2013 – Foreclosures Down and Short Sales up in Asheville and Hendersonville NC area
Exit Realty Vistas
You aren’t hearing as much about Foreclosures as we did in 2010 – 2012 are you? Well, there is a reason for that, there aren’t as many foreclosures coming on the market. In January 2012, foreclosures made up 35 percent of all sales in the country, now we are down to 23%. Now 23% is not the “norm”, prior to this recession, 5% of the market was foreclosed properties and this was considered normal. So we are four times over the amount of distressed properties we would normally have in a regular market.
Another reason why you are not hearing so much about foreclosures is because they have become the new “normal”. Five years ago, a foreclosure was an anomalee, Realtors were not accumstomed to working with them and therefore there was a huge learning curve. Now that foreclosures are the new “normal”, National Association of Realtors started offering designations on working with distressed properties and we have learned what the banks want upfront, what the buyers can expect when negotiating and it is been pretty smooth sailing.
Now Short Sales?!?!? This is another story……
Banks have discovered that Short Sales are the better way to go. You have someone living in the home, even though they are not paying the mortgage payments. This results in less vandalism, the home is being maintained, therefore less repairs by the bank, and in some cases, the homeowner will even keep up the HOA fees, especially if some of their utility cost is included in the HOA fee. As you can see in the image above, we are going to see many more Short Sales in the next few years.
Yes, the purchasing process is longer for the buyer because since the bank doesn’t own the property yet, they have to basically start with qualifying the seller for the short sale which means verifying financials. The bank also has to get the home appraised to determine market value. Once all of this information has been provided, the bank then has to go to the private mortgage insurance, or private investor for approval of the short sale. This can take months. If the home was originally loaned by goverment funds, like a VA, FHA or USDA loan, then it can even take longer.
Buyers, please keep in mind that when you are making an offer on a Short Sale, you are buying it “as is”. With foreclosures, the banks will do repairs if they show up on an appraisal, but with a Short Sale, it is truly “as is”. Why? Because the bank doesn’t own the property yet. The seller still owns it, but they are behind on their payments so they are not making repairs, the bank doesn’t own it, so they are not making repairs, so it is truly “as is”.
Now this can be a problem, because if the buyer needs lending to purchase the home, and on government loans, especially, the lender has the appraiser inspection the home and if the appraiser references repairs needing to be made on the home, then the buyer has to make the decision – do they want to make repairs on a home they do not own yet. So keep all of this in mind when you are considering making an offer on a short sale.
If you are considering purchasing a home in the Asheville/Hendersonville NC area and not currently working with an agent, my firm, Exit Realty Vistas with 26 full time agents, would love the opportunity to service your real estate needs.
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