In Today's Market one of the major components are Short Sales. I am going to outline what a Short Sale is and the process typically involved when purchasing one. A Short Sale is when the owner of the home has come upon some situation that no longer allows them to afford their home. The owner has to prove financial hardship for the Mortgage Company to allow them to do a Short Sale. The listing agent and the owner list the property at what they believe to be current Market value. The owner has his needed paperwork filled out and ready for the mortgage company to review. When you submit an offer on a Short Sale you do so as usual - but with a few added addendums that become part of the total contract. One is an AS-IS Addendum which states that you are buying the house AS - IS and that no repairs will be done. YOU WILL STILL GET A HOME INSPECTION AND EVALUATE THE PROPERTY TO THE FULLEST. Second Addendum is the Short Sale Addendum that explains that the Owner and Mortgage Company have to have a meeting of the minds to complete the transaction. The owner may accept your offer and if they do you will receive a contract signed by the seller. This is step one in the process. After the owner accepts your offer it will be sent to the Mortgage Company if it is the Primary offer. It is not until THE FIRST OFFER on the property is submitted to the Mortgage Company that the Short Sale process actually begins. This is when the Mortgage Company gets involved. This process takes typically from 60-90 DAYS MINIMUM. It is NOW that the bank will investigate if the owner qualifies for a Short Sale. It is Now that they will order BPO's to determine the current Market Value of the property. All of this takes time and it is necessary to be Honest with yourself. DO you have the ability to wait patiently for a positive outcome. Patience is the key whether you are the Seller or Buyer in a Short Sale. Many Short Sale Listings go thru a process of having an offer, working slowly thru the mortgage companies, only to have a buyer go away. There are many reasons a buyer can go away: they got tired of waiting, the financing fell thru, they had a sudden job layoff etc. What this can mean to you as a buyer is that when you look at a Short Sale find out where the listing agent is with the process. (that is something your Buyer's Agent will do) By being informed you can make the best decision about what Short Sale if any is right for you. Once you have started down the path to purchase a Short Sale Property, you have the ability to retract your offer in writing if necessary. You need to retract your offer in writing BEFORE any Official Acceptance of your offer from the Mortgage Company. Occasionally when the listing agent has worked thru an offer and the buyer suddenly drops out a new buyer can slip in finish a purchase in a relatively quick timeframe. The Buyer's Timeline for a purchase of a Short Sale once receiving the Official Agreement Notice is straightforward. Your Inspection Period will start counting, and unless otherwise noted you will be expected to close the transaction 30 days after Notice. I hope all of this has been helpful to you as a buyer. I am Ready, Willing and Able to Help You Navigate Safely thru the Purchase of a Short Sale. |