A short sale is a sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold.
These ten points are not designed to be definitive. On the contrary, they should prompt buyers into further investigation and self-education concerning short sales.
1) BE INFORMED before you enter into proceedings and CONSULT with a real estate attorney.
2) USE a real estate broker with experience in Short Sales.
3) MAKE SURE the lender is involved and in agreement. Beware of phrases such as “offers are subject to third party review”.
4) BE SURE you know what other liens are against the property, including second mortgages, home equity lines of credit, property tax liens, child support, etc. These lien holders may not agree to reduced payoffs.
5) BEWARE as a buyer, of spending your money on inspections and appraisals before you have the commitment of the bank/s (and any other lien holders) to go through with the short sale.
6) REMEMBER – It is the Bank that makes the decisions, not the Seller.
7) DO NOT – Make really low-ball offers.
8) BE PATIENT – the process can take an extended period of time.
9) BE READY – as the buyer, have your financing in order.
10) BE REALISTIC – Don’t enter into a short sale if you are in a hurry.
There are advantages and disadvantages in entering into a short sale. Negotiations are often complicated when several third parties are involved in decision making. Lastly, never set your heart on a home that’s in a short sale. The more parties involved, the less likely agreement will be reached.