Real estate investors take an interest in buying properties offered on short sales because they sniff a good deal. However, one must be careful to decide about buying short sales property because the transaction might not as simple as purchasing any typical home, especially concluding a pre-closure within 30 days or earlier can be quite challenging. Most importantly, one must understand that to succeed in acquiring a property on a short sale, the lender must agree to accept a discounted payoff for releasing an existing mortgage. If a seller lists a property for short sales, it shows the seller’s willingness to sell the property at a discounted price, but it does not mean that it has the concurrence of the lender, which the lender must confirm separately.
To learn more about buying short sale property, you can go through Phill Grove review, and the preparative steps discussed in this article should be of some good help.
Check the public records
Before making an offer for purchase, you must find out who holds the title of the property, how much the seller owes to lender/s, and if there is any foreclosure notice filed. The last piece of information should help to figure out the best price to offer. A single lender is preferable because, in the case of two lenders, there might be problems. Unless your offer covers the payoff expected by both lenders, the deal will not come to fruition.
Find an agent experienced in short sale
Short sales are special types of property transactions, and hiring an agent with experience in short sales is essential. You must not take any chance with an agent who has not handled such transactions earlier. Only an experienced agent can protect your interests by stopping problems from cropping up, be ready for surprises, and knows how to expedite the transaction. An inexperienced agent might overlook some important detail or could lack the skills of coordinating the activities to ensure timely deal closure.
Qualifying the property and seller for short sale
A lender will not easily agree to a short sale unless convinced that the seller has no equity and incapable of paying the difference between the amount owed and the sale price. Sellers must provide a hardship letter to the lender and bear the taxes on the amount of debt forgiven that they can never ask the buyer to pay as a condition for handing over the title of the property because it is illegal. A short sale enables payback to the lender, but no money goes to the seller because, in any case, the lender is losing money.
Buyer must all documents to the lender
After the seller accepts your offer, he or she will forward it to the lender through the listing agent for acceptance. Proof of funds and a copy of the earnest money deposit, as well as pre-approval of a loan of the buyer, are documents that the lender will ask for.
Buyers must give a timeframe to the lender for responding, after which they will be free to cancel the offer. Despite not receiving any money from the transaction, sellers must pay the commission from the sales proceeds.
November 18, 2019