Buyer Short Sale Realities
Setting Realistic Expectations for EVERYONE involved!
Short Sales Take Time!
- The numerous parties, policies, negotiations and other factors involved in a short sale make it a time-consuming process.
- Short sale offers must be approved by several parties, including all investors, lien holders, and mortgage insurers.
- BE committed to completing the Short Sale process.
Cash Buyer or Not Really?
- Cash buyers are not given preferred treatment unless the Investor REQUIRES a cash buyer, because in most cases Investors are concerned with the loss, not the source of proceeds.
- Be sure CASH means Cash and NOT Hard Money or any other source. If it’s Hard Money, just say so! Hard Money Lenders often have down payment requirements and valuation requirements that could later kill the deal. Cash Buyers are expected to settle often times within 15 days of Short Sale Approval.
Purchasing Property at Fair Market Value
- Submit your Highest and Best Offer the first time. Investors hope to recoup as much of their investment as possible, so unreasonably low offers are more likely to be rejected.
- Valuations (appraisals, BPOs) expire and must be valid through closing. Some investors may require an updated valuation every 90 days.
Closing Costs and Fees Typically NOT Paid or severely reduced:
- Closing Cost Credits are not always approved. Make sure you are prepared to settle WITHOUT closing help.
- Escrow Fees (water, etc.)
Complete Requested Tasks Promptly
- Provide complete name, current address, phone number, and first 5 digits of your social security number for Short Sale Lender.
- When asked to submit documentation or respond to a request by the negotiator, please do so immediately. Most short sale tasks are time-sensitive and can delay or even halt the process. The short sale process cannot move forward until all required documents have been received and submitted.
What if the House I Want Needs Repairs?
- Don’t wait to order your Home Inspection. Since short sale properties are typically sold As-Is, a thorough, professional inspection will give you the information you need to determine whether or not you need a rehabilitation loan, such as an FHA 203(k) renovation loan, that combines the cost of the home purchase with the cost of repairs into one loan.
- Fully complete and accurately fill out Sales Contract with all appropriate Addendums signed, initialed and dated by both you and the Buyer (Sellers name must match what’s on the current Deed). All information must be consistent!
- Wet signatures are a MUST, NO electronic signatures.
The Foreclosure Process Works Parallel to the Short Sale process
- In most cases the foreclosure process continues during the short sale process
- Investor/State policies pertaining to foreclosure postponement can vary and change over time.
- Foreclosure sale date postponements are NOT guaranteed.