Short Sale & Foreclosure Specialist | Freeport, & Long Island, New York
Short Sale & Foreclosure | Pros vs. Cons
wether the location is Freeport
, or any other area of Long Island
, neither a short sale
nor a foreclosure
is an easy way out for sellers attempting to get rid of their home mortgage, because they almost never get back the amount of equity put into the home.
Do Your Research
Before placing an offer on a short sale
property, work with your real estate
agent professional service such as Resolution Realty
to do investigative work on the property. Resolution Realty
can check public records to see how much money the Freeport
, or Long Island
homeowner still owes on the mortgage. Between that and the comparable properties in the Freeport
or Long Island
area, Resolution Realty
should be able to give you good advice about making an offer.
The Lender Has the Last Say In Everything
You may be working with the seller and their agent to submit an offer, but keep in mind that, ultimately, the lender’s in control of the short sale
Always do a home inspection by a Resolution Realty Professional Agent
You may be tempted to waive the inspection when buying a short sale to speed up the process, but that would be a big mistake. You should always hire a professional home inspector to evaluate the home. Buying a house without a proper inspection can be disastrous.
Partner with an expert real estate agent at Resolution Realty
Whether you’re selling or buying in the short sale
process, you need an expert real estate
agent who has specific experience with short sale
Because short sales
are so complex, you’ll need a Resolution Realty
agent you can trust to walk you through the process and answer any questions you have along the way.
- Hot Deals
- Letter of authorization allowing agent speak with the bank
- A preliminary closing statement
- A completed financial statement or RMA
- Letter of hardship from the seller
- Two years tax returns & W2
- 30 days payroll stubs
- Two months of bank statements
- list of recent comparable sales in the area (CMA)
- Late Payment
- Notice To Borrower
- Owner Bankruptcy or Forbearance Agreement
- Debt Reaffirmed or Property Surrender
- Bank or 3rd Party Buyer
- Payment Plan
- Trustee Sale
- List With Agent or Sell to Bank
- Establish House Insurance
Why Lenders Do Short Sales Throughout the Freeport & Long Island, NY Area
The only reason a lender would want to go through a short sale
process, and accept a mortgage payoff amount that’s less than the balance owed is because they believe it’s their best chance to recoup as much of the mortgage loan balance as possible based on equity.
Because of that reason, a lender will not consider a short sale if:
The loan is current. If the homeowner is making regular payments, the lender has no reason to think they can’t continue making them. (This is very obvious!) In most cases in freeport
and other Long Island
areas the homeowner must be issued a notice of default in order for the lender to even consider a short sale
The homeowner declares bankruptcy. Negotiating a short sale
is considered a collection activity, which is not allowed in bankruptcy.
The only benefit to the lender is that a short sale
is faster and less expensive for them than a foreclosure
. Once it’s clear a foreclosure
is going to be unavoidable, a lender is more likely to approve a short sale request.
Why Homeowners Do Short Sales in the Freeport & Long Island, NY Areas
If a homeowner is considering a short sale, things have gotten bad. For them, a short sale means losing their home without a profit. Plus, they also have to endure the emotional stress of convincing the lender to allow them to do it. Selling a house through the short sale process is never ideal; the only reason a homeowner would want to do it is to avoid foreclosure. Throughout the process, the homeowner’s focus is convincing the lender that a short sale is the best option. The homeowner must prove they won’t be able to bring the mortgage current and that they have no assets—cash, savings, cars, etc.—that can be used to catch up on payments. Confirm the local housing market value has gone down so low that the home won’t sell for enough to pay off the current balance of the mortgage. Provide most lenders a signed contract with a buyer to consider a short sale.
Make sure the short sale agreement includes a waiver of the lender’s right to pursue the homeowner for the remaining balance of the loan.
In order for a short sale
to take place, both the lender and the homeowner have to be willing to sell the house at a loss. The homeowner will make no profit, and the lender will actually lose money for selling the house for less than the amount owed.
A short sale is not a do-it-yourself deal. A real estate agent who’s experienced in short sales is absolutely essential.
Three Things to Consider Before Buying a Short Sale in the Freeport & Long Island, NY Areas
There’s not a simple answer to whether or not one should purchase a short sale
home in Freeport
or any other Long Island
, New York
area. Deciding if a short sale
property is right for you depends on your specific situation and the details of the property.If you want to buy a short sale
property, in most cases you need to be prepared for a lengthy, complicated process.
Here are three things you should know before submitting an offer for a short sale
1. The timeline will be slow and unpredictable.
Because the lender has to approve the short sale contract, it can take weeks or months before you know if your offer has even been accepted. There’s no way to know exactly how long the process will take since it’s completely up to the lender and their willingness to sell the home at that price.
2. You’ll probably have to buy the house as-is.
Because the lender is in the driver’s seat, it’s also unlikely they will agree to pay for any extras, like closing costs or requested repairs. You may not be able to ask for repairs, but you should always get an inspection so you know exactly what you’re signing up for when you purchase the home.
3. You may not be getting a great deal.
When a short sell listing hits the market, it may be listed for less than it’s worth to draw buyers in. But that doesn’t mean that’s the price it will sell for. In the short sale process, the lender typically doesn’t evaluate the price until there’s a proposed contract and an appraisal—because they’ll want to get a price as close to market value as possible.
A seller might be ready to accept an offer lower than the list price—maybe for the ideal closing situation or because they have a rushed timeline. However, the lender’s goal is to lose as little money as possible in a short sale. While there may be instances where a short sale property really is a great deal, that won’t always be true—so be careful.
Find a Short Sale
Expert like Sal Chierico
at Resolution Realty
Before you consider buying a short sale home, you need to talk to a real estate agent who has experience with the short sale process.
Foreclosure in the Freeport & Long Island, NY Areas
In a foreclosure situation, the bank takes ownership of the Freeport
or Long Island
home after the buyer is unable to make payments. This process is initiated by the lender. The lender will force the sale of the home in order to try to recover as close to the original loan amount as possible.
Most foreclosed homes in Freeport
, and other Long Island
areas usually have already been abandoned, but if the homeowners are still living in the house, the lender will evict them during the foreclosure process. The lender will then attempt to sell the property either through an auction or through a real estate agent professional service like Resolution Realty
process typically takes less time than a short sale
because the lender is trying to liquidate the home as quickly as possible.
Which Is Better, a Short Sale or Foreclosure in the Freeport & Long Island, NY Areas?
, and most Long Island
homeowners, a short sale
is typically preferable to a foreclosure
for two reasons. First, a short sale
is voluntary (while a foreclosure
is forced). Secondly, after a foreclosure
, most people are required to wait a standard seven years before obtaining another mortgage loan (while a short sale may cause you to wait for at least two years).
Most lenders would prefer a short sale
to a foreclosure
process because it allows them to recoup as much of the original loan as possible without a costly legal process. In fact, in most cases a homeowner and lender will only pursue a foreclosure
after an attempt to sell the home through a short sale