Maui Real Estate Blog

Of all the properties for sale on Maui, a large percentage are Short Sale properties.  These properties are usually priced below market value and appear to be a good deal for buyers.  But is it?  The answer depends upon the buyer.

A short sale is when the seller needs to sell the home at a price that is less than amount owed on the mortgage, and the seller's lender has agreed to forgive the difference.  These properties can be in great shape and located in great neighborhoods, but the buyer must understand the short sale process before submitting an offer.  As a buyer, you must:

Be Patient.  Usually an escrow period on a non-distressed property can take an average of 45 days, but a short sale property can take up to 90 days.  The lender must accept the offer, not just the seller, and this process can take a long time.  Frustrations also can arise in the process, so buyers need to be prepared and to have flexible living arrangements available to accomodate a long escrow.

Do Research.  In some cases, a seller is listing their home as a short sale because they are facing financial hardship and, therefore, may not be able pay off liens attached to the property.  The lender will not pay these off for the seller, so unless the seller can ask these to be forgiven by the vendor, the buyer will be expected to pay off the outstanding liens.  Such liens may be unpaid property taxes, HOA fees, or judgement liens. 

If there are liens, the amounts can vary to somewhat insignificant to an amount large enough to discourage a buyer from proceeding with the sale.  Most of these liens can be found in a preliminary title report, but it's important to check all resources so that there are no surprises at the closing table.

Do Due Diligence.  This goes for any property a buyer is interested in purchasing, but I feel it is worth mentioning in a short sale purchase.  A buyer can find out a lot about a property through inspection reports, disclosure forms, and preliminary title reports, but buyers need to do their own investigative research to determine that the home is suitable to their needs. 

Drive or walk around the neighborhood to get a 'feel' of the surroundings.  Do so at different times of the day, such as in the afternoon and again in the evening.  You may discover different things at different times of the day.

Talk to neighbors and try to guage their fondness for the neighborhood.  You may learn a lot!

Pay close attention to anything that might stand out with your next-door neighbors.  Do they take care of their home?  Do you hear any excessive animals noises that might keep you up at night?

The list can go on and on - it really depends on the specific property.

Buyers CAN get a great deal from purchasing a short sale property, but they need to be informed and have realistic expectations to avoid a lot of frustration.  

Please contact me for more information!

 

Many think the tax credit only applies to those who have never owned a home before, but that is not the case.  To qualify as a first-time home buyer, you must not have owned any other main home during the 3 year period ending on date of the purchase on your new home.  

Time is running out for the for first-time home buyers to take advantage of the tax credit of up to $8,000!  The deadline is November 30, 2009, which means you must close on a property by that date in order to receive this credit.  These days, a typical escrow closes between 35 to 45 days, but if the poperty is a short sale or foreclosure, the escrow can take as long as 90 days.  Many in the industry speculate that the deadline will be extended, but no action has been taken yet, so buyers must be prepared and act soon so they don't miss out on this great opportunity.

This tax credit, combined with low mortgage interest rates and reduced home prices, makes this a great opportunity for 'first-time buyers' to buy a home.  Please contact me for a consultation on how I can help you with the purchase of your home!

With Aloha,

Lisa B. Miller


For more information on this First-Time Home Buyer tax credit, please visit the IRS link here:
http://www.irs.gov/newsroom/article/0,,id=206291,00.html