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A Short Primer on Surviving the Short Sale Experience as a Grand Rapids, MI Home Buyer!

have you googled your home address? Purchasing a new home is one of the most exciting experiences an individual or family can have. If you've been out of the real estate market for some time, you may be unaware of some dramatic changes in the real estate market landscape.

In today's market, there are some unique situations which home buyers should be aware of as they prepare to consider the purchase of a new home.

GOOD NEW FIRST...

The good news is that home buyers in the Grand Rapids, Michigan area will find that they have a bountiful number of choices for a new home purchase. Inventory levels of homes for sale are at historic levels.

First time home buyers can also take advantage of some TAX FREE incentives to the tune of up to $7,500 dollars if a new home is purchased on or before July 1, 2009.

HOW THINGS HAVE CHANGED...

However, home buyers looking for a home to purchase will also quickly become aware of a notation which currently accompanies almost 65% of the homes listed for sale in November 2008 through the Grand Rapids Multiple Listing Service. This notation which is accessible to the real estate agent on the listing card, will contain an advisory warning indicating that interested parties should be aware of the fact that the sale of the listed home will necessiate a 'Short Sale'.

If you're a brand new home buyer or recently re-entering the market, this notation may prove perplexing and you may wonder...What is a Short Sale?

SHORT SALES IN BRIEF...

Well, in short (pun intended)...A Short Sale notation on a listing card is an indication that the home is priced below the mortgage balance owed on the home. (after costs associated with the home sale are paid)

WHAT DOES THIS MEANS FOR YOU...

Well, it depends.

On the most basic level, this means that in order to become the new owner of this home, you will have to complete a successful negotiation with the owner (s) of the mortgage note to purchase the home to allow the ownership to be transferred to you for less than the current owner owes. This adds several additional steps and required signatures to the offer acceptance process which will now include: the home owner who signed the listing agreement, the lender (s) and in some cases third party investors.

FOR STARTERS...

But for starters, it means that you should be prepared to be very patient and persistent if you truly want this home. Short Sales are arguably among the most difficult negotiations to complete. It is not unusual for real estate agents to negotiate for months to bring these transactions to closure.

Being prepared for the long haul will save you the angst of increased blood pressure, stress and unnecessary temper tantrums. It will also be deeply appreciated by your hard working real estate agent who will probably accrue more stress than a commission will adequately compensate for.

BASIC STEPS...

Buying a home which requires the negotiation of a Short Sale will also add some additional steps to the home purchasing process. Be prepared to wait while the bank (s) review the home owners paperwork to determine if they qualify for a Short Sale. You can also anticipate that a Broker Price Opinion aka Appraisal may be ordered to determine if the bank wants to entertain your offer as one reflective of the current market conditions.

Offer submissions for Short Sales may languish on an Asset Managers desk while they sift through hundreds of files which have landed there before yours or wait to see if a better competing offer comes through. Be persistent. If you've done your homework and received some professional consultation from your real estate expert, you should be aware of the Value of your purchase. A Short Sale negotiation done correctly can earn you your dream home with a significant amount of equity attached...no small feat in today's market.

HIRE A PROFESSIONAL...

Although it's not possible to cover the complexities of the Short Sale process in this short post, you might find the links below helpful as a home buyer or home seller in the Greater Grand Rapids, MI area. You can also contact us at info@auduhomes to discuss the particular details of your situation. We specialize in advising clients on strategies to buy and sell property in a challenging market.

Click this link for 15 Additional Articles penned by Lola Audu of Audu Real Estate about the Grand Rapids, MI Short Sales Process.

Lola Audu, CRS, GRI e-Pro ~ Audu Real Estate

Lola Audu, is the Designated Broker & Owner of Audu Real Estate. Our company specializes in helping people buy and sell homes in the greater Grand Rapids, West Michigan area. We've had the privilege of helping hundreds of clients succeed in their goals of purchasing and selling property including demonstrated success in the negotiation of Short Sale Transactions. You can contact us via e-mail @ info@auduhomes.com or by phone at 616-791-0511.

Posted by Lola Audu~Real Estate Broker/Owner Grand Rapids, Michigan Real Estate on 12/15/2008 01:01 PM

Comments (11)

Short Sales in the Home Buying Channel

short sales, grand rapids michigan real estate, homes sold in grand rapids michigan, audu real estate, buying a home through short sale

Originally posted at: Inspired Real Estate For Today: A Short Primer on Surviving the Short Sale Experience as a Grand Rapids, MI Home Buyer!

This post has been included in Michigan Information Kent County, MI Information Grand Rapids, MI Information

11 Comments on A Short Primer on Surviving the Short Sale Experience as a Grand Rapids, MI Home Buyer!

DEC

2008

Excellent outline Lola.

Buyers are presented with the best opportunities home purchases in the past 15 years.

If only they would all read your post (or mine) and see the values and opportunities.

Thanks for stopping by Lenn. Always appreciate your insights. If home buyers truly understood the value proposition inherent in purchasing many homes available for short sale, they might be willing to be more patient. There are some really good deals out there, but they are not easy or without risk. That's another reason why using an exprienced professional can be so valuable.

We just sold a no short sale home to a buyer that could not wait for the bank to respond. Some day they may realize that speed of the response may net them more money.

Terry, this is a huge problem. There are so many homes which are going into foreclosure because banks are unable to negotiate a short sale. If a foreclosure occurs, I've seen homes on the market at LESS than what they would have received through a short sale. But by this time, the home has often fallen into additional disrepair. Sometimes, one wonders WHY we are bailing out banks when they seem to be intent on loosing so much money.

Lola - this is a thoughtful article that will serve your buyers well. This would be agreat marketing piece to include in a buyer packet, and to download from your website, if it isn't already. There is NO short explanationon how to get through a short sale. :)

Jeff

Jeff, What a good idea! I hadn't thought of using this in that way. Thank you very much.

Lola yes buying a home, especially your first home is and should be an exciting time as you stated. But buyers also need to read closely what you wrote about Short Sales, because if that purchase is a Short Sale it can sure be a frustrating experience.

Lola, Short sales can be great bargains of the buyer is patient. In my market right now the Shortsales have to be the lowest priced poroperties on the market in order to sell. That is a great opportunity for buyers.

George, buyers need to appreciate just how difficult the Short Sale process can be. This doesn't mean that it should not be pursued. There are many things in life that are difficult and worth the reward.

If a Short Sale allows a buyer to obtain a home they truly desire, it's worth waiting for. The key is understanding the value of the transaction and being determined to follow it through to a conclusion. For home sellers, a short sale enables a negotiated solution to a difficult situation which is better than the messy and prolonged consequences of a foreclosure.

Bryant, you make a important point. In some cases, short sales are actually cheaper than purchasing a foreclosed property. I think that the primary reason for this it that in order to sell a home in a situation where homes compete with foreclosure prices, the pricingof homes listed for short sale has to be lower. But, unlike a foreclosure, homes in short sale situations are still being cared for by the owner who has an incentive to keep the property in good showing condition.

Hi Lola, This is certainly a helpful post for those wishing to explore a short sale.It can be such an outstanding value for the buyer, if she is prepared to wait it out.

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