Sommer Law is fully prepared to handle your short sale purchase. As a buyer who has now ventured into the short sale market, there are several consistent patterns that you must be aware of. Purchasing a short sale can translate into big savings for you, but you must be prepared for how these transactions work. Our attorneys are experienced in short sale purchases and will guide you through the entire process.
THE KEY WORD IS PATIENCE!!!
- Neither you, nor your realtor or attorney, have control over the short sale approval from the seller's lender. The seller's attorney or realtor will be responsible for obtaining that.
- The process can be very time-consuming, so you need to be prepared to wait months, in many cases.
- You will be asked to give a deposit on the property so that the seller knows you are serious about buying the property. The deposit will be due prior to the short sale being approved but will be fully refundable if the short sale is rejected.
- You should do all your inspections prior to the short sale being approved. The seller is losing his house and will have no funds, nor desire, to make repairs or give you any credits. Therefore, inspections are done up front and if there are repairs required, the purchase price can be adjusted down since the short sale has not been submitted to the lender yet. The contract price can be reduced to take into account the work needed on the house. If the short sale is approved before the inspections, the lender will not reduce the amount they are looking for based on your inspection report. You will have lost the opportunity to get a price reduction to cover repairs.
- You should get a pre-approval from your lender along with a credit review. Nothing could be more frustrating to all parties for approval to be granted and the buyer does not qualify for a mortgage. You will be spending money on various items and waiting for possibly months to buy this house, so you want to know as soon as possible if you qualify financially for this property.
- You must be prepared to accept that a lender may reject the short sale based on the seller's financial situation. We will follow up with the seller's attorney to monitor how the short sale negotiations are progressing.
- Do not lowball a property to a price far outside the market value. The bank will not approve the short sale and you will have wasted your time and the seller's time. The short sale lender will do an appraisal of the property before they issue an approval to determine if the offer is fair.
- When the lender issues the written short sale approval, you should be prepared to move quickly. Typically, the lender will give anywhere from 30-60 days for you to close. Do not rely upon them to give an extension on the short sale approval. Have your mortgage financing in place as the lender is never under any obligation to extend their approval. It is common for them to do so, but it is not assured.
- If you do not need financing to purchase the property, you will need to provide "proof of funds" to the seller's attorney so that he/she can turn that over to the short sale lender. They will most certainly require this.
WE WILL DO EVERYTHING POSSIBLE TO INSURE THAT YOU ARE ABLE TO PURCHASE YOUR SHORT SALE PROPERTY, INCLUDING ASSISTING THE SELLER'S ATTORNEY OR REALTOR WHEN ASKED TO.