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I live in a multi-cultural community, and love that my neighbors are of a variety of racial and ethnic backgrounds. I don't want to live anywhere that is completely dominated by a single race or ethnic background. It's not good four the housing market, it's not good for the community. It has nothing to do with "tolerance."
I appreciate that, but it didn't come off that way in your posted comment.
Bellalago is lovely in my opinion and that area of Kissimmee is a great place to live. I love that it "feels" rural and has access to Lake Toho but it has all the amenities you need so that you don't have to travel very far for anything. I don't know how the short sale thing works but if you can get the list price then it something that I would look into further. The 34746 area code of Kissimmee (where Bellalago is) is a very nice area...not all of Kissimmee is bad. The traffic on Pleasant Hill is a little far from desirable but depending on where you work it might not be that bad.
I have heard nothing but positive things about the Bellalago community. On the other other hand, I have heard nothing positive about Kissimmee. But what does that mean? I am from the Bronx, NY, when most people hear "The Bronx" they normally have a negative opinion about the place and the people, but there are some fantastic neighborhoods here with homes starting in excess of 700k, 800k or more. Millions if your talking about the Riverdale area. I will visit a few homes on Friday and form my own opinion. Although I appreciate the input here.
Regarding the homes with low price tags, you just have to bid and be patient.
These are short sales and the bank has to agree to the price, not just the seller (if they're still even seller "owned" vs. already in foreclosure.
If you're in a hurry, these aren't for you.
If you have time, it's worth bidding on a few -- even more than one at once -- and seeing how they work out.
Since they have to go through layers of the bank bureaucracy, you just have to be willing to be patient.
Since I am a first time home buyer, I was under the impression that if you bid on a property you have to put up some money with the bid. If you bid on a few homes will you not loose money if you retract a bid when you finally find a home?
With your offer you do have to put dowb a deposit to show your serious. You can put an offer in contingent on inspections and then that gives you a set amount of time to have the inspections carried out. You can also put an offer in that is only valid for x amount of days. Keep in mind short sales usually take quite along time for them to get back to you. I would recommend focusing on one property, but keep in mind, that price is only gor the satisfaction of the mortgage. It is usually the case there are other liens attached to the property you would have to cover aswell. After all if someone cant afford and isnt paying their mortgage, they usually cant afford their other bills. Im wondering where and for how much is this house you are interested in and what size is it?
Im afraid so. Also you need to keep in mind that the owner is in foreclosure/short sales essentially because they cant afford their mortgage. If they are not paying this bill they more often than not are not paying their HOA dues, taxes and any other bills. Thus all these depbts will be put as liens against the house which the buyer has to pay for as the owner is broke. The listing price in Shorts is essentially what the bank will accept for satisfaction of their mortgage. This doesnt take into accounts of other liens.
True, the owner is likely not paying other bills for the property and there may be other liens. However, you are incorrect saying the listing price of the short is only what the bank is accepting for the mortgage, and the buyer is buying the house subject to other liens. Purchasing a short sale still requires the seller to provide clear title no other liens should follow the property to the next owner. You as a purchaser still receive title insurance just like a regular sale.
The problem with all the extra liens that start attaching to the property when an owner is in default is that all those liens must be contacted and negotiated with to settle their liens upon sale. Liens like HOA dues are negotiated, back taxes are always paid off...but the bank(s) that are approving the short sale take all these liens into account when they calculate whether it is better for them to short sale or foreclose because these costs are taken out of their net....NOT passed on to the buyer. The more the liens the higher the chance the bank will just say no to the sale though. Many liens may clear upon foreclosure and it just makes $ sense for the lender to do so.
That being said, the list prices on many short sales are in fact bogus. The way a short sale listing works is when it's started the bank isn't much involved at all. The seller first sends in a financial package to their bank(s) and then must wait until an offer comes in before the bank starts figuring out what they may or may not accept on the property. It is the seller that hires the agent to list the property and they base the purchase price on whatever the heck they think will generate an offer....they NEED an offer to get past step one in a short sale in this is often why short sales are listed so low. An agent is SUPPOSED to list it at a reasonable price based on comparable sales and what they think the bank will accept, and many short sale agents are starting to wise up and not list rediculously low....but it still happens often, creating unrealistic expectations for buyers that end up burned after months of waiting, only to have the banks come back with an actual market price they will accept that is well above the bogus list price they thought they where getting.
The best short sales to go after however are the one's that have had an offer fallen through already. In those cases the banks have already approved a certain price and are ready to close. They may even negotiate more off an already approved price if some time has passed.
I can write a book on short sales, so i'm going to stop there, I have blogged about it several times if you'd like to read more in depth about short sales, how they work, and how to best structure them for you as a buyer to keep your money from being tied up in escrow waiting for a bank approval, and still keep an option to back out of the short sale if it takes too long...keeping you open to finding other properties while you wait.
I think you missed the point there and that is where the difference between a foreclosure and a short comes in. In a foreclosure situation it is the bank who is transfering the title from them to the buyer so if they accept an offer, then they are clearing all the liens to provide a clear title. A short sale is very different. The bank investigates the owner to see their income and other debts they have to see whether to approve them for a short sale, after all they dont want to approve everyone if they can afford to sell the home normally and thus write off alot of money. However, the price they accept for a short is oly to satisfy their loan. It doesnt cover anyone elses loan. That is where the difference between a foreclosure and a short comes in. In a short sale although it is being done with the lenders approval, the owner is still involved. The property hasnt been removed from them. Therefore it is the current owner who transfers title and is responsible for clearing the liens. Well we have already established for them to sell as a short sale they have to be in dire financial woes, add to this they likely paid too much for the house in the boom so when they sell they are not making any money, and then they have to pay all these liens, (which your right can be negotiates to some extent). However it stands to reason that if they have no money to pay these liens, and we know the bank arnt going to pay them as otherwise they would have foreclosed, therefore the only other party who is going to end up paying is the buyer. So instead of paying a sale price of what was listed, all these other charges are added to it, so the buyer does pay for it. After all they thought they were going to get a home for x amount and end up paying x plus the total of the liens to give them a sale price of Y.
I used at one point to deal with shorts alot, but it is for exactly this reason i stay away from them. People have no idea how disheartening it is as a realtor to work hard to source a property and it meets the buyers criteria and they fall in love with it, only after5 or 6 months down the line (because thats how long shorts can take) that the price you thought initially you were going to pay isnt actually the price because if you really want the house, the only way title can transfer is for it to be clean, and the owners cant afford to pay the liens, so the buyer ends up paying the bill if they still want the house.
Dont confuse foreclosures with shorts. Foreclosures the banks pay the liens to provide clear title. Shorts they dont. That is why they are called shorts. Because the bank are accepting a short amount of money for their mortgage.
Quote:
Originally Posted by GregTraub
True, the owner is likely not paying other bills for the property and there may be other liens. However, you are incorrect saying the listing price of the short is only what the bank is accepting for the mortgage, and the buyer is buying the house subject to other liens. Purchasing a short sale still requires the seller to provide clear title no other liens should follow the property to the next owner. You as a purchaser still receive title insurance just like a regular sale.
The problem with all the extra liens that start attaching to the property when an owner is in default is that all those liens must be contacted and negotiated with to settle their liens upon sale. Liens like HOA dues are negotiated, back taxes are always paid off...but the bank(s) that are approving the short sale take all these liens into account when they calculate whether it is better for them to short sale or foreclose because these costs are taken out of their net....NOT passed on to the buyer. The more the liens the higher the chance the bank will just say no to the sale though. Many liens may clear upon foreclosure and it just makes $ sense for the lender to do so.
That being said, the list prices on many short sales are in fact bogus. The way a short sale listing works is when it's started the bank isn't much involved at all. The seller first sends in a financial package to their bank(s) and then must wait until an offer comes in before the bank starts figuring out what they may or may not accept on the property. It is the seller that hires the agent to list the property and they base the purchase price on whatever the heck they think will generate an offer....they NEED an offer to get past step one in a short sale in this is often why short sales are listed so low. An agent is SUPPOSED to list it at a reasonable price based on comparable sales and what they think the bank will accept, and many short sale agents are starting to wise up and not list rediculously low....but it still happens often, creating unrealistic expectations for buyers that end up burned after months of waiting, only to have the banks come back with an actual market price they will accept that is well above the bogus list price they thought they where getting.
The best short sales to go after however are the one's that have had an offer fallen through already. In those cases the banks have already approved a certain price and are ready to close. They may even negotiate more off an already approved price if some time has passed.
I can write a book on short sales, so i'm going to stop there, I have blogged about it several times if you'd like to read more in depth about short sales, how they work, and how to best structure them for you as a buyer to keep your money from being tied up in escrow waiting for a bank approval, and still keep an option to back out of the short sale if it takes too long...keeping you open to finding other properties while you wait.
Not confusing shorts with forclosures CFI. You are 100% correct on most of what you said, but are 100% wrong with these statements "However, the price they accept for a short is oly to satisfy their loan. It doesnt cover anyone elses loan." and "therefore the only other party who is going to end up paying is the buyer"" Foreclosures the banks pay the liens to provide clear title. Shorts they dont. Shorts must provide clear title just the same as a foreclosure or normal sale. It's all baked into the transaction and the deal, it's more transparent to the buyer and us agents in the case of a short sale, but nonetheless SHORT SALES MUST PROVIDE CLEAR TITLE.
The price the sale price approved by a bank for the short payoff is inclusive of all other liens being paid as well, the bank gets the net afterward. And it is this NET to the bank that makes the banks' decision of what to accept as the sale price. I have NEVER seen a buyer come to closing and have the liens being paid off on the buyer side of the HUD. The only way I can interpret what you said as accurate is by using the same reasoning that the buyer is paying for real estate commissions because the commission is added onto the price of the house......
Say a short sale has an offer of 100K, the bank approving the short sale determines the minimum they can accept for their net payoff is 80K otherwise foreclosing would make more sense for them. There are closing costs like title insurance, doc stamps and real estate commissions that take that 100K sales price down to 90K, then there is also a second mortgage that the second mortgage holder will settle for 5K, an HOA lien for 3K, and outstanding taxes for 3K. The net to the bank at closing is going to be 79K in this scenario, so the bank will tell the parties involved that the lowest sales price they will accept is 101K. So is the buyer technically paying an extra 1K to cover the seller's liens.....yes. Is the bank technically paying 10K to payoff the seller's liens...yes. But to the buyer this scenario is no different than a negotiation where they offered 100K and a seller countered at 101K. All things being equal, the buyer will be paying the same whether purchasing a short sale for 101K or a normal sale at 101K.
I think we're just saying tomato and tomahto here CFI, yes short sales are a PITA and only about 40% have a chance of succeeding (being generous), but they can still be worth it to some people that know what the risks, chances, and complications are upfront. Saying that there will be unexpected costs above and beyond what is paid via a normal sale is not correct though. The bank either accepts their net AFTER all liens are satisfied on the property or they don't. That's why people have to be aware of the fact that if there are too many other liens on a property a short sale is likely not going to succeed. 2 liens, 3 pushing it, I'd say is the max number of liens that allow for a successful short sale.
Im not saying that in a short the title transfers with the liens. In any sale the transfer of title can only occur if it is clear and liens have been cleared. If a buyer goes through with the purchase then they will recieve clear title of course. However, the seller likely doesnt have the money to pay the liens other wise they would have sold the property in a normal process. The bank doesnt pay the liens otherwise it wouldnt be a short but a foreclosure. Therefore the buyer pays the liens off. The amount of the liens is therefore added to the price the bank have accepted to cover the amount they are prepared to accept for the mortgage to satisfy it. Im not saying the buyer ends up with a property which has liens attached to it because they dont, they recieve clear title. But the buyer is essentially paying off the liens as that amount will ultimately be added to the purchase price.
Quote:
Originally Posted by GregTraub
Not confusing shorts with forclosures CFI. You are 100% correct on most of what you said, but are 100% wrong with these statements "However, the price they accept for a short is oly to satisfy their loan. It doesnt cover anyone elses loan." and "therefore the only other party who is going to end up paying is the buyer"" Foreclosures the banks pay the liens to provide clear title. Shorts they dont. Shorts must provide clear title just the same as a foreclosure or normal sale. It's all baked into the transaction and the deal, it's more transparent to the buyer and us agents in the case of a short sale, but nonetheless SHORT SALES MUST PROVIDE CLEAR TITLE.
The price the sale price approved by a bank for the short payoff is inclusive of all other liens being paid as well, the bank gets the net afterward. And it is this NET to the bank that makes the banks' decision of what to accept as the sale price. I have NEVER seen a buyer come to closing and have the liens being paid off on the buyer side of the HUD. The only way I can interpret what you said as accurate is by using the same reasoning that the buyer is paying for real estate commissions because the commission is added onto the price of the house......
Say a short sale has an offer of 100K, the bank approving the short sale determines the minimum they can accept for their net payoff is 80K otherwise foreclosing would make more sense for them. There are closing costs like title insurance, doc stamps and real estate commissions that take that 100K sales price down to 90K, then there is also a second mortgage that the second mortgage holder will settle for 5K, an HOA lien for 3K, and outstanding taxes for 3K. The net to the bank at closing is going to be 79K in this scenario, so the bank will tell the parties involved that the lowest sales price they will accept is 101K. So is the buyer technically paying an extra 1K to cover the seller's liens.....yes. Is the bank technically paying 10K to payoff the seller's liens...yes. But to the buyer this scenario is no different than a negotiation where they offered 100K and a seller countered at 101K. All things being equal, the buyer will be paying the same whether purchasing a short sale for 101K or a normal sale at 101K.
I think we're just saying tomato and tomahto here CFI, yes short sales are a PITA and only about 40% have a chance of succeeding (being generous), but they can still be worth it to some people that know what the risks, chances, and complications are upfront. Saying that there will be unexpected costs above and beyond what is paid via a normal sale is not correct though. The bank either accepts their net AFTER all liens are satisfied on the property or they don't. That's why people have to be aware of the fact that if there are too many other liens on a property a short sale is likely not going to succeed. 2 liens, 3 pushing it, I'd say is the max number of liens that allow for a successful short sale.
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