For years, the term "short sale" has been the antithesis of the real estate market....from holding your breath for seemingly an eternity waiting for a loss negotiator to let you know whether or not you've reached their "golden figure" to wondering whether or not the listing agent is acting as an automatic offer vessel funneling as many offers to the lender as humanly possible. Let's face it, for so long it was the "Wild, Wild West" of the real estate industry.
Then, all of a sudden, lenders (and Realtors) began to actually conceptualize the idea that the notion of selling properties for less than the actual mortgage note could actually work.....as long as processes were made SOP on the lender's end and education became more common throughout the real estate industry. Since I'm a HUGE fan of the FHA Pre-Foreclosure Sales Program, I'm focusing on the benefits of this program from a different angle....the buyer's perspective! Here are a few ways that this program works to assist the home buyer:
•1) Upfront terms - One major benefit, from a buying standpoint, is that these sales are "pre-approved". Not only that, but HUD has mandated a "sliding scale" of what their net profit would have to be based upon the length of market time! Now, the selling agent is able to adequately calculate exactly where your offer needs to be in order to get the deal to the table!
•2) Closing costs assistance - Although HUD advertises that they'll concede up to 1% of the purchase price for closing costs assistance. Ask your negotiator to request a variance for up to 3% in closing costs. It can be done and most of the variance requests are APPROVED as long as their desired net is met.
•3) Appraisal costs - If you're purchasing an FHA Pre-Foreclosure sales program property with an FHA mortgage, then you can bet your bottom dollar that an FHA certified appraisal has already been completed on the property. In fact, since that appraisal has already been assigned an FHA case number, then it's married to the property for the next six months. The bottom line is that your buyer can save the expense of the appraisal since one has already been completed on the home!
It's pretty clear that we'll be dealing with an increased number of short sales for the next few years. So, removing the stigma is a must so that we can reduce the number of boarded abandoned properties and maintain a semblance of communal appeal within our neighborhoods.