Monday Market Update - March 29, 2011
Happy Monday!
A little cold and dreary for the weekend but optimistic of the Spring weather (that hopefully will be back VERY soon).
I've had a lot of questions recently about the difference between a short sale and a foreclosure and I wanted to clear up some misconceptions.
A short sale is when a homeowner is trying to negotiate with the lien holder to accept as full payment, less than is owed on the property (hence the term short sale). Please note, it is not a "short" process. The sellers have to have a legitimate hardship (death of a spouse, loss of job, divorce, etc.) and not be able to afford the house or sell it for more than is owed. Since the owner still owns the property they typically negotiate with the buyer and then present the offer to the bank for approval. It can sometimes take upwards of 60 days or more (sometimes less), to get a response from the bank as to whether or not they will accept the terms of the contract as it is written or make a counter offer. They are typically stipulations of the short sale that are negotiated between the seller and the bank but once a short sale is approved, it can typically close within 30-45 days. So, at best, a short sale can close in around 90 days but could easily get into the 4-5 month range because of the back log of requests for short sales the lenders are reviewing. Obviously, if you need to be moved and in a home because you start a job in 30 days, a short sale is not what you need to be looking at.
A foreclosure is a home that has gone through the foreclosure process, is now owned by the bank and is back on the market with the bank/investor as the seller. Typically, you will hear back from a bank on a foreclosure offer within a few days to a week. Usually, the bank is not willing to do any repairs and makes "no representation" as to the condition of the home. So, if you are looking at a foreclosure, please inspect the property thoroughly. Depending on the type of loan you are getting, some lenders may want certain repairs completed prior to them lending money on the property. You can typically close on a foreclosure within a similar time frame that you could any other home.
If you have any specific questions about foreclosures or short sales, please give us a call. Have a great week and remember The Cameron Team for all your real estate needs.
Melanie Cameron, Broker 910.233.2840
Susan Harkins, Buyer Specialist, 910.431.2362
Gina Martin, Buyer Specialist, 910.619.1987
Alexa Winstead, Marketing/Closing Coordinator 910.202.2547
