There are distressed sales in almost every market. Before we look at Mammoth Lakes specifically, it is important to understand the definition of distressed sale.
A distressed sale in real estate is defined as the urgent need to sell property when the owner can no longer make the mortgage payments. He/she must sell the property immediately to pay off the mortgage, even if it involves losing money on the property. There are two primary types of distressed sales:
Foreclosure: A situation in which a mortgage lender takes possession of the property because the borrower has not made payments on interest or principal for a certain period of time.
Short Sale: An agreement between a mortgage borrower in distress and the lender that allows the borrower to sell the house and remit the proceeds to the lender. A short sale is an alternative to foreclosure or a deed in lieu of foreclosure.
Foreclosure-related sales are on the decline but distressed sales continue to claim a “disproportionately high portion” of total home sales across the country, according to RealtyTrac’s most recent foreclosure and short sales report. The firm also found increases in prices for distressed properties in 2012.
Distressed property sales made up 43 percent of all home sales nationwide in 2012, according to RealtyTrac. Foreclosure-related sales made up 21 percent of all sales, while non-foreclosure short sales made up 22 percent of sales. Together, foreclosure and REO sales decreased 6 percent from 2011 with a total of 947,995 sales over the year in 2012.
Here in Mammoth Lakes, in 2012 distressed property sales made up 41 percent of all home sales. Foreclosure sales made up 15 percent of all sales and short sales were 26 percent.
A qualified licensed real estate agent can provide information on available distressed sales. Often the lender has special requirements for buyers and although there are some “good deals,” patience is a virtue when dealing with distressed sales.
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The answer to this question does not have any clear cut and dry answer. There are quite a few variables involved when trying to figure out when someone will be able to purchase a home after a foreclosure or short sale. Much will depend on the circumstances that led you to foreclose; generally it can take anywhere from two to seven years. Of course it also depends on how you have maintained your credit AFTER the foreclosure. According to most lenders, you will need to re-establish a credit score of at least 580 to qualify. My suggestion is to contact a reputable and knowledgeable lender or mortgage broker. They can review your current situation and offer advice and services on repairing your credit. Also, there are many on-line resources that can help you take the right steps. Some services are free and others charge a monthly/annual fee (try doing a Google search then check for feedback on the provider).
Finally, consider asking your real estate agent for properties where seller financing is available. Often buyers may benefit from less stringent qualifying and loan payment requirements and more flexible rates on a home that otherwise might be out of reach. These loans are often short term with the idea that within a few years, the home will have gained enough in value or the buyers’ financial situation will have improved enough that they can refinance with a traditional lender.
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The Village at Mammoth