Short Sale Home » Short Sale Buyers » Buying A Short Sale…

Short sale properties are just about everywhere on the real estate market.  Short sale properties shouldn’t be a scary purchase as they can result in a good deal, although they should be approached with the right mentality, some patience and facts:

• A seller must disclose if the home is short sale.
• The short sale must be approved by the lender.  Even if the seller accepts your offer, it isn’t an official contract till the lender approves since they are selling the home in this situation.
• The lender will send out an appraiser to look at the property to check for market value.
• The lender must receive a hardship letter and the short sale package to approve a short sale.
• The lender will probably require the home be sold as is and will usually not approve any credit for repairs.
• The short sale may take some time (2 weeks to as long as 5 months).  It is usually the biggest complaint from buyers of short sales.

If you plan on making an offer:

• Make sure the offer is contingent on the short sale being approved by the lender and set a time frame for the approval.  State that escrow does not begin till the lender(s) have sent written approval.
• An short sale addendum is advised to outline the short sale contingency terms and conditions.
• There is a good chance that there will be more than 1 offer on the property.
• It is still good to conduct a home inspection even though the lender is selling the home “as is”.  You want to know what you are buying and see if there are any repairs to be made.
• The seller may not be able to do any Section 1 repairs resulting from the Wood Destroying Pests (termites) due to the hardship of funds.

It’s highly recommended to take on a short sale only if you have representation by a qualified and knowledgable licensed agent.  There is a lot of risk involved.

Tags: addendum, hardship letter, home inspection, real estate market