Where a slowdown is created in the REO or foreclosure market, opportunities may be enhanced for buyers and sellers of distressed properties. As lenders with assets headed toward foreclosure consider slowing the process, bank asset managers may be more inclined to negotiate short payoffs in coming months.
A short sale is where the lienholders (or mortgage holders) of a property will take a payoff from sale that is less than the principal, interest, and fees owned to the lienholder on that property. This shortage in some cases will be forgiven by the lender, and the seller or property owner can avoid foreclosure. This keeps the home (bank asset) from deteriorating and losing value in the foreclosure process, creating a sale of the property prior to foreclosure.
Many things can affect the success of short sales, including the buyer's patience, the seller's financial status, the number of loans and lienholders, and the quality of the negotiator, they can be successful. According to Matt Evans, his team has negotiated, thru a third party, several successful short sales in Indiana and Colorado, and each property poses it's own challenges. He says "it's important to have a willing and responsive seller, and a patient buyer in for the long haul." It can often take 60-90 days to successfully negotiate a sale, and streams of paperwork are required along the way.
Matt notes, "Especially in the Northwest Indiana GNIAR MLS region we are working, sellers have to price their home slightly below market value, and be willing to do price drops until an acceptable contract is achieved. From there, the processing really begins on the short sale."
Many good sources exist for short sale information, and each state and each lender requires different forms and information. Most states require a short sale disclosure, that set the terms and expectations for both parties as the short sale moves forward. If you are expecting to be short on the sale of your home, be sure to meet with a real estate agent (REALTOR) with experience to get the job done.
For more information, go to www.themattevansteam.com and click on the REO and short sale link, or click on http://www.themattevansteam.com/atj/user/AdditionalGetAction.do?pageId=192085 for more information.
--Matt Evans, Keller Williams Realty, Northwest Indiana and Northern Colorado
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