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Are You a Buyer Looking to Purchase a Short Sale?

May 8, 2012 By Leave a Comment

Are You a Buyer Looking to Purchase a Short Sale?

 

Posted: 08 May 2012 04:00 AM PDT

 



 

It seems that there is a significant amount of confusion when it comes to purchasing a short sale. There are many misconceptions when it comes to this type of transaction, so below I have provided some information to potential buyers of short sales. If you are looking to purchase a short sale, understand that it is not the same as a normal sale and the approach is very different.  There could be several parties involved and issues that are unknown to the buyer and buyer’s agent that can affect the transaction. If you are looking to purchase a short sale here is some helpful information.

 

1. On average, to get a short sale approval, it can take 60-90 days.

 

There could be mortgage insurance and an end investor on the loan as well as the servicer, which means it has to go through three different processes. Bank of America could be the servicer on the loan but they do not actually own the loan, so, the short sale has to pass their guidelines, then go to the mortgage insurer if there is one, then to the end investor like Fannie Mae and Freddie Mac. If you are a buyer and can’t wait at least 60-90 days for an approval and then another 30 days to go to closing, then you need to look at other houses. The worst thing you can do is tie up a house that is in a short sale with no intention of being patient while waiting for a short sale approval. Approvals can come sooner than 60 days, but industry standard is at least 60 days to get an approval or denial.

 

2. There is a general assumption that you can purchase a short sale for 40-50% under its listed price.  In a short sale the bank comes out and does a valuation of the property and will expect a slight discount, but will not accept a huge amount under the market value.

 

Hopefully, if the agent who is handling the sale is experienced, they will have already gotten an approved list price from the bank by the time you are interested in making an offer. The bank will usually be willing to negotiate on that price, but will not, in almost every case, take 40-50% off of that price. To that point, you may be able to get a reasonable deal on a short sale, though it will not be, in most cases, as much of a deal as you may be able to get on an REO (foreclosed property). Also to that point, most short sales will be in better condition than an REO. When you look at the potential repairs a comparable REO needs and the time and expense it can take to do those improvements vs. a short sale being sold at a slight market discount with improvements already made, the investment could even out. There are REO properties that can be picked up for a huge discount, but require massive repairs that a comparable short sale may not require.

 

3. Short sales are a very difficult process and it takes a qualified person to handle this type of transaction.

 

With this type of transaction it takes a very experienced agent on the listing side as well as the buying side. Make sure before you move forward on the transaction that the listing agent has ample experience dealing with these types of transactions, or you could be tied up in a contract for months that never goes to settlement. There are several different types of short sale processes and each bank’s process is somewhat different; it takes a professional who has had experience with all of these different types of short sales to help facilitate a successful transaction.

 

4. In most short sale transactions the properties are sold “as-is” and no repairs will be made.

 

Although there are some exceptions to this rule, speaking in general, short sales are sold “as-is” and no repairs will be made even if they are found during a home inspection. In most short sale transactions the bank will require both the buyer and the seller to sign an addendum that states the property is being sold “As-is” and no repairs will be made.

These are just a few short pointers for buyers who are looking to purchase a short sale as they are a reality in every market, and if you have the patience you may be able to get the home you are looking for at a discount!

Are You a Buyer Looking to Purchase a Short Sale?.

Filed Under: Beverly Farms, Beverly MA Condos, Beverly MA homes, Beverly MA Multi-Family, Beverly MA real estate, Beverly MA REO, Manchester by the Sea, Manchester MA, North Shore MA bank owned, North Shore MA foreclosures, North Shore MA real estate Tagged With: , , , , , , , , ,

What Is QM and Why Does It Matter?

May 6, 2012 By Leave a Comment

What Is ‘QM’ and Why Does It Matter?

Posted: 02 May 2012 04:00 AM PDT



We often discuss the difference between the PRICE and the COST of a home. We want buyers to realize, in many ways, the cost of a home is more important to them than the actual price. Obviously, price is part of the cost equation. The other piece, available financing, is also crucial. Soon, there will be major decisions finalized by the government regarding house financing moving forward. These decisions could negatively impact many buyers.

“QM” is a new term which stands for qualified mortgage. The new Bureau of Consumer Financial Protection (CFPB) will be responsible for defining QM thereby setting the consumer guidelines banks and lending institutions must follow before issuing a mortgage.

Richard Cordray, the Director of CFPB, plans to finalize the definition this summer. The Center for Responsible Lending quotes American Banker on this timeline:

“The Consumer Financial Protection Bureau will issue a final rule by the end of June defining what constitutes a ‘qualified mortgage’ that will be exempt from new rules compelling lenders to verify borrowers’ repayment ability.”

The fear of many is that the definition will be too ‘narrow’ resulting in many purchasers not being able to qualify for a mortgage under the QM definition. In a letter to Director Cordray, several industry organizations talk to this issue:

“Most economists and housing market analysts in government and in the private sector agree that today’s underwriting standards are tight and are contributing to a slow housing recovery. Our organizations believe that an unnecessarily narrow definition of QM that covers only a modest proportion of loan products and underwriting standards and serves only a small proportion of borrowers would undermine prospects for a housing recovery and threaten the redevelopment of a sound mortgage market…

We are convinced that the choices around this important rule, including in large measure the breadth of the QM standard, will affect sustainable homeownership for generations to come.” 

What Could This Mean To a Home Buyer?

If a buyer does not qualify under the new ‘QM’ rules, the cost of financing a home will increase. As the letter mentioned above states: 

“A narrowly defined QM would put many of today’s loans and borrowers into the non-QM market, which means that lenders and investors will face a high risk of an ability to pay violation and even a steering violation. As a result of these increased risks, these loans are unlikely to be made. In the unlikely event they are made, they will be far costlier, burdening families least able to bear the expense.”

Securing a mortgage before these new guidelines take effect may make sense to many buyers.

What Is QM and Why Does It Matter?.

Filed Under: Beverly Farms, Beverly MA bank owned, Beverly MA Condos, Beverly MA foreclosed homes, Beverly MA foreclosures, Beverly MA homes, Beverly MA Multi-Family, Beverly MA real estate, Beverly MA REO, Manchester by the Sea, Manchester MA, Manchester MA real estate, North Shore MA bank owned, North Shore MA bank owned, North Shore MA foreclosures, North Shore MA real estate, Pride's Crossing Tagged With: , , , , , ,

Beverly Farms MA Beverly MA real estate and homes

October 5, 2011 By Leave a Comment
You are here: Home / Life in Beverly MA / Beverly MA Neighborhoods / Beverly Farms MA

Beverly Farms MA

Beverly Farms – The real estate market on Beverly MA waterfront

beverly-farms-ma-real-estate-west-beach

Let’s see what Wikipedia has to say…

Beverly Farms is an informally defined neighborhood at the eastern edge of the city of Beverly, Massachusetts. It is an ocean-front community with a population of about 3,500 which extends from the Manchester-by-the-Sea border to another informally defined section of Beverly known as Prides Crossing. This area is part of Massachusetts’s North Shore region, about 20 miles north of Boston.

Past and present

Beverly Farms and the adjacent Prides Crossing originally were farming communities, like the rest of Beverly. In the late eighteenth and early nineteenth centuries, wealthy residents of Boston and New York City built summer “cottages” along the seashore; these cottages were nearly the size and stature of those in Newport, Rhode Island, though only a few of the original mansions remain in Beverly Farms today.

In 1887, Beverly Farms unsuccessfully petitioned the Massachusetts Legislature for incorporation as a town.

By the mid twentieth century, Beverly Farms resembled a small town, somewh at secluded from the rest of Beverly and culturally interlinked with Prides Crossing. Working-class neighborhoods sprang up as support for the mansions became necessary. At this point, there was a wide financial gap between the wealthy and the working class.

Beverly Hills, California, was named in 1907 after Beverly Farms, part of Beverly, which was a vacation spot of then-President Taft.

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Changing times

Beverly Farms remains a vibrant community with changing demographics. Pockets of residential development and generally escalating real-estate values appear to have adjusted average residency to a wealthier population, much as in the past. Real estate in Beverly Farms has become very desirable. The community is served by three churches, Episcopal, Baptist, and Roman Catholic. Among other public buildings are a community center (known as the Hastings House because it was donated and is partially supported by the Merril Hastings foundation), a fire station, a railroad station on the MBTA Commuter Rail, and a recently expanded branch of the Beverly Public Library.

Downtown Beverly Farms extends along West Street (part of Route 127) for about 1/2 mile. It has undergone some gradual changes over the last decade. Currently, the downtown is a mixture of high-end restaurants, bakeries, and clothing stores.

Summer in “The Farms”

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Life in Beverly Farms is slow-paced in the winter but becomes increasingly active when the warm weather arrives. The summer is full of activity for residents and visitors alike. Many of those activities are based at the local community beach, West Beach: this is a private beach, owned by the residents of Beverly Farms and Prides Crossing; current and former residents of the areas are entitled to beach permits, allowing access to West Beach (non-residents must apply for an access permit; their wait typically is six to ten years, because of the limited size of the facility).

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Beverly Farms is busiest at the Fourth of July holiday. A private organization of residents annually raises upwards of $60,000 through fundraisers to enable a weekend-long agenda of activities, including community dances, children’s events, softball games, and the well-known “Horribles” parade. Celebration of the holiday culminates with fireworks at West Beach above a crowd that averages about ten thousand.

Showing properties 1 - 6 of 170. See more city of Beverly real estate.
(all data current as of 5/18/2012)

  1. 7 beds, 6 full, 1 part baths
    Home size: 6,296 sq ft
    Lot size: 1.42 ac
    Year built: 1929
    Parking spots: 15
    Days on market: 138
    Listing provided by Philio W. Cushing, Coldwell Banker Residential Brokerage - Beverly
  2. 6 beds, 5 full, 1 part baths
    Home size: 9,500 sq ft
    Lot size: 1.68 ac
    Year built: 1895
    Parking spots: 21
    Days on market: 345
    Listing provided by Elaine Sawyer, RE/MAX Advantage Real Estate
  3. 7 beds, 7 full, 1 part baths
    Home size: 8,800 sq ft
    Lot size: 1 sqft
    Year built: 2007
    Parking spots: 14
    Days on market: 67
    Listing provided by Lynda Surdam, Coldwell Banker Residential Brokerage - Manchester
  4. $4,100,000 : 441 Hale, Beverly
    11 beds, 9 full, 2 part baths
    Home size: 8,500 sq ft
    Lot size: 4.04 ac
    Year built: 1882
    Parking spots: 6
    Days on market: 665
    Listing provided by Joanie Purinton, River Valley Real Estate
  5. 5 beds, 3 full, 1 part baths
    Home size: 4,531 sq ft
    Lot size: 5.33 ac
    Year built: 1955
    Parking spots: 10
    Days on market: 3
    Listing provided by Carole Sharoff, AVH Realty
  6. 7 beds, 6 full, 1 part baths
    Home size: 6,790 sq ft
    Lot size: 3.27 ac
    Year built: 1900
    Parking spots: 10
    Days on market: 392
    Listing provided by Mary Pruett, J. Barrett & Company

The property listing data and information set forth herein were provided to MLS Property Information Network, Inc. from third party sources, including sellers, lessors and public records, and were compiled by MLS Property Information Network, Inc. The property listing data and information are for the personal, non commercial use of consumers having a good faith interest in purchasing or leasing listed properties of the type displayed to them and may not be used for any purpose other than to identify prospective properties which such consumers may have a good faith interest in purchasing or leasing. MLS Property Information Network, Inc. and its subscribers disclaim any and all representations and warranties as to the accuracy of the property listing data and information set forth herein.
Filed Under: Beverly Farms, Beverly MA Condos, Beverly MA homes, Beverly MA Multi-Family, Beverly MA real estate Tagged With: , , , , , , , , , ,
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Bill Barbin Licensed MA Real Estate Broker with J Barrett and Company Direct: 978-500-1543 Mail to: 1 Beach St. Manchester by the Sea, MA 01944
The property listing data and information set forth herein were provided to MLS Property Information Network, Inc. from third party sources, including sellers, lessors and public records, and were compiled by MLS Property Information Network, Inc. The property listing data and information are for the personal, non commercial use of consumers having a good faith interest in purchasing or leasing listed properties of the type displayed to them and may not be used for any purpose other than to identify prospective properties which such consumers may have a good faith interest in purchasing or leasing. MLS Property Information Network, Inc. and its subscribers disclaim any and all representations and warranties as to the accuracy of the property listing data and information set forth herein.

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