Buying Honolulu Short Sales…Or Not!
January 28th, 2009 categories: For Buyers
There are many buzzwords in the Honolulu real estate market, REO, short sales, foreclosures and pre-foreclosures. It seems these words put dollars in many buyers’ eyes, as they think properties experiencing these problems can be purchased at really low prices. Here are a few random thoughts.
1. We are seeing a few distressed properties in core Honolulu, but not many.
2. Short sales must be approved by the lender who is taking the loss and there are a few frustrating things you need to get ready for.
a. Lenders are taking a loooooong time to give an answer. Did I say they are taking a loooooong time to answer? Why should this concern a buyer?
i. If you need to move into a property on a specific date, you will not be able to plan on making the date due to the lenders timeline.
ii. If you have a locked interest rate, you may lose it or end up paying more due to the length of time the lender takes to approve the sale.
b. It is likely that the lender will raise the price. Lenders willing to take a short sale will try to get a buyer to pay more, so be ready for another negotiation 4 to 6 weeks after the seller accepts your offer.
c. The lender may agree to the deal if the seller agrees to conditions, such as: placing any shortage on a credit card; agreeing to secure the shortage against another property; or some other painful strategy. If the lender requirement is too stringent, the seller could cancel the sale.
Distressed property may be a good way to buy at a price that favors the buyer, but it is not the only way. Frankly, there are very good buys being made everyday for properties that are in no way distressed. In general, I think better values can be found among the properties that are being sold in a normal fashion (not distressed), but that is a blog for another day.
If you would like to talk with me about getting an excellent buy, please call me at 808-737-2093 or toll free at 877-737-2093.
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I think you made some good points. There is obviously a lot to know about this.
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