"DISTRESSED OUT" Dealing with short sales and foreclosures in today's market

"Distressed Out"
	Dealing with short sales and foreclosures in today's market		JUNE 2012
	Let's say you were a conservative, responsible homebuyer back in 2006, and made what, by all accounts, would be considered a conservative, responsible down payment of 20%. Since then, the average home price across Chicagoland has fallen by more than 30%, according to conservative estimates. Conservatively, that means a lot of homeowners in Chicago are "underwater," i.e. the balance of their mortgage is greater than the equity in their home. Watch the @properties Market Minute: Inventory is down and markets are stabilizing. Click on the video to learn more. In fact, the real estate website Zillow.com reports that 41% of homeowners in the Chicago metropolitan area were underwater in the first quarter of 2012. No longer a stigma or symbol of overextended credit, negative equity is a fact of life across every economic tier, in every neighborhood and town, from the West Side to Winnetka. Yet life marches on. People change jobs, start families, decide to downsize - and need to buy and sell homes. Whether you're a seller who can't wait out a full market recovery or a buyer interested in short sales or foreclosures, @properties is here to help. Here are some tips for buyers and sellers in the short sale market: For sellers: • Successful short sales are a team effort. In addition to your broker, it is highly recommended that you hire an attorney experienced in short sale negotiations. • Short sales take longer than traditional sales. Be prepared for an intensive process, even if the bank has already approved a selling price. • Be thorough and timely with required documentation-- such as a seller's hardship letter, tax returns, W2s and financial statements -- to expedite the process with your bank. • A short sale does not necessarily preclude you from buying another home in today's market. There are circumstances in which sellers can purchase anew in a relatively short amount of time. For buyers: • Even in the case of a short sale, your offer needs to be priced near market value since a seller's bank is unlikely to accept an extremely low offer. • Have your mortgage approval ready. Lenders typically want a buyer to close within 30 days of acceptance of an offer. • Do an inspection before approval of your offer. That way, you won't waste time waiting for the green light on a deal you'll ultimately walk away from. • To avoid unnecessary delays, have your agent find out if the listing agent has received the completed short sale package from the seller. • The seller's lender may not give standard credits for prorated taxes or other common items at closing, but the discount you're getting should more than offset these expenses. Please count on me for sound guidance on distressed property transactions or any real estate need. Your trust and referrals remain my highest compliment. Thank you.
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