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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: , , , , , , , , ,

Short Sales Will Increase Dramatically in 2012

May 7, 2012 By Leave a Comment

Posted: 07 May 2012 04:00 AM PDT



We believe that short sales will be a major part of the real estate market in 2012. That is why we have dedicated this entire week to posts exclusively on this subject. We hope that by the end of the week you have a better handle on the need for short sales and a better understanding of the process. – the KCM Crew

It seems that the banks have finally realized that a short sale is a better option than foreclosure for them, the homeowner and the neighborhood. It is for this reason we believe that 2012 will come to be known as the year of the short sale. CNN Money reported on this exact point:

“We believe 2012 could be a record year for short sales,” said Daren Blomquist, vice president at RealtyTrac.

Banks are showing signs of being more open and willing to approve the deals — even if it means accepting less money. The average sales price for a short sale was $174,120 in January, down 4% from December and 10% year-over-year.

Market Watch also addressed the short sale situation recently:

Fitch expects the increase in short sales to continue because of the potential benefits afforded to both lenders and borrowers. Some borrowers may prefer short sales because, though they cannot stay in the property, they often walk away with cash incentives from lenders and healthier credit reports unmarred by foreclosure. For lenders, short sales provide a more efficient and cheaper alternative to the increasingly lengthy and costly foreclosure process.

Why Are the Banks Now Leaning Towards Short Sales?

The simple answer is that the banks lose less money when doing a short sale. The CNN Money article mentioned above explains:

Typically, banks get about 20% less for a foreclosed home. Foreclosure can also take years to unload, during which expenses, like property taxes, insurance and other expenses, mount up.

The Market Watch report breaks it down further:

Short sales…are currently getting completed 20 months after the last payment made on the loan, approximately 10 months less than the average time to foreclose. Shorter timelines reduce lenders’ carrying costs (i.e. accrued loan interest and property taxes, insurance, and maintenance) and eliminate most of the legal expenses associated with foreclosure and liquidation. As a result, loss severities tend to be considerably lower. Historically, for loans with similar attributes, short sales have severities 10%-15% less than REO sales. As the proportion of short sales increases, we expect average loss severities to improve further.

How Many Short Sales Could Be Completed?

JPMorgan has projected that over 500,000 short sales will be done this year. Also, NECN.com recently reported:

RealtyTrac estimates that if the January numbers it found hold up, there would be about 105,000 “pre-foreclosure” sales of homes, most of them short sales, during the first quarter of this year, and at that rate something like 400,000 for the year.

How Long Will Short Sales Be a Major Part of the Market?

The NECN article shows us that short sales are here to stay for some time.

According to the Mortgage Bankers Association, there are nearly 3.5 million homeowners delinquent on their mortgages by at least one month, including 1.5 million who are 90 days or more behind on paying their mortgage. And there are 12.5 million homeowners still who are “underwater,” owing more on their mortgage than their home is worth. That suggests that at the current rates, barring some spectacular economic recovery, it would take years, even decades, for short sales alone to clean up the mortgage mess that remains.

Short sales are here to stay. We must accept this fact and work hard to learn the process and apply it where it makes sense.

Short Sales Will Increase Dramatically in 2012.

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

Prices: 1Q 2012 vs. 4Q 2011

May 4, 2012 By Leave a Comment

Prices: 1Q 2012 vs. 4Q 2011

Posted: 04 May 2012 04:00 AM PDT



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Prices: 1Q 2012 vs. 4Q 2011.

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: , , , , , , ,

Pride’s Crossing in Beverly MA real estate

October 5, 2011 By Leave a Comment

Pride’s Crossing

Prides Crossing Railway Station

Location

Prides Crossing is a historic section located in the City of Beverly, Massachusetts. It is bordered to the north by Beverly Farms, and to the south by the Beverly Cove areas of Beverly. Although no formal boundaries have been determined, most locals consider it to exist between numbers 407 and 600 Hale Street.

beverly ma real estate in pride's crossing

History

The name is associated with John Pride who was granted land in the area in 1636. In the late 1800s and early 1900s grand mansions were built as summer “cottages’ for wealthy business magnates. Henry Clay Frick[1], who made his fortune in steel (Carnegie Steel) was among the best known of these summer residents. He built “Eagle Rock”[2], located between Hale Street and the Atlantic ocean. Edward Carelton Swift[3] , at one time the owner of the largest meat packing operation in the U.S. built a mansion, “Swiftmoor”[4] on Paine Avenue in Prides Crossing. Eleonora “Eleo” Sears a flamboyant female socialite and world class tennis player owned a residence that still exists where Paine Avenue and West Beach meet. These wealthy residents were known to travel to Prides Crossing in their own rail cars, disembarking at the Prides Crossing Railway Station, located on Hale Street across from the entrance gates to Paine Avenue.

Entrance to Paine Avenue

The train station still exists and has been the location of a general store, hardware store and now houses a candy manufacture. The current MBTA Commuter Rail station consists of a single low platform adjacent to the old building.

frick estate in Pride's Crossing in Beverly MA real estate

Notable former residents

  • Henry Clay Frick (Steel Magnate)
  • Alice Roosevelt Longworth (eldest daughter of former President Theodore Roosevelt)
  • Richard D. Sears[5] (U.S. Open Tennis Champion)
  • Edwin C. Swift (Swift Meat Packing)
  • Frederick Ayer[6](Textile Manufacturer)
  • William Henry Moore (One-time owner of the National Bicuit Company and Diamond Match)
  • Norman Prince, co-founder of the Lafayette Escadrille

Pride's Crossing Beverly MA mansion

Local points of interest

  • Prides Crossing Railway Station
  • Prides Crossing Post Office
  • Prides Beach

prides crossing beach Beverly MA real estate for sale

Showing properties 1 - 6 of 113. See more city of Beverly real estate.
(all data current as of 5/18/2012)

  1. 3 beds, 2 full, 1 part baths
    Home size: 3,105 sq ft
    Lot size: 5,598 sqft
    Year built: 1935
    Parking spots: 2
    Days on market: 1
    Listing provided by Jason Parisella, Keller Williams Realty
  2. 4 beds, 2 full, 2 part baths
    Home size: 3,864 sq ft
    Year built: 1987
    Parking spots: 6
    Days on market: 1
    Listing provided by Fay Salt, Coldwell Banker Residential Brokerage - Beverly
  3. 4 beds, 2 full baths
    Home size: 1,470 sq ft
    Lot size: 8,360 sqft
    Year built: 1956
    Parking spots: 2
    Days on market: 2
    Listing provided by Gail Guittarr, Coldwell Banker Residential Brokerage - Beverly
  4. 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
  5. 2 beds, 1 full bath
    Home size: 864 sq ft
    Lot size: 10,760 sqft
    Year built: 1952
    Parking spots: 4
    Days on market: 3
    Listing provided by Kathleen Brown, J. Barrett & Company
  6. 4 beds, 2 full baths
    Home size: 1,797 sq ft
    Lot size: 6,798 sqft
    Year built: 1972
    Parking spots: 4
    Days on market: 3
    Listing provided by Susan C. Olson, RE/MAX Advantage Real Estate

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 MA homes, Beverly MA real estate, Pride's Crossing Tagged With: , , , , , , ,
Pinterest Bookmarklet
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.

This IDX solution is (c) Diverse Solutions 2012.