House Hunt: What Is All the Buzz About Short Sales?

Due to the declining market values, many sellers today are faced with selling as short sales because there is not enough equity in the property to pay off the lender (lien holder).

In accepting the discounted payoff, the lender will release the lien that is secured to the property upon receipt of less money than is actually owed. The lender has to evaluate the financial  situation of the seller in order to determine if the short sale will be  approved.

Oftentimes the approval process is lengthy which  may cause difficulty for any buyer who is interested in purchasing the property and is on a specific timeline to complete the purchase.

Short sales can take months for approval and while some effort has been made to shorten the timeframe, it is, in most cases still a long process. The process is  impacted by many factors including the financial position of the seller, market value of the property and other internal factors related to each financial institution.

In some cases, lenders are allowing the preapproval of short sales which helps tremendously in the timeline, but in most instances an offer on the property is needed to start the process. Once an approval is obtained there is timeframe associated with the approval and all of the transaction must be completed in that time frame or the process starts over.

If you are a buyer looking to purchase a short sale, there are three key things to remember for its success.

• Get loan preapproval and have only the property appraisal outstanding prior to the final approval of the short sale. Include an appraisal contingency in the offer to purchase. By doing so, you will not have to purchase at a price higher than  for which the home appraises.

• Do as much toward the inspection as possible early in the transaction so that it is clear that the  home’s condition is acceptable and months have not passed and you find out that there are major problems with the property. It is an investment  worth the risk and will save valuable time.
• Exercise patience, you will be at the mercy of the negotiator and other  lien holder staff. Each lender has a process and some are easier to maneuver than others. Your realtor will be valuable in keeping you informed on the status of the transaction but patience is truly essential when dealing with a short sale

Please contact Shirley Simmons, Prudential Georgia Realty,404 879-7024 or at www.shirleysimmons.com for help in selling or purchasing a short sale or other real estate.