Buyers Short Sale Information

BUYERS SHORT SALE INFORMATION

WHAT IS A SHORT SALE? A “short Sale” or “negotiated settlement” or “short pay” occurs when a Lender agrees to accept less than the amount owed to payoff a loan as an alternative to foreclosure. If a lender forecloses and the property is worth less than the amount owed on the loan, the lender is going to incur a loss. We can often show a Lender that they will “do better” if they take less than what is owed now rather than taking the property back by foreclosure and trying to sell it later.

HOW LONG WILL IT TAKE? The Short Sale negotiation process is a lengthy one. It may take several weeks and maybe several months to get an approval. Many Lenders have several layers of bureaucracy, insurers, and investors that we will have to maneuver through in order to get a Short Sale approved. It is important to be patient during this long process. Communication is key. There may be long stretches of inactivity however we will always let you know when something significant happens.

HOW DO I KNOW MY OFFER WILL BE ACCEPTED? You don’t. We cannot make any promises to you that your offer will. Be accepted. The Lender is in charge and can proceed to foreclosure if they want to.

CAN I JUST WALK AWAY AND GET MY DEPOSIT BACK? No. A Sale & Purchase Contract is a contract whether it is for a traditional sale or a short sale.  Make sure you understand the terms of the contract that may allow you to get your deposit back and don’t sign a contract to buy property unless you intend to complete the transaction.

WHY WOULD SOMEONE WANT TO BUY PROPERTY INVOLVED IN A SHORT SALE? There are many reasons why someone would consider property involved in a short sale not the least of which is value.  Often short sale properties can be purchased at slightly under market value giving the buyer greater value. If the buyer has patience and wants a particular property at a good price, then a short sale can be an attractive strategy.

WHAT SHOULD I DO TO BETTER MY ODDS THAT MY OFFER WILL BE ACCEPTED?  Recognize first that the banks may not be accomplished when it comes to knowing the local market, but they are not foolish. Making offers at 30% to 50% of current market value rarely succeed. Offers close to market value from cash buyers have the best chance of success. Larger escrow deposits also have a positive influence on the seller’s lender.

ARE THERE EXTRA COSTS I SHOULD BE AWARE OF?  Quite often the Seller’s Lender will not pay all of the costs involved necessary to insure a successful closing of the transaction and the Seller could be insolvent. Thus you may be charged a loss mitigation.

For more information please contact the

Fynes/Fara Realty Team

Coldwell Banker Residential RE

Tom Fynes     941.504.9282

Linda L Fara 941.806.7119

www.realestatelongboatkey.com

 

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