SHORT SALES IN HOMES FOR SALE WINSTON SALEM TRIAD NC
I'm asked at least once or twice a week from buyer customers or clients: "What exactly is a Short Sale Foreclosure?" I usually start answering by telling them what it isn't. It isn't when a property is already in Foreclosure. And it isn't a term used to describe a "Quick Sale" of a foreclosed property.
A "Short Sale" can be defined as an "arrangement" between the homeowner and the bank that lent them the funds to purchase their home, to accept a buyer's offer of a lesser amount than what is now owed to pay off the mortgage. The difference between the amount owed and what the bank will collect at the "short sale" is referred to as "the deficiency".
When I'm speaking with new buyers who have expressed an interest in foreclosures and short sales, I ask these four questions in one fashion or another:
- Why are you looking for foreclosure homes for sale in Winston Salem?
- What level of neglect requiring remodeling are you prepared for?"
- Are you looking for an investment or a home to live in?'
- If its a home to live in, I ask, do you have a home you must sell prior to purchasing?
- If yes or no to the home for sale question, the next is, how quickly do you need to close on a new home?
Not all buyers are ideal candidates for short sales. Some examples are:
- Buyers who do not have resources to repair and rehab the property, if necessary
- Buyers who have alot of contingencies
- Buyers who need to sell their home before purchasing a short sale property
- Buyers who need to close the transaction quickly, within 30 to 60 days.
At the time when an offer is being put together, these issues must be given full attention:
- A "Competitive Market Analysis" should be prepared to avoid the problem of a Lender not approving the short sale contract because the seller may become liable for a deficiency, if the offer is too low. The buyer may lose valuable time as well, waiting for a unacceptable response.
- If the earnest money is not required until after lender approval, there is nothing to bind the buyer. If it is requried prior to lender approval, it can be tied up awhile awaiting lender approval.
If this buyers are considered a good candidate, it's a good idea to prepare a rider to the contract that sets forth the amount of time the buyer is willing to wait for the lender to review and process the short-sale package. It's a good idea to keep in mind, however, if the lender believes the transaction doen't have a good chance of closing, a short sale may not be approved.
When backup offers are considered on these foreclosure homes for sale in Winston Salem, listing agents generally will accept backup offers. However, some listing agents are argreeing not to take backups if the buyer is strong and the contract price and terms are met.
The approval of the Lender should be treated like any other contingency, like a home inspection for example. It is still the Seller's choice whether or not to submit the offer to the lender. Both buyer and seller should sign the contract (not the lender) so that is it a binding contract between them.
If you need help locating Homes for Sale in Winston Salem, please leave us a message at Park Place Real Estate . We are here to help you. If you're a BUYER or a SELLER you can sign up for search for homes for sale in the Winston Salem and Greater Triad Region for free and with no obligations to ever purchase or sell any real estate! We'd love to hear from you!
