I was recently on a conference call with some of the top real estate minds in the country talking about short sales. Based on this call it appears we may be in for a second wave of foreclosures and short sales as many option arm loans are set to adjust in the coming months. It seems like every week I get a call from an investor or homeowner interested in alternatives to foreclosure. Simply put a short sale involves negotiating with the bank that holds the mortgage to accept a lower amount then what is owed on the home so the home can be sold. For example, say the owner owes $200,000 on a home. The home is sold and under contract for $175,000. The sale price results in the owner being "short" $25,000 in funds to pay the bank off. The short sale is contingent on the banks willingness to accept the lower amount and forgive the owner of the additional $25,000. This is a much better alternative to foreclosure.
With short sales almost becoming common place in our market it is surprising to me the perception still is they are not worth the time and effort. The fact of the matter is, if you understand the way they work the process is fairly straight forward. Over the past several months I have had short sales accepted that were tens of thousands of dollars under what was owed. One was even $200,000 short and was accepted by the bank! Typically, we are getting them accepted $50,000-$80,000 short. As far as the time frame goes I have had short sales take at little at 30 days from the time of contract to the time of closing! While this is unusual it can be done!
From my experience there are three critical factors key to the success of short sale. The first is the involvement of a real estate professional familiar with the short sale process. Second is the existence of a legitimate hardship on the part of the seller. This may be a job loss, illness, etc. In one case I have even had incarceration used as a hardship! Finally, the third key to the success of a short sale is the buyer's patience and understanding of the process. A short sale is not a typical transaction and while they can be completed in 30 days, it is not uncommon to wait 90 days for a response and to get a sale approved. If the buyer is not willing to wait and loses patience it will start the process over.
For help with your specific short sale questions contact me anytime. We do this everyday! Do not let you home go to foreclosure when you have a viable short sale alternative!
Visits us anytime at Albany NY Short sales
Your Friend in the business,
Kevin Clancy
518-861-7016
kevin@clancyrealestate.com
http://www.clancyrealestate.com
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