What is your experience and patience (how long can you reasonably wait) as a buyer? What is the listing agents experience in preparing the short sale package? How accessible is the lender in communicating with the list agent? Is the lender local? Each lender has specific requirements that a list agent and seller need to include in the short sale package and have those requirements been met? What other lender requirements need to be satisfied? Have you asked for feedback regarding, among other things, market value and contract contingencies to the process?
Every property has a unique story and no two transactions are ever the same but there are some basic time lines, information and questions associated with these distressed properties that you may want to additionally know or consider as a buyer:
1. Are you in a position where you can reasonably wait any longer for the lenderâ€™s approval?
2. Do you understand that the lender will make the final call on terms and price?
3. Do you have the resources to rehab or repair the property if necessary?
4. The value of the property may have changed during the wait for lender approval period. Has the market value increased, decreased or remained the same? You may want to ask for a new CMA on the property.
5. Have you consulted with your attorney regarding earnest money, home inspections and the contingency period for third party approval??
6. Is there an addendum to the contract â€œsubject to lenders approvalâ€ should stipulate how long the buyer is willing to wait? If not, you may want to consult with your attorney as to what your options are.
7. How many liens are on the property? If more than one lien, what are they? What is the plan to satisfy all of the lien holderâ€™s?
8. If you wish to move on and purchase another property consult with your agent about your options and your attorney as to if you need to sign â€œsubject to release of prior contract.â€
9. Is all of your financing in order? Although the lender approval process can take quite a long time (up to 6 months or more) typically lenderâ€™s final short sale approval will provide only days maybe as little as 5 days to two weeks for closing. You will be required to meet the lenders specified closing date.
10. Confirm with your agent and attorney the approximate time line in your state from notice of default to foreclosure. In some states itâ€™s 7 months from notice of default to foreclosure.
11. Communication among all parties to the transaction is essential.
12. Some of the reasons why a short sale may not close: Incomplete short sale package, package not submitted properly, offer too low, buyer not strong enough financially, lender took too long and buyer backed out, inaccurate BPOâ€™s and or appraisal of property was inaccurate and lender has a distorted picture of what the fair market value is of the property, junior lien holder says â€œno.â€
13. Continue to educate yourself and ask questions. There are great on-line resources available.
14. Please remember some Short Sales do close!
15. The choice to move on or not is yours!
MOST IMPORTANTLY, CONSULT WITH YOUR REAL ESTATE ATTORNEY AND YOUR AGENT!! They are the professionals who know how best to represent you and to protect you.
Best of Luck!!
We are having much greater success closing foreclosure transactions and suggest you may want to look at some foreclosures. Here is a resource to view foreclosure listings in Cape Coral: http://www.greaterftmyers.com/cape-coral-foreclosures.php
Good luck with your search!
Unless it is all perfect, the lender sends it to the bottom of the pile. I have just been certified to learn the documentation and proceedures necessary, but without stepping on your agent's toes, cannot to anything to help. The best solution is communication with lender, which unfortunately takes time.
Terry McCarley, Realtor, CDPE
Remax Realty Team