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SHORT SALES
Information about pre-foreclosures

Short Sale

Short sales, also known as pre-foreclosures, are a dominate property type on the real estate market.  Unlike how they sound, a short sale can actually take several months to close, if they in fact close at all.

Numerous factors can determine the likelihood of a short sale making it to the closing table.  Educating yourself on the overall process can save you time and money.

What is a Short Sale?
A short sale occurs when the lien holder, often a mortgage lender, settles on a loan for "short" than the balance owed.  This is one method used as an attempt to avoid foreclosure.

How a Seller can qualify to sell as a Short sale
If a borrower has fallen behind on their mortgage payments, their mortgage company may be inclined to allow the borrower to sell the property as a short sale.

Falling behind on payments isn't the only reason a lien holder may consider a short sale.  If a borrower has become ill, loss their job, etc., they may take these matters into consideration to grant a short sale.  Since each company's policies can vary, you should check with yours to determine their guidelines.

Buying a Short Sale
With the massive amount of inventory on the New Mexico real estate market, you'll inevitably come across a distressed property such as a short sale.  Home buyers should spend quality time understanding the transactional process of a short sale before considering them as an option in the house hunting.

Approved vs. Unapproved - Knowing if a listed short sale is approved or unapproved will make a world of a difference.

If a short sale is approved, you can close on a short sale in as little as 3-6 months.

This is because the homeowner's mortgage company has received necessary documents from the homeowner, ordered appraisals and/or BPOs (Broker Price Opinions) and have approved a specific list price.

When a short sale listing has not been approved, the overall transaction can take 6 months to over a year to close.  This is due to the fact that the bank for one, may not realize the homeowner is attempting to sell as a short sale or is barely in the initial stages of seeking permission to sell as a short sale.

A very important factor that can determine the timeframe of a short sale, is the listing and buyer agent's experience with distressed properties.

List Price - It is important to understand that the list price shown on a property, more than likely is not the approved or acceptable price for the property.  While the home make look appealing and a steal for the price, keep in mind, if it looks to good to be true, it probably is.  Far too often, a list price is reduced without the mortgage company's knowledge or permission in order to attract a buyer to submit an offer.  This can lead to heartbreak, not to mention months of wasted time.

As-Is - Be prepared to accept the home as is.  The mortgage company in most cases, will not make an repairs to the property.  Then, since the homeowner is in a distressed situation, they may not be able to afford to make any repairs, even if they FHA required and you're using an FHA loan.  You should budget to make the repairs yourself, especially the lender required repairs prior to closing on the home.

Interested in Buying or Selling a Short Sale?
Syan Real Estate is an experienced short sale brokerage.  We can assist you in the sale of a short sale or the purchase of one.  You can e-mail us or call (505) 730-8181 for direct and immediate assistance.

 

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