Real Estate Short Sale Guide

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How to Buy a Short Sale

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Buyers looking to purchase a short sale property need to understand the special process that short sales require to close.  It’s very different than a traditional transaction and could possibly either end up being a good deal or a bad deal depending on how well the bank is willing to work with you and the seller in selling off the property.

What you’ll need – A real estate agent with short sale experience

  1. High a real estate agent who has short sale experience who knows the in’s and out’s so that they may guide you through the short sale process and help you cut through any red tape quickly and efficiently.
  2. Go to the city office and ask for public record information or even look on the MLS (short sales are being listed on the MLS nowadays).  The agent can pull the property title, foreclosure status, notices filed against the seller and find out how much is owed to the lender.  You’ll even be able to find out if there is more than one lender involved in this property (1st and 2nd mortgage).
  3. The seller may have some unsettled debts or unpaid property taxes on the property.  You will want to make sure that gets taken care before the bank agrees to sell the property.
  4. The seller needs to submit a short sale package including a hardship letter to the bank including requried documents asked by the lender.   You’ll need to send a offer for the process to get started and may also need to include an earnest deposit on the property, usually it is made out to “Escrow to be determined”.
  5. Make sure to determine a solid date for the sellers lender to get back to you with the approval of the deal.  If the lender does not return with an answer in this time period, make sure to be clear that you will be free to cancel your offer and get back the earnest deposit.
  6. Usually the bank will request that you purchase the property “as is” – they will not do any repairs.  So, make sure your final offer is contingent upon the approval of the inspection to save you a lot of money down the line.
  7. If you work with an experienced short sale agent, they should be able to help you avoid most obstacles and pitfalls involved with buying a short sale property.  Hopefully it won’t be too hard of an experience for you.