Buyers
pursue short sales to get a good deal. So when you see a price listed for a home
that you think is too low for the neighborhood, before you jump on that
price ask your New Visions Realty real estate agent to call the listing
agent to find out if the home is a short sale or a foreclosure. Because you might want to think twice about making an offer
on a pre-foreclosure, short sale home due to many unforeseen problems. It's not
as simple as you may believe, and very few can close in 30 days or less.
What is a Short Sale?
A short sale means the seller's lender is accepting a
discounted payoff to release an existing mortgage. Just because a property is
listed with short sale terms does not mean the lender will accept your offer,
even if the seller accepts it.Be
aware that the seller will need to be in default, to have stopped making
mortgage payments, before a lender will consider a short sale if not a VA
secured loan. Also, the seller might have over-encumbered, owe more than the
home is worth, so a discounted price might bring the price in line with market
value, not below it.
Check
the Public Records
Do
your research before making an offer to purchase. Your New Visions Realty agent
can find out who is in title, whether a foreclosure notice has been filed and
how much is owed to the lender(s). This is important because it will help you to
determine how much to offer.
If
there are two loans, you could have a problem. The first mortgage lender's
position is protected by the second lender, unless the second lender does not
want to foreclose. If a seller owes $160,000 on the first and $40,000 on the
second, offering $160,000 leaves nothing for the second. The first will need to
give something to the second to gain its cooperation.
Hire
an Agent with Short Sale Experience at New Visions Realty
LLC
It's
one strike against you if the listing agent has never handled a short sale, but
it's even worse if your own agent has no experience in that arena. You need an
experienced short sale agent.
New Visions Realty or NSIC will appoint an agent with
experience in short sales will help to expedite your transaction and protect
your interests. You don't want to miss any important detail 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. Click here for
short sale help .
Click here for Buying Short
Sales.
Prepare
the Seller for Lender Demands
A
lender is not going to agree to a short sale unless the seller has no equity and
is unable to repay the difference between your sales price and the existing
loans. Sellers need to provide a hardship letter to the lender. Sellers may also
owe taxes on the amount of debt that is forgiven.
Submit
Documentation & Purchase Offer to Lender
Once
the seller has accepted your offer, send it to the lender for approval. You do
not have a deal until the lender accepts. Also, send the lender a copy of your
earnest money deposit. Do not be astonished if the lender asks you to increase
it.
In addition, the
lender will want to see that you have your own loan available and you are
pre approved. Send a pre approval letter to the lender. It will help if
your agent sends a list of comparable sales that support the price you are
offering to pay for the home.
Give
the Lender a Deadline
Make
your offer contingent upon the lender's acceptance. Give the lender a time frame
in which to respond, after which, you will be free to cancel. If the lender is
under no pressure to make a decision, the paperwork will sit on an underling's
desk.
Some
lenders submit short sales to committee, but most can make a decision within two
to three weeks, providing you have submitted the offer to the individual in
decision-making capacity. Get a name and phone number for the appropriate
contact at the lender. Don't send an offer blindly to a
department.
Expect
Commission Negotiations
The lender is actually the entity paying the commission. The
reason is the seller is not receiving any money with which to pay a commission.
Since the lender is losing money, the lender will likely negotiate the
commission directly with the listing broker at New Visions Realty LLC, who will
then share the commission with Buyer agent that sells the property.
Click here for more information
Reserve
the Right to Conduct Inspections
Generally,
the lender will not pay for customary items that a seller would pay. These
include home protection plans for the buyer, buyer credits of any kind and pest
/ termite inspections. A buyer will be asked to purchase the property "as is,"
which means no repairs.
It
is extremely important that a buyer obtain a home inspection and pay for other
types of inspections such as pest, roof, sewers, septic tanks, chimney or
fireplace inspections. Do not waive your right to obtain these inspections and
make your offer contingent on approving them.
Ron Kimball, REALTOR. "A Internet Realtor"
Serving all of Kitsap & Pierce & Mason County,
WA
New
Visions Realty LLC
Voice
(360) 876-4741 | Fax (360 ) 876-4843 | Toll Free (800) 710
2507
E-mail: ron@ronkimball.com
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