Why buy a short sale? The below article from Quicken Loans lays out some up the upsides and downsides for buyers interested in purchasing a short sale in Fairfield County, CT.
We commonly hear buyers saying they want to buy a short sale because they feel they can “get a great deal.” While short sales can be a good purchase where the buyer can add value and increase their equity, they certainly are not for everyone. Short sales can often 2 or 3 times as long to close compared to a conventional sale (from the time their offer was submitted), and short sale properties almost always have “deferred maintenance” that needs addressing. Deferred maintenance is Realtor-speak for necessary repairs that have been neglected for months or years. Sometimes minor issues like a slow dripping leak under a sink, can turn into much larger issues like rot, mold, etc. if not addressed for months or years.
This is just par for the course for short sales, and important points to be aware of.
Check out this article from Quicken Loans to get more info on what to look out for in the short sale process. Always feel free to reach Milligan Realty and ask for Jason Milligan or Todd Turcotte, your local experts, for more information.
Happy House Hunting!
Here is a new testimonial from a Short Sale client who successfully completed a short sale of their Monroe, CT property:
Jason Milligan Real Estate recently concluded a short sale for us on our Connecticut home. Both Jason and Todd Turcotte and the rest of the office personnel were outstanding [5 stars] during the long, drawn out process with the banks. They never lost patience and their communication with my wife and I was perfect, especially since we had moved out of town. I would recommend them to anyone who asks including family and friends. I can’t thank them enough.
Jeff and Sandy Winnick 2114 Hartfords Bluff Lane Mt Pleasant SC 29466
To read the testimonial on Zillow, visit: http://www.zillow.com/profile/Short-Sale-Savvior/Reviews/?review=1163535
Like many in the industry expected, the Mortgage Debt Forgiveness Extension has passed the house and is off to the desk of the President for his signature.
This extension basically changes the way the IRS views the deficient balance in a short sale. With the extension, the deficient balance of a short sale might be looked at as income by the IRS.
For more info, CLICK HERE.
Most in the industry expected the Mortgage Debt Forgiveness Act to be extended. It expired December 31, 2013. The extension has passed the House and is now on to the Senate.
The extension would be retroactive back to December 31, 2013 and would help property owners who did a short sale in 2014.
For more info, CLICK HERE.
The Mortgage Debt Forgiveness Relief Act, which had expired on January 1st, looks like it will be extended. It might not be until December that the act is officially approved. This is great news for property owners who wish to do a short sale.
It has been assumed that the Mortgage Debt Forgiveness Relief Act would be extended, but it is nice to see some proof that action is being taken.
For more info, CLICK HERE.
Short Sale Definition
A short sale is when a financial institution agrees to settle for a lesser amount than the total sum you owe on a mortgage, thus avoiding foreclosure. Short sales have existed for a while, but it wasn’t until the recent downturn in the housing market that a “short sale” became household terminology.
If you find yourself in the position where the proceeds from selling your home fail to pay off your present mortgage, a short sale might be worth considering. Before you commit to a short sale, you need to weigh your options. Hiring an experienced short sale realtor in CT is a good place to start.
Eligibility for a short sale
In order to be eligible for a short sale…
- You need to owe more on your mortgage (or mortgages) than your property is current worth.
- You need to establish a genuine “hardship.” For example: A job loss or reduction in income, death, divorce, adverse medical condition, etc. These things can help the bank verify that you aren’t able to bring in the same household income that you once did.
- In almost every case, the lender will require that you are behind in your mortgage payments to be considered for a short sale.
Why does a short sale make sense?
Sellers who go through with a short sale generally do so to avoid foreclosure. A foreclosure can adversely affect the homeowner in various ways. A foreclosure leaves a negative mark on your credit report that will make financing larger purchase (real estate, cars, etc. ) much more difficult in the future. A short sale also has a negative impact on a credit report, but a foreclosure is relatively much more negative. A short sale will also be removed from your credit report sooner than a foreclosure will.
Not every realtor has experience with short sales. Short sale realtors in CT may suggest a short sale for a number of reasons that are specific to each property owner. Every case is unique.
The main advantages of short sale
A short sale specialist in CT should be able to explain the benefits of a short sale. Some of those benefits include:
- After a short sale, you might need to wait only 1 or 2 years before being able to obtain a new mortgage and purchase another property. With a foreclosure, you often have to wait 5 to 7 years before you can obtain another mortgage.
- A short sale in CT has less of a negative impact on your credit score and credit report than a foreclosure.
- You can often stay in your home longer, while you are working through the short sale process and weighing your options for your next move.
- Working closely with your short sale specialist, will help you carry out the negotiation of your short sale.
We’re starting something new! Each week we will be updating you on changes to the short sale market, including the total number of properties for sale in each town, and the number of those that are possible short sales and those that are bank owned. Our goal is to communicate the normalcy of this process in your area, and that you are not alone in struggling.
To the right, you can select the town you would like to see. On that page is a table that contains the short sale market history. Eventually, you will be able to see the trends in the market over time, but it will take a little while to gather adequate data. For now, here are the town comparisons for this week:
|Town||Total Listings||Active Listings||Possible Short Sales||Bank Owned|
*Numbers have been found through searching the Connecticut MLS
Wells Fargo, Citigroup, and JP Morgan cut back considerably on foreclosure sales in several states to adjust for the new minimum standards designated by the Office of the Comptroller of the Currency. These regulations have also been issued by the Federal Reserve, making them an industry standard. As of now, JP Morgan is back to functioning as usual, with Citi not far behind.
Check out the full article from American Banker.
Listing Price: $1,295,000
Large Mediterranean-style house on 1.67 acres overlooking pond.
Located in private association. Recent addition completed in 2006.
Listing Price: $399,000