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What is a Short Sale, and How Long Does it Take?

Posted on by Hometown Development

If you’re struggling to keep up with mortgage payments and are looking for a way out of debt, or you need to move out of your mortgaged home for a job or change in status, a short sale could be a good option for you. Here’s everything you need to know about a short sale, from what it is to the sale process to some tips for how to make your short sale a success.

What is a short sale?

A short sale occurs when a homeowner going through financial hardship sells their home for less than the amount owed in the mortgage in order to get out from under debt and avoid foreclosure. This is often in response to a new financial hardship or reason to move. When selling in a short sale, the earnings go directly to the lender to pay the mortgage. The remainder of the mortgage sum might be forgiven by the lender. Or, if the lender issues a deficiency judgement, the borrower is required to pay the difference. 

Keep in mind that a short sale can be a lengthy process. This is because various stages require the bank’s approval. Short sales also involve a lot of paperwork to be completed and filed correctly. Throughout the process, you’re at the mercy of your lender and their schedule – and they are in no rush to sell your home while it can still be profitable.

Why should I sell my home in a short sale?

A short sale might be a great option if:

  • You need to sell your home quickly because your status or situation has suddenly changed, such as divorce or job relocation
  • If you’re behind on payments and want to avoid foreclosure 
  • If your home needs a lot of repairs or its value doesn’t match the amount you owe

Benefits of a short sale:

Selling your home in a short sale has many advantages:

  • You can sell your home as-is without making any changes or repairs
  • You can find a buyer who will pay cash, making for a simple transaction
  • The right buyer or investor will work with you and your lender’s schedule
  • You can save points on your credit score by avoiding foreclosure

How do I sell my home in the short sale process?

Selling your home in a short sale can be complicated and time-consuming, but for the extra effort it could seriously pay off. Here are the ins and outs of the short sale process:

You Qualify for a Short Sale

Since it’s ultimately up to your lender whether they will allow you to short sell your home, certain qualifications will make it more likely your lender will approve. Before a lender will consider a short sale, you have to already be in default on your mortgage payments and be able to show that you are unable to make payments. 

You should also be able to demonstrate that the cause of financial hardship is recent, such as medical costs or unexpected loss.  If you weren’t up front with your lender about your situation prior to signing the mortgage agreement, they likely won’t be willing to help you resolve the debt and get back on your feet.

Your lender is also unlikely to accept a short sale if you have a cosigner. If you default on the loan, your cosigner will automatically be required to pay and selling will not be an option.

The Lender Is Open to a Short Sale

Before you can sell your home, your lender must agree. Talk to someone at the company who is authorized to make decisions on your lending agreement before going ahead with the process. Keep in mind if they think they could earn more from selling your home after its foreclosed on, they won’t want to help you sell your home in a short sale. 

If, however, they are open to the option of a short sale, you can move on to finding the appropriate buyer.

Finding the Right Buyer

If your lender is open to a short sale, you must then find someone to purchase your home. There are various ways to do this, but most will list their home with a real estate agent or reach out to a reputable real estate investor. 

The major benefit of an investor is they can wait for the lender approval process which can often delay a sale by several months. A traditional buyer, on the other hand, probably wants to move toward closing right away and could become impatient while waiting for a bank to sign off. If forced to wait too long, they might find another home to purchase.

Bank Accepts Short Sale Offer

If a buyer is found, the lender still has to accept or deny the offer. SInce they will likely lose money from the arrangement, it might be difficult to convince them to sell. If your lender believes they can make more money in a foreclosure they will most likely deny the offer. However, a lender may accept a short sale offer to avoid having to make repairs and sell your home traditionally. A short sale could be more profitable and timely than going through the foreclosure process. 

Sell Your Home in a Short Sale

Once the lender accepts the offer, the buyer pays your lender the agreed-upon amount. This payment goes toward the lien on your home, which is just one part of the mortgage. The other part of the mortgage is the promise you made to pay back the loan. Your lender may still require you to pay the difference between the sale price and the value of your mortgage. If they do not forgive this sum they could hold you to this agreement by issuing what’s called a deficiency judgement against you in order to collect the money.

When the home is sold to a new owner, you must remove your belongings from the property. Once rid of your home and the debt that came with it, you are free to move on with your life.

How long does a short sale take?

While the process varies for everyone, short sales typically require a lot of paperwork and waiting periods for lender approval and can take from several weeks to months. Unfortunately, you’re often at the mercy of your lender, moving through the process according to their schedule and waiting on their judgement for whether you can fulfill your mortgage contract and free yourself from the debt. Be patient and seek out experts for help. Incorrect paperwork will delay the process further, so it’s better to be extra thorough when completing all necessary forms.

Short Sale Best Practices:

Here are some general tips for navigating the short sale process that will help things go smoother with minimal hassle.

Be honest with your lender.

Advise them of your situation when looking at financing options. It is equally advantageous for the lender to have an agreement you can repay. If a short sale isn’t a good option, work with your lender on a repayment plan.

Find a lawyer who can help you present your case.

Many attorneys and tax experts specialize in this difficult process and can help you navigate your financial records and compile the necessary paperwork.

Consult a real estate agent or a reputable real estate investor.

Lean on professionals to help you make the short sale a success and be ready to sell your home as soon as your lender agrees.

Be patient and keep reasonable expectations.

The short sale process can be long and complicated. Go into the process with an open mind and be flexible when it comes to your lender’s requirements. Focus on the possibility of walking away from the situation debt-free and in a good position to rebuild your credit and move forward.

I want to sell my home in a short sale. How do I find a buyer?

A short sale is one key way to get out from under major mortgage payments. If you’re working to arrange a short sale with your lender, and just need a buyer, let Hometown Development help. We purchase properties in any condition, for cash, and we can help ensure your short sale goes through. Call us at 616-379-3090 or leave us a message online, and we’ll get back to you with more information as soon as possible.

What to Expect When Selling Your Home As-Is

Posted on by Hometown Development
If you’re considering selling your home, you may be looking for an option that will complete a sale quickly and efficiently, with minimal stress or manual labor. With an as-is sale, you can expect to sell your home fast, without having to deal with the usual repairs and delays of a traditional home sale. If you’re ready to move out and move on, an as-is sale might be the perfect choice for you.

What is an As-Is Sale?

Many homeowners are unfamiliar with an as-is sale. An as-is sale occurs when the homeowner sells their home exactly as it is, without making repairs, cleaning, or updating the home’s condition. The buyer will probably have the resources and time to make those changes, and purchasing the home for a slightly lower price allows them to do so. An as-is sale helps you sell your home quickly and without hassle, so you can get on with your life.

As-Is Selling Process

When you’re selling your home as-is, a potential buyer will assess the home and appraise its value. Based on the home’s value and any necessary repairs or changes, the buyer will make an offer, often in cash. 

Once the offer is accepted, the closing process is easy. The buyer will be ready to pay right away, so you won’t have to wait for them to secure a loan or other financing. You’ll receive the agreed-upon amount, and your transaction is complete.

The buyer already knows the condition of your home from the walk-through, so there won’t be any surprises. They will take care of any repairs or updates after the home is sold, so you won’t have to worry about it. The amount you receive might be slightly lower than if the house was in perfect selling condition, but you escape the hassle of trying to prepare it for sale. Here’s a helpful offer comparison of a traditional vs. as-is sale if you’d like to know more about the financial aspect of an as-is sale. 

You won’t need a realtor if you sell your home as-is, you’ll just work with the buying agent and can avoid realtor’s commission fees completely. The entire process will only take a week or two, and you can get started on whatever is next in your life.

What to Expect When Selling Your Home As-Is

You won’t need to make repairs.

Even if you spend the time and money to make the necessary changes to your home before selling, there’s no guarantee you’ll be able to make that money back in the list price. Selling your home as-is means you’ll have your money faster, and for a good value based on your home’s current condition. However, fixing major issues such as a leaky roof or a foundation concern may have monetary benefits.

You can sell your home fast.

The process can vary, based on the housing market and local competition, but the total length of the as-is sale process is from five days to two weeks. As-is sales don’t require multiple showings or inspections, which further cuts downtime before closing. Compared with a traditional home sale which can take two months or more, a quick as-is sale is very appealing.

You don’t need a realtor.

Realtors can be a hassle. They are often more concerned with their cut of the profits than what you as the homeowner will get out of a sale. Realtors aren’t necessary with an as-is sale. The buyer and the seller communicate to agree on an offer that best matches the home’s value.

You can unburden yourself from a weighty mortgage or fear of foreclosure.

If you’re feeling pressure from mortgage lenders or are in the foreclosure process, an as-is home sale can help you get out from under your debt quickly and painlessly, and free you of the worry of losing your home. Don’t let your debts sink you. You can take control of your finances by selling your home as-is for an instant economic solution.

You can move on quickly.

Most importantly, once you sell your home in an as-is sale, you can move on right away. Start the next chapter of your life in a new home, without having to cope with the stress of selling your old one. You can have the life you want, and an as-is sale might help you get there.

As-is sales aren’t right for everyone. If you have the time, money and skills to repair your home and prepare it for sale, entertain showings and negotiate with potential buyers, host inspections and wait for the sale to close, you might be more comfortable with a traditional sale. However, if you’re concerned repairs won’t have much of an impact on the sale price, or the hassle just isn’t worth it, or you need to sell your home fast, an as-is sale will put money in your pocket much faster.

If you still have questions about the process, or if you think an as-is sale is the right option for you, Hometown Development can help. Give us a call at 616-379-3090 or contact us online for more information. 

Behind on Mortgage Payments? Here’s What You Can Do

Posted on by Hometown Development

I’m behind on mortgage payments. What can I do?

Getting behind on mortgage payments can be a slippery slope, and the longer you ignore the problem, the more dangerous it becomes. It can feel like you’re running out of options, treading water until a life-preserver is thrown out to you. Ultimately, you want to avoid foreclosure and losing your home, as this will put you in a difficult financial situation that it is very hard to recover from. Don’t lose hope, as you have options when it comes to catching up with your payments or getting rid of your mortgage altogether.

Make a Plan

First, you need to accept where you are and understand the importance of your next steps. Taking action early can save you a lot of headaches down the line, and leave you in better financial shape for the rest of your life. 

Second, take ownership of your financial decisions. You are in control, and what you decide will impact your future. Read through your lending agreement so you know the terms and the rights available to you as a homeowner. Make a plan that is realistic for paying your debts.

Finally, ask for help if you need it. Know that there are resources out there to help you and others like you get back on your feet. You are not the first person to struggle with a cumbersome mortgage, nor the last. There are people who specialize in this exact situation who are prepared to lend a hand and assist you in dealing with your debts and continue to move forward.

 

If you’re behind on mortgage payments, there are things you can do to help yourself. Let’s explore some of your options.

Catch up on Mortgage Payments

The quickest way to fix this problem is to catch up on payments by paying them outright in a lump sum. This will bring you up to current payments and you can go back to paying normal amounts next month. To acquire funds for this lump sum, you may consider selling assets like non-sentimental valuables or antiques. Look around your home for ways you can downsize and get rid of possessions you don’t need, like an extra television set or expensive camping gear. Every little bit you can sell will help you get closer to your goals.

Talk to Your Mortgage Lender

Another action that could help you if you’re behind on mortgage payments is to speak with your lender about possible solutions. They may be open to arranging a new repayment plan or adjusting the terms of your mortgage to help you meet more achievable monthly payments. Let’s look at a few options you can bring up with your mortgage lender.

Forbearance

Forbearance means your lender would temporarily postpone or reduce payments until you can agree on a repayment schedule. Agreeing to forbearance means your lender will not pursue foreclosure, which will give you peace of mind as you work on a plan that benefits both parties. Keep in mind that when your repayment is due, you will need to pay back all of the missed payments to bring your account current.

Reduction of the Mortgage Principal

Your lender might be open to reducing the amount you owe, or the principal of your loan. The lender might agree to this if they could recover more money through a lowered principal than they would in a foreclosure, especially if you owe more than what your home is worth.

Mortgage Refinance

Refinancing your loan means you make a completely new loan agreement with new payment amounts, interest rates, and payment schedule. It may lower your monthly payments, which could help you keep up with the schedule. You must be up to date on payments to refinance your loan or you will still need to settle the other mortgage, but it could help prevent you from falling behind on mortgage payments by making them more manageable in the future.

Selling Your Home to Pay Off the Mortgage

If you’re falling behind on mortgage payments, it can feel overwhelming when the debt stacks up month after month. If you want to get rid of your mortgage payments altogether, you may consider selling your home to pay off your debt. There are a few different ways to do this. You can sell your home in a short sale, with the help of a realtor, or sell it as-is for a quick sale.

Sell Your Home in a Short Sale 

A short sale is when you sell your home for less than you owe. You can avoid foreclosure with a short sale, but you basically start from scratch. It might be an option if you’re desperate to get out from under your debts. You have to discuss it with your lender before you can sell your home in a short sale.

Sell Your Home With a Realtor

If you choose to sell your home with a realtor, you will work with their office to prepare your home for sale. It could take months before it’s ready to be put on the market, and months more before an offer is received. Although you might be able to sell your home for a higher price with a realtor’s skilled help, their commission will slightly lower your profits — and the amount you can pay back on the mortgage. Plus, the time it takes to sell your home this way puts your further behind on mortgage payments, leaving you with a bigger debt to settle at the end of the process.

Sell Your Home As-Is for Cash.

In an as-is home sale, professional real-estate investors will give you a fair price for your home’s value. You don’t have to worry about making repairs or working with a realtor. Most importantly, you can be paid for your home sale right away. You can have your debts paid in as little as five days and move on to the next chapter of your life.

Get Some Help

If you still have questions about catching up with mortgage payments, go to a government agency like Housing and Urban Development. They have housing counselors available to guide you through the process of catching up with missed mortgage payments. Counselors can give you real answers about what to expect if you aren’t able to pay your debts as well as practical solutions to avoiding foreclosure and bankruptcy. Their advice is free, so it never hurts to ask.

You’ve already made a great first step by looking for a solution before you’re underwater. You’ve taken control of the process and are well on your way to forming a clear plan that will lead you out of mortgage debt.

Here at Hometown Development, we know it can be tough to feel like you’ll never catch up. Our team is here to help. If you’re behind on mortgage payments, we can offer you a fair cash offer for the market value of your home to help you get out from under that cumbersome mortgage. Call our office at 616-379-3090 or contact us online to learn more.

Why Now is the Time to Invest in West Michigan Real Estate

Posted on by Hometown Development

If you’re looking for new opportunities to invest in real estate, West Michigan has some of the fastest-growing real estate markets in the country. Michigan is already on many investors’ radar because of the low cost of living, competitive housing market and low vacancy rates.

A Grand Opportunity

The city in Michigan with the highest investment value right now is Grand Rapids. It’s the second-largest city in the state with a population of about 200,000. Many view it as the most promising city in Michigan. 

Grand Rapids has a strong economy and low unemployment rate, which draws people in from surrounding areas. It also has a growing student population which pertains to several colleges in the area. The young people are staying in the city after graduating, buying homes with a stable income from a healthy job market. Property values have been steadily rising in recent years and are projected to grow at least at the rate of inflation for the next few years. Typically, homes receive two offers and are sold in about two weeks. This positive return on West Michigan real estate investment is hard to pass up.

Competition is extremely high for prospective buyers and investors. Most residents of Grand Rapids are homeowners, not renters. Those who are renting are reluctant to end their leases, meaning less turn-over in rentable properties. Currently, the trend is to flip older houses and turn them into multi-family rentals, rather than build high rises or condominiums. It is still a seller’s market, meaning there are more buyers than there are homes to sell them.

Rising Stars

Many towns surrounding Grand Rapids are showing similar growth patterns, making them equally lucrative investment sites, possibly without the intense competition. East Grand Rapids and Kentwood are developing quickly. As prices rise in Grand Rapids, residents will be moving outward to find available homes with a short commute. These communities boast excellent schools and are attracting many young families.

Also, Michigan is still home to much undeveloped land, and as more people flock to centers of industry and community, suburbs will need to be expanded. This land is typically very economical and is generally ready to build, thanks to Michigan’s malleable landscape and consistent elevation. What’s special about Michigan is the dedication of its residents to their small communities. Developments not only capitalize on this cultural need, but serve the people by bringing them together and creating neighborhoods where they can connect.

Bright and Brighter

What are continuing to be solid real estate investments are properties along the shore of Lake Michigan in cities like Grand Haven, Holland and further north in Traverse City. Second homes and vacation rentals don’t stay on the market long and appreciate well over time. 

Lake Michigan properties are increasing in popularity for the purpose of retirement. Grand Haven has a very active community and walkable plan. Combined with its proximity to the beach, it is a very popular spot to settle for older residents. Grand Haven has a healthy population of year-round residents, so activity doesn’t stop in the colder months. Homes in this area are still increasing in value and make for lucrative investment properties. 

The Future is in West Michigan Real Estate

Now is the time to get in on the ground floor before the market opens up and prices skyrocket. Working with local real estate investment companies that specialize in serving their communities would give anyone an edge in those markets. An investment in returning older homes to their former glory — especially those homes that have an existing hold in growing communities — can provide you with the return you need, while helping restore our West Michigan neighborhoods for the larger community. A partnership between a keen investor and a knowledgeable development company would be fruitful for all parties. 

West Michigan is one of the fastest-growing regions of the country and its real estate market is ripe for investment. For attractive real estate investment opportunities, talk to the team at Hometown Development — we’d love to work with you! Leave us a message online, or give our office a call at 616-379-3090.

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Licensed Builder
Licensed Real Estate Agent

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Meghan Vandenhout 616-942-8955

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