Short Sales In Today's Market !

The market has picked up and more buyers are out looking for homes, my job is to help guide those buyers and homeowners who are selling their homes ! I want to touch base and give everyone a quick refresher on what a short sale is and what the process actually is, there are still quite a few leftover on the market and new ones coming onto the market.

What Kind Of Short Sales Are There On The Market ? 

• Approved Short Sales:  This is where the bank has already set a price that they are willing to take for the home.  These kinds tend to move a bit quicker since the "negotiations" have already taken place, unless you plan on submitting an offer below asking price.  These can usually close within 90 - 120 days after going to contract.  

• Un-Approved Short Sales: This is the less predictable short sale because not only has the bank not agreed to a price but more than likely the homeowners are still in the process of submitting all of their paperwork as well.  Normally in order to submit your offer to the bank you will need to provide them with contracts, which means you will need to use your down payment to get into contract.  

What Is The Process Of Purchasing A Short Sale ? 

1. Meeting with your buyers broker, deciding on your offering price based on the actual market value of the home.  Take the time to review how long it has been on the market, and for your own knowledge what the Lis Pendens is on the home.  
2. Presenting the offer to the homeowners, ideally they will accept the offer or counter.  You can sometimes ask the homeowners to do fixes or repairs as well, but your agent will advise you to if this will help or hurt your chances.  
3. Once you have an accepted offer from the homeowner, you will than go into contract on the home.  Your offer will now be submitted to the bank for their approval this is where the timeline becomes less predictable.  
4. The bank will send out their own appraiser to perform a BPO of the property.  This is where they  will go look at the condition of the home, and of the surrounding comparable homes.  This is why basing your offer on the current market value is key, if they see your offer is considerably less than it chances are they will not accept.  Remember the bank does not necessarily have to counter your offer they can simply reject and you will need to re-start the process to change your offer.  
5. Hopefully you will have gotten your offer accepted or successfully negotiated with counters to get the home for the price your comfortable with.  Your mortgage broker should have began your process of you obtaining your commitment so that all the attorneys can schedule the closing and get all of the necessary paperwork from the homeowners for their short sale to be complete for you to be able to close ! 

Truths & Myths Of Short Sales 

• Myth: The homeowners have defaulted on the house and have not paid there mortgage.
• Myth: Anyone can short sale their home if they owe more than it is worth.    
• Truth: The homeowners must have suffered some circumstance for no longer being able to afford their home, and are unable to make other arrangements with the bank.  

• Myth: You can offer the bank whatever you want, they would rather sell it than hold onto it! 
• Truth: The home may not be worth what the remaining mortgage is on the home, but on average the bank wants 96% of the market value of the home regardless of what they are owed. 

• Myth: You can use any company to list your homes as a short sale! 
• Truth: You can, but your home will not sell.  You need to hire an agent and company that has worked on and with banks on short sales in your area.  Only a knowledgeable agent will be able to properly handle a short sale, the reason their is a higher commission rate is because of the extensive additional work we must do.  

• Myth: Whatever is left in the home the bank will come and clean out before your closing.
• Truth: What you see is what you get, literally this unfortunately includes whatever leftover debris is left by the previous owners.  In the case where the homeowners are still in possession they will almost always take their belongings and properly dispose of what they are not taking with them. 

What Happens After Your Offer Is Accepted

You have successfully gotten an accepted offer it may have been a quick simple negotiation or it may have been a bit of back and forth, but either way you have officially gotten passed one of the biggest parts of the home buying process !

Now you must know and any reputable Realtor will tell you that just because your offer is accepted, it does not mean that it will stop being shown so you must move quickly thru the next few steps to secure that home !! It is common that anyone else who views the home will be told that their is a first accepted offer, they can still place offers which will be presented to the homeowner.  Lower offers will be held as "back up" offers, but their is always a chance someone will outbid you and their offer may have terms that the owner may prefer.  I will usually recommend to my sellers to stay with the first offer, mainly because sometimes they may have outbid their first buyer to get in, and could drive the price down with concessions or changes.

That is the reason why time is of the essence so your going to want to get things done as quickly as you possibly can, this is not to rush the sellers but to show them that you are serious !! 

Step 1 - Sales Agreement & Attorney Review

This is a very standard form and is very important to your purchase, this is really sometimes the first step, but if you have had to negotiate and make changes to your original offer you will want to fill out a new updated one to send over to the attorneys.  The buyer and the seller will fill this out independently and receive a copy.  You attorney will review this document normally without any changes, because the contract will have the specifics credits or add-ons.

Step 2 - Call Your Mortgage Broker

Your realtor should have already developed a relationship with your mortgage broker to be sure this is a home that you can afford with the sales price/taxes/insurance.  If they have not spoken to them they shouldn't wait any longer to get that relationship going.  I personally like to have a direct line of communication the moment they give you the okay to go out and start looking.

Sometimes the seller will want you to get a 2nd mortgage pre-approval, this is not unusual in my business, because I work for a company who has their own mortgage company.  A seller can not however tell you who to get a mortgage with, they can only request a pre-approval thru a specific company.

This is not to say that using a mortgage broker your agent has not yet worked with will cause a problem,  I have had many deals go perfectly with mortgage companies I had not previously worked with.

Step 3 - Home Inspection

Many companies will have a preferred list of home inspectors, if you already have someone.  You want to have the home inspection as soon as possible, even with a first accepted offer.  A home inspector should check for of course the obvious red flags: mold, mildew, termite damage, but you also want them to check to make sure of some other things you may not think of.  Most will check to make sure that the hot water, actually gets hot, in older home this will take a bit longer but these are things that once you move in can become important.  They will also check things in the attics, basements and crawlspaces.

Homes that are remodeled it usually only takes about an hour for a full inspection, and others usually take about 2 hours. You will get a full copy of the report, and they will talk to you about it before they leave the property.

Step 4 - Sign The Contracts

Now depending on how your home inspection went sometimes you will be just going in to sign contracts with no changes, but sometimes there will have been more changes because of things that came up during your home inspection.  Remember your offer is still accepted, but now you are going to be changing the terms.

I can not stress what I am going to say enough, and it is what I say to not only buyers but to sellers too, BE REASONABLE!

I can understand a seller does not want to have to do work to the home they are moving out of, but you can't expect a buyer to just ignore problems that may have arose during a home inspection.  Try and work with the buyer, because no matter who the buyer is they WILL have a home inspection and you will more than likely be in the same position.

That being said sometimes buyers should be reasonable, don't let fear of losing the house force you to overlook a major problem but don't let a little problem cause you to loose your dream home either.

Step 5 - Bank Appraisal

This again is where a good Realtor is key, because the bank is going to come in and make sure the house is worth the money that in reality the bank is putting up for it.

This is what in today's market really is an asset to the buyer, because banks are not easily giving out money the way they did 10 years ago when the prices were really at its highest point.  The banks are very careful that the home is worth what your paying for it.  

I personally try and make the bank appraisers life as easy as possible, I bring my comps to the appraisal now we can't force them to use those specifically but most appraisers will appreciate it and many times end up using them. This depends on the bank and the appraiser but if they feel  the realtor has done there due diligence to make sure the buyers are not over paying, than they will use them.

Step 6  - THE HOME STRETCH

Your ready to close, you will have not much else to do till about a month before your closing !

I will write another blog outlining the things you will need to get in order prior to your closing separate from this one, and attach the link!

Relocation & Choosing The Neighborhood That Is Right For You!

Deciding on a home in any town is a hard decision, especially when there are so many homes on the market.  What could possibly make this decision any harder..... when you aren't decided on a town! There are a few reasons this sometimes happens to buyers. Most common is that they are re-locating from out of state, this is something that I come across quite often since we work directly with Cactus Relocation.  We have clients from outside of New York, that might have a particular kind of home in mind but not a town.  Another instance is when a client has to change their search to other towns because they are looking for a very specific kind of home. 

Now back to the topic at hand, how do you decide on what town you will search for that new home of yours in? Well the first step is to decide what is most important to you! So here is just a few quick questions you should ask yourself to help narrow down your search! 

• Do you need to be in close proximity to your work ? 
• How close do you need to be to transportation ? (Buses, Trains)
• Are there certain amenities that you need/want to be close? (Pools, Parks, Marinas, Beaches)
• Are you looking for a specific style of neighborhood? (Incorporated Village or Township)
• Is school district important (Ratings, Teacher:Student Ratios)

Every town here on Long Island is unique, but this is exspecially true here on the South Shore of Long Island.  We have homes that range from $100,000 to over $1 Million Dollars sometimes only a few minutes away from each other.  Every town on the South Shore offers some unique characteristics. If something like having an area to dock your boat is not a priority than a town made up of mostly waterfront homes may not be for you.  If you like to take advantage of the outdoors and hiking than someplace near some of our state parks would be a great area for you.  If your not from the South Shore you may not be aware of what certain towns offer as far as schools, entertainment, restaurants, or even the history of the town.  If you are planning on living in this home for the next 15-30 years these are things that I am sure are important to you, I know that they are important to my clients.   

Sometimes there are circumstances where someone needs to move to be close to family members, this is where the normal rules for relocation gets thrown completely out the window, sometimes even the kind of home no longer matters.  When this happens I always recommend you get a broker involved immediately, because this is where time is the most important.  Looking at a home where the sellers have not found their new home yet means it will be a longer waiting period to get into the house.  A Realtor will be able to find out all this information with just a phone call.  

Technology has made it very simple to find out about a town and what they offer but I have decided to take it one step further for my clients, and my readers I have created a informational newsletter.  It is not only a great resource for the potential homeowners, but for those that have decided to go ahead and buy a home in one of our communities.  In each newsletter it gives you the address's, phone numbers, and teacher information for the schools in the community.  I have taken the time to compile some of the restaurants, parks, marinas, entertainment spots that are popular along with other web links that you can use to get to know more about your new town and where things are located  Lastly I give you some background about the community that you are moving into, interesting tidbits of gossip like if anyone significant lived in the town.   

Here are just some of the towns that have available newsletters, you can find additional newsletters on my main page under the "About The Neighborhood" Column.

Amityville

Babylon

Copiague

Deer Park

Lindenhurst

North Babylon

West Babylon

West Islip

If you are looking for information on a specific town, but do not see the newsletter please feel free to email me and I will be more than happy to get the information for you.

Now let's talk about all the paperwork that goes along with buying a home, your sending and receiving paperwork constantly and all the while you are trying to pack away paperwork that is already in your home office.   It is inevitable at some point you may misplace or pack away something that you didn't mean to.   Do not stress, every piece of paperwork that goes on in your transaction is loaded onto a safe & secure website allowing you access at anytime! 

Next up,  you have found the house but now you need to hire movers, painters and most important hooking up all your utilities so you have power/lights/cable when you get to your new home!  In order to make sure our clients have the most pleasant experience my company has taken the time to find qualified and highly recommended professionals to get the work done for you.  This our Concierge Service, these professionals can not pay to be on our lists it is strictly based on the quality of work that they do for our clients, they must be certified in their field and insured! We offer alot of services to our buyers to help them in their home buying process everything from Mortgages, Title, Insurance.  

I pride myself on helping my clients get into that perfect new home, as quickly and stress free as I possibly can!

I hope these newsletters are helpful to those re-locating to our wonderful South Shore!