What Should I Expect When I Buy?
Short sales often look like other listings in the MLS, except they may have a lower asking price than comparable properties.
The term "short sale" is a bit of a misnomer, though, as this type of transaction can take much longer to complete than a standard home sale.
The buying process is similar to a standard purchase. You still apply for financing the same way, and order inspections the same way, for instance. But complications in the selling process aren't uncommon, and you'll need patience.
The good news, though, is that times have changed. Many banks have streamlined their processes for short sales, making it much simpler and less time consuming for buyers and sellers. Market data shows that the time it takes to close a short sale has steadily decreased over the past few years.
Possible short sale hurdles I can help you navigate:
Second mortgages: These can pose problems because a second lender may not agree to the terms set between the primary lender and the seller.
Mortgage insurance: If the seller has mortgage insurance on their loan, the mortgage insurance company will need to approve the short sale.
Other liens on the property: A lien is a claim by an outside person or company on a property for money owed. Liens pose hurdles whether the transaction is a short sale or not, and will have to be addressed before the property can be transferred to a new owner.
Government-backed loans: If the home seller's loan was a government-backed loan, such as an FHA loan, this can cause delays and hurdles because the government will need to be involved in approvals.
HOAs: HOAs can present complications because the lender might not pay fees associated with the HOA transfer from the seller to the new owner.
The Short Sale Buyer's Checklist
- Get prequalified for a mortgage.
- Get a home inspection, but understand that most lenders will sell only "as is." The inspection can help you decide whether the short sale price is reasonable, given the cost of repairs needed.
- Understand who is paying the agent's commission and whether you have to make up any differences to your agent.
- Submit documentation to the lender.
- Have plenty of patience, but balance it with persistence. Keep in mind that banks have grown much better at processing short sales, which is good news for you.
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Community Updates
Terrace Park
Browse West Lake Okoboji Real EstateTerrace Park is located in Brown's Bay on West Lake, Okoboji. It is one of the largest public beaches on West Lake and has entertained beach goers for many years. Next to Terrace Park is Boys Town out of Omaha, Nebraska. I remember as a kid spending entire days at terrace park, either riding bicycle or taking a moped (yes a moped) down to meet with friends and playing king on the dock. In 2010, the morning after "the storm", Terrace Park was carnage. Boat were stacked on top of each other. Trees were uprooted, and hoists were tossed around. Boats and other water craft were found in Terrace Park that belonged to owners on the North end of West Lake.
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"The Harbor"
Browse West Lake Okoboji Real EstateThe harbor is a man made inlet located on the north end of West Lake. A board walk surrounds the harbor and this is one of the most tranquil parts of the lake. Homeowners in the harbor have a more affordable way to have access to West Lake, and still get to enjoy the clean waters West Lake has to offer. Homes in the Harbor typically range from about $350k to as much as $700k.
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Cheap vs high end quality. A buyer's perspective.
Here's the scenario. You are building a house or remodeling your house. Material costs are up. Labor costs are up. You ask yourself, where can I save a buck? Before answering this question, you must be careful, especially if your home is located in an area where other quality homes are built, whether on the lake, off the lake, or in higher valued developments such as golf course developments, etc. Growing up in construction and with a plethora of new construction and remodels under my belt, let me share with you some of the easy things that your future buyers will recognize when they are looking for quality.
1. One of the first things buyers of higher end homes will look for is to determine if the owner used hollow core doors. It's an immediate sign that the seller was looking for ways to save money (where else then did they cut back that I can't see???)
2. The second most obvious is the counter tops. Did the sellers spend for a quality granite, quartz, or other hard surface, or was formica used?
3. The third item that might stick out is the cabinetry. Do the drawers have dovetail construction with hardwoods? Did they use "soft close" drawers? Are there pull outs for the pots and pans?
4. Flooring is an easy one also. Was laminate used, or is it engineered or hardwoods? Does the carpet convey a quality feel and plushness? Is there a nice thick pad underneath the carpet?
5. Though there are many other items to look at, cheap vs quality lighting and plumbing fixtures are probably the next major focus.
There is nothing wrong with with using lower cost materials, especially when trying to keep a project within budget, especially when trying to build more house for less money. Just be aware that most buyers looking to spend in excess of $300k for off lake homes and $500+ for East Lake chain homes, and $1M+ for West and Big Spirit will expect the very best materials and finishes.