Scituate MA Short Sale, or sometimes knows as “A Pre-foreclosure Purchase”
Have you been searching for a property that is a good value relative to the local market. Do you have some time, of say, three to five months, before you need to close on your purchase. Well, perhaps you may wish to consider a Scituate MA short sale as a potential option. A Short Sale transaction can be a cumbersome and often a frustrating process. Also do not confuse a short sale with a foreclosure purchase, the difference being that in a foreclosure, that lender has already taken title to the property. In a short sale the seller is trying to sell the property for less than they owe the lender(s) and have those same lenders approve of the transaction. A Scituate MA Short sale could yield a buyer a more than fair price, but in an effort to do so, you should hire experienced professionals that understand all aspects of the transaction. Utilize the services of Realtors, attorneys, accountants, mortgage lenders and home inspectors as they all provide expert advice.
A Scituate MA Short Sale Defined
A homeowner that is facing a financial hardship may pursue a short sale prior to foreclosure. If a home owner’s property value is less than the outstanding liens on the property (mortgages and insurance premiums) and the homeowner does not have sufficient resources to pay the difference, this is when a short sale can be a win-win remedy to this sort of situation. Negotiating a short sale may be a preferable option to a homeowner to preserve their credit and limit their debt exposure. If a short sale is approved by the lender(s), this means the lender(s) is/are willing to accept less than what is owed to them.
Massachusetts law often presents the lender with incentives to offer the homeowner other alternatives. The foreclosure process takes time and money and may prove to be more costly to the lender. Under the Home Affordable Foreclosure Alternative (HAFA) offered in 2010 by the Treasury Department, lenders and homeowners have additional incentives to consider a short sale. Buyers also benefit as the Scituate MA short sale listing may have been pre-approved and will allow for a more typical negotiation and transaction.
The first step to a successful Scituate MA short sale transaction requires the negotiation of an acceptable contract with the Seller subject to lender approval with no guarantees that your offer will be approved. If the contract is not approved by the lender then the Seller may not have sufficient time to sell to another party and avoid foreclosure. The following tips will increase your chances of negotiating a successful Massachusetts short sale transaction:
The Buyer’s Credit Must be Pre-Approved
As a home buyer you must provide evidence that you qualify to purchase the property. The Seller is not likely to accept your offer without a valid credit approval as the lender will not grant approval. Get pre-approved from a reputable lender or if a cash buyer provide proof of funds. The approval must not contain conditions such as selling an existing property as this is an issue for the lender.
Finding Scituate MA Short Sales That Qualify
Homeowners in financial distress typically have a limited amount of time to find a qualified buyer. If they have not connected with their lender(s) and started the process, there may not be sufficient time to affect a sale. Consider all Scituate MA real estate listings and surrounding communities. As your real estate agent, I can identify properties that you may want consider. Information I will obtain includes:
- Is the seller’s short sale package prepared for submission to the lender?
- Does the property have multiple liens? If more than one, what are they?
- Is there a plan to obtain releases from all the lien-holders?
If you pursue a property that is not “short sale ready” and you are not prepared to see what can be a lengthy process, then a Scituate MA short sale may not be your best option. You may wish consider other listings available at Scituate MA Homes for Sale.
Offer and Acceptance by the Seller
The first step is to negotiate a contract with the Seller and you will be competing against other buyers. Some real estate agents market the property substantially below market value to entice buyers. Others price the property at the bottom of fair market value. Price, terms and your qualifications will be the deciding factors for Seller acceptance.Sellers and lenders prefer offers with fewer contingencies.
- Your Deposit – Sellers will not be likely to accept your offer with a low deposit. A buyer that has little to lose can easily pursue another property and “walk away”. To demonstrate good faith offer the Seller a strong deposit.
- Home Inspection – It is customary to conduct the home inspection prior to submitting to the lender. A seller can’t take the risk of allowing the inspection after lender approval. The buyer can easily “walk” from the home inspection and lenders normally will not approve them.
- Flexible Closing Date – Lenders often approve short sales with quick closings. You must be prepared to comply if you want to consummate the sale.
- Subsequent Offers -As a rule, real estate agents must present all offers. A contract with a higher sales price may have a better chance of being approved by the lender. The lender will give the Seller direction as to submitting additional offers and in most cases they will be treated as back-up offers. In addition, arrange for your lender to lock your interest rate for your mortgage so that you qualify whenever the closing is required.
Lenders have no set formula for determining the value of the property other than to substantiate values through due diligence. However, Freddie Mac (one of the largest secondary market lenders) has a value range of 88% of one or more broker price opinions (BOP). Have realistic expectations of the time-frame for approval as it may take between 30-180 days and property values can change.
If the lender and the Seller are participating in the HAFA program, these time lines will be streamlined for a quicker response. Once the homeowner has started the process, the documents for lender approval may have already been reviewed and a projected selling price established.
Is a Scituate MA Short Sale right of you?
Before pursuing a short sale you need to ask yourself some hard questions. Are you prepared to handle the frustration? Do you have the time to wait while we negotiate with the lender(s)? And have you got your credit in order so that you can demonstrate to both the buyer and the buyer’s lender(s) that you have the financial wherewithal to complete the transaction?
Or are you thinking that a short sale may be a proper alternative for the sale of your home? You may only get one chance to propose a short sale to your lender(s). You should be sure to work with a REALTOR that has experience in these matters. I have that experience and training and would welcome the opportunity to discuss with you how I may be able to assist you in your unique situation. Download a free copy of my eBook, The Home Owner’s Guide to Fighting Foreclosure and learn about how to avoid a foreclosure using the alternatives available to you.
About the author:
The above Real Estate information about Scituate MA Short Sales was provided by Bill Tierney, a highly respected name in real estate who covers the South Shore real estate market for William Raveis Real Estate. Bill can be reached via email at firstname.lastname@example.org or by phone at 617-653-1955. Bill has been a licensed real estate agent for over seven years.
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