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Don't Be Scared...of Short Sales

By
Real Estate Agent with Rose & Womble Realty

The latest in horror shows....The Short Sale!


   If you were to read the press and speak to some real estate agents or buyers, you would hear exclamations of fear and trepidation.


What is a Short Sale?  


 The sale of a home by a party that needs to move that owes more on the home than the present market(buyers) will pay for the home

 

 

 

 

Yet, no home purchase or home sale needs to be a "fearful" venture.  Though no two home purchases/sales will ever be the same, it is true that a Short Sale brings extra wrinkles to the process.


The biggest wrinkle is that the Bank(s) holding the mortgage liens must approve the sale price and terms that the ready and able buyer and the ready and able seller agree upon.  A second wrinkle is the seller's lack of funds to do any repairs; home is sold "as is".  Typically, a home inspection is allowed but only as a "check point" for the buyer as no repairs will be completed.

 

 

Thus, a buyer or seller must be prepared for:


    A:  Probable slow response for the bank's approval of the contract

    B:  Additional forms or submissions of documents at the

             time a contract is ratified by the buyer and seller.

    C:  Conflict between 1st Lien Holder and 2nd Lien Holder(s)

    D:  Contract falling through due to home inspection noting

             major system faults in home or the buyers/sellers 

             unwillingness to accept bank's terms of sale.


 

Recognition of these factors plus proactive steps by a buyer or seller will relieve much of the stress and "pain" of the transaction.


Steps the Seller can take:

     1.   Contact Bank immediately for Short Sale package, gathering 

               all the information required.

     2.   List your home with an SFR(Short Sale and Foreclosure 

               Resource) certified Realtor. 

     3.   Be honest with Realtor regarding mortgage(s) owed so that

               a "possible short sale" can be recognized and addressed.

     4.   Contact and secure the services of a Real Estate Attorney

     5.   Consult with your accountant regarding the tax implications

     6.   Assist in all matters that any party requires in a timely

               manner.


Steps the Buyer can take:


     1.  Search for homes with an SFR Realtor.

     2.  Recognize that Short Sales will require a longer than

            normal closing time.

     3.  Recognize that Short Sale doesn't always equal "Bargain".

            It is not unusual to see a Short Sale priced higher than

             the market will bear.

     4.  Recognize the Seller may agree to a "low ball" offer but

            the Bank may reject the "net proceeds" it will receive.

     5.  Have Title Work completed prior to submitting an offer to

            verify the liens on the property(your Realtor can ask

            the Seller's Realtor but it is possible that Realtor doesn't

            have the whole story).

      6.  Read all of the Bank's addendums to the Sales Contract!!!

             Submit to your attorney anything you don't understand

              or can't believe you must adhere to.


So don't run "Scared"...... Be Prepared!!!


Questions???  


 Ever buy a short sale?? 

                                        WHAT DID YOU EXPERIENCE???

Did you ever need to sell short?


Posted by

Bryan Cerny, Associate Broker, GRI, ABR, SRES, SFR

Rose &Womble Realty, Chesapeake, VA

Licensed in VA & NC

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