Short Sales in Highlands Ranch
A Short Sale is the sale of a home where the owner owes the bank more than the property is worth. The bank is forced to either foreclose on the property or take less than is owed on the mortgage creating a “shortage”. Usually a person applying for a short sale has some sort of hardship that is causing them to no longer afford the home that they once qualified for. The most common reasons for owners to consider a short sale is a loss of income due to unemployment or increase in expenses due to illness. Another cause of short sales I come across is divorce. When a divorce happens and the couple can no longer live together the remaining spouse is unable to afford the property with one income and they are forced to sell the home via short sale.
Falling Home Values Cause Short Sales
When I started selling homes in 1991 there weren’t any short sales. Throughout the 90′s and into the mid 2000′s there weren’t many foreclosures so a short sale wasn’t really considered. In most cases values were steadily increasing and people that had gotten into a distressed situation had enough equity in the home to sell it and walk away with money in their pocket. It wasn’t until late 2006 and early 2007 that values began to decline and people were unable to sell them for what was owed creating the mortgage meltdown crisis of 2008. One of the other contributing factors to the huge increase in short sales was the popularity of second mortgages during the early 2000′s. Many people saw their home values increasing and pulled that equity out of their home using a second mortgage. When values began to decrease, there wasn’t any cushion and people became upside down on their mortgage.
Short Sales a Good Buying Opportunity?
You need to know the facts prior to looking at a short sale in Highlands Ranch. I have found that most short sales do actually close if the buyer is willing to wait for the bank to make a decision. There are so many factors that can cause delays and frustrate both buyers and agents alike. Much of the frustration is the result of inexperienced and untrained listing agents that take short sale listings without qualifying the sellers to determine whether they qualify or not. When I represent buyers on these deals, I do a lot of education regarding the process and set the expectations low. For the owner occupant that needs a house in 30 days these are not an option to consider unless the bank has pre-approved the short sale listing price. For the investor that is patient and can wait, there may be some opportunities. You can realistically expect a discount of some sort because it is a distressed property. I would not expect drastic price reductions because the bank that holds the mortgage always does an appraisal to determine the value of the property. If the offer is below their minimum acceptable offer, they will not approve the sale. Just because an agent listed the property for a ridiculously low price does not obligate the bank to accept it.
List of Short Sales in Highlands Ranch