Buying a Short Sale Property
What You Need to Know Before Buying a Short Sale Property
Here are a few things you should know about buying a Short Sale Property before you start the process:
– The process is usually LONG.
- List the home and decide that the short sale is the best option
- Contact the lender and inform them the borrower wants to do the short sale
- Write up hardship letter and assemble short sale package
- Submit short sale package to bank
- Receive an offer
- Wait for lender to review. This is the long part; it includes:
- Bank doing financial audit
- Bank ordering appraisal and title search
- Bank possibly asking for more financial docs/information
- Sending file to bank underwriters
- Bank underwriters negotiating offer
- Sending to loan investors to approve
This process will look different depending on loan type/investors and bank.
– Possible delays or unexpected issues:
- Could be that there are liens against the home, even if the lien holder didn’t notify the seller. I’ve asked the sellers if they know of any, and we try to do a preliminary title search once we receive an offer, but there’s always a possibility that a lien or judgment is uncovered later in the game. If this happens, I try to resolve the lien as quickly as possible, so as to not to delay closing.
- Some conventional loan investors are requiring using an auction process instead of ordering an appraisal in order to verify the fair market value of your home. So far only Ocwen Loan Servicing and NationStar are enlisting the help of an auctioneer.