Revisiting Short Sale Basics

By
Real Estate Agent with The Palm Beach Group

If you check the news lately, you cannot help but see how distressed properties sales are getting a hefty share of the market. In fact, for the first quarter of 2011, 28 percent of the total home sales activity involved properties in distress including short sale.

For those of you who are thinking of investing in real estate and attracted to the benefits offered by short sale homes, you should at least refresh your memory with these short sale basic information.

Who Dictates the Sale Price?

The price of the property is actually the amount agreed by both the seller and the buyer and established during the bidding and negotiation part of the sales transaction.  Some people make the mistake of thinking the lenders dictate the selling price. This is not the case. Their decision only involves accepting or rejecting the amount in the short sale proposal. This is perhaps why it is important the seller justifies the amount in their proposal to make it easier for the bank to accept it.

There is also what is referred to as approved short sale, wherein the bank has already revealed the amount they will accept. Buyers usually look for these short sale transactions since they are almost always quick.

How Long Does Short Sale Take?

Short sales, despite their name, take time. If you are the seller, make sure all documents are prepared properly and you are working with a professional short sale Realtor to ensure everything goes as smoothly as possible. On the other hand, if you are the buyer, you have to be patient. You might even be tempted to look at other properties. It would be wise to wait a while.

How to Ensure Closing

Some buyers make the mistake of not preparing the mortgage paperwork once escrow has been opened resulting to the delay in closing. It would be smart to make sure everything has been prepared a couple of days before the actual closing date. If there are problems, you should ask the bank for an extension but do this as soon as you know you are going to be late and not on the actual closing date.

Depending on your preparedness, a short sale can be simple or problematic. So, it is really up to you.

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