What is a short sale?
By definition a short sale is when a property is for sale for less than what is owed on the property. The bank or mortgage lender agrees to discount a mortgage loan usually in order to avoid the lengthy and expensive foreclosure process.
View current short sales in Chicago below
Ted Guarnero has years of experience with short sales; according to Ted, “many potential buyers are attracted to short sales since they are priced under market value, but short sales are not for everybody. I complete a full short sale package for all of my short sale prospects before moving forward. Below is hopefully the very basic information, the pros and cons of the short sale process.”
Pro: Buyers get property for less
As a buyer, you may get the property for less than market value, or at least for a lower price than found in the neighborhood on similar properties. The bank or mortgage lender will typically determine the property’s worth from a Broker Price Opinion BPO or through an independent appraisal. NOTE : YOU ARE NOT GOING TO STEAL A SHORT SALE. So unless it's a home that has some great features that can not be duplicated, Don't fall in love with in unit !
According to Ted and his years of short sale experience, he says:
- Fannie Mae and Freddie Mac will accept 85 to 90 percent of the fair market values in a short sale of the BPO
- HUD will accept as low as 82 percent in a short sale situation
- The seller of the property can in no way profit from a short sale
Pro: Homeowner avoids foreclosure
For the home owner and seller of property, a short sale will avoid foreclosure. The negative impact on their credit history can be the difference of owning another home again and being a lifelong renter. It must be mentioned that unless the remaining balance is indicated on an acceptance offer as extinguished, the homeowner may still owe the short money on the transaction.
Although a short sale is faster than a foreclosure, it will still take a considerably longer time to complete than a regular home sale since a buyer is not negotiating with the home seller, but rather the loss mitigation department of the lender.
Con: The extended closing timeline
If buying a short sale property, a buyer must be aware that short sales take a much longer time to close than a standard sale and the buyer should be prepared for 2 to 6 months before showing According to Ted Guarnero, an expert in short sales, “you are probably looking at a 6 weeks to a few months to even hear back about the acceptance of your offer, then a few more months between offer acceptance and closing.” Adding a second mortgage will delay this process as well.
Con: dealing directly with a bank or mortgage lender
Dealing with the bank or mortgage lender is much different than dealing with a homeowner. Some of the differences that individuals must account for when dealing with a bank as a short seller are:
- There is NO urgency/need for the bank to sell the property—Banks often are over loaded with offers
- Even if you offer the homeowner and bank full short sale price, the bank may still may still reject your offer for a variety of reasons with the owner
- The owner is the one accepting or denying the offer to purchase.
- The bank accepting the short sale is contengent with the seller NOT THE BUYER.
- Once you submit an offer, you are locked into that price and contract. In today’s real estate market with sliding prices, if the bank takes several months to respond to your offer, you may be paying more than current market value
Con: Short sales can require more work on the part of the buyer who must also qualify for the transaction
To make a case for the short sale, the buyer needs to compile paperwork to prove to the lender that the homeowner qualifies for a short sale payoff.
Since the average layperson is not familiar with the many nuances and legalities of most real estate transactions, including short sales, working with a Realtor® like Ted Guarnero who specializes in this area and can save prospective buyers a lot of aggravation, time and money. Whether you go it alone, or seek professional help, Ted says you will need to present the following to a lender for any short sale:
- Purchase agreement
- List of repairs with bid quotes
- Photos of problems
- Seller’s hardship letter
- HUD-1 Net Sheet
- Sellers Financial Information—tax returns, etc.
- Your formal offer with a time limit for acceptance
Obviously, this is a lot of work involved. This is why it is important now more than ever that you hire a real estate agent and an attorney who is familiar with short sales and the complexity of them.
Current Short Sales In Chicago
228 Search Results Found. Showing Results 1 - 8.
SHORT SALE! GREAT LOCATION! PERFECT FOR IN-TOWN CONDO OR 1ST TIME HOME BUYER. THIS CHARMING...
Short Sale. Beautifully remodeled studio on Gold Coast. This charming, vintage elevator building...
One of only 2 studios at 525 W. Hawthorne. New hardwood floors, Great kitchen complete with...
Short Sale. POSITIVE CASH FLOW. Intown/Investment.Beautifully studio on Gold Coast. This charming,...
SHORT SALE. SOLD AS IS CONDITION. ALL OFFERS MUST HAVE PRE APPROVAL AND ARE SUBJECT TO LENDERS...
"SHORT SALE - SUBJECT TO LENDER'S APPROVAL, SOLD-AS-IS". 1-BR/1-BA SPACIOUS UNIT, LAMINATED...
2 BEDROOM HOME W/ FINISHED BASEMENT AND 1 CAR GARAGE. SOLD AS-IS; SUBJECT TO LIEN HOLDER'S...
SHORT SALE! STUIDO WITH PRIVATE BALCANY THIS DOWNTOWN CHICAGO LANDMARK BUILDING HAS A BALLY'S...
The data relating to real estate for sale on this website comes in part from the Broker Reciprocity program of Midwest Real Estate Data LLC. Real Estate listings held by brokerage firms other than Baird & Warner are marked with the Broker Reciprocity logo or the Broker Reciprocity thumbnail logo (a little black house) and detailed information about them includes the names of the listing brokers. Some properties which appear for sale on this website may subsequently have sold and may no longer be available. The information being provided is for consumers' personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Information deemed reliable but not guaranteed.
Did you know?
Short sales are the largest growing segment of real estate sales within the last two years. When buying a short sale, you may have to not only try to satisfy the original mortgage lender, but any secondary liens as well. Multiple levels of approvals and conditions are very common with short sales. Junior liens - such as second mortgages, home equity lenders, and HOA (special assessment liens) - may need to approve type of real estate transaction which is why unfortunately short sale deals have a high failure rate and often do not close on time to save homeowners from foreclosure when they are not handled by a knowledgeable and experienced professional. The best sources of knowledge and expertise in short sales are short sale negotiators, loss mitigation are realtors that have years of direct experience dealing with short sales.
Because short sales are more complicated than regular sales, it is imperative that you choose a Realtor to represent you who has experience in short sales. Call Ted Guarnero for a list of short sale properties.Let Ted’s 25 years of experience handle negotiations for you, and make sure that your best interests are protected throughout what can be a complicated process.
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