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Today's market has provided some exceptional opportunities for Buyers who are looking to save money. Finding a home that is a Short Sale or Foreclosure could score you a purchase at a truly bargain price. However, there are some very important warnings that are appropriate for exploring this segment of the market. Please read the following carefully and then, if you feel prepared to explore this exciting market, contact our office and allow us to walk you through the process.


I have been awarded the Short Sale & Foreclosure Resource designation, by the National Association of Realtors (NAR). This designation comes only after rigorous training has prepared me to assist clients who need professional guidance with the Short Sale and Foreclosure process. NAR strongly recommends working with a Realtor who holds this specific designation, to insure that your representative is well trained and qualified to assist you.



What is a Short Sale?

A Short Sale is when an owner is allowed to sell a home for less than they owe on their mortgages. All mortgage companies must agree to allow a short sale before a Short Sale transaction can be completed, and that is the most common hindrance to a Short Sale becoming final. Ultimately, the mortgage company or companies lose money in a Short Sale transaction. So it's understandable that they are often the last ones to agree to the deal.

What is good about a Short Sale?


A Short Sale CAN be good for a Buyer who is shopping for a bargain, as a Short Sales is often a distress sale and therefore, more likely to be a good deal. However, just because a home is sold for less than the owner owes DOES NOT always mean that it's a bargain!


A Short Sale CAN be good for a Seller who needs to sell in a down market, or when they are in financial distress, as it often allows them to dispose of real estate without having to pay the full balance on the mortgages.


It is critically important to determine whether the price that is being offered is really a good price. This typically requires a comparative market analysis, and a licensed real estate broker should prepare this for you. Remember, just because a home is being sold for less than the owner owes, or even for less than the owner paid for the house, does not guarantee that it's a good deal!

What are the Dangers of a Short Sale?


There are many! As mentioned above, a Buyer must determine the fair market value of a home and not depend upon the mere fact that it is a Short Sale. A real estate broker is best equipped to provide this type of information. Beware: the Listing Agent represents the Seller and is duty-bound to protect the Seller's best interest. Buyer are strongly advised against buying a home without using a Buyer's Agent to represent them!


In addition to the issue of price and value, there is another significant danger in buying a Short Sale home: The Short Sale process is often long and uncertain. And a Buyer can be bound into a contract to purchase a Short Sale home, without any assurance that the transaction will close.


Frequently, final approval is sought from the mortgage companies only after a sales contract is executed, and all Short Sale contract are ultimately contingent upon the approval of the mortgage holders. Unless all mortgage companies agrees to the terms of the contract (in other words: unless all mortgage companies agree to the loss they will incure), and that approval can take months to obtain, the deal will not close. During the process of waiting on mortgage company approval, a Buyer is usually bound into the contract, unable to look for other homes, and unable to cancel the transaction.


What is a Foreclosure?

A true Foreclosure is a home that has been repossessed by the mortgage company or bank that held the mortgage. Often a home will have more than one mortgage, but once it goes into foreclosure, the primary mortgage company will purchase all interest in the home from any secondary mortgage lenders.


It is important to note that the word 'foreclosure' is often used to describe a home that is in some stage of the foreclosure process, and in those instances, there are many things to consider and pitfalls to avoid. It is critically important to have a licensed real estate broker representing you so you can determine the precise status of ownership and avoid getting tied up in a complicated financial transaction that cannot close.

What is good about a Foreclosure?

Once the mortgage company owns the property, it is often offered for sale at a substantially reduced price. However, there are exceptions! Only a licensed real estate broker, or a licensed appraiser, can assist you in determining the fair market value of a home.


Do not assume that every foreclosure is a great deal. But many ARE true bargains to be found and there are some compelling reasons to consider buying a foreclosure home.

What are the Dangers a Foreclosure Sale?

The most obvious danger is related to the condition of the house! Logic tells us that if an owner loses a home to foreclosure, they probably did not have the money or the motivation to maintain the home. Foreclosures are often neglected or abused, and repairs can be costly.


Additionally, foreclosure homes are often vacant for months, and that can cause a home to deteriorate.


It is very important for a Buyer to have a home professionally inspected prior to purchasing it, even if the seller is only offering to sell that home in 'as is' condition. Even if the seller is unwilling to make any needed repairs, a Buyer must determine the true condition of the home, prior to agreeing to purchase it.


A Buyer's Agent can arrange a professional inspection for you, and assist you in evaluating the findings and negotiating needed repairs with the seller.

Who can Assist me in Considering these Options?

I am qualified and experienced with these complex transactions. Please allow me to assist you in finding, evaluating, negotiating, arranging inspections, and purchasing a Short Sale or Foreclosure home.


For more information, contact me at (704) 844-0733.



REALTOR® -- A Registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® and subscribes to its strict Code of Ethics.


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