see if they can do some research.
Make a Counter Offer if Needed
Talk with your real estate agent about what would be a fair counter offer given the market, location of the home, short sale conditions, and more. This way you do not waste time making many rejected offers and have a better chance of getting the home you want.
With the housing market the way it is and many people needing to move quickly, short sales are being more popular. There are some things you need to know with short sales though and it is important to work with your real estate agent as much as possible. This way you will have peace of mind and enjoy your home now and in the future.
Guidelines for Short Sales Set by Treasury
Last Monday the U.S. Treasury set guidelines to speed up short sales of homes and make other loan modifications to try to keep foreclosures from rising. The Home Affordable Foreclosure Alternatives program provides financial incentives for making short sales simpler. This program involves a lender to agreeing to pay the sale price of a home and pay off its mortgage even when the price is short of the price owned by the homebuyer.
This program also includes guidelines such as setting limits on the amount of time it takes a bank to accept an offer, helping borrowers with their debt and limiting claims from lenders. Even though this Home Affordable Foreclosure Alternatives program has good intentions to help, it has had limited success in doing so. Due to this limited success on Monday more pressure was put on mortgage companies to make the trial of 650,000 modifications permanent.
Short sales are a big favorite of real estate agents and other community group over foreclosure properties because they help with the borrower’s credit rating and leave the property in better condition than when the homeowner got evicted. However, agents have complained about short sales because of the lenders not following through and whether or not they will hold the buyer responsible for the debt in the future.
These new requirements and guidelines include mortgage servicers having ten days to approve or disapprove the request for a short sale and it also requires the lender to release the borrower from all debt. It also does not allow mortgage companies to reduce real estate agent’s commissions on a short sale.
This new program seems to have all the best intentions and if it is able to succeed further and in more areas, it could be very good news for homebuyers and also real estate agents. It may help the housing market as well because more people will be able to afford a home. So, home buyers and agents should look out for updates on this and other future programs to benefit homebuyers.
References and for more information visit:
http://news.yahoo.com/s/nm/20091130/bs_nm/us_treasury_shortsales
Five Ways to Encourage Foreclosure
No one wants to buy a home, and then lose it to foreclosure. It happens, though, even if you do everything right when buying a home.
There are some things that buyers do, however, that just encourage a foreclosure. Here’s what not to do when buying if you want to keep your home.
- Attend a “no money down” seminar. Most banks won’t even discuss a no money down loan with you anymore, but there is almost always one bank looking to make a profit. In exchange for a 15% interest rate, with the entirety of the loan due within five years, you might be able to get a no money down mortgage. But what happens in five years when you’re still living in the home, and can’t make the balloon payment? You’re going to lose the home.
- Putting your entire savings into buying a home. A down payment and closing costs are expensive. So is hiring a moving truck and getting any extra items you needed for your new home. That’s not an excuse to go overboard and clear out your entire savings account. Don’t assume that you can just start making up the difference again in your next paycheck, or that you should be able to turn to your credit cards for emergencies. Homes are expensive, and you need to have the money set aside for emergencies or to cover a mortgage payment or two if your income is suddenly reduced.
- Don’t take the good advice offered to you buy your real estate agent, mortgage broker, and other professionals you will be working with when buying a home. Don’t assume that you know everything, just because you’ve read a couple books on real estate. These people are professionals, and they want you to move into a home that you like, and one that you can afford. They aren’t giving you advice just to close the sale and collect their fees.
- Choose the most expensive home. Just because you’ve been prequalified for a $300,000 home, does not mean that you can easily afford the payments for that home. Find out how much you can reasonably afford (plan on 33% of your take-home income), and keep to that amount. Overextending yourself will only get you into a home that you can’t actually afford.
- Significantly changing your financial picture before close. Yes, it would be nice to have a new car sitting in your new driveway, or to buy the furniture set you’ve been eyeing as a housewarming gift to yourself. Don’t do it. Your credit score is affected by your available amount of credit. If you use that credit to buy any extras, that can change what the bank can offer you for a loan. It also affects what credit you have available in the case of a financial emergency. Don’t lose the home of your dreams because you just had to have that new dinette set.
No one wants to lose their home. Unfortunately, sometimes things happen beyond your control. Some things, however, you can control. Avoiding these common buyer traps, though, and you’ll be in better shape to keep your finances in good shape, and to avoid foreclosure.
Short Sale Tips for Sellers
In this economy and these days, many people trying to sell their homes need to sell their homes fast. This may be because of cash flow problems, job conflicts, location conflicts or personal reasons. Whatever the case, there are some options. Having a short sale can be an advantage for these types of sellers. Here are some tips on how to set your home up for a short sale. That way you can move to your new place right when you need to with fewer worries and hassles.
Ask your real estate agent for advice
Real estate agents have experience with all types of sales. They will be able to help you determine if a short sale is best for you and your family and help you get started.
Determine the value of your home
If you are working with a real estate agent, they can help provide you with help in determining how much your home is worth.
Add up all your costs
Add up all your costs of selling your home. Then work with your real estate agent or broker they can then help you determine your closing costs.
Figure out what is owed
It is important to figure out what is owed on the property, including all loans taken out for the property.
Contact a lender
Contacting a lender, will help you determine how they specifically handle a short sale of a home. Some lenders will help you reduce what it is owed or make other options possible. Others make work with agents or anyone else involved to see if they can help in any way to make the short sale possible.
These tips will help those home owners who need to sell their home fast, get a good start. That way they can be on their way to that new job, new location, friends and family and more and have less left behind to worry about. This way they can focus more on their new bright future.