Short Sale? You Need An Agent!
Filed under Buyer / Seller Tips, Listings, Real Estate, Shout Outs, Uncategorized Short sales. One of the most misunderstood real estate term on the planet. Short sales do not mean short in time, they do not necessarily mean short in money either. The term short refers to the fact that the lender is willing to accept less than full amounts for the lifting of the lien on the home. That means for the buyer that the price accepted will be less than what is owed. But, that has nothing to do with a home’s WORTH! The part of the short sale process that many buyers do not understand is that a loan on a home may exceed the amount of the home’s worth. This is especially true when changes in the real estate market in a given area go south. Take this example: A home buyer chooses a new construction for their home purchase. They purchase the home for $250,000. Only 3 months after the close of the sale, the builder chooses to lower the price of the models sold in that community to $200,000. That means, the worth of your home just dropped by $50,000 with the flick of a pen. This example is important to understand when it comes to short sales. A homeowner can have two or three mortgages on a home. The home may be worth $300,000 and the first mortgage may only have $150,000 left. A great buy, right? Wrong, if the other mortgages add up to another $200,000, the home will be placed on the market for a short sale that may cost the buyer more than the home is actually worth. Sheer confusion, I understand. But, at the heart of understanding the short sale process and the loops that much be carefully stepped through when going after that short sale are what real estate agents are trained for. A seasoned agent. One that knows the area, knows the comps, know what the potential real estate values will be worth based upon experience and understanding of real estate fluctuations. These are the real estate agents that can point you in the right direction. A short sale can be a great deal, but that does not mean it has to be. The real estate agent you choose when searching or attempting to buy that short sale, will mean a world of difference when it comes to that bottom line; your new home and you!