I was counseling a buyer client recently who was relocating for a job and he had ninety days to be moved into a new place. He was keenly interested in the prospect of getting a bargain if he purchased a single family home which may be a "short sale". I didn't want to be a pessimist, but I told him we needed to have a discussion about the " Facts of Life" of a short sale.
First off, a " short sale" isn't necessarily a quick sale. 90 days might seem like a long time, but in the life cycle of a short sale, it is not. A short sale is a pre-forclosure transaction and it involves many layers of decisions and actions by people who are not usually communicating with each other in a timely oe efficient fashion.
A short sale occurs when the mortgage debt on a property exceeds the value of the property and the lender or lenders agree to accept less than the full amount of the debt. Even if a homeowner is willing to accept a certain price which is less than the amount of the debt, any offer is subject the lender's final approval. If the is more than one lein holder, the process is even more complicated.
The most important prerequisites for a buyer for a successful short sale is patience and flexibility. The lender is in control and the buyer is not.
For details and tips for purchasing a short sale:
If you are familiar with Belmont, MA, as one of Boston's "bedroom communities" it may surprise you to know that there are more multi family homes in Belmont than single family homes. And surprise you to see how well the value of these homes and the multi family market in Belmont held up from last year to this.
In the first six months of 2008 (the last gasp of the "irrational exuberance"), 10 multi family homes sold in Belmont with an average sales price of $587,100 and an average of 83 days on the market.
In the first six months of 2009 (the gasp for air), 8 multi family homes sold with an average price of $514,033 and just 80 days on the market.
In this era of ‘fiscal responsibility', buying a multi family home with the additional rental income is very appealing. It can be a better investment than a condo in the short and long run with rental income and a greater appreciation basis.