Short sales come as an option before foreclosure of mortgage or deed of trust sales. It means that the owner has found a buyer who will pay the bank less than the amount owed to the bank by the homeowner. It is a negotiation to avoid higher costs of foreclosure and property management afterwards.
OK, now that all of us understand the situation, the Seller should hire a Seller's Agent experience in short sales or a real estate lawyer to get the Short Sale approval . In my opinion, this is not something the Seller can or should handle on their own.
Likewise you should work through a Buyer's agent or hire your own real estate lawyer. Also make sure you use a competent Escrow Agency and be sure the Owner's Title Policy you receive from the Seller is issued by a Title Insurance company that has a Demotech.com financial rating of "A" Double Prime (i.e Fidelity National, Chicago, Old Republic Title).
There are may other items to look out for that a good Buyer's agent will be able to bring to your attention.
Your Local Expert
Central AZ Real Estate
No one is open for business today, so I will be back in touch as soon as I have a definitive answer for you.
Yes Bill, you are correct. We are hoping to buy a FSBO property that has a reverse mortgage. As far as we understand the situation the latest FHA appraisal is apparently substantially less than the original reverse mortgage amount.
The owners of this property are still living...wish to move to another state. As far as I know the only reason they wish to move is to be closer to family. They are under the impression that they can sell the property to whomever they wish, at the appraised value of the property, resulting in a short sale.
We understand that any short sale can take an extended time to close but are there any other pitfalls that we should be aware of?
I am a bit confused by your question and the answers below. Could you please verify I am understanding what you are asking?
From the tag line "Home Buying in Camp Verde" I believe you are looking to buy a home owned by someone whom has a reverse mortgage on the property, and owes more than the home is worth. You want to know how the holder (the bank) of the reverse mortgage will react to an offer in such a situation.
Is this correct?
Bill Parker, Loan Officer
AZ Lic# 09011570
CPA--Licensed, no longer practicing
GenCor Mortgage, Inc.
15730 N. 83rd Way, Suite 103
Scottsdale, AZ 85260
(O) 480-525-8496; (M) 602-565-3646; (F) TBD
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Red Adair, Oil well firefighter
1) no payment of principal and interest
2) interest only
3) principal and interest.
It should be ok to make no payments with our a problem. If you are upside down, this would be the way to go. To make a change is usually as simple as no longer making payments. Check the fine print. Check the fine print. Check with the lender. Check with a lender you trust.
In this case the Lender would continue to pay the proceeds or interest until the death of the owner. A short sale does not apply. Upon the owner's death, the bank would end up with the house and they would sell it for what they can get. A short sale does not apply.
Is the owner forced by court order or circumstance to vacate the house? This could be a different situation, requiring legal representation and lender advice. Let me know if you need a recommendation.