Home Buyers have been hearing a lot about Short Sales these days. Do you know what a Short Sale is? Purchasing a Short Sale is different than the “normal” buying process. Put simply, a Short Sale is the sale of real estate in which the proceeds (or total amount derived from the sale) are less than the amount owed to the Lender. If the Seller doesn’t have a means to make up the difference between what is owed and the sale price they must ask the Lender for approval to accept less than what they owe. These tough economic times coupled with declining market values are a perfect storm for Short Sales. It most often occurs as a means for both borrower and lender to avoid foreclosure which is costly for the Lender and results in a catastrophic loss in the Sellers credit rating. The Seller is required to provide documentation of their financial hardship.
Patience is a Short Sale Buyers most important tool! This process ALWAYS takes more time than a normal purchase. Here are some pointers to help make your Short Sale purchase as pleasant as possible.
1) Choose a Realtor who’s got experience with this type of sale. This can make the difference! Your agent should do some research and suggest an appropriate offer because Banks don’t just give away real estate.
2) Get Pre-Approved by a reputable Local Lender and submit your Letter with your offer. I’ve never seen a Short Sale where the Bank didn’t require a Pre-Approval Letter from the Buyer.
3) Properties offered as a Short Sale are typically sold in “As-Is” condition, owners usually can’t afford to make repairs. Your Realtor should include an Inspection Contingency as part of your Purchase Offer. Have a qualified Home Inspector inspect the property. If the Inspector finds a major problem you weren’t aware of you can withdraw your offer or move forward with the knowledge you’ll have to address it.
4) Try to keep the Seller involved in the transaction! This is important. Good communication from a polite, cooperative Seller can lead to an understanding and more forgiving Bank.
One last thing that’s required from the Buyer, beside all the paperwork necessary, is Persistence! Be Persistent and Patient. Some Lenders take longer than others and they all have different procedures. Make sure your agent follows up regularly and keep pushing the process. Don’t hesitate to call, text or email me for more help with Short Sales!
Edwin J. Maldonado, ABR, GREEN, GRI
NYS Licensed Real Estate Broker-Associate
Murphy Realty Group / 845.338.5252
845.389.8555 (Call or Text)