What is a Chicago Short Sale?
A Chicago short sale is the sale of real estate in which the proceeds from selling your Chicago property fall short of the debt balance due and secured by liens against your property.
A short sale may take place if you as the property owner can no longer afford to repay the full amount of the loan due to a hardship.
Under the Mortgage Forgiveness & Debt Relief Act , lien holders may agree to release the lien on your principle residence and accept less than the amount owed on the debt. The term “deficiency” refers to any unpaid balance owed to the creditors.
The lien holders may agree to release their lien on your principle residence. Chicago Short sale agreements don’t necessarily release you as the borrower from your obligations to repay on the loans, unless specifically agreed to between the parties. Once the short sale is approved, no deficiencies are permitted after the short sale.
Alternative to Foreclosure
A Chicago short sale is often used as an alternative to foreclosure because it can reduce additional fees and costs to both the creditor and borrower. There have been 2.2 million short sales in the United States during the sub-prime mortgage crisis which began in 2008.
Buying a Chicago short-sale property in some ways is similar to a traditional home purchase. There are however, a couple of ways which the purchase agreement you and your agent draw up are different. The contract will specify that the terms are subject to the mortgage lender’s approval whereas in a traditional transaction, the only party who would need to approve the sale is the seller.
Many experts say that short sales are priced below market value, which then creates an opportunity for buyers to get a really good deal on a property or for first-time home buyers to get into a home they might otherwise not be able to afford. All that being said, if you are considering buying a Chicago short sale, be prepared wait on the close (sometimes up to a year).
What is a Chicago Foreclosure?
When a Chicago foreclosure takes place, a homeowner’s rights to a property are forfeited because of failure to pay the mortgage.
If the homeowner is unable to pay off the outstanding debt or sell it by doing a Chicago short sale, the property then goes to a foreclosure auction and if it fails to sell at auction, it becomes the property of the lending institution.
You May Want to Consider Purchasing a Foreclosure
If you are looking to purchase a home, you may want to consider buying a Chicago foreclosed home, which is also referred to as a “real estate owned (REO) property.” An REO property is one that is owned by the lender as a result of the previous owner defaulting on the loan, also known as a bank-owned property or foreclosed property.
A Few Things to Consider
The two most common ways of buying a Chicago foreclosed home are working with a Chicago real estate agent or through public auction. REO/forecloed properties are an affordable housing option, but there are things you should be aware of such as:
- Property Condition – There may not be any record of property repairs or maintenance that would assess the true property condition if the bank has not maintained or had first-hand knowledge of the foreclosed home before acquisition, Often times, the bank is unable to verify the condition of the property or complete a Seller’s Disclosure. Buyers are allowed and encouraged to complete professional home inspections on the property.
- Out-of-Pocket Expenses – With a typical real estate transaction, out-of-pocket expenses can occur before and after an offer to purchase a property has been submitted. They may include lender required documentation such as an appraisal or home inspection and bank-required minimum earnest money or “good faith” deposit demonstrating the buyer’s interest in the property and may be an indicator of how much money will be deposited as a down payment.
- Title Issues – If these are discovered during the closing process, they will need to be addressed and resolved, along with completion of all necessary paperwork to support the transaction. An extension of the close date may also be requested by the seller if these issues cannot be resolved by the contract close date. You as the buyer, should allow enough time after the scheduled contract close date to schedule movers, furniture deliveries, utilities, etc.
Chicago Real Estate Specialists – Call Now 1 -773-671-4663
Hands down, RE/MAX Associates are the most knowledgeable agents with the experience and community connections to assist you with in your home purchase across the globe. Customers going through the home buying and selling process know RE/MAX Associates as “The Real Estate Leaders®” and why no one in the world sells more real estate than RE/MAX.
Call us today for a list of Chicago homes for sale currently available in your area of interest. We offer a variety of comprehensive real estate services for buyers and sellers in the following counties:
- Cook County IL Real Estate
- Will County IL Real Estate
- Du Page CountyIL Real Estate
- Kane CountyIL Real Estate
- McHenry County IL Real Estate
- Lake County IL Real Estate
We look forward to speaking with you!
Adam Balawender, Realtor, CDPE
Real Estate Pro Chicago Remax, City
Cell Phone: 773.671.4663
Map of the Chicago Metro Area, Illinois