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Archive for the ‘Short Sale’ Category

Buying an Oakland County MI Short Sale Listing- What to Expect

Between what I’ve heard on TV and radio, read and from conversations I’ve had with clients, potential clients, other agents, relatives, friends… I have learned that there are a whole host of definitions for the term “short sale.” And most of them not very accurate.

A short sale is when the house is offered for sale by the owner (person as opposed to a bank) who owes more than what the house is worth and can’t, or isn’t willing to, pay the difference themselves. Any offer that home owner would accept would be subject to the bank agreeing to reduce the mortgage payoff. Selling short. Short sale.

Short sale listings can be some of the best bargains available in Oakland County MI, but there are things about short sales that the Oakland County Michigan home buyer should be aware of prior to even looking at houses.

  • Be      prepared to wait 3-6 months (sometimes longer) for short sale approval
  • Be aware the lien holders may not agree to the payoff required to proceed with your      offer. After 3-6+ months your offer may be countered or outright rejected
  • Don’t expect appliances to stay
  • Don’t expect the seller to pay for repairs
  • Don’t expect your closing costs to be covered in the form of seller concessions-      sometimes they’re capped at 3% and sometimes they won’t be covered at all
  • DO expect to close pretty quickly once the short sale is approved

One of the first things everybody involved in a short sale needs to understand is that the banks are under no obligation to approve a short sale. You would think it would be in the banks best interest to approve a short sale when the offer is reasonable, but often times the actions of many of these banks seem to defy logic. Also, the more lien holders involved in the transaction the more difficult it is to complete and the higher the probability that it won’t close.

Buyers need to realize that there are factors beyond the control of the buyer or buyer’s agent.

  • We can’t      control how cooperative the seller will be with the bank’s demands      addressed in more detail here
  • We can’t      control how      knowledgeable or diligent the listing agent is
  • We don’t      know from day-to-day what financial incentives the government will      offer the banks which can determine what short sales they approve
  • When there      are multiple mortgages we don’t know how well the negotiators for the      first and the second will play together or the abilities of the listing      agent to ref them
  • The seller      can also reject the terms of the short sale which will be addressed in detail      in another article

In a nut shell– short sales can be a good bargain but for the right buyer. You need to have the patience of a saint and the ability to move on someone else’s schedule.

Search the MLS

What to Expect From Your Oakland County Buyer’s Agent

Financing Your Oakland County Home Purchase

Buying an Oakland County Foreclosure or Short Sale

Jackie Hawley, Realtor
ReMax Encore, Clarkston MI
Cell: 248-736-6407
Jackie@JackieHawley.com

www.MiRelocation.com

www.MacedayLake.com

www.OaklandCountyMichiganLakes.com

www.LakeOaklandHomes.com

www.LakeOrionLakefrontRealEstate.com

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Oakland County MI Real Estate

A short sale is when the house is offered for sale by the owner (person as opposed to a bank) who owes more than what is owed. Once an offer is accepted, the bank has to agree to reduce the mortgage payoff. Usually some of the leg work has been done before the house ever hits the market, but there’s only so much that can be done prior to getting an offer. I have had answers back on short sale offers as quickly as a few days (this is VERY rare), but typically it takes 3-6 months to get an answer back on an offer, and sometimes that answer is just “no” with no counter.

If you need to get into your Oakland County home right away, looking at short sale listings is probably a bad idea. If you have time (and patience) you can usually get a pretty good deal on a short sale listing. It benefits the bank to take their loss now rather than wait and incur the costs of foreclosing. Short sale is also a searchable field in the multiple listing service (MLS) I belong to. Oakland County MI short sale listings can be searched or excluded from searches.

WARNING:

  • Short sales are not for the faint of heart
  • There is no guarantee the short sale will be approved
  • There is no guarantee if the short sale IS approved that it will be at the price agreed upon by you and the seller- SO be prepared for a counter offer
  • Do not even look at short sales if you are under any kind of time constraints!!

Search the MLS

What to Expect From Your Oakland County Buyer’s Agent

Financing Your Oakland County Home Purchase

Buying an Oakland County Foreclosure or Short Sale

Jackie Hawley, Realtor
ReMax Encore, Clarkston MI

Cell: 248-736-6407

Jackie@JackieHawley.com

www.MiRelocation.com

www.MacedayLake.com

www.OaklandCountyMichiganLakes.com

www.LakeOaklandHomes.com

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Short sales in Clarkston Michigan – click here for the very basics including my attempt to define exactly what a short sale is and the basic steps involved. Below is more about what to expect throughout the short sale transaction.

Short sale listings can be some of the best bargains available in Clarkston MI, but there are things about short sales that the Clarkston MI home buyer should be aware of prior to even looking at houses.

  • Be prepared to wait 3-6 months (sometimes longer) for short sale approval
  • Be aware the lien holders may not agree to the payoff required to proceed with your offer. After 3-6+ months your offer may be countered or outright rejected
  • Don’t expect appliances to stay
  • Don’t expect the seller to pay for repairs
  • DO expect to close pretty quickly once the short sale is approved

One of the first things everybody involved in a short sale needs to understand is that the banks are under no obligation to approve a short sale. The banks are better off accepting a reasonable offer on a short sale rather than foreclosing, and I haven’t had one denied yet, but that doesn’t mean they are never denied. There are factors beyond the control of the buyer or buyer’s agent.

  • We can’t control how cooperative the seller will be with the bank’s demands addressed in more detail here
  • We can’t control how knowledgeable or diligent the listing agent is
  • We don’t know from day-to-day what financial incentives the government will offer the banks which can determine what short sales they approve
  • When there are multiple mortgages we don’t know how well the negotiators for the first and the second will play together or the abilities of the listing agent to ref them
  • The seller can also reject the terms of the short sale which will be addressed in detail in another post

In a nut shell– short sales can be a good bargain but for the right buyer. You need to have the patience of a saint and the ability to move on someone else’s schedule.

Coming soon – strategies for making a short sale offer.

Jackie Hawley
Keller Williams Realty, Clarkston
Cell: (248) 736-6407
Jackie@JackieHawley.com

Search the MLS

Clarkston Lakefront Homes For Sale

Clarkston MI Homes For Sale

Lake Oakland and Woodhull Lake

Lotus and Maceday Lakes

Deer Lake

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Making an Offer on an Oakland County Michigan Short Sale Listing? The Asking Price Means Nothing!

First a quick run down about how the short sale process works. Owner lists a house with a real estate agent. The owner owes more on the house than he can sell it for and is either unable or unwilling to bring the short fall to the closing, so it is listed subject to short sale approval. The banks do not pre-approve houses for short sale and the banks do not set the asking price.

The point is, the seller and his agent set a price to ask for sale and it has nothing to do with what the bank (or banks) will take for a pay off. I know how I price a short sale listing, but every agent is going to have their own ideas of what works best. Some agents appear to have no rhyme or reason behind their pricing. When considering buying a short sale listing, one of the factors to consider is the abilities of the listing agent. He or she is a major component to getting a favorable approval.

One of the myths floating around out there is that the banks will approve anything. There are some great deals, but they exist in all types of sales: short sales, foreclosures and regular sales. But I can honestly tell you that is a rare to non-existent happening that a bank will approve a payoff of $50K for a house worth $150K in this market and owes $300K. Something IS NOT necessarily better than nothing. The banks aren’t going to just forgive debts because it’s the easiest thing for sellers and real estate agents. In Michigan the banks have 10 years to come after the deficiency, and if they don’t release the seller from that deficiency there isn’t much incentive for the seller to approve the short sale and continue to closing.

Short sale listings tend to sell at the low end of fair market value and even slightly under today’s fair market value. And they should if you consider a 6 month wait on the part of the buyer to even find out if they can buy the house. I like to equate that wait and uncertainty to sweat equity. But the current asking price has absolutely nothing to do with the final sale price. It is very possible/likely that you will wait it out and the short sale gets flat out rejected. Or you may get a counter offer. During that time you hope interest rates don’t go up.

Before we make an offer on a short sale listing, I will do a detailed market analysis on the house. There’s no need to make a low offer that you can’t or won’t move off of if the bank won’t accept that low of a pay off. There’s also no need to make an offer so high that your lender won’t approve the mortgage due to a probable low appraisal.

I have a series of blog posts about buying a short sale listing. Some about the downfalls as well as the perks to buying a short sale listing. After reading the posts outlining the good and the bad, if you are willing and able to still pursue possible short sale listings, there are more posts about negotiating with a short sale seller. The incentives for a short sale seller are very different than those of a traditional seller.

Jackie Hawley Keller Williams Realty, Clarkston MI

Cell: (248) 736-6407

Jackie@JackieHawley.com

Buying Real Estate In Oakland County Michigan

Writing the Offer

Financing

The Home Inspection

Foreclosures and Short Sales 

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Southeast Michigan Short Sales- Why You Should Avoid Many Of The So Called “Short Sale Specialists”

I will preface this post with a kind of anti-disclaimer: If you have to sell via short sale, I DO NOT WANT TO LIST YOUR HOUSE. If you are a past client or a friend, I will list your house if selling via short sale is the best option for you, and you agree to my rules. So this post is NOT to get your short sale business.

I have my own reasons for not listing short sales, one of them being the success rate to close. In just general MLS searches for buyers and for market anlaysis’ for listings, it appears that about 1/3 of the houses that go pending short sale approval, end up back on the market or foreclosed. I personally never saw the benefits of a business model that has a 1/3 failure rate built into it.

Then today, one of my associates received an e-newsletter from a local “short sale team.” They bragged a bit about having closed over 100 short sale transactions in the past year. They then go on to crow about the fact they “process on average 75 active short sales daily…” Hmmmm. I was never a math genius, but I do own a calculator and that comes out to 100 closings for every 27,000+ clients they take on. So about one third of one percent of their business actually closes.

Since I can’t convince all my buyer clients to avoid short sale listings, PLEASE PLEASE PLEASE hire a good, experienced, successful agent to handle your short sale. Someone who was a good and successful agent BEFORE short sales became such a big business. To me it looks like many of the “specialists”, whether they are attorneys or real estate agents, specialize in listing a high volume of distressed homes with a small success rate. From a seller’s perspective, you may want to consider quality over quantity.

What Makes a Good Short Sale Agent?

Short Sale Approval is Subject to Seller Approval of the Terms

Bad Advise From Your Realtor? From Your “Short Sale Specialist”? What Are Our Responsibilities? Where Does The Buck Stop?

Jackie Hawley

Keller Williams Realty, Clarkston MI

Cell: (248) 736-6407

Jackie@JackieHawley.com

Buying Real Estate In Oakland County Michigan

Writing the Offer

Financing

The Home Inspection

Foreclosures and Short Sales 

Read Full Post »

Am I Overpaying? Is the listing overpriced? What is the house worth?

All questions, or variations of questions, most buyers ask when buying a house. They are valid questions with not easy or pat answer. The value of the home depends on your point of view.

Webster defines “value” as “a fair return or equivalent in goods, services, or money for something exchanged” or “the monetary worth of something.”

Out of everything that is currently on the market: Is it the best house for you, with an asking price you would be comfortable paying? If you were assured the asking price is fair, would you feel like you were settling with this particular house? If the house is everything you were hoping for in your price range, then you’re not overpaying.

Websters defines “market value” as “a price at which both  buyers and sellers are willing to do business.”

Now that doesn’t mean it will appraise. Appraisals are usually needed to get a mortgage.

My definition of “appraised value” is “a price determined by a licensed appraiser who is following both government and lender guidelines.”

Some of the rules appraisers have to follow for most residential loans, that can and do affect “value” are (among others):

  • they are limited on the amount of value they can give outbuildings
  • they are limited on the amount of value they can give to land when buying a home on acreage
  • they are limited on the amount of value they can give for upgrades such as top of the line windows, 50 year warranted roof, finished basements, crown molding, upgraded cabinets, flooring, light or plumbing fixtures…..

Other factors that can affect the appraised value are the lack of comparable sales. If you are selling a custom lakefront home on a lake that has had mostly cheap foreclosure sales, converted cottages, the appraisal could come in low. Especially if the house is on one of the more desirable lakes- the sold comps for more custom homes may come from a less desirable lake and there’s really no way to adjust value for the lake.

If you are buying a house with a hundred thousand dollar indoor arena and another fifty thousand in oak fencing and 20 acres, the lender expects the seller to give little to no value to the barns, fencing and land.

Do these things have value to the consumer? Are there things about the house you want, that have value to you, that an appraiser may not consider? If so, are you able and prepared to pay the difference if the appraisal comes in below the agreed upon sale price?

If you are unable to pay the difference between appraised value and what the seller is willing to sell for, then we would need to determine an approximate value an appraiser would come in at and not exceed that price in negotiations.

If you are able to pay the difference, you need to decide what the value of a particular house is for you. Basing your purchase solely on appraised value can cost you more in the long run.

Making the Offer

All About Financing

The Home Inspection

Search the MLS

Jackie Hawley
ReMax Encore, Clarkston MI

Cell: (248) 73606407

Email: Jackie@JackieHawley.com  

Read Full Post »

Buying an Oakland County MI Short Sale Listing- What to Expect

Between what I’ve heard on TV and radio, read and from conversations I’ve had with clients, potential clients, other agents, relatives, friends… I have learned that there are a whole host of definitions for the term “short sale.” And most of them not very accurate.

A short sale is when the house is offered for sale by the owner (person as opposed to a bank) who owes more than what the house is worth and can’t, or isn’t willing to, pay the difference themselves. Any offer that home owner would accept would be subject to the bank agreeing to reduce the mortgage payoff. Selling short. Short sale.

Short sale listings can be some of the best bargains available in Oakland County Michigan, but there are things about short sales that the Oakland County Michigan home buyer should be aware of prior to even looking at houses.

  • Be prepared to wait 3-6 months (sometimes longer) for short sale approval
  • Be aware the lien holders may not agree to the payoff required to proceed with your offer. After 3-6+ months your offer may be countered or outright rejected
  • Don’t expect appliances to stay
  • Don’t expect the seller to pay for repairs
  • Don’t expect your closing costs to be covered in the form of seller concessions- sometimes they’re capped at 3% and sometimes they won’t be covered at all
  • DO expect to close pretty quickly once the short sale is approved

One of the first things everybody involved in a short sale needs to understand is that the banks are under no obligation to approve a short sale. You would think it would be in the banks best interest to approve a short sale when the offer is reasonable, but often times the actions of many of these banks seem to defy logic. Also, the more lien holders involved in the transaction the more difficult it is to complete and the higher the probability that it won’t close.

Buyers need to realize that there are factors beyond the control of the buyer or buyer’s agent.

  • We can’t control how cooperative the seller will be with the bank’s demands addressed in more detail here
  • We can’t control how knowledgeable or diligent the listing agent is
  • We don’t know from day-to-day what financial incentives the government will offer the banks which can determine what short sales they approve
  • When there are multiple mortgages we don’t know how well the negotiators for the first and the second will play together or the abilities of the listing agent to ref them
  • The seller can also reject the terms of the short sale which will be addressed in detail in another article

In a nut shell– short sales can be a good bargain but for the right buyer. You need to have the patience of a saint and the ability to move on someone else’s schedule.

What if the Appraisal is Low?

Search the MLS

Property Taxes and Your Home Purchase

Is the Appraisal for Your Protection?

Jackie Hawley
Keller Williams Realty
Cell: (248) 736-6407
Email: Jackie@JackieHawley.com
www.MiRelocation.com

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