With more and more homeowners falling behind in payments many homes are going straight to the bank! This is where you can find one of the deepest discounts in the market today... Let's start with a common scenario happening all over Northern Virginia as we speak.
Bob and Sue have a home and they just can't make the payments on anymore due to the rate increase in the 5-1 Arm (Adjustable Rate Mortgage) that they were talked into getting 24 months ago and can barely make the second trust payment. They started with a 3% "teaser rate" on the first trust and now they are at 6% on a home they should have been qualified at around 6%...not at a teaser rate of 3%. Their payments just jumped up $900+ each month and they just can't make ends meet anymore as Sue is a school teacher and Bob worked in the marketing dept. for a well know home builder and was recently laid off. They can't refinance or sell their home because it is now worth $80,000 less than they bought it for 24mo. ago.
Bob and Sue decided to looking a Short Sale scenario with their mortgage company by calling them up and asking to speak to someone who may want to take less than owed on their home. The bank tells them that they must put it on the market first, get an offer and then present it to them for consideration. Bob and Sue after three months finally get a (low ball) offer on the home 100K less than what they paid for it. They present the offer to the bank and wait 2-6 weeks to later find out that the second trust company will not agree with the first trust mortgage company at that price. The second trust company is only willing to except a loss of 20K on their end and thus there is no acceptance of the Short Sale after having the home on the market for 3 months and waiting another 6 weeks for a response to the offer they submitted! That's not to mention that the buyers wasted 6 weeks waiting on a response from the bank that had not even approved a short sale selling price on the home!
Now what???? Bankruptcy or Foreclosure??? Bob and Sue are at wits end and decide to rent an apartment quickly and leave their current home vacant for the bank to foreclose on... so the court house process begins and the home does not immediately sell. The bank now has the home as one of their 1000's of inventory across the county and must dispose of it (sell) as quickly as possible as they are loosing more money in expenses and loss of interest on their investment.
Can you say desperate? The winner by far are all the buyers purchasing Bank Owned Homes! Not just in negotiating and saving on the sales price, but also the fact they only had to wait a few days and up to a week to hear back from the bank as to whether or not they are going to get the contract accepted and ratified to the agreed terms of the offer. Though the buyers are purchasing the home "As-is" and it may need 15-20K in upgrades and repairs, they saved 10's of thousands of dollars on the home and didn't waste 1-2 months on an offer they made on a Short Sale that wasn't going to get accepted.... Why does it take so long for a short sales offer to get accepted you ask? Because the banks usually want to see anywhere from 3-6+ offers on the home before they accept or counter an offer! How about you just ask the listing agent how many offers there are on the home before considering to make an offer you ask? Because many of the banks as of recently have been forcing the listing agent NOT to make that information public. Listing agents and representatives for the banks are now keeping this on the HUSH!
Though Short Sales can often be excellent deals and save you potentially 10's of thousands off the sales price... if you don't have the patience to wait up to 2 months for a bank answer then go for the Bank Owned homes or Foreclosures in the Northern Virginia real estate market.
Bank Owned Homes Win By a TKO!
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