Short Sales in Branford Connecticut and New Haven County - The Process Starts - Part 4

This series about Short Sales in Branford Connecticut and New Haven County continues as we further explore what happens when an offer has been made on a short sale listing.  This article is of important interest to buyers who are considering making offers on short sales.  As a buyer you should know what is included and your agent should understand and be able to follow the process of making a short sale offer.

To fully understand and be up to date about short sales in Branford Connecticut and New Haven County you may want to consider reading the other 3 parts of this series:

Short Sales In Branford Connecticut and New Haven County - An Alternative to Foreclosure - Part 1

Short Sales in Branford Connecticut and New Haven County - Do You Qualify? - Part 2

Short Sales in Branford Connecticut and New Haven County - What You Need To Know - Part 3

Let us suppose for this post that the seller understands what a short sale is, has met the qualification test, their Realtor has experience doing short sales and the seller and their Realtor have all the documents put together that are required by the lender.

Everything is now set to receive an offer from a buyer.  Your buyer's agent should know how to help you understand what the process is from both the seller and buyer side of the transaction in order to have a smooth transaction.

The primary and most important thing to know about the short sale is that the seller still owns the property and is the final decision maker on which offer will be accepted.  A seller has mortgaged their property and the note holder or the note servicer is the lender.  The bank is not the owner of the property.  While a Lis Pendens might have been recorded and foreclosure measure may have started until the property is sold at auction or on the courthouse steps, the owner of record is still on the town records.

A seller can consent to an offer from a buyer but since the offer will be less than what the seller owes, there has to also be approval by a third party to the offer.  The third party is the lender to whom the seller owes their mortgage to.

The property will be required by this third party lender to be sold in "as is" condition and approve all the fees associated on the closing side of the seller.

As the buyer it will be necessary for you to prepare a good presentation with your offer to the third party lender.  You agent will have all the required documents to prepare an Offer to Purchase along with any required short sale addendums.  You will need your lender's approval letter if you are obtaining financing for this purchase. 

Make certain you have been approved for your loan.  This means that you have filled out a loan application, your credit has been checked and you have furnished the required documents to your lender such as tax return and W-2's.  If your offer is accepted it is more than likely that the third party lender will require a closing with 3-4 weeks of their acceptance of the terms and the amount of the short sale pay off.

You are best served if you choose a mortgage company that deals with short sales and can get your loan through underwriting in the shortest amount of time.

The moment the third party lender approves your offer your earnest money deposit needs to be immediately placed into an escrow account.  If you are making your earnest money deposit with a personal check it may take 10 to 14 days for that check to clear so you might consider getting a cashier's check so there is not hold up at closing for funds that have not cleared yet.

You should submit a handwritten note along with your offer explaining to the third party lender why you would like to move into the home.  An example is the story of a single mom who was trying to get a home for her children and that the offer she made was the highest she could go.  She got the home even though there were multiple offers on the property.

Your agent should strengthen your offer with comparable sales in the area along with any other relevant supporting market documentation.

The next article of our Short Sales in Branford Connecticut and New Haven County Series will go over how to decide what to offer on a short sale, myths and truths about offer prices on short sales.

Mortgage Assistance Relief Services Disclosure

RE/MAX Alliance is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.  If you stop paying your mortgage, you could lose your home and damage your credit rating.  RE/MAX Alliance is not engaged in the practice of law nor gives legal or tax advice.  It is strongly recommended that you seek appropriate professional legal counsel and tax advice for any real estate transaction.

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