By Joseph Palumbo III
Lately, we have heard the term “short sale” come up in Queens. A short sale occurs when a bank is willing to take less than what it is owed. For example, a buyer purchases a home for $500,000 and can no longer pay the mortgage. The homeowner tries but fails to work out the late payments with the bank. A short sale becomes the only realistic option to get the buyer out of the home without having to go through foreclose proceedings. The home is put on the market at a reduced price.
What has to happen for a short sale to occur is a documented hardship, like a job loss, a death in the family or medical bills. The homeowner must also be “upside−down” — that is, owe more than the home is worth when sold through a realtor. If you are in this situation, get approved for an apartment or rental immediately. Keep documents for everything as soon as it is clear you are falling into foreclosure. If you do not have a documented hardship, your chances diminish.
Do not think filing for bankruptcy will let you keep your home. It will help you stay in it longer, but the foreclosure process will be inevitable. One benefit is that you get to stay in the home a little longer without making payments. If you want to purchase another home in the future, some lenders will deem you more responsible and look at your situation more favorably, and some banks will not make you sign a promissory note. Most importantly, you will avoid the foreclosure process.
So How’s Business regarding short sales? If you are looking to purchase a short sale, there is a possibility you can steal a deal. There is a solid inventory of homes some would−be buyers would not be able to afford, but in this tumultuous market, banks and homeowners in trouble are looking to make a deal. It is likely for first−time home buyers to get homes they would never have thought possible on their budget. Banks are looking to take money, run and get out of what is a losing proposition for them. Contact a realtor to find out what is available in your area.
Contact Joe Palumbo at 516−297−4034 or jp@c21amhomes.com.
