When purchasing a short sale, isnâ€™t the title free and clear? Could liens present a problem? Oh, boy the questions you think and maybe donâ€™t ask!! The answers to any of your questions can be Yes, or Yes, or No!! So how do I know??
Unless you are sitting in the home you just purchased on a short sale, then you still have time to question and understand. You the purchaser are not responsible for any lien on the home. The owner is still the responsible party for any debt or obligations on the home. Sometimes these â€œobligationsâ€ can become deal breakers in a short sale, especially if the owner is financially strapped or the lender is unwilling to assist. If you were to close on a short sale and these â€œobligationsâ€ were NOT satisfied, then you would most likely be held accountable for such. These could include property tax liens, IRS liens, contractor liens, second mortgages, or even homeownerâ€™s association liens.
You must remember that a short sale is NOT a foreclosure. In a foreclosure, most of these items would or could possibly be wiped clean. Not so in a short sale. These items must be satisfied in some way or another, this could mean some hefty negotiating.
So, as you can see this doesnâ€™t mean title is free and clear, you need to do your homework and have open communication with the title company. Once an approval is completed, ask for a title commitment, complete your due diligence, and ask questions if you do not understand something. You may need to assist your seller in a negotiation, you never know.
Be patient, short sales tend to suffer failure rates and sometimes just simply canâ€™t close in time to prevent foreclosure. A persistent lien holder can play a key role in delaying the closing of a short sale. If all parties are willing to be a part of the process then you can come out â€œfree and clearâ€!
Have questions about the short sale process or what can be missed, call me today, Jennifer Ferri @ 239-415-6574 or visit us at www.title-junction.com