Short Sales - The Family Hunting Game

I know that short sales could be a great opportunity for some Buyers. It is obviously a sign of distress when it comes to sellers. Hunting down and capturing a short sale home (prior to foreclosure) certainly has become the latest sport for the Buyers in the market place. What any good "sportsman" has to do is to get acquainted with the approach and know their opponent - that is the key to success. Extremely low-balling a home is kinda like firing a warning shot above their heads. In my experience it will make the lender run away and not respond. Do your research (determine the value of comparable homes, derive a value on the property, make an educated and well thought out offer within 85% of the determined value NOT LIST PRICE) and then fire your direct shot. Do you think that the lender has not already determined the home's value? Knowing what they know is the key. That approach will not scare them away - it will more than likely really make them appreciate your offer and take it much more seriously. The "warning shots" take up a lot of time for a lot of people and most of the time, do not pan out.

I am not a hunter. However the analogy seemed to fit in quite well here!

IS YOUR HOME UPSIDE DOWN?

Weary homeowners finding it tough to qualify for federally sponsored mortgage assistance programs are increasingly contemplating whether or not to consider the short sales route instead. While short sales have certainly assisted many homeowners in resolving their debt burdens, there are pros and cons to consider. Below are some of the most critical questions to answer before deciding whether to short sale your home or not…

1. Can you afford to keep your current home? Is your current economic situation a question or weeks or months/years? Depending upon your specific situation you may be able to delay or make partial payments for a few months by contacting your current mortgage service department. On the other hand, if you have been permanently downsized, disabled or are facing other longer term economic problems, it is a good idea to grapple with reality sooner rather than later; by addressing the problem early you have more choices.

2. Do you want to keep your current home? Sometimes situations change. Marital status, children leaving home (or coming home), job change, health or other events make a once desirable home little more than an ongoing headache. Evaluate your present property to make sure it is still a good fit before deciding whether to keep it or sell.3. Can you handle your other debt obligations? Short sales are often a great alternative to thos

e seeking to avoid bankruptcy or planning to restructure their debt obligations.

4. Do you owe more on the home than it is worth? Unfortunately, declining real estate values combined with variable interest rate loans, teaser loans or other hybrid mortgages have created a situation where many homeowners now owe more than the current market value of the home. In many cases, tens of thousands of dollars more. Make it a priority to determine whether it is worth the long term cost of paying down a high mortgage or saving for retirement, college and other expenses for the family.

5. Are you unable to refinance or gain more favorable terms? Not only have home values plummeted in many parts of the nation but rising unemployment rates, tighter lending standards and higher debt to income ratios caused by re-setting interest rates on ARMS have resulted in the perfect debt storm. Homeowners are increasingly unable to obtain favorable refinance terms.

6. Do you desire a relatively fast sale? Due to the downturn in the economy and backlog of existing home sales, there is a large inventory of homes on the market. Those that seriously wish to sell must price right and work aggressively to position their home for a fast sale. Many short sale investors are already pre-qualified and able to purchase the property as soon as the bank approves the offer. While a short sale isn’t “instant” (45-90 days), they are generally much faster than the current sales period for a regular MLS listing (6 to 12 months).

7. Do you want to avoid fixing the property in anticipation of a sale? Few things are worse than being forced to spend money in order to sell a property below the price you originally paid. Short sale investors routinely purchase properties in “as is” condition saving you the time and money required to put the property up for sale in the traditional manner.

Hello..is anyone home? HELLO

Imagine being homeless. No, not under a bridge in the stereotypical way. You have just sold your home in a down market. You have held off looking for your next home until yours finally sold. After months of patience you are off on the house hunting trip you've long awaited. You can feel the excitement and your anxiety is somewhat palpable.

There it is- the home you have been eyeing from a distance is finally in site. Nobody lives there, it is just meant to be! Except for one thing, the owner of the home does not care to sell. You can't get in to the home to even see it. Trespassing you walk around the exterior, peering in windows. You notice the power is out and your dream home is slowly being abused by a lack of attention. The basement is getting wet, the grass is growing, the paint is beginning to peel.

This is frustrating to say the least. I have clients that want to buy homes that are sitting empty. See, in Indiana we own homes. Even if you have a mortgage on the property, you own your home. If you don't pay your mortgage payments the bank may have to start foreclosure proceedings followed by the actual foreclosure or sheriffs sale. I have known people who have lived in their home for 12 months without paying a payment and moving out just prior to the sheriffs sale.

Potential buyers cannot buy your home unless you, the homeowner, allow them to see the property and they submit to you an offer to purchase. Many folks going through the foreclosure process feel like the house of cards is falling in all around them. They don't want to face the facts or do anything to save their credit. They feel that there really is nothing they can do to help themselves.

Now, I don't claim to have all the answers. I do feel that if you are facing foreclosure you should do anything you can do to sell your home. Communication is the KEY!!! Talk with potential buyers, enlist an active real estate professional to help. Don't forget that our services are free to you as a seller anyway. You might not be able to save your home but you may be able to save your credit and place yourself in a good position to be able to purchase another home in a year. If you foreclose you won't be able to consider it for about 7 years.