Short Sale: 5 Mistakes to Avoid

 

A short sale occurs when a property is sold at a price less than the amount the homeowner owes on the mortgage, and the homeowner’s mortgage lender(s) agrees to the “short” payoff. A lender may accept a short sale with the property worth less than the balance of the mortgage if: the borrower is no longer financially capable to make the monthly loan payment, does not have enough money to pay back the full balance of loan and needs to move out of the property.

Purchasing a home on a short sale can be beneficial to the buyer and seller. A home seller avoids foreclosure and the consequences that go along with a foreclosure, which will allow for an easier transition into more affordable housing. A buyer avoids the risk of buying a foreclosed property and receives a fair market value on the home.

 

If you are considering purchasing a short sale home, take precaution and make sure you avoid these 5 common mistakes:

 

1.) Ignoring property problems

green carpet

Short sellers are motivated to sell and repair their credit, so they will most likely fill out a property condition disclosure form. However, there is the possibility that the seller may not have thoroughly followed through on essential maintenance to the roof, furnace, air conditioner, hot water heater, etc. Also, since the seller is in a bit of a financial bind, it is most likely the home has not seen a cosmetic face lift for a number of  years.

 

 

 

2.) Skipping the home inspection

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As the potential buyer, you should make time to tag along on the home inspection of the short sale home. This is the time where the house is open for all criticism and questions. By drawing attention to questionable items/problems within the house, you may be able drop the price of thehome due to renovations. Also do not forget to ask about repair estimates when an inspector records a problem because homeowners typically underestimate the true cost of renovations.

If you are interested in purchasing a short sale home, you may want to consider doing an inspection on the property before you make an offer. A preoffer inspection allows potential buyers to walk away and find a better investment.

 

3.) Ignoring legal and insurance information

A typical disclosure statement would specify if a house was in a flood plain or had an unpermitted renovations. Bank-owned properties often sell “as is” without disclosure, buyers need to do extra research on the home’s status. Make sure that all renovations have been permitted and approved.

 

4.) Leaving too little time for closing

Short sale homebuyers need to be aware that the sale won’t necessarily close as quickly as it would for a traditional home. The seller’s lender must grant approval of the short sale price. Sometimes legal troubles can influence closing. For example, a buyer could wait months on a bank-owned property while the bank continually pushes back the close date due to unresolved liens.

 

5.) Having your mind set on a bad home

Consider the house’s condition, inspection, price and value dispassionately. Now ask yourself these three common sense questions.thinking-man

 

  • If you were to buy this property, could you afford to rent it out for as much as, or less than, your mortgage payment?
  • What if the home’s value drops another 20% percent, will you still feel confident in your purchase?
  • How much money are you willing to invest into the property (if necessary)?

Some homebuyers do not want to listen to inspectors because they believe it is their house already and they love it, even if there is a slope in the floor or cracks on the basement walls.

 

In the end, if you are in the market for a new home and are considering a short sale home, avoid the five mistakes above. Remember your Homesale Agent is here to guide you through the process by providing you with thorough information and keeping your best interest at the top of their priorities.

 

Short Sale: 5 Mistakes to Avoid

Quick Tips for Selling Quickly

Sell-your-house-fast-nutleyPatience is a virtue for just about any circumstance including selling your home. Yet sometimes you must sell quickly when a job opportunity arises or you face an abrupt lifestyle change. Assuming your home is in good condition and free of liens, here are several tips to help expedite a sale.

1. Price your house correctly: Working with your agent, choose a price that’s somewhat lower than what you’re seeing in the market, but not too low that it will send up red flags. Let your agent establish a price he or she feels will make your house the buzz of the neighborhood. The amount may not be what you had envisioned—remember, the market has changed substantially over the last five years—yet when priced slightly below comparable sales you should attract serious buyers.
Many Prudential Homesale agents use the Prudential Value Range Marketing SM as an additional pricing resource. Instead of setting a specific price, a value range is selected enabling sellers to entertain offers in a defined range.

2. Be flexible, compromise: know your basement price and don’t be offended by offers within those parameters. Consider negotiating housewares and fixtures that may appeal to prospective buyers, such as those expensive new drapes you just installed, the dining-room chandelier or that slick, washer-drier combo. Conduct a complete inventory of household features to determine what you can and can’t live without.

3. Remove the clutter from your home: This must be done regardless of time frame. Throw away anything you won’t be taking with you and pack in storage items that you won’t miss during the sale process. Consider renting a storage pod that can be picked up and eventually moved to your new home.

4. Offer incentives: One popular incentive for a fast closing is to share or pay for your buyer’s closing costs. You may also offer higher commissions for a fast sale, which may lead to even more showings.

5. Rent to buy: If there’s interest in your home but no one is willing to step up to meet your timeline, offer prospective buyers the chance to rent your property with the right to buy it in six months or a year. Both parties win, as buyers can experience the home and neighborhood firsthand while you transition with cash flow to cover expenses.
Indeed, home-selling requires time and patience yet there are several things you can do to help expedite the process, if necessary. With flexibility and creativity, you can increase your chances of a quick sale.

Quick Tips for Selling Quickly

Plant a Tree (Earth Day)

“The creation of a thousand forests is in one acorn.”
– Ralph Waldo Emerson

earth-dayEarth Day is right around the corner (April 22) and planting a tree is a great way to show your support.  Finding the perfect tree is not as simple as it sounds.  Here are some suggestions on those you should consider planting in your yard and the trees you may want to avoid.

You should first consider what you are looking for in a tree; amount of shade, the size, shape, blossom production, and the attraction of birds or wildlife.  Then do a little research to find out which trees thrive best in the area where you live.

A few top choices…

  • Red Maple –     Most common tree in Eastern U.S., it is adaptable to a wide variety of conditions.  Often used for shade and medium to high quality lumber.
  • Yellow Poplar –     Also called the Tulip tree because of the beautiful yellow blooms that reach from top to bottom.  It is a tall, fast growing tree, without the common problem of weak wood strength.
  • Red Oak –     Not usually very tall, but great for shade.  Leaves in the spring are a delicate silvery, pink and change to a yellow, green before finally turning red in the fall.
  • Dogwood –     A beautiful, blooming tree in the spring that attracts small birds.  Historically popular for wood strength, it was also used in inks and dyes and for the treatment of dogs with mange, which may be how it got its name.
  • Sycamore –     The sycamore is able to endure a big city environment and has been extensively planted as a shade tree.  It bears transplanting well and grows rapidly.
  • American Holly –    It will grow in both dry and swampy soil, but grows slowly.  Holly is also a cold-tolerant plant, playing an important role as a survival food for birds, who will eat the berries after other food sources are exhausted.
  • Redbud –     They are characterized by simple, rounded to heart-shaped leaves and pinkish-red flowers borne in the early spring on bare leafless shoots, on both branches and the trunk.
  • Conifers –    Conifers are of immense, ecological importance. They are the dominant plants over huge areas of land.  They are also of great economic value; primarily used for timber and paper production.

Skip these…

  • Silver Maple –     Great shade tree, but the speed at which it grows makes for weak, brittle wood that may break during severe storms.  The shallow roots invade sewer pipes and drain fields and are notorious for cracking driveways and walkways.
  • Ash –     Threatened by the emerald ash borer beetle that is on track to wipe out this tree species.  If you want something long term, look elsewhere.
  • Quaking Aspen –     Root system sends up suckers that try to turn into new trees.  Once established it just takes over.
  • Willow –     Beautiful on the outside, yes, but the willow has an aggressive, water-hungry root system that terrorizes drain fields, sewer lines, and irrigation pipes. The wood is weak and prone to cracking, and the tree is relatively short-lived, lasting only about 30 years.
  • Eucalyptus —     This tree has a bad reputation for suddenly and unexpectedly dropping big, heavy, resin-filled branches.  The showy bark peels off annually and adds to seasonal maintenance chores.
  • Mountain Cedar –     This bushy tree releases massive amounts of pollen during the cooler months, causing severe allergic reactions in many people. Even if you don’t have allergies, planting one in your yard may affect neighbors.
  • Mulberry –     Big surface roots, lots of pollen, messy fruit, and shade so dense that grass refuses to grow underneath…and silkworms love it!!  The mulberry is the silkworm’s only source of food.

Our planet is in desperate need of more trees to replace the billions lost in development.  Planting a tree every year will add beauty to your yard, increase your home’s value, and help to make our planet a better place to live!

Plant a Tree (Earth Day)

Tips to Help You Save Money NOW!

Saving money can be a constant challenge, so having the right impression is important. keep in mind that a budget is not a form of punishment, but a key step in helping you improve your financial well-being. When you are ready to make a large purchase such as a new home, you’ll have the financial resources at your very own finger tips. Follow these simple tips and before you know it you will be well on your way to saving money for the things that are important to you!

Don’t know how much money you need to save in order to buy a new home? Try our mortgage calculator to help you find out how much you will need to purchase a new home. Have you already saved up enough money for a new home? Search homes for sale on our real estate website today. Prudential Homesale helps home buyers and sellers through Maryland & Pennsylvania find the new home of their dreams!

Tips to Help You Save Money NOW!