San Joaquin Homes Community Blog

As more homeowners find themselves underwater -- owing more on their mortgage than their home is currently worth -- and unable to make the monthly mortgage payments, many are turning to short sales, which allows a homeowner to sell their home for less than owed on the mortgage. With the lender’s approval, home buyers can purchase properties in desirable neighborhoods and at favorable prices.

· According to real estate Web site Zillow.com, 14 percent of homeowners nationwide are currently underwater. In some areas, especially those hardest-hit by foreclosures thathave experienced the greatest price declines, more than 50 percent of homeowners would owe more than their home is worth if they sold today.

· Unlike foreclosed properties, which may be run-down and vacant for many months, short-sell properties are likely to be better maintained as many owners may still live in the home.

· In a short sale, the homeowner must receive approval from the lender before the sale of the property can proceed. With many lenders overwhelmed by short-sale transactions, it can take between two and six months to execute.

· Working with a REALTOR® who has experience with short sales can help both sellers and home buyers during the transaction. A seasoned REALTOR® will be able to serve as the mediator between the seller and the lender and lead to a successful transaction, while a buyer’s agent can help with offers, counter offers, home inspections, closing, and more.

· It is important to remember that although the seller may be anxious about selling the property and willing to accept any offer, it is ultimately up to the lender to determine if, and at what price, the property can be sold. Therefore, home buyers should work closely with their REALTOR® to submit a realistic offer.

· According to REALTOR® Loni Parmelly, author of Success in Short Sales, buyers should ask the lender to pay for all closing costs as part of the contract. The contract also should specify that the buyer will not conduct an appraisal or inspection of the property until the offer is approved. This added guarantee can protect home buyers from spending money on a home they may not purchase.