It is important to realize that not all homes will qualify for a short sell. If you are looking into buying a short sale you need to be aware that there could be some drawbacks. Before making a purchase you should get advice from a real estate lawyer, discuss and understand short sale tax ramifications.
If you are qualified to short sell your home then you need to use a real estate agent that has experience with short sale. This can make the process much smoother and easier and the agent will know how to protect your interested as it is important not to miss any deadlines.
One of the only ways a financial institute will accept a short sell is if you have absolutely no equity and have no way to repay the loan. You will need to provide a hardship letter, as it may be possible to have any tax associate with the debt forgiven. Ultimately with a short sale the seller does not see any money, as the money will go directly to the lender.
Once you have someone interested in purchasing your home on short sale you will need the lender to approve the sale. Nothing can happen until the lender accepts the offer. The lender will need to see information on the buyers loan information including a preapproval document. A smart real estate agent will also send a list of comparable sales that supports the selling price.
You will need to keep the lender to a specific timetable and make sure you give them a deadline in which to reply. Many times without a deadline the paperwork will not get done. Most lenders will be able to have an answer to you within a few weeks. Make sure have the information to a specific person at the financial institute.
In most cases on a short sell the lender will negotiate the commission for the agent, as they will be the ones absorbing this cost since the seller is not actually receiving any money. If for some reason the amount charged by the agent is more then the amount the lender is willing to pay then the seller may be required to pay the difference.
When an individual purchases a short sell they are buying the property as is and cannot negotiate the price for repairs. Therefore any potential buyer should thoroughly inspect the house before committing to buy. These inspections should include sewers, chimney, roof, pests, and septic tank inspections. Doing a short sale can be an option that is better for your credit then having your home foreclosed or filing for bankruptcy.
