Q: Why is short sale so popular with homeowners right now?
A: Short sale is a win-win solution for homeowners and the bank. Short selling will provide a way out of a home they can no longer afford and time to live in their home during the short sale.
Q: What are the major benefits of a short sale?
A: Short selling will allow the homeowner more time to stay in their home. Most banks will allow a “Seller Move-out Incentive” in the amount of $1,000 to $3,000 upon the close of escrow. This money is meant as a move-out assistance program for homeowners that have cooperated with the short sale. For specific qualifications and guidelines, check with your bank directly.
Q: Is short sale a good bargain for buyers?
A: Yes. If you are a renter paying $800 or more per month. Run down to your bank and check out if you can qualify for a home loan. Run don’t walk. It is cheaper to buy right now. For $800 to $1,200 a renter can get into a 3-bedroom house with yard and a garage.
Q: What is the difference between a short sale and foreclosure?
A: A short sale takes an average of two to four months or longer to receive a bank approval for the buyer to proceed with the purchase. A foreclosure generally takes less time for the buyer to receive approval and most buyers can expect to receive bank approval to purchase in 5 to 15 days.
Q: Can I move in upon receipt of the bank approval?
A: If you are a cash buyer, you can clear title and escrow procedures in three to five days, get all inspections done and get the key to move in. If you are a loan buyer, your lender will require an appraisal and/or inspections. It might takes 30 to 45 days to close escrow and get to move in.
Q: Is purchasing a short sale right for everyone?
A: No. Housing needs and wants are different for everyone. For buyers that need to move in 30 days or less, you should focus on regular sales or a foreclosure. If you have a few months to hang out and wait for a bank approval, there are more short sale homes to choose from.
Q: Home prices are so low, should I buy a fixer?
A: Maybe. A real fixer is one that requires a roof, kitchen, bathrooms, etc. A real fixer attracts cash buyers or multiple cash buyers that tend to outbid one another. These type of destroyed homes will not qualify for any financing. Cash buyers usually have the available funds to rehab the property.
Q: Is every home on the market a legal steal?
A: No, not all of them. I would say over 60 percent of the listed homes are a legal steal compared to the price the current homeowner paid for it. Homes that are priced too high have to eventually lower their prices in order to sell. Short sales and foreclosures are no exception.
Q: Is for sale by owner a good buy?
A: Whenever I call on the for sale by owner near my listings, they are priced too high and they have no idea what the fair market value is for their homes. Some of the for sale by owners are not willing to adjust their asking prices for a variety of personal reasons.
Annie Christian is a local real estate broker who specializes in short sales and helping homeowners cope with the loss of their homes.