May 13, 2011
Tips Worth Knowing For The Short Sales Process
Many buyers and sellers of homes in real estate transactions hire agents to represent them. Buyer’s agents represent potential buyers’ interests. Selling agents look out for sellers’ interests. Though buyers and settlers are not required to use the services of real estate agents, it is highly recommended. Short sales have become an increasing important category in many recent real estate transactions. The main participants include banks, sellers, potential owners and respective agent representatives. All have important parts to play to ensure for the transaction to succeed.
The potential buyers are bargain hunters. Short sales are real estate transactions between distressed sellers of homes and potential owners. Approval from the owners mortgage lender is required. The balance due on the mortgaged amount of a loan is higher than the money the homeowner can sell the home for.
An appointment is normally made to see the property for sale. The potential short sale information must be fully disclosed by the selling party to the buyers’ side. The potential purchase then make an offer based on the buyer’s agents advise. Good agents perform a sales comparison report based on recent sales of identical properties locally.
An offer, made in writing is sent to the agent representing the owner. After presenting all offers to the seller, a decision is made to accept, reject or counter the offer. If agreement is reached between the two parties, both buyer and seller sign the offer to form a contract. The contract is then forwarded to the seller’s loan provider for review and a decision. Lender approval must be gained.
Mortgage loan providers response time to short sale offers vary. Some financial institutions have made significant progress in this area. The ability to send contract information to and receive feedback from lenders in a timely manner is critical. Many potential buyers are put off by a third party’s slow response.
Financial institutions have loss mitigation departments responsible for processing short sale offers. Real estate contracts received are initially handled by the documentation department. They ensure all documents received are in compliance with the institutions standards. The negotiating department assigns a negotiator to look over the documents and propose any changes. A report is complied by an appraiser to provide the negotiator with a fair market sales price. This report is mostly based on recent sales of similar types of dwellings. The final reviewer is called an underwriter. Approval is then sought from the investor who provided the sellers mortgage loan.
The lenders’ decision is sent to all concerned parties stating after approval. The sale process can then proceed. The seller must move out of the property on or before the date the ownership transfer takes place. The buyer contacts their lender of choice to complete purchase terms for a loan. The buyer chooses a settlement company to facilitate transfer of ownership. Funds are also collected from the buyers’ financial institution.
Many short sales do not succeed for a variety of reasons. Included are the lender’s level of responsiveness and efficiency. The loss mitigation department’s competence level, the willingness of the owner’s investor and resolve of the seller and buyer are also critical. All interested parties must work together in order for the short sales process to work satisfactorily.
For more short sale information from Jasper Brinks don’t forget to check out his Nibley Utah Homes For Sale website where you can search all Nibley Real Estate.
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