Short Sale & Bank-Owned Properties Market Report for Lindenhurst

Short Sale and Bank-Owned Properties Market Report for Lindenhurst as of February 2013

Currently there are 179 homes on the market in Lindenhurst. Fifty five of these homes are short sales, and two are bank-owned (REO) properties. Prices of the short sale homes range from $80,000 for a three-bedroom Cape on Willow Lane to $210,000 for a three-bedroom Cape on Linton Avenue. The majority of these short sale homes are priced between $100,000 to $199,999.

The two bank-owned/REO homes are priced at $149,900 for a three-bedroom, five-room ranch on Shore Road, and the other is priced at $339,900 for a five-bedroom, 11-room high ranch on South Ninth Street.

What is a Short Sale?
A short sale is when a homeowner has to sell their home for less than what they owe on their mortgage. Most homeowners are also behind on their mortgage payments when they decide to do a short sale. Banks are cooperating now more than ever with short sales. They know if they foreclose on a home, then they'll lose a lot more money compared to a short sale. Banks also want a valid hardship letter from each homeowner. Examples of hardships: Death of a spouse/partner, job loss, health issues, job relocation, reduction of income (you lost your job and got a new one for less money). You cannot do a short sale just because your home lost equity.

What Are the Benefits of Short Saling Your Home?
A short sale stays on your credit for up to five years. A foreclosure stays on your credit for seven to 10 years. Some are able to purchase another home in as little as two years after short saling their home. Of course your credit, income and job status matter as always when it comes to getting any mortgage.

Short Sale Myths
Pre-Approved Short Sales: There's no such thing. The bank may approve the list price, but until a buyer's offer is accepted, the home is not an approved short sale. Be leery of this type of advertising in the MLS.

The home won't sell as a short sale because there's too much money owed on the mortgage. This is FALSE. I listed and closed three short sales in 2012. One owed $450,000, $350,000 and $250,000. The amount owed was never an issue.

What is a Bank-Owned (REO) Property?
This is when a home has already been through the foreclosure process. If the home doesn't sell on the courthouse steps then it goes back to the bank and becomes a bank-owned property. Then the bank hires a realtor experienced with REO homes and places it on the market to sell. If you're considering buying a bank-owned home, then keep in mind most banks want to sell the home close to asking price and they are sold AS IS, meaning if there's anything wrong with the house, then the buyer takes care of it. Plus, the buyer pays the seller's transfer tax, which is $4.00 per $1,000 of the selling price.

Most of these bank-owned homes need a good amount of work, so you won't be able to get a conventional mortgage. You either pay cash or get a 203K mortgage (rehabilitation mortgage). In a lot of cases cash is king here, so don't be surprised that the bank accepted your offer and then takes a cash offer a few days later. The banks want these homes sold and off their books.

Until next time, take care and be well.