A Las Vegas Short Sale. Is It Your Best Move? Maybe Not.
- Date: 2007-04-04 - Word Count: 441
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I was doing a search for vacant properties the other day for a client uncomfortable with the idea of going into other people's homes while they still live there, and the list of 60 or so vacant homes I came up with had 48 that were short sales. I thought, Wow, that's a lot.
You might ask, ok, exactly what is a short sale anyway?
A short sale is a circumstance where a house is for sale for less than what is owed on it. Most of us have had the experience of being upside down on a car we are trying to trade in, and it's not much fun. With your house, it's even less.
The catch with a short sale is that the bank or mortgage company that holds the note on the house gets the final say on the price and the terms of the sale.
This is a pretty big deal, because lending institutions aren't in love with the idea of losing money on real estate. Who is?
So they take their sweet time to consider short sale offers. Here's a typical scenario.
You find a house you like that's a short sale, and since we all love a deal, you make an aggressive offer. Right about now the other agent informs you that it will be 4 to 6 weeks before the bank even LOOKS at your offer. Yikes! But ok, a great deal is worth the wait.
Or is it?
Consider also the meltdown going on in the mortgage industry. Not only are rates going up, but many of the attractive low down, interest only, adjustable rate mortgages that got you into the market in the first place are going away.
So by the time the bank gets around to countering your aggressive offer there's a good chance that not only will the interest rate and payment be substantially higher than you first planned, the loan program you need is possibly gone, and then maybe you don't even qualify anymore!
Another problem, but good for homeowners, is that the banks know that values here have bottomed out, and they don't need to give real estate away at bargain prices, so the buyer's dream of instant equity probably isn't going to happen quite the way they hoped it would.
The good news is that your investment in Las Vegas Real Estate is likely to safe and sound.
So when looking for properties, consider buying from the homeowner who's trying hard not to become a short sale or a foreclosure, and buy from a human being with something to lose, instead of from a bank, where the person making the deal is more concerned about losing his job.
You might ask, ok, exactly what is a short sale anyway?
A short sale is a circumstance where a house is for sale for less than what is owed on it. Most of us have had the experience of being upside down on a car we are trying to trade in, and it's not much fun. With your house, it's even less.
The catch with a short sale is that the bank or mortgage company that holds the note on the house gets the final say on the price and the terms of the sale.
This is a pretty big deal, because lending institutions aren't in love with the idea of losing money on real estate. Who is?
So they take their sweet time to consider short sale offers. Here's a typical scenario.
You find a house you like that's a short sale, and since we all love a deal, you make an aggressive offer. Right about now the other agent informs you that it will be 4 to 6 weeks before the bank even LOOKS at your offer. Yikes! But ok, a great deal is worth the wait.
Or is it?
Consider also the meltdown going on in the mortgage industry. Not only are rates going up, but many of the attractive low down, interest only, adjustable rate mortgages that got you into the market in the first place are going away.
So by the time the bank gets around to countering your aggressive offer there's a good chance that not only will the interest rate and payment be substantially higher than you first planned, the loan program you need is possibly gone, and then maybe you don't even qualify anymore!
Another problem, but good for homeowners, is that the banks know that values here have bottomed out, and they don't need to give real estate away at bargain prices, so the buyer's dream of instant equity probably isn't going to happen quite the way they hoped it would.
The good news is that your investment in Las Vegas Real Estate is likely to safe and sound.
So when looking for properties, consider buying from the homeowner who's trying hard not to become a short sale or a foreclosure, and buy from a human being with something to lose, instead of from a bank, where the person making the deal is more concerned about losing his job.
Related Tags: las vegas real estate, las vegas investment properties, las vegas high rise condos, city center las vegas, las vegas investment properties for sale
Bob Tracey is a 20 year resident of Las Vegas with a combined practice in real estate and mortgage finance. Visit him at www.willworkforbuyers.com Your Article Search Directory : Find in Articles
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