Purchasing A Short Sale Home!

In today's real estate market, there are many "deals" out there for the homebuyer!  One of the "deals" many of my buyers want to know more about is a Short Sale!  So below, I have listed some of the questions many of my buyers have asked when considering a Short Sale listing to purchase.

• What is a Short Sale?  A short sale is one in which the lender(s) are accepting less than the payoff on the existing mortgage(s).

• If I Make An Offer on a Short Sale Home Should I Be Excited?  You can be a little bit excited, but you should keep in mind that, although the seller has accepted your offer, it is still contingent upon the lender(s) accepting this offer!  And there is always the possibility that the lender may not accept the offer the seller has accepted!!!

• Why Wouldn't the Bank Accept My Offer?  There are a number of reasons why a bank may not accept your offer:

            1.  The bank feels the short sale offer is too low!

            2.  The short sale package is incomplete!

            3.  The seller does not qualify for a short sale!

            4.  The buyer does not qualify to purchase the property!

            5.  The bank no longer owns the loan!

• How Long Will It Take To Get My Offer Approved By The Bank?  This could take anywhere from 30 to 120 days or more.  Much of this will depend upon the lender and if there are more than 1 lenders involved.  Remember, all lenders must approve on the short sale offer!  Patience is key here! 

• Are There Any Special Addendums To Attach To The Offer?  In this area, my company has a Short Sale Addendum we use to attach to the offer.  This addendum deals with when things like loan application & inspections will be done, as well as when the earnest money deposit will be deposited.  It also indicates how long the buyer will allow for written lender approval to be received.  Any contract you write on a short sale listing should include either an addendum dealing with these items, or should be incorporated into your offer.

• Can We Negotiate Inspections?  Short sales are almost always sold "as is" and the seller will do no repairs.  However, your contract should allow you to do your repairs and to approve the property with the condition you find during the home inspection or rescind the contract and move onto another property.  Inspections you should consider doing include:  whole house, termite, roof, well & septic, chimney, fireplace, radon!

• Can We Include a Contingency for Selling Our Home?  No - if you have a home to sell, you should sell your home first before putting in an offer on a short sale home.  If your home is under contract but not yet closed, you should consider waiting until all contingencies on your current home have been satisfied, so that the only contingency in your offer on the short sale home is the successful closing of your home!

• What Type of Financing Can We Include?  Of course, your strongest way to purchase the home is with cash, but few buyers are in a position to buy a home for cash.  When you make your offer on a short sale home, make sure you have a letter from a local lender indicating that they have reviewed your tri-merged credit report and that they see no reason why you should not be able to purchase the home.

• Closing - Should We Use An Attorney or a Title Company?  I always recommend that you use a real estate attorney, knowledgeable about the real estate laws in the state of Virginia, to help you with your purchase. 

Thinking of purchasing a short sale home?  Click Here to email me and I will be happy to email you all short sale homes for sale in the Richmond VA area!