For real estate investors, or people looking to get into the housing market, there may never be a better time to get a home in the Orlando area. Houses are large, and on well situated lots, because during the crazy years leading up to many years to come, everyone was obsessed with ‘bigger and better’. Deals can be had, and they can be had for some interesting terms.
All that said, while the opportunity is golden if you’ve got cash to spend (or are one of the diminished handful that can get credit sufficient to cover a mortgage), there are extra hurdles to jump through to buy a home. There are enough extra hassles in buying a distressed property that you may want to have an expert along for the ride; this can make the difference between getting a stunning deal and a merely good one. Distressed home sales run through a number of steps – the earliest one is called a short sale. In a nutshell, a homeowner who’s behind on his mortgage, and unable to find a buyer who will pay what’s left on the debt to take over the house will try to act as the intermediary between a prospective buyer willing to pay less, and a bank which may be willing to take less rather than go through the process of a formal foreclosure. This type of sale starts to show up when housing prices fall or merely stagnate.
The win-win-win scenario in a short sale is that the seller doesn’t torpedo their credit from walking away from the house, the bank loses less money than if they foreclosed on the house, and the buyer gets a house for a significant discount. In a number of Orlando neighborhoods, houses in a short-sale situation can be had for as much as 40% 50% or 60% off of their present appraised value.
What short sales aren’t are fast. Each party in the three-way transaction has their own interests to watch out for, and none of those interests are conducive to a fast transaction. The bank needs to assess how much of a loss they’re willing to take to cut out on the transaction, the buyer wants to push the price down as far as he can, and the seller wants to keep the price as high as possible to preserve his credit rating. Expect this to take four to nine months to resolve, and longer if the property has multiple mortgages.
So, as a home buyer, expect to exercise patience. Because of the collapse of the housing sector, even assessing proper values on a home can be tricky. The largest discounts on short sales are for very large houses; houses in the $300,000 or less range (and many condominiums) are holding their value well. Also, as with all things dealing with real estate, location and neighborhoods have an impact on top of this.
Another thing to consider, when buying a distressed property, is how much you’ll have to spend to get it livable, or ready for resale. While some people made a lot of money flipping houses during the real estate bubble, this is a different market. If you’re buying a house as an investment property, you’re better off holding the long view on its value. Finding a new buyer in today’s market is a challenge to say the least.
Still, Central Florida remains a destination of choice, and for people who are buying a home to retire in, or a vacation home, distressed properties are a window of opportunity at the moment. In order to buy a home, you will most probably need a mortgage to secure it. There are many mortgage lenders on the market and one of the leading one would be the Churchill mortgage. If you never heard of this lender, it is best for you to study the Churchill mortgage reviews first and figure out if any of the mortgages that offered by this lender is matching you.
