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Art Cell: 818-383-2792
Aida Cell: 818-371-5742
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Navigating through the Short Sale Process
It seems like every area in Southern California has their own share of listings on the market which are Short Sales. A quick reminder, a short sale refers to a property whose total debt exceeds its fair market value. Because the lender is not being paid off in full, they must approve any contract the seller agrees to. In other words, the BANK has the final say. Short Sales are abundant in today's market. Sure, there are some horror stories, where the Bank didn't respond to an offer for 60 days, however, the truth is, banks are not in the Real Estate business. They don't want to own property, they want to lend. The pre-approved, relaxed, patient and savvy buyer will end up getting a great deal.
Here are some guidelines that will help you fulfill your journey.
1. Generally speaking, offers should be contingency free, other than for inspections, disclosures and loans. In other words, you shouldn't make your offer contingent on whether your own house sells or not. Banks (lenders) want offers to be as "clean" as possible.
2. Buyers need to be pre-approved, comlpete with a letter of pre-approval, and proof of funds.
3. Be patient, at times, the bank employees who are handling the short sales are flooded with work themselves. It could take up to 60 days to get a response, HOWEVER, that is extreme. Most banks want to move quickly and try to get things moving within a few weeks.
4. The property is being sold "as is". Usually, the bank (or other lender), will NOT approve any requests for credit or repairs. HOWEVER, again, as a BUYER, it is ABSOLUTELY your right to get an inspection of the home.
5. Lenders will generally pay customary seller closing costs (their portion of escrow & title). The lender will also determine the agents' final commisions. Lenders will generally NOT pay for Buyers closing costs (most of the time, they don't, however, sometimes, they do. If a lenders plans to pay for any of your closing costs, they will usually post it in the listing information sheet).
6. Lenders may or may not approve termite work needed for the property. If there is a termite report on the property, please ask your agent to request one, otherwise, have your agent request that the seller pay for section 1 termite work in your offer.
Good luck!!
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