Many prospective home buyers here in Orlando always ask about the availability of short sales. Are there many out there? Are they a good buy? Yes and yes…but they can be difficult to work with and they take time. For an investor, or a home buyer who is not looking for a home to move into immediately, we recommend taking a look at the short sales in your preferred Orlando area neighborhood. But for those of you looking to buy, close and move into your new home quickly, short sales may not be the way to go for you.
Short sales can sometimes be misunderstood. So let’s first take a look at what a short sale is. A short sale is when a lender accepts a discount on a mortgage as payment in full. Lenders often accept this so that they don’t lose a larger sum of money down the road when the home owner may go into foreclosure or bankruptcy. Although the buyer is still buying the home from the seller, the lender must give permission and final approval of everything. An example of a short sale situation would be when the mortgage on a home is $250,000, but the home is worth somewhere in the high 100’s. In this scenario, a buyer may offer to buy the home for $180,000. The seller would then need to provide all relevant information to the lender to see if the lender will accept that amount as payment in full, and therefore approve the short sale. The lender may accept this knowing that if they didn’t, then they may have to foreclose on the home in the future and receive only pennies on the dollar at a foreclosure sale.
There are many benefits of a short sale. The biggest benefit for a seller is to get the home for far less than what it would sell for if the mortgage was not so high. The biggest drawback to a short sale is that it can require much more work on the part of the buyer.
But with all the short sales available in Orlando at this time, it certainly is worth a try if you are not in a hurry. Typically, And don’t forget about second mortgages! Even if the seller and buyer negotiate a deal with the first lien holder, the others will also have to agree on a deal to discount their liens as well. And if the buyer is paying entirely in cash, the lender will usually take that offer more seriously and be more likely to approve the offer.
So if you are looking for a home in Orlando, consider any of Orlando’s short sales. They are worth a look and worth discussing with a qualified Orlando short sales realtor.
Contact us today if you have more questions.
