Posted by: Roby Robertson | January 26, 2010

Lake Norman Short Sales and Foreclosures

Looking for the a “deal” with a short sale, foreclosure or REO property? You may want to consider the following…..

With the growing number of distressed properties on the market, many buyers are seeking foreclosures, short sales, and REO properties (Real Estate Owned—by a lender) as an the opportunity to take advantage of a good “deal”. But is getting wrapped up in the “deal” always a smart decision choice for you? Consider the following:

1. Do you know the difference between a foreclosure, short sale and REO property? Is the seller the homeowner or the lender? This is important as you determine a realistic price you should expect to pay for the property and the motivation of the seller. Is the list price above, below or at fair market value?

2. How much time do you have? Lenders are notoriously slow to approve short sales because it usually means a write down of the debt owed to them. With the extension of the tax credit deadline ending this April, are you willing to miss out on up to $8000 while you wait for a lender to approve your short sale offer? How will you feel if your offer isn’t accepted in time? What other homes may have sold during your waiting period?

3. Do you like to clean? Many buyers don’t realize anticipate the condition of distressed properties that are sold “as is” and or understand that the home may require substantial work. Often At best, homeowners who are losing their homes to foreclosure do not spend the take time to clean their baseboards or steam clean their carpets before they move; at worst, they have not maintained the home for months. . Be prepared to see homes that may will need some “TLC”.

4. “List price may not be sufficient to cover all liens, encumbrances….” You find a home in a neighborhood you love, it has the space you need and doesn’t require a lot of work. It looks like the deal you have been searching for- $100,000 less than what the seller paid two years ago. But not so fast, especially if it is a short sale- this list price has not been approved by the lender…be prepared to receive counter-offer approval from the lender that is GREATER THAN the list price an offer OVER the list price from the lender.

5. Are you the only one on the block Is the home the only distressed property on the block? ? Finding the one distressed home in an established community neighborhood usually makes for a better investment than being one of several in the community neighborhood. Depending on the age of the neighborhood, there could be several others distressed properties on the market and with more to come as other current homeowners subprime loans interest rates adjust.

6. Are you ready to pull the trigger? Having your own financing in line is the key. If you want to jump into the game, be ready to play. Be prepared with a pre-approval letter, earnest money, and if you have a current home to sell, know if you qualify for the new property if your current home is not sold. Most sellers will not accept contingent contracts on distressed properties.

7. It’s a foreclosure- it must be the best deal right? Not necessarily,. a A motivated seller with an immaculate home may be able to provide you with a better overall value than a conservative lender who doesn’t want to lose their its shirt on the former owner’s loan.

8. Are you willing to ride the an emotional roller coaster? Most buyers buy homes based on emotion and justify their purchase with logic. Are you prepared to fall in love with a home, knowing you may not be able to buy it for the price you think are willing or able to pay? Are you willing to get into a bidding war with other potential buyers? Will you drive by the home every day after work for two months, picturing barbeques in the backyard? and then wWhat will you do if the lender counters your full price offer on the a short sale for the full amount they feel they are owed?  Statistically speaking, Most short sales never make it to closing!

Distressed properties are can be great opportunities to take advantage of the current market conditions. It is important to consider these questions to determine if a distressed property is a good fit for you. Consulting a REALTOR® is an easy first step and those with NAR’s the National Association of Realtor Short Sales and Foreclosure Resource Certification know how to help sellers maneuver the complexities of short sales as well as help buyers you pursue short sale REO and foreclosure opportunities.

Want to see all the foreclosures in the Lake Norman area?  Visit Lake Norman Foreclosures


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