Short Sales from the buyers eyessss

What is a Short Sale? From the Buyer’s eye… If you are considering buying a home during the current market of 2009, you might run into homes on the market, which are a “Short Sale”. A short sale maybe the opportunity you have been waiting for to buy a home in today’s market conditions. A Short Sale to a buyer means you will need patience, patience and patience! Why both you ask? Because a short sale is when the seller of the current home is selling their property for less than they owe and they must receive a bank approval to accept these types of reduced offers. As a buyer, you need to be patient during the process and understand that the owner conditionally accepts the offer, prepares contracts and submits the entire package to the bank holding there mortgage and than waits! What are they waiting for? The current owner is waiting to see if the bank will accept the offer presented, based on an analysis of the market value of the home and the present homeowners ability of repayment. A homeowner has the right to sell the home at any price, but it is the homeowners responsible to pay off all debt to the bank, so that you the buyer can receive free and clear marketable title with no past liens attached to the property. So you see it is still in the hands of the bank to decide to release the homeowner of the debt differential. The homeowner needs to submit to the bank a current financial picture and explain there hardship position. This takes time and the banks are inundated with these requests. Therefore, patience is critical for the buyer. The bank reviews the application and if they feel that a possible hardship exists, they will than have an appraisal of the home and the value of the loss to the bank. If the bank feels that it would be in their best interest to accept the offer they will, if not they will turn the offer down. So when making an offer on a short sale make sure you are offering reasonable current market value of the property, because if it is a bargain in today’s market the bank will let the property foreclose and sell it after it owns the home. Buyer’s attorneys suggest that the down payment be of a smaller value than the normal 10% at contract signing. This is due to the fact the process can take as long as 3 to 6 months for the bank approval. Until the bank approves the offer it would be wise to hold off on a home inspection, because it could be wasted dollars. Make sure the attorney that is representing the buyer has an opt out provision that if they do not have an accepted offer from the bank by a certain date or time frame that the buyer can be fully refunded their down payment. Finally, if your offer is approved be ready to move quickly! Get your home inspection done and be ready to close within approximately 30 days. I hope this opens your eyes to a Short Sale.
Sharon Tucker, ERA Tucker Associates, Inc.
www.tuckerera.com
845-623-5200