Short Sale Sellers
Buyers pursuing a real estate short sale property may think they are getting a good deal. Buyers look at the listed price and think, Wow, that’s a great price! Before jumping on that price like a kid in a candy store, ask your real estate agent to call the listing agent to find out if it really is a short sale.
You may be surprised as to how much work it is to complete a short sale. A pre-foreclosure home is not as simple as a traditional sale and very few can close in 30 days or less.
What is a Short Sale?
A short sale means the borrower’s lender is accepting a discount off the existing mortgage loan(s) and the lender will be paying for the real estate commission, plus any other fees agreed upon. Just because a property is listed on the MLS as a short sale, does NOT mean that it has been approved by the bank or lender. This doesn’t happen till the first offer comes in.
The sellers does not have to be in default to be considering a short sale. It can also be due to the seller being in a property that’s value has fallen greatly. Thus, a discounted price will being the home price in line with the market not below it.
- 10 Steps to Short Sale Buying: There are less active buyers in the real estate market nowadays…and each one of these have been looking at a foreclosure or a short sale.
- Are You Sure You Want to Buy a Short Sale Home?: Here are some things to think about before leaping into purchasing a short sale
- Interested in Purchasing a Short Sale Property: If you are looking to purchase a short sale property, here are some common steps to take
- Persistence is Key: Persistence is to successfully purchasing a short sale at the price point you want. After all the paperwork is done, the bank can take many months to get their act together to finalize the deal.
- Short Sales Are More than Cancelling A Mortgage: Short sales are becoming even more common nowadays and keywords like “bank approval required” is being seen more frequently in the description.
- Typical Short Sale Transactions: An individual owns the property but are having trouble selling it and need to sell it for less than what is owed on the property. The lender must approve any “short payoff” of their loan in order for the transaction to close.
Hire an Agent with Short Sale Experience
If the listing agent of the property of interest has never performed a short sale, it could make the process harder. An agent with short sale experience will help make the process finalize quicker and protect your best interest, which is very important. You really don’t want to miss any important detail due to inexperience.
Giving the Lender a Deadline
It’s very important to give the lender a deadline, even if they’ll ignore it. Make the offer contingent upon the lender’s acceptance AND give the lender a time frame in which to respond, after which, you could be free to cancel. Since lenders are sometimes under no pressure to make a decision quickly, the paperwork will sit on someone’s desk for quite some time.
Some lenders submit short sales to committee but some can make a decisions with 2 to 3 weeks.
Commission Negotiations
The lender will be the entity paying for the real estate agent’s commission, since the seller is not receiving any money with which to pay the commission. The lender will negotiate the commission with the listing broker who will then share the commission with your agent.
If you have signed a buyer’s broker agreement with your real estate agent, ask the agent if they will waive the difference due or you may have to pay out of pocket.
Conduct Inspections
The lender won’t pay for things a seller would typically pay for in a traditional sale. These items include, home protection plans for the buyer, buyer credits of any kind and pest/termite inspections. A buyer will be asked to purchase the property “as is”…meaning there are no repairs.
For this reason, it is very important for a buyer to perform a home inspection and pay for other types of inspections including pest, roof, sewers, chimney, fireplace and septic tanks. Don’t waive your right to an inspection and make your offer contingent on approving them.
More Short Sale Buyer Articles:
The Short Sale Offer:
- Room to Negotiate with Short Sales?
- Should You Buy a Short Sale?
- Before Buying a Short Sale
- Questions to Ask a Short Sale Listing Agent
- Short Sale Addendum
- Short Sale Contingencies
- Be Prepared When Buying A Short Sale
- Low-Balling a Short Sale
- Buying a Short Sale with Realtor
- Purchasing Short Sale
- Earnest Deposit and Short Sales
- Short Sale Buyer
- 20 to 25% Under Loan Amount Reasonable?
- Asking for Repairs and Inspections with Short Sales
- Closing Costs in Short Sale Deals
- Countering an Offer After Bank Acceptance
- Getting a Short Sale Offer Rejected
- How to Get an Offer Accepted on a Short Sale
- Managing Expectations For Short Sales
- Short Sale Owner Must Qualify
- Short Sale Timeline
- Short Sales Transactions Come To Those That Wait
- Think You’re Ready to Buy a Short Sale?
- Time Contingency on A Short Sale
- Top Reasons Why Banks Reject Short Sales
- What is the Process of a Short Sale?
- What to Offer on a Short Sale?
- Why Buyers May Not Want to Purchase a Short Sale
