You are out in the marketplace. You are looking around at short sale properties because they fit your budget. You are told that a short sale isn't easy to purchase. Now you are wondering if you have made the right decision to move forward and spend your time, pin your hopes on dreams of owning a home.
Here's what you need understand about a short sale:
A short sale is a"pre-foreclosure" whereby the value of the property is less than the amount owed to the current bank. The bank is allowing the property to be sold for less then what is owed on the mortgage.
Short sales are different then the "standard" sales when it comes to closing costs. The bank will be looking for a net selling price. The net selling price is the amount the bank is willing to accept which will have to include all closing costs, commissions, outstanding liens, tax liens, water bills, attorney fees, etc.
The property is sold in "as is" condition. This is where you must have a wtachful eye, a good Realtor that understands as much about due diligence and construction, and have a Realtor who has skilled/license tradesmen that will be able to review the home for you before you put your offer in to the Realtor, which the seller has to sign and then it goes ultimatley to the bank for their decision.
The stronger the down payment, the better your chances. A pre-qualification letter will not fly with any bank when it comes to purchasing a short sale. You are just wasting your time as well as there time.
You need to have your Realtor do due diligence on the property to find anything that would be a detriment to your findings at the closing table.
I had a short sale closing where the Listing Agent didn't disclose a $43,000 lien against the seller! I negotiated that lien at the closing table and my buyer didn't have to pay for it. It all comes down to having a Realtor who understands short sales and isn't learning how to do them on your time.
Hope this helps a little.
DISCLAIMER: The opinions rendered are those of the writer and not of Keller Williams. Barb Van Stensel is an expert in short sales as well as is a consultant in loan modifications. For more information about Barb's forums on buying and investing in real estate, visit http://www.BarbVan.com
Photo courtesy of Microsoft Office.