Cleveland Real Estate News

I love it when I can feature good writing and good explanations. Bob Carney who manages a real estate office in Frederick Maryland does a really good job explaining some of the points about Short Sales.  In a nutshell, a short sale is something home owners can  do when listing their homes.  They owe a certain amount of money but get their bank (lenders) to agree to take less than they owe. This usually (but not always) means a buyer can be purchasing a house for less than market value. It’s a way for a seller to avoid having a foreclosure on their record. I know most of you know this, but just in case, I thought an explanation was in order. Lenders are made aware (by the home owners) that the house is going on the market and the market prices are not going to allow them to sell their home for what they owe the lender. There is never a real guarantee that this lender is going to accept a short sale, but lenders will provide sellers with paperwork that says go ahead list it and we will examine any offers you get on your home when the offers are made.

Needless to say there are quite a few short sale homes to be found in our area.

Bob Carney does a great job explaining some issues that arise under these short sale circumstances.  It’s worth reading even if you are not selling your home so you can see what is going on in the market.  And if you are selling your home under normal market conditions, it’s worth reading so you can see what some of your competition is doing. Because trust me, it doesn’t matter where you live (suburbs or city), you will be competing with homes being sold under foreclosure or short sale.

Two points come to mind as a follow up to Bob’s post.

1. In our market, most banks/lenders will not pay for a home warranty. And the house is being sold ‘as is,’ so if the furnace is 30 years old, it may be working but you won’t be able to get the sellers to pay for a warranty on that furnace…so no one year cushion against replacement.

2. There are seemingly tons of pages of bank addendums to fill out. They are usually standard issue. Some lenders will follow the rules and regs stated on these pages and some won’t.  But as a potential buyer, you have to sign all the pages as they are written anyway. One example is an addendum that states if you as a buyer go past the stated closing date, the lender has the right to charge you $100/day for every day you extend the closing.  Many listing agents will say ‘our lender is not following that regulation,’ but hey, you sign anyway, and are taking a leap of faith that first your closing won’t get held up because of your loan application or something else, and two, that the lender will not charge you if it does get extended.  That part always seems a bit hairy to me. But buyers will sign, because they want the house and/or they want the deal.

So a big thank you to Bob Carney for such a good explanation! Peace Out – 3C