The Life of it's Own-dealing with short sales in a Recovering Housing Market

You were encouraged to purchase your home during the height of the market. By all accounts, you were considered responsibly investing in your future putting 10% or 20% down, which lenders were thrilled to take your loan and gamble on your future. Consequently we had a financial fall in the country, and in specifically in Chicagoland,  the average decline is more than 30%,  according to the conservative estimates I have seen. This means that a lot of homeowners in Chicago land are "underwater", that the balance of the mortgage is greater than the equity in their home. 

Our decline of values though hasn't stopped Life. Life happens! Jobs were lost, greater stress on relationships occurred, people got sick and recovered and some people died. People were born even when the world as we knew was changing faster than we ever knew. Now the housing market, and confidence in the future are gaining strides in the market and life. Things are stabilizing with new positions, new hopes and the light in the tunnel is getting brighter. The problem is Life Changed and a full recovery in your family has contingencies of reversing those earlier decisions and there is a way since inventories are down and interest rates are favorable for buyers.

Here are some tips for sellers and buyers on your road to recovery or opportunity that I have learned in this crazy world, and I hope to help guide you:

For Sellers

1. The Bank understand that you have a hardship, however they need to see proof. Your financial records will need to reflect your hardship. Be thorough and timely with required documentation ie tax returns, W2s and financial statements proving you have exhausted your available resources to recover. This is ongoing in the process with the bank. Your statements "expire" with the bank every 60 days. I would be happy to organize yourself through the process. 

2. Be prepared with an attorney that has the staff and knowledge to accomplish the task of negotiating with the Bank. It is a team effort, your cooperation with the documentation and patience for the conversation with the Bank will take a long time, however the Banks are improving on the time line. 

3. There is more acceptance toward the short sale and a re-purchase of a home can happen in time. Average credit scores recover when you prove things are more stable in your life. 

For Buyers

1. Even in cases of short sales, your offer needs to be close to market value, since the seller's bank is unlikely to accept a "give away" price. They are protecting their investors to bring them the most they can accept in this market. Average value you will benefit as a short sale buyer is a home within 15% of market. The Seller's Bank recognizes the decline in value, and understands the uncertainty of value and has discounted the price of the home for you.

2. Have your mortgage totally preapproved. You need your documents in the bank with underwriting approval for the Seller's Bank to accept your offer. All necessary requests from your lender need to be answered for the approval. The Sellers Bank will want to close in 30-45 days after their acceptance of the Seller's terms. This leads your Lender in the HOT seat to arrange the appraisal, and final documentation for a commitment from your lender to the Seller's Bank.

3. To avoid future problems with your purchase, have your inspection prior to the approval. Homes that are sold "short" are AS IS contracts. You are of the understanding that the seller can not make the mortgage and can not credit or repair anything. The Seller's Bank will have you recognize that they are not the owner of the home, therefore will not repair anything. 

4. The seller's lender may not give standard credits for prorated taxes or other common items at closing, but the discount you're getting should more than offset these expenses. For example, I have seen surveys are a buyer's cost sometimes. 

Please count on me to guide you through the process. I have the experience to know the road you will be traveling to get the Bank to listen, or the opportunity available to buyers to start your Life. I am grateful and thankful for the trust in my experience to accomplish your goals and appreciate your business as well as your referrals. 

Count on me, your caring professional Realtor to guide you through the process. Call Jan@RE/MAX SUBURBAN 847-274-0535