Real Estate

How do I buy a short sale

Patience, Patience, and lots of patience.
Short sales should be called long sales as in time requirements. It often takes many months to get a short sale accepted at the bank. However if you are not in a big hurry, you may be able to get a good deal.
The seller’s lender will need to sign off on the contract in addition to the seller. The majority of the time the lender will want to see an offer on the property before starting the short sale procedures. Local lender’s may want to determine value sooner than a larger national bank. Either way, the seller’s lender will do the following in order to complete a short sale.
1. Current owner will fill out a financial package to determine if they qualify for the short sale, including a hardship letter detailing why they need the short sale.
2. The lender will review the short sale packet. This takes time.
3. If the owner qualifies for a short sale, they will send out an appraiser to quantify the value of the property. They may also request a BPO (broker’s price opinion)
4. The current lender will use the appraisal price to determine the amount they are willing to accept on a short sale. Most of the time, the realtor will reduce or increase the list price at this time to match the appraisal price.
5. The lender will accept a net amount based on the appraisal price. (In my experience, this number has been 86-88% of appraisal price)—remember this the net to the seller’s lender after all expenses, realtor fees, etc. So there is not a lot of room off the appraisal price. Hopefully the appraiser has not over valued the property.
6. Several people at the bank will need to review the short sale offer and sign off on it before turning it over to a closer to set the closing up.
7. The new buyer will need to make sure their lending requirements are met. I do not advise buyers spending money to do inspections or appraisals prior to the current bank’s approval to sell. Once that approval is given, the rest of the sale works mostly like a regular sale.
Just remember that these homes are sold as is and where is and may have some repair requirements.
If you have real estate questions please feel free to call me at 405-213-2992 or visit my website

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