Buying and selling your home can be a very exciting (but also a very stressful) process. It is one of the biggest financial transactions you may ever undertake, and may be one of the biggest decision
Get to know Neal Greene
There are many REALTORS® who are licensed in both Maryland and Virginia. But there is a HUGE difference between being licensed in both states and having knowledge of both states. I grew up in Montgomery County, MD and have lived in Loudoun County, VA for more than 7 years. But it's my familiarity with and knowledge of both states, along with my dedication to service, that makes a difference.
If you're selling a home in one state and buying in the other, you can work with me on both sides of the river for a smoother transition. If you're not sure if you want to buy in Maryland or Virginia, I can show you homes in both states. I'll help you compare communities on both sides of the river so you can determine which area best meets your needs, with no pressure to buy in one state or the other, as there might be if you were working with one REALTOR® in Maryland and another REALTOR® in Virginia.
Short Sales and Foreclosur What is a Foreclosure?The over-simplified answer is that a foreclosure is a home owned by a bank.What is a Short Sale?The over-simplified answer is that a short sale is the sale of a home where a bank accepts less than what is owed on a home's mortgage as the payoff for the loan.Why would a bank accept this?It costs the bank less to accept a partial payoff than foreclosing on the home.Why wouldn't a bank accept this?The bank might feel it can get more money for the home.The owner might have other assets. Let's say a homeowner owes $400,000 on a home that is currently worth $350,000. If the owner has no other assets and the foreclosure process, including the loss of the equity, would cost the bank $75,000, the bank might accept the short sale as a way to cut its loss. But let's say the homeowner has a second home, also worth $350,000 on which he or she only owes $200,000. Or, let's say the homeowner has a savings account with a $100,000 in it. The bank might feel that because the owner can afford to take the loss, it is not going to take the loss and will not approve the short sale.There may be more than one bank with a lien on the home. Let's say a homeowner owes $400,000 to Bank "A" on a home that is currently worth $350,000, and $50,000 to Bank "B. In this situation, banks don't simply split the gain or loss equally, or even proportionally. Bank "A" is the first mortgage holder and gets whatever funds are available. Bank "B" then gets whatever funds are left."Bank "A" may approve the short sale because it will get most of its money. But Bank "B" may not approve the sale because it will not get any of its funds.Buying a Foreclosure.The process of buying a foreclosure is the same as buying a home that a private owner owns (a traditional sale). You simply find the home you want and write your offer. Your offer is then submitted to the owner, who happens to be the bank. The bank can then accept, reject or counter your offer. There are, however, a few things to keep in mind when submitting an offer on a foreclosure. Most banks owned properties are sold as-is. Most banks will not make any repairs to the property. Most banks will allow a home inspection for informational purposes only. This gives you an idea of the general condition of the property. Think twice about buying a foreclosure if the bank will not allow a home inspection. A bank does not have to provide you with Homeowner Documents, and usually does not do so, but you are still bound by the rules and regulations. If the bank does not provide you with these documents, you should buy them. It can cost up to $375, but can save you a lot of time, money and aggravation in the future. DO NOT accept an old copy of the Homeowner Documents. The current documents will include (but is by no means limited to) the current budget, the current rules and regulations, and a often a list of any architectural violations on the subject home. Suppose you don't get the Homeowner Documents, or get an old copy, and you later find out your new home has architectural violations that will cost $1000 to repair? Or that you can't paint your front door the color you want? Or your car gets towed because you need a parking permit? Foreclosure does not mean desperate. In fact, it often means just the opposite. Foreclosures are sold without seller emotion. The price of a foreclosure is based upon current market conditions. The bank orders at least one Broker Price Opinion (BPO), which is very similar to a comparative market analysis (CMA) to determine a home's value. The bank will then price the home at market value. However, many banks price foreclosed homes below market value. As you would imagine, this attract many buyers. Everything is negotiable, but keep in mind that when writing an offer on a foreclosure you will often have to pay the list price, or more than the list price. You should always have loan approval when writing an offer on any home, however many banks require that you have loan approval prior to submitting an offer. Some banks may not even consider an offer without loan approval. There are two types of approval. Pre-Approval simply means that a lender feels you are qualified to buy a home of a specific price based upon the information you provided verbally. This type of approval means very little. Approval means a lender has verified your employment & income and credit history and has submitted your loan to underwriting. You are then approved for a loan up to a certain amount based upon the home appraising for the appropriate amount and the seller being able to provide clear title to the home. You're not in the clear yet! Don't go out and buy a new car or television! Even when you have loan approval, the loan is still subject to a final underwriting and a final check of your credit prior to closing. A bank may require you to qualify with its own lender before your offer is submitted, even if you have loan approval. There are several reasons for this. The first is, the bank would like to retain the loan on the property if possible. The second is that while your loan approval may have come from a large, national lender, another potential purchaser's loan may have come from an unknown mortgage company. Picking and choosing which buyers have to qualify with the bank who owns the property and which potential buyers don't violates Fair Housing Laws, so the bank requires it of ALL potential buyers. However, it is important to know that a bank can require you to qualify with them prior to submitting an offer, but a bank cannot require you to fund your new loan through them. You still have the right to use any lender you choose. Buying a Short SaleThe process of buying a short sale is somewhat different than buying a foreclosure or a home through the traditional sale process. Remember, a bank may not approve a short sale if it thinks the owner can afford to take the loss on the home. And the process of find this out takes time. The process of buying a short sale begins the same as with any other home sale. You identify the home you want. Your offer is then submitted to the owner. Because the owner, not the bank, is still in possession of the home, the person who owns the home signs the paperwork. However, this paperwork is contingent upon the bank approving the sale. This is where the process begins to differ. Once your offer is accepted, the listing agent should change the status of the listing in the multiple listing service to show that there is an offer pending on the home contingent upon third party approval as this is the correct procedure and this greatly reduces the possibility of someone else submitting an offer. Because most short sales are not approved prior to the offer being submitted, the short sale process now begins. Know that it can take up to three months for a short sale to be approved. And know that when another buyer sees that your offer is still contingent upon third party approval he or she can still write an offer. Because your offer has been accepted with a contingency, the owner, and subsequently the bank, can still accept another offer. And lastly, know that after waiting up to three months, your offer may not be accepted by the bank.Does this mean you should not buy a short sale?It does not mean this. It simply means that it is something to think about. From a buyer's standpoint, the best reason for buying a short sale is that the home has a unique feature, such as a specific location, a specific lot, updates, or is priced well. The other reason to consider a short sale is that there is often less competition for a short sale than there is for a foreclosure.What happens if I submit an offer on a short sale and find another home?Any offer can be withdrawn up until the time that all parties have agreed to all the terms. Because there is a contingency for third party approval that has not been satisfied, you can withdraw your offer and write an offer on another home.