The Truth About SHORT SALES for both Buyers and Sellers

By
Real Estate Agent with Luxury Partners Realty

The Truth About Short Sales

 

There  is no doubt that a short sale is considered a better alternative than foreclosure - it's not quite as tough on one's credit rating.  As a result, short sale transactions are becoming more and more prevalent.  Investors who want to purchase a home at a dramatic discount are jumping in head first, but the entire short sale process can be tricky and working with a professional real estate agent who is experienced in short sales is an absolute must. Understanding how to successfully complete this type of transaction isn't something the uninitiated can easily bring to fruition.  It's difficult and involves a great deal of patience, skill and knowledge.  I cannot stress how important it is to work with a Realtor who has completed a short sale.  Without prior experience, you may just be wasting your client's time. As a result, whether you are a buyer or a seller, here are some things to consider.

One must prove financial distress   If you're a homeowner considering listing your home as a short sale, you must prove "financial distress" -- that you are not able to make your mortgage payments or pay off the difference between the current value of your home and your mortgage amount.

 Time IS NOT of the essence!   Unfortunately although the clock is ticking and the foreclosure process may be looming closer and closer, the approval time for a short sale is typically very slow in coming. It could take as little as 45 days or as long as 6 months. So, if this is something you are considering, begin the process early!

The process may not always be fair   Many lenders wait a minimum of 45 days to see how many offers come in and then work with the highest bidder, rather than negotiating each offer as it is received. This creates a very uneven playing field for a buyer.

Buyer beware   There are many things you should know when considering a short sale for purchase. Has the property been approved for short sale? Is there a second mortgage on the property with a different lender? Are there offers already on the table? Has a foreclosure date been established? And if you make an offer on one, don't start spending money on appraisals, inspections, etc. until you have been advised in writing from the lender that your offer has been received. Many lenders wait a minimum of 45 days to see how many offers come in and then work with the highest bidder, rather than negotiating each offer as it is received. This creates a very uneven playing field for a buyer.

Remember, there are people who really really care.  Together you and an experienced Realtor can find solutions that can resolve these issues.....just ask.

Boca Real Estate Group - Jill F. Golden, PA and Laura Richter, P.A.

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