PROPERTY TYPES IN LONG BEACH ISLAND, NJ

The short sale process in the LBI real estate market is complex for homeowners, but it can be just as frustrating and strenuous to try and buy a short sale or other types of distressed property. One of the most significant issues with short sales is that they take so long to complete – sometimes up to a year or more. Many real estate investors opt to purchase another type of property with a motivated seller to avoid these delays. The short sale process is not straightforward, but from time to time you can find a short sale on LBI that you can buy and have it make sense. If you are looking for an inexpensive home in the LBI real estate market, buying a short-sale property can sometimes be a good option – but sometimes, short sales can not be a good value. These homes often need a great deal of work, and the attention they draw from other buyers in the LBI real estate market can drive the price up. If you are looking for a short sale on LBI, it is imperative to work with an experienced real estate agent who knows all of the short sales currently available in your area and has navigated this transaction before. Do short sales work? They sometimes do, so long as there isn’t another buyer who’s willing to pay more than what the current homeowner owes. It all depends on how motivated and committed everyone involved truly is when trying to complete this type of transaction.

There are a few ways to improve an offer when bidding on a short sale in the LBI real estate market.

• Banks often look at terms as much as price

• Most short sales or distressed properties are sold as is so buyers should budget for repairs

• Negotiations can come in many forms including the seller taking back part of the short sale

In any real estate transaction, the terms offered to the seller can greatly influence the sale. When dealing with a short sale, the terms can be even more important! When a “cleaner” deal is offered to the bank, they will often give that offer precedence. Superior terms can include an all cash offer, a pre-approval (not a pre-qualification), or a very quick closing.

Most short sales are sold in as is condition meaning the buyer, not the seller or the bank, is responsible for repairs made to the house. Therefore, a buyer should plan for these expenses when making an offer and throughout the negotiation.  This is especially true in the wake of Hurricane Sandy when many homes sustained damage as a result of the storm.

There are a number of things that can be negotiated during the course of the transaction. For example, many banks will ask the seller to take back part of the loan as a mortgage to aid in limiting the loss to the bank. Additionally closing costs, real estate commission and other fees can be changed to make the transaction work for all involved.

Below are some of the most common ways to avoid foreclosure, short sale, or other distressed sales in the Long Beach Island real estate market.

1. Contact Your Lender
The first step to avoid foreclosure in the LBI real estate market is to contact your lender as soon as possible. Explain your situation and see if there are any options for modifying your loan or creating a repayment plan. Many lenders are open to working with a homeowner as there is an enormous cost to the lending institution to foreclose on a property, even one as valuable as a home on Long Beach Island.

2. Seek Professional Help
Many professionals, including a foreclosure attorney or a housing counselor, can help you navigate the foreclosure process. They can help you understand your options and negotiate with your lender on your behalf, but there may be a cost, something that may prove challenging if you are facing financial hardship.

3. Look into Refinancing Your LBI Home
Refinancing your mortgage can be a good option if you need help to make your mortgage payments, but with rates higher than they have been, this is unlikely to be a viable option. Most buyers and homeowners are finding interest rates higher than their current loan, but depending on the time you lock in your mortgage or the mortgage terms, there may be an advantage to a refinance.

4. Sell Your Home in the LBI Real Estate Market
If you are unable to keep up with your mortgage payments, selling your home may be the best option. This can help you avoid foreclosure and protect your credit score. The LBI real estate market is in short supply of homes, and values have increased by leaps and bounds over the last few years. Even in the last year or so, prices are up about 8%, so there is a good chance your home is worth more than you paid for it.

When a homeowner on Long Beach Island considers a deed-in-lieu of foreclosure, there are many things to account for. It is always best to hire an attorney to aid in this process, as entering into this kind of transaction can have a negative impact on your credit score and can even have tax consequences. A homeowner considering this process may also find resistance from the bank as some banks will prefer a short sale to a deed-in-lieu. The primary reason for this is when a bank takes the property back via a deed-in-lieu, it shifts the responsibility of selling the home from the owner to the bank. Many buyers in the LBI real estate market will view a deed-in-lieu as a potential opportunity-and in some cases, these can be buying opportunities. Like any foreclosure, short sale, or bank-owned sale in the LBI real estate market, they often end up trading at or even above fair market value, so it may not be a great value.

The Long Beach Island real estate market has, historically, been very stable. Even in 2008 and 2009, we saw a very low number of distressed sales and foreclosures. That recession was fueled almost entirely by real estate and was a very different environment than the one we are in today. In today’s market, most borrowers took advantage of low fixed-rate mortgages, which are far more affordable. This, coupled with the higher property values throughout the LBI real estate market, help to safeguard property values.

Of course, some homeowners will fall on hard times, which could lead to a short sale or a foreclosure. The good news is that owners in the LBI real estate market have options. The first and most obvious available assistance is the LBI rental market. The summer rental income generated by a single season can usually meet or exceed the yearly ownership cost for a home on Long Beach Island. Second, the massive equity position enjoyed by most homeowners would allow them to sell with little to no loss. Thirdly, depending on the nature of the issue, a homeowner may be able to refinance or cash out their equity position to help pay off troublesome debts.