What is a Short Sale? A short sale means that the seller’s lender is accepting a discounted amount to release the excising mortgage. When dealing with a short sale, you are dealing with the Seller and the Lender. Both parties have to accept the offer.
Short sales don’t always mean that the seller has defaulted on the loan. As property values have declined, some houses are agreed to be sold as short sales because the value has dropped. The owners are over-encumbered, and owe more than the home is worth. So a bank’s “discounted” price, may bring the home’s value in line with what the current market value is- and not less. That ‘s why sometimes we see short sales and expect them to be a lot lower than the rest of the homes on the market - but a lot of times they are not.
If you have found a wonderful short sale property that you simply MUST have, call your agent and get a list of comparable sales. Make sure you are aware of the prices of PENDING sales as well. Short sales take an average of 2-3 months to close, and your pending sales market research, will become your comparable sales at time of closing.
Some short sales are priced very low and receive multiple offers. Price your offer closer to market value.
Make sure the property you want to purchase is represented by an agent that is savvy in short sale process.
Find out if the listing agent has received all of the qualifying paperwork; Sellers’ hardship letter, Tax returns, W-2’s payroll stubs and financial statements. These questions and preparations will help the process go a lot more quickly, and help you get into the house you want.
by Rachael Maddalena -Tara Properties NW
Check out the inside of this Upside down house at Lemon Drop.com
"Die Welt Steht Kopf" (or "The World Stands on Its Head"),just opened as a tourist attraction on a German island.
Rachael, Some good points for people to know.
Rachael, Some good points for people to know. Thanks for sharing.
Yes, good points! I also advise my buyers not to get their hopes up too much, there have been such let downs sometimes with the short sales:(
Tara & Rachael, Indeed asking the listing agent if they have collected the seller documents is critical. Too many agents take the listing and then cannot submit the offer because they are still waiting on seller documents. All seller documents must be in my possession prior to taking a listing.
HI Tara, I love the picture of the upside down house! Thanks for sharing these great points on short sales. What a great education tool for your clients.
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"you are dealing with the Seller and the Lender. Both parties have to accept the offer."
Actually, both parties have to accept, but parties are the Buyer and the Seller. The Lender IS NOT a party to the contract. They have the right to Approve, Counter, but not to accept
Hi guys & gals. Thanks for your feedback and comments. I always appreciate it! Hope all is well in your lives.
~Tara