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Are Short Sales Guaranteed to Work?
- By Fred Sed
- Published 10/9/2008
- Real Estate Success
- Unrated
Fred Sed
Fred Sed of The Pahua Group specializes in buyer & seller representation of foreclosures/bank owned REOs and tenant representation of Orange County Rental Properties. Fred also specializes in the representation of homeowners in distress by way of Short Selling. For more about Fred visit: http://activerain.com/fredsed and Short Sale FAQs.
With all of the chaos in the mortgage industry, short sales have become the answer for many. Unfortunately, they are not the panacea for every problem. Even though short sales are increasing they are still fairly complex. First you must meet all of the criteria for a bank to even consider a short sale. Second you must convince the bank that the market value of the home is lower than what they are owed (remember, they don't like to take a loss on any loan).
With short sales the banks must be convinced to discount the mortgage enough to make it viable for a potential buyer. So it is very important that every request made by the bank be managed quickly and correctly. This requires commitment on the part of the broker and the homeowner from day one.
In some short sales, the broker does all the paperwork and waits several weeks only to be denied. During that time the homeowner continues to own and live in the house if he or she chooses.
If the lender does not approve the short sale, the broker has no rights at all to the property and no transaction occurs. The purchase agreement becomes void and the listing continues.
From the very moment you contact a broker like The Pahua Group you should be evaluated to determine if you can actually qualify for a short sale. The broker should not talk you into it; nor should you waste their time or yours. It is crucial that you answer every question honestly so that if an attempt is made at a short sale on your home, it is successful.
What if a bank doesn't accept the short sale?
If the bank doesn't accept the short sale offer, there is no transaction and the home is still owned by the homeowner. The foreclosure process continues. A good Realtor will probe the bank to find out why they did not approve the transaction in order to determine if there is a possiblity to reapply for this type of sale.
But with proper due diligence at the beginning of the short sale process, many of these problems can and should be avoided.
Tune in next time to learn how much time a short sale can take, what a borrowers authorization form is and why it is needed.
With short sales the banks must be convinced to discount the mortgage enough to make it viable for a potential buyer. So it is very important that every request made by the bank be managed quickly and correctly. This requires commitment on the part of the broker and the homeowner from day one.
In some short sales, the broker does all the paperwork and waits several weeks only to be denied. During that time the homeowner continues to own and live in the house if he or she chooses.
If the lender does not approve the short sale, the broker has no rights at all to the property and no transaction occurs. The purchase agreement becomes void and the listing continues.
From the very moment you contact a broker like The Pahua Group you should be evaluated to determine if you can actually qualify for a short sale. The broker should not talk you into it; nor should you waste their time or yours. It is crucial that you answer every question honestly so that if an attempt is made at a short sale on your home, it is successful.
What if a bank doesn't accept the short sale?
If the bank doesn't accept the short sale offer, there is no transaction and the home is still owned by the homeowner. The foreclosure process continues. A good Realtor will probe the bank to find out why they did not approve the transaction in order to determine if there is a possiblity to reapply for this type of sale.
But with proper due diligence at the beginning of the short sale process, many of these problems can and should be avoided.
Tune in next time to learn how much time a short sale can take, what a borrowers authorization form is and why it is needed.
