Short sales are appealing to many customers who want to buy a home at a bargain price. A short sale occurs when the seller’s lender agrees to accept less than the full amount owing on the mortgage, a lengthy approval procedure that necessitates both patience and funds. Make a strong offer, be flexible, and prepare to wait a long time if you want to succeed.
Put in the work
Consulting local real estate brokers and attorneys and identifying those that are skilled short-sale experts before deciding on a home will be of immense benefit to you. This is so because such agents would be in the best position to find suitable properties and may already have a connection with the seller’s agent or the seller himself.
Building a healthy working relationship with the seller is critical to the short sale process because short sale sellers are more likely to leave a property in excellent shape after closing, as opposed to irate foreclosed debtors who have nothing to lose. An expert attorney will also comb through property records for title issues, pending liens, bankruptcy filings, and other contract issues that can undermine months of work.
Ascertain your funding plan
Purchasing a property necessitates the submission of numerous documentations, especially if you require a home loan. Maintaining immaculate credit, in other words, buying expensive products on credit and making a late payment can dampen your chances of sealing the deal.
Also, you’ll need to submit tax returns, proof of income, and savings and investment statements in addition to the mortgage application. Check with the seller’s lender as well, even if you already have a good deal through your mortgage broker. A desperate bank may offer special financing to a highly qualified applicant, saving you money over the life of the loan as well as at closing.
Conduct a probe of the property
Smart buyers conduct a comprehensive and timely investigation of the property. A lender will normally not authorize a short sale unless the buyer is 90 days past due and cannot afford to make regular payments; this is why it is recommended to review courthouse listings and online databases to ascertain whether or not a property is in preforeclosure.
Also, learn as much as you can about local property values, resale profit potential, the amount of work the property requires, property tax rates, and the quality of local amenities like schools and facilities. Another important point is to desist from undertaking a property whose owner has declared bankruptcy, this puts a stop to all collection efforts, including property sales.
Persuading the Mortgage company
Above all, you must assist the seller in persuading the lender that a short sale is in their best interests. Most sellers price their homes aggressively, so making an offer that reaches or comes close to the listing price will expedite the authorization.
You should also use your home inspection to your advantage by informing the lender about the home’s required repairs and expected expenditures. Though this lender will not pay for repairs in a short sale, if the home goes into foreclosure, the lender may be forced to do so.
Be tenacious, respond quickly to inquiries, and prepare for a months-long wait for the approval. Finally, don’t be scared to reject a terrible agreement because a costly brief blunder is preferable to a complicated long ordeal.