Short Sales, Dare You Risk It?

No story or discussion about real estate today is complete without the mention of short sales. So, are they worth the effort, should you consider a short sale? Basically, a short sale is the sale of a property where the Sellers owes more than current value and the lender is prepared to forgive the difference between what can be realised in a sale and what is owed on the mortgage/s.

Short sales can be had at excellent prices but there are important factors to consider. If I am assisting a client purchase a short sale property, I always take certain steps first to ensure the deal is viable:

• First, I find out which lenders are involved. There are certain lenders who are notoriously bad at getting the short sale done effeciently. In addition, if more than one lender is involved, the deal will take longer and negotiations with each will have to take place.
• Next, it's important to know how much is owed and what the current market value is. The condition of the home will also afect the lender's willingness to get a deal done.
• Besides the mortgage, are there any other costs that the Seller may be delinquent in paying, the Homeowners Association, the property taxes, insurance, etc. All these factors will affect the purchase price and the lenders willingness to deal.
• Who is going to be negotiating the short sale. If the Seller has hired someone who understands the process and has experience in closing short sales than the transaction may be worth pursuing. But there are too many so called "experts" around who can really mes up a short sale - stay away from those deals.
• Lastly and most important, how patient is my Buyer. Short sales are usually great deals but they could take anywhere from 4 to 12 months. Don't expect to close a short sale in 45 days, there is seldom any chance of that happening.

If you take a look at the city of Boca Raton for example and search single family homes for sale, there are presently 869 short sales available. These are in all types of communities, from country clubs such as Boca Grove and St. Andrews to great family comunities like Mission Bay and Boca Falls.

From January 1, 2010 to May 25, 2010, there have been 109 sales of single family home short sales. I can comfortable say that the sales price of the short sales were, on average, at least 15% lower than current market value.

In conclusion, if you are looking to buy in South Florida, don't shy away from short sales, just make sure you are dealing with a professional who understands the process and has your best interests as her primary concern.
Call me to find your South Florida home:
Tali Wolder
561-866-9372
tali@floridianinternational.com