DID YOU KNOW? Short Sales in Leesburg and Greater Loudoun County
On a positive note about short sales in this day and age, as time passes I see the expediting of short sales getting better. Agents are more educated and are preparing their short sale sellers much better for the process. Lenders are more organized across the board and approvals are being done in a more timely manner (2-3 months as opposed to 6-9). Good news aside, there will always be "gotchas" the short sale consumer will need to have an awareness of.
Fees, fees, fees. In the course of a short sale transaction in Loudoun County, the underlying assumption is that the seller has (retirement funds aside, those are protected) no funds available to continue paying on mortgage or maintenance of the property. Therefore, there are fairly strict guidelines in place for what a lienholder(s) will and will not pay. Agent commissions - check, these are covered. However items such as title and survey, unpaid utility bills or outstanding HOA dues likely will not be covered as part of the settlement.
Home inspection. Wouldn't it be great if all parties agreed that the subject short sale property was a "go" at the moment the approval letter arrived? Curbing the surprise of a cracked foundation, leaky roofs and an HVAC system on the fritz early on is possible with an asap home inspection. It is encouraged to have the home inspection completed immediately after ratification so all parties are in full agreement that they are moving forward to close the transaction.
Contingency removal. With a short sale transaction in Loudoun County, contingencies need to be ticked off just as they do with any other transaction type. Get HOA/condo docs ordered immediately at ratification, schedule the home inspection, see if the buyer's lender will allow the appraisal be done right away - and for goodness sake make sure the buyers' lender has absolute confidence in their ability to purchase. How quickly can their file get into the hands of the lender's underwriting team? Having a plan to manage contingencies helps to solidify the closure of the transaction.
Establish a communication schedule. It will take a few weeks for a short sale packet to be received by the lienholder(s) and assigned to a processor, but how often will the parties communicate after ratification to make sure everyone's still on board with seeing the transaction through? I recommend the listing agent calendar a bi-weekly update with the assigned negotiator, and manage the updates with the purchasing agent.
HOA and Condo Associations must be in good standing. A seasoned short sale listing agent will perform due diligence with regard to the state of the subject property's HOA or condo association. If there are any signs of distress (e.g. no reserve funds, a disproportionate amount of owner/occupants versus investors, deferred maintenance, a large number of resident unpaid dues), a lender's underwriting may deem the loan too risky to make.
If you are in the process of exploring if a short sale is right for you, it's important to have a frank discussion with a real estate professional who can advise without overstepping their boundaries. BEWARE of anyone holding a REALTOR® license dispensing advice on legal and/or financial matters. Know that real estate agents are authorized to give an overview of the short sale process, and should be referring all legal and financial-specific questions to our virtual team members who are educated and licensed to take accountability for their guidance.
For more information on any of these specific points, or to schedule your private and confidential short sale consultation for your Loudoun County home, call or contact me today.