What You Need to Know About A Short Sale
If you were thinking about purchasing a short sale as an investment or your next home, you don’t have to be aprehensive of these types of purchases anymore as long as you start the buying process with your eyes wide open. One of the most important things you can do is to choose the right agent to represent you. There are several questions to ask your real estate agent when you are deciding if purchasing a short sale home is the right fit for you. Some questions to ask your real estate agent may include:
- How many mortgages does the home have?
- Does it have a primary and home equity loan or a second mortgage?
- Are there other liens on the property and are they being negotiated at the time?
- Is the seller filing for bankruptcy? Or are they planning on filing for bankruptcy?
- What type of bankruptcy are they filing and what phase are they currently in?
- Who is the end investor behind the loan: it is FHA, Fannie, private funding, etc.
- Who is negotiating the sale of the property and has any paperwork been submitted yet?
Another important part of the short sale purchasing process and is a required piece is the “Arms-Length Transaction” form. This form states that the buyer and seller are unrelated parties. It is important for buyers to keep in the back of their heads closing dates because when one buys a distressed property, the timeline should have some flexibility; they are not like a typical sale. Once you have decided to pursue a short sale you should also be informed and have an understanding or you responsibilities as the buyer. 9 times out of 10 you will required to obtain all town and municipal requirements including the certificate of occupancy. In addition to that, depending on the lender, you will NOT receive a credit or any repairs at closing. The point of the short sale is to successfully complete the transaction in the best interest of all parties.