Class Today is on Short Sales and Anyone in a Short Sale Knows it’s Anything But Short!
Seems like today anything goes (or not) when it comes to short sales, and no two are the same, however here are some generalities.
- Your lender requires your entire application/package be submitted all at the same time. Let’s do it right from the beginning, in the long-run it can save you time and help save your transaction.
- Your approval may be determined by a third-party negotiator (an asset manager outside your lending institution) who is most likely over-worked and has more on their plate than they can handle.
- Your approval process can be more difficult if there is more than one loan. Even if multiple loans were made by the same lender, you may have two completely different departments (or locations) needed to approve the process.
- Your lender may require a new property appraisal or a BPO, aka Broker Price Opinion, usually completed by a local Realtor.
- Your second (or 3rd) lender won’t (and isn’t required to) roll over, they will expect some compensation/payoff to sign off the loan, this will be negotiated with the first lender.
- Your REALTORS(S) experience obviously is crucial, however (irrespective of what you may have heard from some) your broker does not have control of whether your lender will consent to the short payoff.
- Your broker will may not provide legal or tax advice, you are advised to see your own from the proper professional.
- Your lender (if approved after waiting months) will want a fast closing and condition the approval on a final last minute review of costs and expenses just days prior to closing.
- Your buyer is not required to meet your lenders terms.
- Your short sale addendum (to the purchase agreement if you use the CA standard form) states you shall reasonably cooperate with the lender (s) in the short-sale process.
- Your buyer’s deposit check may or most like may not be placed into escrow until written approval is received from your lender.
- Your buyer may not stick it out, they may withdraw their offer at some point, depending on the length of time it takes to receive a reply from your lender.
- You and your buyer may incur some expenses during the escrow, i. e. inspection, appraisal, association documents. etc, etc.
- Your lender is likely to move forward with a foreclosure during the short sale process.
- Your lender is not likley pay for any house repairs.
- Your lender is not likely to pay for back association fees.
- Your lender may or may-not postpone a trustees sale during the short sale process.
- Your lender may ask for a financial contribution from you to close.
- Your lender may make last minute requirements so hold onto your hat until you close.
So when it comes to a short sale, as much as anything else, be prepared to be patient and contact me, Lynda@PreferredHomeBrokers.com.