The Calculated Risk blog is a great source of info on real estate market conditions and finance topics. Check it out if you haven't already done so.
A recent post covers the growing popularity of short sales and an alternative path out from under a mortgage: the deed in lieu of foreclosure. A "deed in lieu" is exactly what it sounds like. The mortgage lender voluntarily accepts a deed for the property from the owner without having to go through the foreclosure process.
Will a short sale or deed in lieu result in less of a hit to your credit score? Nope, says a source quoted in the post.
Real estate auctioneers will tell you that most of the people participating in an auction have never been to one before. That puts a premium on knowing what to expect at an auction, which is typically fast-paced and sometimes confusing.
In the video, Sheldon Good's Julie First gives an overview of what you can expect on the day of an auction.
A short sale is a property that's being sold for less than the balance of the mortgages that encumber it.
Many home buyers are enamored of the notion that a short sale, because it's offered for sale for less than the current owner paid for it, is necessarily a bargain. It may or may not be a bargain and, I'd argue, it's no more necessarily a bargain than any other property on the market.
If you're looking to buy a home the way you should think about short sales is: don't think them until you find the home that's the best fit for your needs.
If you find that home and it's a short sale, ask yourself whether it's unique: i.e., is it the only home on the market that you'd consider buying at your price point? If there are homes that you like just as well at comparable prices, skip the short sale without giving it any further thought and make your best offer on one of the other properties.
Why is that? Because the short sale process is often long and is almost always unpredictable, sometimes wildly so. By entering into it you surrender control of a transaction that it's in your best interest to control or, at the very least, predict its outcome.
If you're determined to proceed with a short sale, my next post will give you some tips on minimizing the riskiness of your undertaking.
The current market is leading to some creative offers from home sellers. Take this ad on Craigslist, for example:
I own a home on Sheridan Road in Highland Park on almost an acre of land. Just steps to Lake Michigan. Great area. We bought the house, completely remodeled it and were going to move in and then we decided to stay in the city. So, now we want to sell or exchange the home. Trade it for a property or a business that you may own. here's the idea, because everything is difficult to sell right now, people aren't getting mortgages, so trading seems like the next best choice. and we can defer some of the taxes. My home is worth $1.5m, it was recently remodeled, 2 car garage and it is rented, so you could keep it as is and collect the rent or you could make it your next home. It is 4 blocks from some of the best schools and a mile from downtown Highland Park.
According to data compiled by the Woodstock Institute, 572 foreclosures were filed in Aurora in the first quarter of 2010, making that suburb the poster child for distressed properties among Chicago's suburbs overall and in the west suburban region.
Take a tip from a grizzled veteran who has a finely calibrated sleaze-o-meter - me.
When you spend more than 40 years as a social worker, attorney, home builder and real estate publisher, as I have, you have multiple encounters with every shade of hustler and con on the planet. You recogtnie them almost instantly.
You can hear a cacophony of cons in far less than 40 years. Just spend a day or two listening to radio commercials for short sale artists, foreclosure come-ons, loan modification schemes and real estate investment gurus and you'll absorb a concentrated dose of sleaze.
And now to my tip: when you hear one of these commercials, just tune out. The odds are high that they're luring you into a bad bet. Find a local non-profit, legal aid clinic or governmental agency that offers similar services. You'll save yourself a lot of money and a lot of grief.
If you're thinking about buying a home or condo at a real estate auction it's critical that you arrive at the auction completely prepared, with a full understanding of auction terminology and process.
Last fall, prior to the auction of Motor Row Lofts in the South Loop, we sat down with Julie First of Sheldon Good & Company for a video overview of the auction process. Sheldon Good has long been recognized as one of the top-tier real estate auctioneers in the United States.
