SHORT SALE PROPERTY LISTINGS (Scroll Down to Bottom of Page to View All Listings)
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SHORT SALES
When a homeowner needs to sell and the property is worth less than what is owed on the mortgage we have an upside down home or sale. If the homeowner is facing foreclosure, many times the option of a short sale is a good alternative.
If the homeowner can document financial hardship, they may qualify for a short sale, where the bank may agree to be paid back less than what is owed. If it is listed for sale, it is now a short sale pending lender approval of the seller’s financial hardship and review of an offer, once accepted.
Many times, these properties are listed below market value to move the property quickly before foreclosure and a Trustee’s Sale occurs.. Other times, depending on the lender as well as how much time remains prior to foreclosure, the house will be initially listed at fair market value in an attempt to demonstrate to the lender that fair market value may be less than when it was originally listed and certainly less than what is owed.
Bargains can be found, with persistence, but always remember to conduct a thorough comparative market analysis of other comparable homes sold in the neighborhood to determine real current value as well as resale value. We can help with that.
BUYING SHORT SALES
There is a lot of interest in buying short sale properties today. A lot of information, some good and some bad, is floating around about the subject. Often the information offered is for sale, with the promise that you can make a lot of money with little effort once you know “the secret formula”. The fact is that there are no secrets, and to get a good bargain does require effort.
WHAT IS A SHORT SALE?
A short sale can be an excellent solution for homeowners who need to sell, and who owe more on their homes than they are worth. In the past, it was rare for a bank or lender to accept a short sale.
Today, however, due to overwhelming market changes, banks and lenders have become much more negotiable when it comes to these transactions. Recent changes in corporate policy and the Obama administration have also improved the chances of getting a short sale approved.
But to be technical, here's a more official definition:
A homeowner is 'short' when the amount owed on his/her property is higher than current market value.
A short sale occurs when a negotiation is entered into with the homeowner's mortgage company (or companies) to accept less than the full balance of the loan at closing. A buyer closes on the property, and the property is then 'sold short' of the total value of the mortgage.
THE SHORT SALE PURCHASE PROCESS
There are many important questions an experienced real estate agent, who represents you as the buyer, should be prepared to ask the seller’s agent.
First it’s helpful to know if the seller is behind in their mortgage payments and if they have received a letter of default (a notice that if they do not get caught up within a strict period of time, the home will be foreclosed on). This is important so that we may get a better understanding as to seller motivation, how much longer the property may be available as a short sale and what the total time frame might be.
Second, it’s important to know if there is a second mortgage. Many borrowers, during the mortgage boom, were purchasing homes with no down payment and 100% financing. This was typically accomplished by obtaining a first mortgage in the amount of 80% of the purchase price, and a second mortgage for the remaining 20%. As a result, with the request for a short pay approval, a seller will have to get approval from two lenders.
Third, it is very important to know if the seller has applied for a short sale with the lender, or lenders, if there is more than one mortgage. This is an application and package the seller prepares documenting their finances as well as describing their current financial hardship, a critical first step for the seller to qualify for a short sale in the first place.
If the seller has already done this, than that’s good news for a buyer, as all the seller and lenders are now waiting for is an offer to purchase from a buyer. If the seller has not submitted a short sale application yet (some lenders will not look at an application until an offer is presented), then we know that the short sale process and possible approval or denial will take longer.
Fourth, although it may not seem so terribly important, we ask if the seller’s real estate agent has had past experience in successfully closing other short sale transactions. The process of the seller’s agent working with and negotiating with the bank is arduous, requires special knowledge, great levels of patience and perseverance and an unusual skill to follow through and communicate well. It is very helpful if the agent representing the seller has a strong record of successful, closed short sales.
Finally, once an offer is presented to the listing agent and the seller and is accepted, it is then sent immediately to the lender, or lenders (if more than one mortgage is involved) and the short sale approval process begins.
It is important to note that at this stage, your offer is not "technically" accepted since the lender, or lenders, have not agreed to a short sale yet. As a result, escrow is typically not opened and a buyer's earnest money deposit is not required at this time until a short pay approval letter is provided. Also, none of the buyer contingencies such as a home inspection, termite inspection and others begin until the short pay is approved.
Although it is a matter of great debate, some seller's agents keep these listings "active" in the MLS to obtain back up offers and other interested buyers, while others will change the listing to a pending status, that we refer to as "Contingent-Other", which basically means an offer has already been accepted by the seller.
The short sale process will almost always include an appraisal by a Licensed Appraiser and possibly a BPO (Broker Price Opinion) from a local Broker or real estate agent, as well as a thorough review by the lender’s mitigation department and committees. This process can take anywhere from four weeks to nine months. The good news is that the process is improving, becoming more streamlined with approval or denial coming much more quickly. It is not uncommon now to see many short sales approved within 4-6 weeks.
When the bank finally does respond with an answer, sometimes this can be in the form of a counter offer, a request for the seller to contribute some funds of their own, or the offer may be accepted outright. At this time, a short pay letter of approval is provided the seller. This letter will contain the price the bank is willing to accept “short”, what closing costs are to be paid by the lender, the seller and the buyer, and a period of time in which the sale and transaction must close, usually 30 days.
WHY PATIENCE IS REQUIRED
The simplest reason why patience is required as a buyer is that you will find yourself waiting weeks and weeks without hearing anything from the seller’s lender. In the past, it has not been uncommon for a short sale to take six months or even longer to finally get an answer from the lender. It can feel very frustrating and nerve wracking.
A good real estate agent, working for the buyer, will check frequently with the seller’s agent to see if there has been any communication at all with the bank. Hopefully that agent is following up regularly with the bank as well, as this is an important part of a short pay approval.
As mentioned above, some lenders are doing a much better job at streamlining and speeding up the process. We are hearing more and more about approvals occurring within 4-6 weeks now. Keep in mind that some lenders are better than others. Some have a bad reputation for being slow and others are known for doing a much better job. Experienced real estate agents, with a good track record of successfully helping buyers purchase and close short sale transactions will know who the good and bad lenders are to work with.
WHY SHORT SALES ARE THE BEST REAL ESTATE LAY AWAY PLAN
There are two huge reasons that make short sales a great real estate lay away plan. As mentioned above, escrow is not opened and no deposits are required. REPEAT.......escrow is not opened and no deposits are required until the short pay is approved.
As a result, a buyer can make an offer on a short sale property with very little, if any risk. Since no earnest money deposit is tied up and escrow does not start until bank approval, if it occurs, none of the buyer contingencies actually start until bank approval as well. In essence you have tied up a property with your offer while everyone waits for a response from the lenders.
Because there is in essence no risk with your “pending” offer, many buyers will see the opportunity in making more than one offer. In fact, many will make offers on multiple properties, not necessarily all at once, but if another property comes along that seems bargain priced and meeting a buyers search parameters, there’s very little risk in having more than offer out there. Should you find a property better than one you previously made an offer on, you can keep both offers active, or if you feel the first offer made was on a property now inferior to a better one you found, your agent can contact the seller’s agent to withdraw your offer.
And, almost always, there will be multiple backup offers in place on most short sales. There are two reasons for this. One is that at bargain low prices, often times more than one buyer is attracted to the property and makes an offer. If made simultaneously, the seller and their agent will present the best one to the lender. And, in some cases even with an offer presented to the lender, a seller will want to obtain backup offers in case the first buyer grows inpatient or finds a better property and backs out.
So, here’s an opportunity to “float” an offer or multiple offers, with little or no risk and wait and see what happens. This really is an unprecedented situation where you can make offers on real estate just like a lay away plan!
My favorite scenario is when a buyer decides to put off making an offer because they have some sense that maybe prices may fall a little further in six months. Well, if that’s the case, you can present an offer on a short sale, or a number of short sales, and by the time the lender gets around to doing their appraisal, it could very well be six months later. If prices are lower, you win!
AND WHILE WE'RE ON THE SUBJECT OF BACKUP OFFERS
As we’ve described above, it’s not uncommon to have multiple offers on a property all remaining in back up position.
Many times, the buyer who was in first position has either already found another property, perhaps growing impatient with the wait for the short pay approval, and did not let the seller’s agent know that they were no longer interested in purchasing the property. So, when the bank finally does approve the short sale, buyer number one is no longer interested in purchasing, so they will then go to the backup offers. Since the same situation could possibly apply to backup buyer number two, number three, etc, sometimes, although surprising, a buyer who may have been in a fifth or eighth backup position will end up in first position and buying the property.
And, there are a few other reasons why the first buyer may decide not to purchase the property, even if it was approved for a short sale by the bank. Sometimes there can be some downsides, not always learned until late in the process.
WHAT ARE THE DOWNSIDES, OR LAST MINUTE SURPRISES?
Waiting – In worse case scenarios, a short sale approval can take up to six months and we’ve even seen and heard of a few approaching ten months. Many buyers simply get tired of waiting, give up on a purchase or find something else to buy instead. Thankfully, we are beginning to see a trend of shortened short pay approvals by lenders today.
Lender Counter Offer – Since, as a part of the bank’s short sale approval process, an appraisal, and often a BPO (Broker Price Opinion) is done. Many times if the valuation ends up higher than the agreed upon sales price with the seller, the lender will respond with a counter offer at a higher price. Many buyers are disappointed and will decide to cancel. Some buyers will still see value and a good bargain price and accept it, or even try to counter it.
The Second Lender – If there is a second mortgage and lender (usually with 100% financing) this lender has to agree to a short sale as well. It’s important to understand that if the seller is foreclosed on, the second mortgage holder will get nothing. Their loan will be totally defaulted on. So, in most cases the second lender will agree to substantially less than what is owed. The second lender typically feels that getting something is far better than nothing upon foreclosure. Typically a second lender might settle for $3,000 to $8,000 regardless of the balance owed. However, in some less common situations, they will want more, leaving the buyer frustrated with the greater expense.
Past Due H.O.A. (Home Owner Association) Dues – Of course, if the homeowner is having difficulty making their mortgage payments, it is likely they are also behind with their monthly H.O.A. payments if the property is a condo or in a Home Owner Association. So, when the approval comes along, all the liens filed on the property (including unpaid H.O.A) are discovered. These dues can quickly add up to a large amount when you include past due penalties and interest. This amount will need to be successfully negotiated by the seller’s real estate agent as well.
Other Liens – When a homeowner is having financial difficulties, it is not uncommon for other bills to not get paid as well. If the amount owing has anything to do with the home (maybe some recent roof work, furnace or air conditioning work, etc) and it is unpaid the contractor may have filed a lien against the home. Again, at the time of short sale approval these liens are discovered.
Lender Conditions – In some situations the lender, as part of the short sale approval, will put some odd or unusual conditions on the transaction. In some cases it can be a seller concession, where they are asking the seller to contribute in some way to the closing, particularly if they could not demonstrate financial hardship. In other cases there can be buyer concessions requested such as paying some seller closing costs, etc.
Who is Expected to Pay? – Well, this is the biggest surprise, but really shouldn’t be. If the seller is in financial distress and having difficulty making mortgage payments, H.O.A. payments and other home related expenses, then it should be somewhat obvious that any other outstanding amounts owed cannot be paid by the seller. These expenses won’t be paid by the lenders either, as they are already agreeing to be paid back less than what was borrowed. So, who is expected to pay? The buyer. Who else? Which is why some buyers walk and why buyers in backup position can end up ultimately becoming the buyer, and new owner.
ARE SHORT SALES A BARGAIN?
It’s commonly assumed that any Short Sale must be a bargain and an opportunity for easy money. This simply isn’t true. You have to be very careful about buying a Short Sale if your intent is to make money off of it, or simply get a good bargain price.
While it’s true that the bank is typically motivated to sell the property as a short sale, since foreclosing on a homeowners is very costly, they still have to look at their bottom line.
When considering the value of these properties, you need to look closely at comparable sales in the neighborhood and be sure to take into account the time and cost of any repairs or remodeling needed to prepare the house for resale. There are indeed many bargains to be found, but not every short sales equals a bargain. Consult with a real estate agent who is experienced closing short sales. It can make all the difference in the world.
ARE YOU READY TO MAKE AN OFFER?
We are here to help and we are here to explain. Please feel free to call or email anytime. I’d be happy to meet with any interested buyer and explain the short sale process in greater detail than described here.
There really are some wonderful opportunities, bargain prices and great homes and condos for sale. Very few agents and very few buyers truly understand the short sale process as well as we do. And, we see it from both sides, as we also help homeowners facing foreclosure, discover that the short sale is a valid alternative to foreclosure and we guide them through the short sale approval process.
We understand the short sale process from both the buyer and the seller perspective!
MORE ABOUT SHORT SALE BARGAINS!!
With more and more short sale properties coming on the market, and the new Federal Program, H.A.F.A., which will streamline and shorten the short sale process with preapproved short sales.
UPDATE - APPROVED SHORT SALE BARGAINS! Lender Approved Short Sales included.....SEE BELOW
These are properties where the sellers have already submitted a request for a Short Pay with their Mortgage Lender and the Lender has approved the asking price, even though it is less than what is owed on the mortgage.
This is a classic "Short Sale", but what makes it unique and beneficial to a buyer, is that the bank has already approved the short pay and selling price. A quick and easy escrow can be accommodated instead of the very long and frustrating waiting game for the lender to appraise, review and decide whether or not to accept a selling price, a process that can often take two to six or more months.
FOR APPROVED SHORT SALES "DAILY HOT LINK" PLEASE GO TO THE FORECLOSURE PROPERTY LISTINGS PAGE.
WE’RE HERE TO HELP
We are here to help and we are here to explain. Please feel free to call or email anytime. I’d be happy to meet with any interested buyer and explain the short sale process in greater detail than described here.
We understand the short sale process from both the buyer and the seller perspective!
WE WORK WITH BUYERS AND SELLERS. THE LISTINGS BELOW ARE NOT ALL OUR LISTINGS, HOWEVER WE CAN REPRESENT YOU IN ANY TRANSACTION.
Please feel free to let us know how we can be of further assistance. We'd be more than happy to answer any questions, provide a Comparative Market Analysis (CMA), or show you any properties for sale. We look forward to helping you.
If you or anyone you know is facing possible foreclosure, please visit .
TO SEE CURRENT LISTINGS CLICK ON THE LINKS BELOW:
5/21/13 DAILY HOT LINK! - SHORT SALE LISTINGS
Click on the "Daily Hot Link" above to see Short Sale Listings updated daily. New Each Day! Last Update 5/21/13.
5/20/13 HOT LINK
5/17/13 HOT LINK
THE LISTINGS BELOW ARE UPDATED EVERY TWO WEEKS. THE LAST UPDATE WAS 5/8/13.
PLEASE NOTE: THE LISTINGS BELOW ARE "LIVE". IF PRICES ARE REDUCED, THE PRICE MAY NO LONGER FIT THE PRICE BRACKETS SHOWN BELOW EVEN THOUGH THEY DID ORIGINALLY. ALSO, IF A LISTING GOES INTO ESCROW IT WILL CHANGE "LIVE" AND SHOW AS CONTINGENT OR PENDING, AND IF A LISTING EXPIRES, IT WILL SHOW AS EXPIRED.
SHORT SALE PROPERTY LISTINGS - SINGLE FAMILY HOMES: