Buying Short Sales

Searching for a Short Sale Property to Buy?  What you should know before you make signing the contract

Let's face it...consumers pursue short sales to get a good deal! So whenever you see a sale price listed for a house that you simply assume is just too low for the neighborhood, before you leap on that home, ask your agent to call the listing broker to see if the house is a short sale.  You may need to think twice about making an offer on a pre-foreclosure, short sale home. It isn’t as simple as you might think, and only a few can close escrow in 30 days or less. Lots of our home investors have waited four to six months to close escrow on a short sale, typically longer.

What Exactly Is a Short Sale?

A short sale means the property seller’s lender is accepting a reduced payoff to release an present mortgage. Simply because a property is listed with short sale terms doesn’t imply the lender will settle for your bid, even when the property owner accepts it.  Remember that the owner needn’t be in default — to have stopped making mortgage payments — before a lender will think about a short sale. A lender might think about a short sale if the owner is current but the worth has fallen. property owner might have over-encumbered, owe more than the house is value, so a reduced price may convey the price consistent with market worth, not under it.

Examine the Public Records to research the short sale and the homeowner

Do your analysis before making an offer to purchase the property. We can discover who’s on title, whether or not a foreclosure notice has been filed and what amount is owed to the lenders. That is essential because it’ll assist you to to find out how much to offer.If there are multiple loans, you can possibly have a problem. The primary mortgage lender’s place is protected by the second lender, except if the second lender doesn’t opt to foreclose. If a seller owes one hundred sixty dollars on the primary and forty thousand on the second, providing one hundred sixty thousand leaves nothing left for the second. The primary will need to give some proceeds to the second to realize its cooperation.  Hire a Realtor that has Short Sale Experience!

It's a strike against you, the buyer, if the selling agent has never dealt with a short sale, however it’s even worse if your personal agent has no expertise. You want an skilled short sale agent. We are "Certified Distressed Property Experts" and have been trained to negotiate all distressed sales. Agents with expertise short sales will aid you to expedite your transaction and defend your interests. You do not need to miss any essential element because of inexperience. You also don’t want to discover your transaction isn’t closing on time as a result of your Realtors failure to follow up up in a well timed manner.

Qualifying the house and Seller for a Short Sale

A lender is unlikely to comply with a short sale unless the owner has little or no equity and is unable to repay the difference between your offer price and the prevailing loans. Sellers want to offer a hardship letter to the lender. Sellers can also owe taxes on the quantity of debt that’s forgiven.  We encountered a seller who demanded that the customer slip the owner $1,000 to be given the ablility to buy the owner’s house. This is illegal! That is considered fraud and the lender legally pursued that seller. Don’t be lured by sellers who recommend this practice. In a short sale, the owner is not permitted to receive any cash because the lender is forgiving money.

Submit Documentation and Contract to Lender

As soon as the owner has accepted your bid, it is faxed to the lender for approval. You wont have a deal till the lender accepts. Additionally, provide the lender a replica of your earnest money deposit. Don’t be astonished if the lender asks you to extend it.  In addition, the lender will need to see that you've been preapproved for your mortgagelan. It’ll also help if your Realtor sends an inventory of comparable sales that back up the value you’re bidding to pay for the property.  Give the short sale lender time to reply. Make your offer contingent upon the lender’s acceptance. Give the lender a time-frame by which to reply, after which, you’ll be free to cancel.  Some lenders submit short sales to committee, however most can decide inside two to 3 months.

Reserve the Right to Conduct Inspections

Usually, the lender won’t pay for customary "fix-its" that a seller would pay. These include house safety plans for the customer, buyer credits of any type and pest / termite inspections. A purchaser shall be requested to buy the property “as is, ” which suggests no repairs.

Understand Short Sale Commissions

Whatever the commission the owner has agreed to pay, the lender is actually the entity paying the commission. The reason being the owner isn’t receiving any cash with which to pay a commission. Because the lender is losing cash, the lender will probably negotiate the commission immediately with the selling agent, who will then share the commission together with your agent.When you have signed a purchaser’s agent agreement together with your agent, ask if the agent will waive the difference due otherwise you may need to pay it out of your pocket. Some brokers really feel it’s unfair to penalize the agent, however the lender is calling the shots.  Should you want extra information on searching for a short sale please contact us today for more details at (949) 916-9319. 

Team Steele Real Estate Group buyer agents will represent you, the homebuyer, during every step of the homebuying process. In fact, our buyer agents have a legal responsibility to homebuyers. That means that we are bound to protect your interests and preferences from the moment you engage our Realtors to help you.

This type of service allows you to shop for a home with the comfort and confidence that someone is looking out for your best interests. So call us and ask for a buyer agent who is completely devoted to you.

Call us today at 949-916-9319, for a step by step information packet that makes buying a home a snap! It is an easy to use guide that demystifies the homebuyer's process. With teamwork like this, we will get you moving!

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