Outer Banks Real Estate- What's A Short Sale & How Do You Buy A Outer Banks Short Sale

It seems like every day you hear about more people losing their homes to foreclosure (more about that tomorrow) or what is becoming the new buzz word in real estate the "Short Sale". It was just a short time ago that no one, at least the majority of us in the Outer Banks real estate market, had ever heard of a short sale. Now it seems a day does not go by where a new short sale listing comes on the market. Unfortunately I have become somewhat of an expert on short sales as I have sold and listed several in the last few months. So, what is a short sale???

A short sale is when a sellers list price and eventual sale price is below what the current payoff will be to the mortgage company. It's that simple!! This has become more common on the Outer Banks over the last year as home values have dropped substantially causing a lot of homes to sell below what the seller originally paid for the house as far back as 2004. Here on the Outer Banks most of the homes were bought with 100% financing which equals bad news for the sellers in today's market. It comes down to sellers who own homes they can't sell for a profit and for a myriad of reasons can't afford to pay for them. If the seller is in this situation, then what are the options??

Well the best option available for the seller is to get the lender to agree to a lower payoff amount rather than go to foreclosure. Most lenders these days are more than happy to work with a seller even if they are still current with the mortgage. Once the lender agrees to a short sale what happens next?? Each lender has different requirements but the most common ones are:

• The house has to be listed for at least 90 days
• The seller will have to fill out the lenders mortgage workout paperwork- This explains how the short sale will work and what papers the seller will need to give the bank such as tax returns, bank statement, pay stubs etc.
• The seller will have to provide a hardship letter stating why they can't afford the house
• The Realtor will have to provide the lender a current copy of the listing agreement, recent sold comps, and a letter to explain the current market conditions

Then the seller waits for a buyer to come along to submit an offer. Once there is an offer on the house the seller and lender must approve the offer.

So as a buyer what can I expect when purchasing a short sale??

In most cases short sales are great deals if you work with a good Realtor who knows the market and you have patience. Keep in mind though that just because a house is short sale does not mean it is the best deal on the market. Also, just because you submit and offer doesn't mean the lender is going to accept it. Here are a few common things you can expect when purchasing a short sale:

• In almost all cases the property will be sold in "As-Is" condition meaning you get it just as you see it. I always recommend a home inspection be done before an offer is made so there are no surprises after closing.
• The lender will not pay any closing costs or make any other concessions
• The lender will require the buyer to submit a pre-approval letter or proof of funds for a cash buyer along with the offer
• Expect multiple offers on the property, so make a good offer to start with. Since the lenders are losing money on these deals my experience has been that they will accept less than the list price but not too much less. I have had lenders reject offers that were too low.
• Be patient!! Don't expect the lender to make a decision for at least 2 to 4 weeks. Lenders have a protocol they must follow in order for the offer to be processed and it does not happen overnight. This is small price to pay for getting a house a great price
• Be prepared to close within 30 days or less when the lender accepts your offer. It's very important to remember this is not a standard real estate negotiation!!! The lender dictates what an acceptable price is and when closing will occur.

I hope this helps explain the short sale process. If you have any more questions or comments please contact me here .

My experience on the Outer Banks has been that short sales offer an excellent opportunity for the right person who can work within the above limitations. The Outer Banks market has short sale listings across all price ranges from $225,000 to $2,000,000+. I would love to work with you to find a great Outer Banks Short Sale. Go to Outer Banks Short Sales to receive a current short sale list. If you're a seller who owns property on the Outer Banks and would like to see if a short sale is an option for you contact me here.

Visit my website at http://www.hometownobx.com/