With housing prices slowly making a comeback and foreclosures declining, those looking to find deals or invest in real estate in Annapolis, Maryland still have options. One of those options includes Annapolis real estate short sales or Bank Owned homes (sometimes called “REOs” meaning real estate owned).
A home listed as a short sale means the lender allows the seller to list the home and sell it for less than the amount still owed on the mortgage. A short sale home does not always mean the home is in foreclosure, it can simply mean the owner has fallen on difficult times and owes more than the house is worth. It also means the value of the home has dropped significantly. Bank Owned homes are properties owned by the bank after the owner goes into foreclosure and fails to make mortgage payments.
Common Benefits of Annapolis area Short Sales
The key to navigating a successful short sale is persistence and patience. A short sale can take anywhere from 6 months to a year to close after the initial offer is made and the bank has approved the short sale. Don’t count on moving out right away after an offer is made. Each step in the short sale process has to be approved by the lender or bank and takes time.
Often multiple offers are made on a short sale home and the buyer has to be prepared to make competing offers on the house and spend a little more than the original offer.
Inexperience – Finding an agent experienced in short sales is a vital step in navigating the short sale waters. Often times a buyer is unaware of the complex process of buying a short sale home and many of the pitfalls including shady deals and lack of disclosure on the property’s history.
Tips for the Seller
As stated above, the seller of a short sale home must be prepared to be patient. The process does not happen overnight, although more lenders and banks are preparing to streamline the process following regulatory changes and market conditions.
Be prepared to show all of your assets to the lender and demonstrate economic hardship before listing your home as a short sale. Reduction in income, job loss, divorce or medical emergencies are just a few of the examples the lender will examine before agreeing to a short sale.
Be prepared for the short sale to show up on your credit rating. Depending on how many months the seller is behind on their payments, their credit score will be dinged up to 300 points. A short sale typically shows up as a pre-foreclosure redemption but the lender might not make the distinction.
Tips for the Buyer
Always get an inspection! Because short sales take time, this step is often skipped to close the deal faster. An inspection by a qualified contractor saves headaches and money and shows if the home has structural damage or is located on a flood plain.
Find a good agent! An agent skilled and knowledgeable in Annapolis area short sales is a key to a smooth process and will help avoid roadblocks and bumps along the way.
Research! Research the home before making offer. Have your agent check the title on the home to find out if a foreclosure notice was filed and how much is owed. Many homeowners have second or third mortgages on their homes thus dictating how quickly your offer is accepted by the lender. Offers less than 30 percent of the mortgaged amount are typically not accepted by lenders and banks.
Annapolis area short sales can be a rewarding experience for both the buyer and seller as long as both parties know what to expect and are represented by qualified agents.