Short Sales

The real estate market has certainly seen its challenges over the past couple of years but for buyers there are opportunities available that have not been seen in decades, the short sale.  Short sales are becoming more prevalent in the Chicago area and buyers are seeking them out as never before.  It is not rocket science to understand the basics of a short sale.  Short sales are when a lender agrees to accept less than the amount owed against the home because there is not enough equity to sell and pay all costs of the loan.  It used to be that lenders would not even consider short sales if your payments were current but with the changing real estate and mortgage markets more and more lenders are more agreeable to negotiate.

There are several areas you need to be aware of if you intend to pursue a short sale.  First of all hire a real estate agent who has short sale experience.  Not all agent even know what a short sales is or ever been involved in this type of transaction.  An experienced agent can help expedite the transaction and protect your interests.  It is important that you not miss any details that could affect the sale somewhere down the road.  Next is to prepare the seller for demands made by the lender.  Remember the seller has no equity and is unable to pay the difference between the sales price and existing loans.  Your seller may need to provide a hardship letter indicating their inability to pay the difference as well as taxes they may owe.  Another very important area to address is to make certain the lender is given a deadline in which to respond once the seller has accepted an offer.  Some lenders submit short sales to committees but that does not mean a decision could be reached in two to three weeks which lessens the possibility of getting further behind.  Remember the lender may not be under any pressure to make a decision and the paperwork could sit on someone's desk so a deadline can be beneficial to everyone involved.  One last area to consider with short sales is commissions.  The seller may agree to pay a commission but actually the lender is who ultimately will pay.  The reason is the seller is not receiving any money in which to pay the commission.  Since the lender is losing money they will likely negotiate the commission directly with the listing broker.

Short sales in Chicago can be the path to home ownership for many buyers which are expected enter the market in the next few months. It is not always an easy way to purchase your home or condo but the benefits can be enormous.