Thursday, October 17, 2013

Short Sale questions answered - Real Estate 101

What is a Short Sale?
A Short Sale is a transaction in which the seller’s proceeds are less than the amount necessary to pay off liens secured by the
property. Examples of such liens include, but are not limited to, mortgages, home equity lines of credit, tax claims, home-
owners' association/condominium fees, and legal judgments.

What parties are involved in a short sale transaction?
A Short Sale may require the approval of one or more third parties, unlike a traditional transaction which only requires the
approval of the buyer and seller. In a Short Sale, after the buyer and seller have agreed on the terms of the Agreement of Sale,
the seller may need to request the approval of the lender(s) or other lien holder(s) (“creditor(s)”).

What time frames does one consider in a short sale transaction?
In a potential Short Sale, creditors can take an extended period to respond to a Short Sale request. In some cases, creditors
do not respond at all. Delays in creditor approval can make it difficult to set a specific settlement date.

Do you have negotiating power when making an offer to buy a short sale?
Creditors do not have an obligation to approve the terms of Buyer’s offer to the seller. Creditors may add conditions or
restrictions in accepting the offer. Common examples may include refusing to pay Buyer’s closing costs or refusing to allow the seller to pay for repairs requested by Buyer. A buyer and seller are under no obligation to accept these conditions or restrictions from creditors, although failure to accept them may result in termination of the Agreement.

Buyer should consider making their offer contingent upon approval by creditors and should retain the right to terminate at
a specified time in the Short Sale process. Buyer is advised that a seller may elect to consider additional offers from other buyers until Creditor approval is obtained.

Bela VoraREALTOR®, 
Coldwell Banker Preferred - Exton Real Estate.
Office: 610 363 6006; Cell: (484) 947 3127
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1 comment:

  1. It seems likely short sale will continue to dominate our Las Vegas market for some time to come