What is a Short Sale?
A short sale occurs when the seller’s lender decides to accept a discounted payoff to relieve an existing mortgage. A seller does not need to be in default before a lender considers a short sale. A lender may consider a short sale if the value of the home has fallen
Do Your Research
Make sure to do your research and check the public records before making an offer. Your agent can find out who is in title, whether a foreclosure notice has been filed and how much is owed to the lender. This will help you figure out how much to offer.
Hire an Experienced Agent
An agent who has experience with short sales will help to expedite the process and protect your interests. You don’t want to miss any important details due to inexperience or find out your transaction is not going to close on time because no one has followed up in a timely manner.
Learn the Facts About Short Sale Commissions
Regardless of the what the seller has agreed to, it is actually the lender that decides the commission. The reason for this is that the seller never sees any of the money from the transaction. Since it is the lender who you are paying, they will negotiate the commission directly with the listing broker who will in turn share the commission with your agent. Your agent’s fee may not be completely covered by the lender and unless they waive the difference you may have to pay out of your pocket.
Make Sure to Conduct Inspections
Usually, the lender will not pay expenses that are customarily covered by the seller. These include home protection plans for the buyer, buyer credits of any kind and pest/termite inspections. A short sale will be sold “as is,” which means no repairs. It is extremely important that a buyer obtain a customary home inspection.