Short Sales: Anything But Short

October 5, 2009

A short sale is when the proceeds from the sale of a home are less then what is owed. Short sales can create a great deal of frustration if you don’t set the appropriate expectations up front. Here are five tips to keep in mind when purchasing a short sale.

S = Stomach. Short sales are not for everyone – you must have the stomach for it. Because short sales are handled differently from traditional sales, it is imperative that you understand the process before you invest any energy or emotion into pursuing a property.

H = Homework. As with any property, do your homework. Research the property and the market that it’s in. Remember, real estate is and always has been a local business. What may be a good deal in one area isn’t always a good deal in another.

O = Open to change. When negotiating a short sale, you’re dealing not just with the seller, but also with the seller’s lender or lenders depending on how many mortgages are on the property. Each lender has its own set of rules which can cause changes along the way. Remain open minded and flexible or you’ll become very frustrated.

R = Realtor. All short sales are unique and will have very specific forms and disclosures for you to look at. Engage an expert to help you understand what you’re signing and ultimately agreeing to. An experienced Realtor can walk you through the process and alert you when something is out of the ordinary. In fact, a Realtor’s fees are already factored into the transaction so why not take advantage of that?

T = Time. Short sales can take two to three months and sometimes longer before you’ll get final approval from the lender. Then, there can be another 30 to 45 days to complete the closing. Make sure when considering a short sale you have a realistic understanding of the time-frames involved and plenty of patience.

For an interactive map showing all of the foreclosure and short sales in the Twin Cities, go to TwinCitiesHomeForeclosures.com and click on the search tab. While there, you can also click on the news tab to find the latest Twin Cities foreclosure and short sale statistics from the Minneapolis Area Association of Realtors (MAAR) as well as all the local real estate headlines.

— John MacKany

Edina REO & Short Sales

September 15, 2009

What’s happening with foreclosures and short sales in Edina? Are they increasing or decreasing and how does this compare to last year? Let’s take a look at the recent statistics published by the Minneapolis Area Association of Realtors (MAAR).

According to the report, as of July 1, 2009, Edina had 592 total listings for sale. Of these, 47 or 7.9% were foreclosures and short sales. This is 27.0% higher then July 1, 2008 when there were 37 such listings. From July 2008 through June 2009, Edina had 118 new foreclosure and short sale listings compared to 91 for the previous year. That’s an increase of 29.7%. During this same period there were 62 closed sales that were foreclosures and short sales compared to 42 for the previous year. The overall share of closed sales that were foreclosures and short sales was 10.0% which is up 47.6% from the previous year.

Looking at the 13-county metro area as of July 1, 2009, 25.2% of all active listings and 44.2% of all closed sales were foreclosures and short sales. While the low interest rates continue to keep the affordability level high and help to reduce inventory, the continued rise in the unemployment rate will undoubtedly impact the number of foreclosures and short sales going forward.

— John MacKany

Lake Minnetonka Area REO & Short Sales

September 10, 2009

What’s happening with foreclosures and short sales in the Lake Minnetonka area? Are they increasing or decreasing and how does this compare to last year? Let’s take a look at the recent statistics published by the Minneapolis Area Association of Realtors (MAAR).

According to the report, as of July 1, 2009, the Lake Minnetonka area had 967 total listings for sale. Of these, 137 or 14.2% were foreclosures and short sales. This is 13.2% higher then July 1, 2008 when there were 121 such listings. From July 2008 through June 2009, the Lake Minnetonka area had 397 new foreclosure and short sale listings compared to 244 for the previous year. That’s an increase of 62.7%. During this same period there were 211 closed sales that were foreclosures and short sales compared to 82 for the previous year. The overall share of closed sales that were foreclosures and short sales was 32.9% which is up 157.3% from the previous year.

Looking at the 13-county metro area as of July 1, 2009, 25.2% of all active listings and 44.2% of all closed sales were foreclosures and short sales. While the low interest rates continue to keep the affordability level high and help to reduce inventory, the continued rise in the unemployment rate will undoubtedly impact the number of foreclosures and short sales going forward.

— John MacKany

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