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Short Sale tips

Posted by Susanna Haynie on June 26, 2013
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short sale tipsSome homeowners are able to pull out from under their mortgages these days with rising real estate prices. There has been a slight decline in short sales, but there are still plenty out there.

If you feel adventurous and the lure of a possibly sweet deal as well as some handywork appeals to you then by all means enter the dark side of….

….. Short Sale Offers

=> Seller wants to sell their home which is worth less then what’s owed.

=> Seller lists the home.

=> Seller might /should send a hardship package and documentation to the bank in order to get the ball rolling and hopefully speed up the short sale process. FHA is still painfully behind, but then, others are too!

=>Seller receives offer and agrees to it by signing. Doesn’t really mean much, because if the bank does not agree to a short sale, seller starts with square one.

=>The signed contract is submitted to the short selling bank(s) and lien holders for review and hopefully approval

=>The bank will most likely require a BPO (brokers price opinion = a BPO trained agent will go and value the home and submit his findings to the bank) or an appraisal.

=>This appraisal or BPO will help the bank –most of the time- to determine the price for the property for sale.

=>If buyer and bank agree on price and conditions of the contract, the property will be ready for closing.

=> This is hopefully the end of a LOOOONG journey for seller and buyer, unless there are issues, but let’s not go there.

TIPS

  1. If you have the time and conditions are right, you may write a backup offer on  a short sale that is already under contract.
  2. If the listing price requires a full price offer – there is no need to lowball, it’s not going to happen.
  3. Most of the time you will not receive a Sellers Property Disclosure. Having a great home inspector inspect and evaluate the home is key. Don’t expect ANY repairs, instead figure any cost into your offer price. Most short sales are sold AS-IS.
  4. Banks take several weeks or months to make a decision on a short sale. Try to stay up on the process but there is no need to call every day.
  5. Just like with other properties you will need a lenders pre approval letter to give your offer ‘bite’.

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