You’ve considered moving, but the home you are buying is either a foreclosed or short sale property. You’re not sure just how it works when purchasing such properties. The home is priced right, but you need to know more before proceeding.
Listed below are the concerns for buyers who wish to purchase foreclosed or short sale homes:
2.Appraisal: The home must appraise for the sales price you offer and requires a review by our underwriters to measure the value. Review with your realtor the comparable sales in the vicinity of the new home to be sure the comparable values are in line with your offer.
3. Time: When you make your offer, be sure to allow enough time for the lien holder to accept your offer and then additional time to final settlement. Our experience has shown 60-90 days settlement time is not unusable.
4.Be Ready: When you receive the go ahead from the lien holder, be ready to move quickly. The time it takes to get approved is slow, but once the lien holder agrees to the terms of sale, things move quickly. Don’t allow the seller to push you beyond the expected time to complete the sale.
5. Sales Contract: Have your sales contract reviewed by your real estate attorney. Make sure the contract includes all disclosures and any known conditions that exist with the property.
6. Earnest Money: Be sure your sales contract addresses any earnest money deposited. Copy your earnest money check and keep it in your file for future reference. Your mortgage lender may also ask for a copy.
7. Documentation: You want to make sure you can afford to purchase the home. If the home needs some “TLC” you may want to see if you have enough additional assets to make the purchase or are you expecting to get a mortgage that addresses those concerns? Knowing the mortgage programs and getting pre-approved is essential.
8 Attorney: You want to make sure the home you are buying has a clear, unencumbered title. Hiring a qualified real estate attorney or title agent is very important. Don’t be afraid to ask for credentials and client testimonials.
There are some great buying opportunities on the market at this time. Usually there is a reason behind why a property is being offered at a below market price. As buyers, you’re key question to ask is whether or not you can tolerate the possibilities of dealing with uncertain issues that may arise during the purchase transition.
If you have further questions, just click on the button below or give us a call at 302-266-9500 or toll free 877-266-9500.
Many banks are still experiencing a large amount of seriously delinquent loans on their books and many are turning to short sales to dispose of properties as opposed to foreclosures. The reason being is that short sales are faster and less costly for lenders to dispose of delinquent loans.
What exactly is a Short Sale?
As defined by Wikipedia, a short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property and the property owner cannot afford to repay the liens’ full amounts, whereby the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt. Any unpaid balance owed to the creditors is known as a deficiency.Short sale agreements do not necessarily release borrowers from their obligations to repay any deficiencies of the loans, unless specifically agreed to between the parties.
What does this mean for you if you are in the market for a new home?
This ramped up approach by the lenders will present more opportunities to purchase a home that may be an attractive sales offering for new buyers. Short sales homes most notably are available at or considerably below market prices.
RealtyTrac is predicting that 2012 will be a record year for short sales. “Short sales are growing and will grow explosively over the next year, ”said Charlie Engle, RealtyTrac’s director of business development.
If you purchase a home that is a Short Sale, how do you qualify for a purchase mortgage?
From a buyers perspective, there is no difference between purchasing a short sale home versus any other sales listing. You see a house you like, make an offer to purchase. Next, the lender will review the offer and either accept or deny your sales offer.
Purchasing a short sale home can sometimes take a little longer to purchase vs. a normal purchase. Basically there are a couple of reasons for time delays: 1. It takes time for the lender to approve your offer. Lenders are getting much better with this than in the past. 2. Clearing title may delay the settlement. Always hire a professional title settlement agent and be represented by an attorney at settlement. The title agent will perform a lien and title search to make sure you have a clear title and there are no liens against the property that will come back to haunt you after purchasing the home. We recommend you always purchase “Owners Title Insurance” when purchasing not only a short sale, but any property. Owners Title Insurance will provide you with the extra security necessary if someone knocks on your door and presents an unsatisfied lien on your new home.
There are opportunities abound for clients who are looking to purchase their primary residence, second home, or investment property, especially home that are considered short sales. Your timing could never be better and the window of opportunity is open! Look for 2012 and extending into 2013 to see more and more short sales hitting the real estate market.
If you want to talk to one of our mortgage consultants, please call (302) 266-9500 or simply click on the button below to fill out our online contact form.
If you rent the home you live in or thinking about upgrading to a larger home or moving to another area, then the right planning can help you to purchase a home.
To discover your homebuying potential, you will want to calculate your:
These factors determine how much of a loan you can afford and how buying a home will affect your monthly budget, once you compute all your expenses.
What is your Income?First you need to determine all of your sources of income. You will need money for your down payment and for your closing costs. The FHA, VA and other mortgage programs may require smaller down payments. In some cases the closing costs may sometimes be rolled into the mortgage or you can get seller assistance.Here are a few questions to help you to estimate your financial position.• What is your average monthly income? • Do you expect your income to remain level in the near future? • If not, do you expect it to increase or decrease?
Use the following income categories to estimate your monthly income:
How much will you need for your Down Payment?Do you have Savings, Investments, Stocks or other Liquid?Add up your savings. Any money saved can help you buy a home. Your savings can be used to pay the down payment and/or closing costs. You know your own saving habits, the more you save the better and the more you put down on your house, the lower will be your monthly payment.
• What portion of your income are you saving now? • Can you afford to put more money into savings?
Use the following savings categories to estimate your monthly savings.
Retirement Fund Contributions
Stocks, Mutual Fund Investments
Monthly Expenses – Do you know where your money is going?How much are you spending each month? You can expect your monthly expenses to go up when you buy a home. Will you have enough money to pay the mortgage, insurance and property tax in addition to your other expenses?
Use the worksheet below to calculate the money you currently spend each month.
How Much Debt do you Have?Review your current debt obligations. We examine the ratio of your debt to your income when deciding how much money to lend you. Consider how additional debt from house payments, added to your existing debt, will affect your lifestyle.
Other Personal Debt
Wow! There is a lot to consider when buying a home. Rest assured, if you are on this page right now you are on the right path. Please feel free to let us know if you have any questions.
Still have questions? Just give us a call at (302) 266-9500 or simply click the button below to contact Sam.
com/article/20120515/BUSINESS06/305150009/Delaware-home-sales-stay-iffy-April”>Delaware OnLine, year-over-year sales in April were down slightly from 171 to 168 in Sussex County, remained flat at 116 in Kent County, and jumped from 395 to 420 in New Castle County, according to statistics from the Sussex County Association of Realtors and Trend MLS
Considering where we were compared to where we are now, Delaware homebuyers still have a great opportunity