Home Buying in Higgins Lake>Question Details

Dardyr, Home Buyer in Canton, MI

Hi, I'm looking at a short sale piece of property. What do I need to be most concerned about other than the time limit to close.?

Asked by Dardyr, Canton, MI Mon Oct 25, 2010

Hi,
I'm looking into purchasing a short sale piece of property. Will the inspection tell me all I need to know or is there something else that I need to look for. Like maybe utilities? Past taxes? what else do I need to ask about and have proven to me? Any help I would be GRATEFUL!! How do you get ripped off with a short sale.

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You should make sure the title company knows what they are doing to get you to the closing and that all bases are covered. Make sure everthing is paid up until the closing, taxes, sewer and any outstanding debts. Short sales are great deals for the buyers as long as they are handled properly. Midge from Re/Max
0 votes Thank Flag Link Tue Oct 26, 2010
I think you must be aware that it may never close. Sometimes, even with the best of negotiators, the bank gets a bee in their bonnet and never approve the sale, or they don't approve the sale with any terms acceptable to the seller.
0 votes Thank Flag Link Tue Oct 26, 2010
With a short sale, you want to make sure teh short sale pays off all liens regarding the property, a few but not limited would be 1st mortgage, a 2nd mortgage hoa fee, property taxes, water bill and sewer bills. You should have abuyer broker who is very well experienced in short sales that can assist you through each step of the short sale.

Please see my blog with advice and tips you will need.
0 votes Thank Flag Link Tue Oct 26, 2010
In addition to liens and time, you need to be very aware you will buying the home in 'as is' condition. Homeowners who cannot afford to ay their mortgage also do not have money to do routine maintenance. Be sure to read any 'selllers disclosures' documents carefully and take any deferred maintenance into consideration when you determine your offer price. Also, take a good look around the home yourself and look for anything that you think needs to be repaired or replaced. Reflect those items in your offer as well. The bank is not likely to negotiate any credits for these items unless they are considered a safety hazard and even then they may be reluctant.

Make sure your contract has a home inspection contingency, then have a home inspection done by a very competent home inspector. Once you have the home inspection report you will be able to decide whether you want to go forward with the purchase considering the condition of the home. Try to negotiate credits for any items that are considered to be a safety hazard but be prepared to walk away if big ticket items such as a leaking under ground oil tank or a failed septic system are not fixed prior to closing.

You may also want to see if the bank will pay for a home warranty on the house. Many items that come up during home inspections, such as age of the water heater, can be addressed with a home warranty.

A short Sale can provide a very good deal, but there are pitfalls to be aware of and you are very smart to ask about those up front. You got some very good answers. Take them all into consideration and best of luck to you.
0 votes Thank Flag Link Tue Oct 26, 2010
Buying a Short Sale

Buying a short sale is not like buying a property in a traditional way. A short sale may have some risk but it also can be very rewarding. When you are searching for a short sale you will want to make sure you are prepared. Here are some things you will need to consider.

First of all, you need to make sure that you have enough time. It takes anywhere from 30 days to 6 months or even more to get an answer on a short sale. It really depends on many factors. The bank may come back with a counteroffer or reject your offer completely. In some instances you may not even hear back from the bank at all.

Short sales take a long time because the bank has to review it and they are back logged with many short sales and don't have enough coverage to complete them in a timely manner. The bank typically is willing to work with the seller and buyer on short sales to help avoid foreclosure.

One of the benefits of buying a short sale is that the bank is typically willing to accept less money for the property because of the time and risk involved. So you generally are getting the home at below market value.

If you have the time to wait, a short sale is a good way to go. One thing to be sure to ask when purchasing a short sale is, "who is handling it?" Is the Realtor an experienced short sale expert? Or is the listing agent using a Short Sale company that strictly focuses on short sales? By having someone with knowledge and expertise in short sales, it will make the process go much smoother and faster.

Tammy Hayes, Realtor, Sandals Realty, Punta Gorda, FL tammyhayesre@gmail.com
0 votes Thank Flag Link Tue Oct 26, 2010
Dardyr,
Taxes and liens generally all need to be cleared for title to change hands. Utilities vary so check with the companies who provide electric, gas, phones, cable etc. In my state they follow the owner, but you'll have plenty of time while waiting for the lender to check this out.
I would also recommend a walk through once you have a closing date and again just before you sign papers. Make sure everything you expect to be in the home is still there. I've heard of frustrated homeowners stripping appliances, fixtures and any valuables. It's rare, but it pays to be sure.
0 votes Thank Flag Link Tue Oct 26, 2010
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