A. Daniel Bouchard-Licensed in DC/VA/MD

Real Estate Short Sales in DC Virginia and Maryland

The most prevailing inevitable first question I get from new home buyers I meet is,

"What's the deal with these Short Sales"?

Real estate Short Sales are both an opportunity and a curse for home buyers in today's market.

In theory, Short Sale is a fantastic concept that really can go a long way to making things better for everyone involved all the way around.

In practice, the truth is that Short Sales are extremely frustrating, time consuming, and seemingly completely illogical processes to get to the desired end result.

A Short Sale starts with a home owner who is "Upside Down" on their mortgage. In other words, the debts on the home exceed the value on the open market.

Usually a short sale home seller is in financial distress, struggling or unable to continue making the high mortgage payments that are due on the loan. Additionally other debts like taxes, mechanics liens, and other miscelaneous court judgments can be piled on top of the original mortgage(s).

Typically the home owner is drowning in debt. NOT necessarily due to any reasons that are their own fault either. Life circumstances can sometimes be unfair and vicious.

So in these cases, the owner makes a deal with the bank(s) to accept less money than is actually owed on the property in order to be freed of the liabilities. The banks in theory are willing to do this usually because typically their losses will be less than if they have to Foreclose on the property.

Some timese these home are distressed, unmaintained, old furnishings or otherwise neglected. Other times they are pristine fresh and new and need nothing at all to make them the perfect dream home.

Usually these homes are available to be purchased at or below fair market value. Sometimes these homes are distressed but often they can be in pristine condition.

Typically the banks involved with the seller are not in a hurry to make a decision however on accepting an offer from a buyer. These banks are often usually inclined to just sit and wait things out to see how many offers they can collect before deciding on one. This process usually takes at least 2-4 months or more just to get an answer from the banks.

Usually the answer comes back and forth several times with repeat increase in price demands and further concessions from the buyer.

Then additionally it takes another month or more to settle in many of these cases. The possibility exists that you could wait for a short sale property for 6-9 months and then get to the settlement table only to discover that the bank has now foreclosed on the property and the home will not be yours after all. Additionally there are other legal concerns with titling the property that could become problematic for you if you are not careful

In almost 85% of all cases, buyers who pursue the short sale options eventually abandon their efforts and go with a traditional purchase or a foreclosure purchase which are both far simpler to acquire.

Still there are phenomenal price opportunities if you have the time and patience to deal with these Short Sales. Just be really sure that you have the stomach to deal with the hassles and frustrations before you get involved.

I have lots of experience with these short sales and can honestly say that there are great opportunities to be had. But they are NOT for the faint of heart.

Call Dan to learn more about Short Sales and Learn how you can navigate the hurdles and get that dream home at a bargain basement price.

Being prepared is 2/3's the battle.

:-)

Top 200 Washington DC Real Estate Homes

Here is Dan Bouchard's Top 200 List of Washington DC Real Estate listings

(Courtesy of Metropolitan Regional Information Systems- The local REALTOR® Multiple listing Service

For your consumer MLS Access

Top 200 Inner Beltway Virginia Real Estate listings

Here are Dan Bouchard's top 200 list of Northern Virginia Inner Beltway condo, townhouse and detached homes(Courtesy of Metropolitan Regional Information Systems- The local REALTOR® Multiple listing Service

For your consumer MLS Access

Cautions about Financing Contingencies in Virginia, DC, MD

In my continuing effort to educate folks about relevant recent experiences that might be useful reminders to buyers and sellers alike, I offer my latest topic of discussion regarding the Expiration of Finance Contingency.

Most local regional home resale contracts are drafted with a financing contingency deadline. Typically this deadline is 21-30 days long but that can vary.

An important note to keep in mind for home buyers and sellers alike is that depending on the contract written, this contingency is usually automatically continued until the seller initiates a NOTICE to the buyer giving 3 days to remove the contingency or the contract becomes void. While the Contingency is "Active", the buyer's earnest money is protected for financing issues, until the contracted settlement date.

Now it is important for buyers to understand that removing a finance contingency should rarely be done unless forced to do so by such a NOTICE.

Additionally, caution should be used to be sure the buyer has received a solid contingency free loan commitment by the lender, and also if the buyer has exceptional confidence that extenuating circumstances beyond their control are not going to happen (i.e. losing your job unexpectedly).

Sellers however, SHOULD initiate the NOTICE immediately in order to protect their interests. If a deal is going to fall apart, it is better to learn about it sooner and move on to finding another buyer, than to risk wasting time on a buyer that has issues with getting their loan approved. But keep in mind, that forcing the buyer into that corner could kill the deal if the buyer is unwilling to release the contingency.

The Northern Virginia and the Greater Capital Area conventional contracts both have provisions for financing contingencies and these contingencies usually can go down any one of 3 likely paths once the contingency period expires.

For FHA and VA loans, refer to those respective Addendums detailing the terms, but the process is similar.

Upon expiration of the contingency period (and NOTICE given by seller), the options are:

1. The buyer is obligated to remove the finance contingency and acknowledge that the earnest money is at risk in the event of default.
2. The buyer decides that they can not risk eliminating the contingency and decides instead to forfeit their contract on the property.
3. The buyer requests an extension of the deadline, to which the seller may or may not be willing to comply. If the seller is not willing to comply, the transaction dies and the buyer technically forfeits their contract to purchase the property, the seller is then free to pursue other buyers.

In scenario 3 above, in the event that the buyer is able to solidify the financing before the seller secures another buyer, the parties could in theory still settle on the property if they are willing and able to do so "Out of Contract".

This is not legally a very "tidy" way to handle the situation but it is plausible and does happen from time to time.

This article is strictly experiential in nature over 16 years in this Real Estate industry. Dan Bouchard is NOT an attorney and this article should NOT be construed as legal advise. Please consult competent legal counsel regarding your specific situation.

Today's TOP 300 homes $400-650k 2 bedrooms+ in Washington DC (Source: MRIS )

Dan Bouchard offers today's list of the top 300 homes in Washington DC.

Traditional re-sale, new construction, foreclosure and short sale properties. Many of these homes are pristine and fantastic properties.

Call Dan today to be buyer represented on any of these below listed homes. Also, contact Dan for help with purchasing and renovating distressed properties.

Here is today's top Washington DC 300 list <<<<< click on the link to view all the details :-):