Loudoun Foreclosures

Can You Protect Yourself From Short-Sales That Don't Disclose?

Have you ever thought a property was a "regular resale" only to find out it was a "short-sale" at the last minute? If you have, you were probably disappointed and possibly upset. You may have even thought that the seller and listing agent/broker were lying to you and the general public by not disclosing it was a short-sale.

Before you go off calling the seller and listing agent/broker "interesting names", let's look at a few things first that will help you understand why this happens so you know how to best protect yourself...

1. Listing agents/brokers are not allowed to disclose "confidential financial information" about the seller without the seller's written permission. Announcing to the public (you) that the it's a short-sale situation is considered to be disclosing "confidential financial information" about the seller. If the seller does not allow the listing agent/broker to do so, they can't. (I wouldn't accept a short-sale listing if the seller wouldn't let me disclose, but that's me)
2. Though most sellers know that it's much worse to not disclose that it's a short-sale than to disclose that fact up front, some may keep silent anyway. Sellers aren't obligated to disclose that they're in a short-sale situation. In fact, the burden is on the buyer to do their homework and find out.
3. What about the ones that are right on the cusp? These are the sellers right on the brink of owing money once all the costs of selling their property are paid. If they accept an offer at their current asking price, they'll be fine. But if they accept an offer lower than their asking price, they won't have the money to make up the difference in what they owe. This means that the "regular resale" just turned into a "short-sale".

Is there a way to protect yourself as a buyer? The answer is yes.

There is language you can add to your offer that, if the seller accepts it, will force their hand and tell you if they are facing a short-sale situation. An experienced and knowledgeable Buyer's Agent will know what that language is and where in the offer to put it.

-Danilo

Short On Time And Patience? Short-Sales May Not Be For You

"Short-sale" seems to be a buzz word these days with many buyers going after short-sales because they think they can get a great deal. Yes, there is a chance you can get a great deal on a short-sale. But you must have a lot of patience and not be in a hurry to move.

Let me repeat...

You must have a lot of patience and not be in a hurry to move if you're trying to buy a short-sale.

Why must you have patience and a lot of time? Because the bank makes the final decision on whether your offer is approved and that process takes an average of 60 to 90 days. In some cases, it may take up to 6 months.

Why does it take so long? Because the first thing banks did when profits plummeted is cut staff. When you mix a huge increase in case files and a staffing cut of 50 percent or more, you get overworked and underpaid employees that care more about finding a new job than your offer.

I have to move into something in the next 30 to 45 days...should I consider short-sales? I wouldn't say that you should not go after a short-sale, but have "Plan B" in place so that you're not homeless come time to move. You may get extremely lucky and get a response in less than 60 to 90 days, but don't bank on it (pun intended).

Should I call the listing agent regularly to check up on the situation? If you consider "being patient" calling the listing agent every week asking whether they've heard a response, think again. By calling the listing agent over and over, all you're doing is annoying the agent. The listing agent is trying to sell the house as quickly and as much as you're trying to buy it. Trust me, the listing agent will call you the second they get a response from the bank.

Why doesn't the listing agent call the bank and hurry things along? (insert "bank" for "listing agent" in the above paragraph)

So remember...when it comes to short-sales, you must be patient and not be in a hurry to move. You have to understand that the process takes much longer than a traditional resale. And know that the listing agent is doing everything they can to make the process go as quickly as possible.

-Danilo 

An Example Of Real Estate Investing Gone Bad

During the boom market, many people and investors jumped at the opportunity to buy new construction in Loudoun County with the hopes of flipping the property(ies) in the future for a profit. After all, many thought that the boom would never end.

Well, many got burned.

One such example is the owner of three of the homes in the Villages of Waxpool subdivision in Ashburn.

They bought three properties from the builder for a total amount of $3,403,708 in 2005.

These three properties are now all on the market almost 3 years later as "short-sales" for a total amount of $2,490,664. If they get the full asking price, they will have lost $913,044. And that's if the bank/lender approves the short-sale, which doesn't happen often.

This just goes to show that you need to do your homework before making any such decisions and perhaps not go at it alone.

Looking For A Complete List Of Foreclosures In Loudoun County?

Yes, Loudoun Foreclosures is primarily focused on the best foreclosures/REOs, short-sale and other great deals in Loudoun County. But if you are looking for a complete list of such properties in Loudoun County and/or the surrounding areas such as Fairfax, Arlington or Prince William counties, contact us and we will provide that to you. We have access to all foreclosure/REO and short-sale properties currently available as well as an inside scoop on those that may not be on the market yet, but are coming soon.

We also have the inside scoop on builder inventory both, "build from dirt" and "spec". This includes knowing about new homes/lots that have had deals fall through on them and will be back on the market as "specs" in the near future.

If you are looking for stats, data or resources on the Loudoun County real estate market in general, check out Loudoun Stats. If there is any other information we can provide you, please let us know.

Best Deal in Potomac Lakes, Cascades

Just came across this awesome deal in the Potomac Lakes/Cascades area of Sterling.  It is a 4 bedroom, 3.5 bath single family home on .22 acres.  It has over 3500 finished square feet on 3 levels.  It was built in 1994.  The assessed value is $569,400.  The last comparable sale in the neighborhood was a slighly smaller house on a slightly smaller lot and the list price was $535,000.   The price for this house is $475,000.  This will be sold in the next week.