Date post: | 09-May-2015 |
Category: |
Real Estate |
Upload: | lashea-miller |
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SHORT SALES
What Every Buyer Needs to Know About Short Sales
What is a short sale?
• A short sale means a lender
is willing to accept less than the total amount
due on the mortgage.
FACT
• A lender will approve a short sale to avoid the high costs of a foreclosure.
FACT
• Some lenders will allow a buyer to purchase a home for less than the mortgage balance while in the pre-foreclosure stage.
FACT
• THERE ARE 3 STAGES OF FORECLOSURE:
– PRE-FORECLOSURE– FORECLOSURE– POST-FORECLOSURE
Qualifications for a Short Sale
– The mortgage is in the process of default
– The seller has no assets
– The seller is experiencing economic problems.
– The property market value has declined.
Types of Hardship
– Unemployment– Divorce– Medical Emergency– Sudden Illness– Bankruptcy– Death
Steps to Taken for Short Sale
• Seller signs a listing agreement with a real estate agent to sell the property as a short sale which is subject to the lender’s approval.
Steps to Taken Short Sale
• Listing agent finds a buyer who makes an offer for less than the amount of the mortgage.
• Seller accepts the buyer’s purchase offer.
• The lender accepts the buyer’s offer.
• Once all the contingencies are met and due diligence is performed.
• The buyer delivers the funds
• The lender releases the lien
• The seller delivers the deed.
What should a buyer accomplish?
• Obtain a real estate attorney
• Make the offer contingent upon a property inspection and the lender’s acceptance of the offer.
What should a buyer accomplish?
• The buyer should allow the lender a specific amount of time to accept the offer.
• If the lender does not accept the offer within that amount of time the buyer should be able to withdraw the offer.
Why a short sale may not be beneficial
– The seller paid too much originally for the property.
– Home sells in “as-is” condition.
– Transaction takes to long to close.
Why a short sale may not be beneficial
– Lender can modify the terms of the sale at
anytime
– Higher than normal closing cost
Things to Remember
• It may take between 30 to 90 days to close.
Things to Remember
• The seller can accept the
offer but the lender must
approve the short sale.
QUESTIONS
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