Thursday, January 20, 2011

Home buying tips: Three questions before viewing a short sale

Can you fit into this short sale?

Already this year it seems our clients are asking to look at more and more properties that are short sales. It's no mystery. The short sale listings usually have an attractive price among other comparable properties.

However, Bob and know there are several key issues that may make viewing, offering or trying to close a short sale a wasted effort. We investigate each case to see if it will work out for our particular client. Short slaes can get done when all the paperwork, issues and approvals are lined up.

1. Is the short sale approved by the bank? The bank will issue a price it's willing to take for an approved short sale. They will send and investigator out to appraise the unit and complete a BPO report. If this has not happened, there is still a lot of painful red tape to go through.

2. How many liens or mortgages on the property? If the seller needs to get approval for the short sale from two investor parties it could be trouble.

3. What is the condition of the condo association? If a condo unit, the situation in the association may make it difficult to get a conventional loan or low down payment financing. It may have to be a cash deal. For instance, the building may have over 50% renters. In those cases financing is difficult and the owner will eventually either be allowed to sign the unit over to the bank or will be foreclosed because they can't sell to the limited market.

If an owner gets foreclosed on, it can be a year or more before the property reemerges as a for sale listing. If the deed is signed over to the bank (deed in lieu of foreclosure) it may come back on quickly however.

Feel free to call or email us if you'd like to work with experienced agents. For more home buying tips click here!

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