What's a Short Sale
Information provided by
Pablo Lopez of
Century 21 Elite Realty
What's a short sale you might be asking; if you are a home buyer looking to buy your dream home a short sale can sometimes get you an excellent deal. But what's short about a short sale? "Nothing in the process" That's right the process is not short at all most of the time. I have helped buyers and sellers to contract, negotiate and navigate the short sale process at times from a few months to sometimes nail biting edge of the seat sitting 12-months. That's right 12-months! if you are looking to contract that beautiful dream home and you are in a big hurry to start remodeling a short sale might not be for you. But if you have the patients to wait and deal with any contingencies that might arise from the process a short sale can earn you that beautiful home that you been dreaming about for cents to the dollar at times.
What's a Short Sale?
By definition the
short in short sale refers to the mortgage lender servicing the current mortgage note. A short sale happens when a homeowner proposes to the lender to accept less that what is owed to them on a mortgage collateralize by real property. There are many reasons that can contribute for a short sale to happen and/or a homeowner to consider short selling their home.
Some of the hardships include but not limited to:
- Financial Hardship;
- Falling Market Values;
- Loss of Main Household Provider;
- Illness.
Questions you might ask when entering in a short sale transaction as a buyer:
- Has the short sale process started?
- Has the lender approved or declined any previous short sale offers?
- Is the property mortgaged to more than one lender?
- Does the property need any repairs prior to closing?
- Does the property meet the local building codes and can you obtain a certificate of occupancy?
- Are there any underground fuel storage tanks?
- If Septic System and/or water well- Does the septic meet the town and EPA requirements?
- Are there any open construction permits or violations?
Watch for deal breakers, get a home inspection early in the process; a home inspection is an investment that can save you time and disappointments. Know when to walkaway from the deal, distressed homeowner are unable to perform any repairs to make the deal happen. The lender holding the note is not going to perform any repairs, they are already loosing 100s of thousands of dollars. As-is-Condition buyer responsible for all necessary inspections, this is something that you are going to encounter in most short sale listings. As-is-condition doesn't mean that you have to take it, you always have the option to walkaway from the deal should there be any major defects that would stop you from closing on the transaction or complying with local building codes. Always retain an attorney to represent you and counsel you on any real estate transaction.
Making a short sale offer
Making a short sale offer is no different than making an offer on a traditional real estate transaction. My experience is that highest and best always leads to a successful transaction. Obtaining a
comparative market analysis can help you with the decision on what to offer. Learn what the
local market trend obtain at least four similar sold listings that sold withing the last three to four months six month on a very slow market. At least four similar available competing homes that are currently been offered for sale. Give the most wight to the sold listings look at the List price vs the Sold price. Compatible listings should be like the home you like ins size, number of bedrooms and amenities. This should give you a very good idea what buyers in your desire neighborhood are willing to pay for similar homes. Yes there are many other factors that go in to play when making the decision; like condition, location, amenities and of course how much you like the home.
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