Tips for Short Sales

Tips on Short Sales

A short sale happens, when the owner of a property does not have the money to meet monthly loan repayments. Instead of going through the embarrassing process of a foreclosure of declaration of bankruptcy, they opt for a short sale. The reason why this form of a property sale is called a short sale is because the sale proceeds are less than the amount outstanding to the lender.

A short sale can be done only after getting approval from the lender. The amount received by way of sale goes to the lender to pay the outstanding loan amount. Usually lenders opt for short sales, when they feel that foreclosing a property would result in a lot of expenses, which they can save by having this sort of a sale done.

Tips for Sellers

As a seller, check on the following points before you get into a Short Sale:

Be Well-Informed – Gather all information related to the process of a short sale. Find out rules that have to be followed for this process to come out the right way. You should also be aware of the implications of having a short sale done in your credit report.

Prepare the Property – You have to wait till the lender approve of you having a Short Sale. Once you get this approval the next thing to do is prepare the property to handle this. You have to spruce up the interiors and get necessary repairs done, so that those who come to see it will show an interest to buy it.

Get Necessary Documents Ready – You have to get all documents ready to proceed with the short sale. Since you need the lender’s approval first, you have to prepare it properly, stating your dire need for having a short sale. You have to prove that you are financially down and that you are facing extreme hardship as a result of which you want to get the mortgage payments off your expenses, by having a short sale. Find out what property documents have to be ready for submission along with your letters.

Take Guidance –  In order to successful carry out a short sale, you need to take help from people such as a real estate agent, a lawyer, accountant and a short sale negotiator. Getting guidance on the legal aspect of a short sale and how the processes goes from such people is vital to having a sale done that give you the right price for your property.

Tips or Buyers

Choose the Right Agent – You need to find the right real estate agent to handle this matter as this is not like a normal sale. In a short sale, the kind of real estate agent you hire must be someone who specialises in such sort of purchases. They should be able to give you a comparative study between the property available on a short sale and other properties in the market and also bring out fault in the property in an objective way.

Get Inspection – When you decide to ho in for a short sale purchase, you have to buy the property in the condition that it is and that why you pay the kind of price that comes with it. This means you have to have the property inspected because at least you should have a decent property or one in which repair costs are bearable. Inspect places such as the roof, sewers, chimney, water tank, septic tank, rooms, and electric wires and so on.

Make a Good Offer – The main reason why a property is put out in a short sale is because it needs to be taken off the hands of the owner, but at a decent price. Therefore, you have to put an offer that is acceptable for both the lender and the seller are seeking. In this regards, you need to check out property prices in the area, the kind of bid that lender and seller are seeking and then think and make the right offer, so that your offer  comes through.

Specify the Time Frame – You have to wait till the lender sends approval for you offer. Once it comes through, specify the period within which the deal must come through. You can also state firmly that you will cancel the deal if this does not happen.

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