Real Estate

Short Sale…with a VA or FHA loan.

Can I buy a Short sale with a VA or a FHA loan? Maybe is the best answer. It depends upon the condition of the house.
All real estate transactions where a buyer is obtaining a FHA or VA loan will require an appraisal to determine the value and whether the condition of the property is safe, sound and secure. If a property has appraisal repairs, then this may be a problem.
A seller is selling a property short because they are typically behind on their mortgage, have a negative equity situation, and cannot to afford to bring the mortgage current. Consequently the seller does not typically have money to correct defects in the property. The property may or may not be in good condition. But I always want to ask, if the home owner could not make the mortgage could he afford to maintain the property. The majority of the time I find that the short sale properties have repair issues.
In addition, these loan products require a clear termite certificate. What if the property needs to be treated for termites.
Who will pay? If the seller doesn’t have the money to pay for the repairs; can the buyer pay for the repairs. Well I would strongly council any buyer to not repair any house that is not their property. They could treat for termites or spend money on the house and it not close for many reasons. In real estate, we always say it isn’t closed until it is closed.
When submitting a short sale offer, the seller’s lender is required to participate in the transaction. It is possible that there is more than one lien holder on the property. If so, all lien holders will have to participate. This can take time and negotiation. If the lender refuses to sign off on the offer, there is no deal. This can take a long time—generally 4-6 months. After the seller’s lender has agreed to the transaction then the buyer should perform their inspections and appraisal. Noting that the sale is “as is”. Consequently the VA or FHA buyer may have waited a long period of time for a house that will not appraise without repairs.
If you have other questions about real estate, please feel free to call me at 405-213-2992 or visit my website http://www.sandiwalker.net

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