SHORT SALES What Every Buyer Needs to Know About Short Sales

What is a short sale? A short sale means a lender is willing to accept less than the total amount due on the mortgage.

A short sale means a lender

is willing to accept less than the total amount

due on the mortgage.

FACT A lender will approve a short sale to avoid the high costs of a foreclosure.

A lender will approve a short sale to avoid the high costs of a foreclosure.

FACT Some lenders will allow a buyer to purchase a home for less than the mortgage balance while in the pre-foreclosure stage.

Some lenders will allow a buyer to purchase a home for less than the mortgage balance while in the pre-foreclosure stage.

FACT THERE ARE 3 STAGES OF FORECLOSURE: PRE-FORECLOSURE FORECLOSURE POST-FORECLOSURE

THERE ARE 3 STAGES OF FORECLOSURE:

PRE-FORECLOSURE

FORECLOSURE

POST-FORECLOSURE

Qualifications for a Short Sale The mortgage is in the process of default The seller has no assets The seller is experiencing economic problems. The property market value has declined.

The mortgage is in the process of default

The seller has no assets

The seller is experiencing economic problems.

The property market value has declined.

Types of Hardship Unemployment Divorce Medical Emergency Sudden Illness Bankruptcy Death

Unemployment

Divorce

Medical Emergency

Sudden Illness

Bankruptcy

Death

Steps to Taken for Short Sale Seller signs a listing agreement with a real estate agent to sell the property as a short sale which is subject to the lender’s approval.

Seller signs a listing agreement with a real estate agent to sell the property as a short sale which is subject to the lender’s approval.

Steps to Taken Short Sale Listing agent finds a buyer who makes an offer for less than the amount of the mortgage.

Listing agent finds a buyer who makes an offer for less than the amount of the mortgage.

Seller accepts the buyer’s purchase offer. The lender accepts the buyer’s offer.

Seller accepts the buyer’s purchase offer.

The lender accepts the buyer’s offer.

Once all the contingencies are met and due diligence is performed. The buyer delivers the funds The lender releases the lien The seller delivers the deed.

Once all the contingencies are met and due diligence is performed.

The buyer delivers the funds

The lender releases the lien

The seller delivers the deed.

What should a buyer accomplish? Obtain a real estate attorney Make the offer contingent upon a property inspection and the lender’s acceptance of the offer.

Obtain a real estate attorney

Make the offer contingent upon a property inspection and the lender’s acceptance of the offer.

What should a buyer accomplish? The buyer should allow the lender a specific amount of time to accept the offer. If the lender does not accept the offer within that amount of time the buyer should be able to withdraw the offer.

The buyer should allow the lender a specific amount of time to accept the offer.

If the lender does not accept the offer within that amount of time the buyer should be able to withdraw the offer.

Why a short sale may not be beneficial The seller paid too much originally for the property. Home sells in “as-is” condition. Transaction takes to long to close.

The seller paid too much originally for the property.

Home sells in “as-is” condition.

Transaction takes to long to close.

Why a short sale may not be beneficial Lender can modify the terms of the sale at anytime Higher than normal closing cost

Lender can modify the terms of the sale at anytime

Higher than normal closing cost

Things to Remember It may take between 30 to 90 days to close.

It may take between 30 to 90 days to close.

Things to Remember The seller can accept the offer but the lender must approve the short sale.

The seller can accept the

offer but the lender must

approve the short sale.

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