Newton Massachusetts Short Sales - Not You're Typical Real Estate Transaction
If you are buying a home and want the best "deal" in the purchase of real estate a "short sale" may be your best option. Buying a Newton MA short sale is a difficult and often a frustrating process. To have success, hire experienced professionals that understand all aspects of the transaction. Expert advice can be provided by real estate agents, attorneys, mortgage brokers or bankers and home inspectors.
What is a Short Sale?
Homeowners that have financial difficulties may pursue a short sale prior to foreclosure. This process may be the best option to preserve their credit and limit their debt exposure. In MA, the laws governing foreclosures provide incentives for lenders to work with homeowners that can no longer afford their homes. The foreclosure process takes time and money and may prove to be more costly to the lender.
Under the Home Affordable Alternatives Program (HAFA) offered in 2010 by the Treasury Department, lenders and homeowners have additional incentives to consider a short sale. Homeowners have a choice to enter the HAFA program or attempt to negotiate with their lender outside the program. As a buyer, you may have more success purchasing a property that is in the program due to the streamlined process. Your real estate agent can determine which properties are in the program.
The Short Sale Process
The first step in the process is to negotiate a contract with the homeowner that would be subject to lender approval If the contract is not approved by the lender then the Seller may not have sufficient time to sell to another party and avoid foreclosure. The following tips will increase your chances of negotiating a successful Newton Massachusetts short sale transaction:
You Must be Credit Approved
Providing creditable evidence that you can purchase the property is absolutely necessary. The Seller is not likely to accept your offer without a valid credit approval as the lender will reject the contract. Obtain a credit approval from a reputable lender or if a cash buyer provide proof of funds. The contract must have only the standard and typical conditions of sale to obtain lender approval.
Finding Newton Listings That Qualify
Homeowners in financial distress typically have a limited amount of time to find a qualified buyer. If they have not connected with their lender(s) and started the process, there may not be sufficient time to affect a sale. As mentioned earlier, if the homeowner is in the HAFA program, they have already begun the process. Go to Newton MA foreclosures and register to receive new and current listings available in the MLS. As your Realtor, I can pre-qualify a listing on your behalf. Information I will obtain includes:
- Is the seller's short sale package prepared for submission to the lender?
- How many liens are on the property? If more than one, what are they? Is there a plan to satisfy all the lien-holders?
Don't take yourself out of the market for a property that has no chance of closing. Consider and evaluate all properties on the market and surrounding communities. Visit Newton MA real estate for community, demographic, school, relocation and home buying information.
Negotiating the Offer for a Newton Massachusetts Home
The first step is to negotiate a contract with the Seller and you will be competing against other contracts. Some real estate agents market the property substantially below market value to entice buyers. Others offer the property at the low end of fair market value. The terms and conditions of your offer can be as important as the offered price. Sellers and lenders prefer offers with fewer contingencies.
- You're Deposit - Sellers will not be likely to accept your offer with a low deposit. A buyer that has little to lose can easily pursue another property and "walk away". To demonstrate good faith, offer the Seller a strong deposit.
- Home Inspection - be prepared to invest the time and money in the home inspection prior to lender approval. A seller may not want to take the risk of allowing the inspection after lender approval. The buyer can easily "walk" from the home inspection and lenders normally will not approve them.
- Flexible Closing Date - once the lender approves the offer, they may require a "quick" closing. You must be prepared to comply if you want to consummate the sale.
Subsequent Offers
The listing agent must submit all offers to the Seller up to closing. A contract with better terms and conditions may have a better chance of being approved by the lender. The lender will give the homeowner direction as to their policy submitting additional offers. In most cases, once the homeowner has an accepted offer, additional offers will be considered as a back-up contracts. Also, be prepared to lock your interest rate thru closing so that your mortgage commitment will be valid.
Lender Approval
Lenders have no set formula for determining the value of the property other than to substantiate values through due diligence. However, Freddie Mac (one of the largest secondary market lenders) has a value range of 88% of one or more broker price opinions (BOP). Have realistic expectations of the approval process as it may take between 30-180 days and market conditions can change.
If the lender and the Seller are participating in the HAFA program, these timelines will be streamlined for a quicker response. In fact, the Lender may have approved a listing price for the property and negotiate a contract as they would a bank owned property.
Virtual Homes Real Estate agents can assist you with Newton MA short sales, foreclosures and MLS listings currently on the market. We can represent you as a Buyer's agent which provides for a fiduciary responsibility to you to protect your interests as a client.
Newton Massachusetts real estate resource for finding and evaluating Newton MA short sales.
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