Kim Daneault
KELLER WILLIAMS REALTY / Metropolitan | 603-345-7783 | [email protected]


Posted by Kim Daneault on 8/25/2019

“Short sales” may have one of the most deceiving names in real estate. Any client who is undertaking the purchase of a short sale property will ask, “Why is this taking so long?” Short sales generally happen due to lapsed payments on a mortgage. In the short sale, the owners take a loss on the property, but it saves them from being foreclosed on by the bank. Many of these sales are circumstantial by divorce, or a sudden change in job. The seller asks the bank to take less money than the amount owed on the house in a short sale transaction. 


If You’re Buying A Short Sale Property


If you have made an offer and the seller accepts it, your dealings are far from over in a short sale. The seller’s bank needs to approve the sale. Since the bank is losing money in the deal, this is where the hold up can be in the entire transaction.


The First Step


The seller’s bank must review the short sale package first. The seller needs to submit a complete picture of their finances to the lender. The seller’s credit score will also be reviewed. A bank would not approve a short sale if, let’s say, the seller happened to have a lot of extra cash just sitting in a bank account. The lender needs to protect themselves.


The listing agent should be on top of all of the paperwork that should be done in order to have the transaction approved. As a buyer, you’ll appreciate a good short sale listing agent. 


Make Sure Everything Is In Order


There’s a lot of paperwork to sign in order to get a house. There’s even more paperwork to sign in order to secure the purchase of a short sale. If just one page of the documents are missing or one signature is left unsigned, the entire process can be slowed down even more. As a buyer, you should confirm that all the required documents have been signed and received. 


Another problem that can occur is that documents quickly become outdated. Bank and other financial statements are a good example of this. By the time paperwork is ready to go through the lender, last month’s bank statement could be completely outdated. The lender will then need an updated statement, holding up the process even more. The seller and agent need to be ready for these circumstances. The faster the lender is responded to, the smoother the process will go.          

 

Remember You’re Working With Two Banks


When you’re purchasing a home that’s a short sale, you’ll need to deal with two banks- your lender and the bank handling the short sale. Be mindful of the timelines that each bank has. If you aren’t, you could be approved hours too late to buy the property, leaving you and the seller to start from scratch. 


Buying a short sale is risky because there is always a greater chance the sale will fall through or succumb to foreclosure due to some kind of circumstances beyond the buyer or the seller’s control. If you have the right realtors on both sides of the table, the process of buying a short sale should go as smoothly as can be expected.      





Posted by Kim Daneault on 10/30/2016

You may think buying a short sale is a good deal and many times it can be a good option. Short sales can also be fraught with complications and often can easily fall apart. Here is a list of things to be aware of so your short sale doesn't become a long shot. • When a house is placed for sale as a short sale the owner doesn't always have the authority to sell the house at the advertised price. The owner hopes the bank will accept that price as a short sale. • The negotiating process is far different than a regular sale. You often will first negotiate with a seller but remember the bank has the final say-so. • You are making an offer to purchase blind because many lenders will not even discuss a short sale with a seller until a purchase contract is in place. There is no guarantee the lender will even accept a short-sale offer. • Short sales often are not short at all. They can be long, drawn-out affairs. Be prepared for it to take months. • Even though the lender may have taken their time on the short sale approval, once approved the lender often require the sale to close within a short period of time. Due to the way many short sales happen, a buyer may have to put out money for a home inspection, appraisal, credit report and application fees paid to their lender and the sale may not even happen. So while short sales can often be a good deal they can also be a long shot. Take your time, do your research and be sure to work with a real estate professional to help guide you through the potential pitfalls of a short sale.







Tags