Posted by: terryorealtor | February 1, 2008

So you are going to buy a Short Sale home…

Things to remember….

  • Always get pre-Approved before starting your home search. Those agents who encourage you to look with a pre-qualification letter are not doing you any favors. You get yourself in an accepted contract,fall in love with the home, only to find out you will need to bring in more money, the interest rate is higher than you thought and the terms were not all what you were originally led to believe….then your stuck
  • Since the banks are taking 30-45 days to approve any short sales, make sure your inspection contingencies are to start on the day the bank approves the offer NOT when the seller signs….WHY? Inspections are costly, but needed, but NOT needed if your offer is not accepted. Why pay for an Appraisal if the offer is not accepted?
  • Believe it or not we still have loan sharks out there and people are still falling for their tactics……
  • You have the right to shop loans…do so, LOOK at all terms….Look for experienced loan officer who has been in the business for several years with a track record.
  • You should always receive a Truth In Lending Statement from your loan officer.
  • There are hundreds of potential short sale homes for you to consider.
  • Many are good buys. You just need to be patient.
  • Realistically expect a minimum of 45 days to close. Some banks are taking longer, some are taking shorter.
  • Remember you are not negotiating with the seller, you are negotiating with the bank!
  • The seller will need to sign off on your purchase offer. The purchase offer along with other required documents from the seller will be presented to the bank.
  • Having a Pre Approval letter from your bank will fair far better than a pre qualification letter. Some banks will require that you be approved by their own staff even though you are free to use whom you choose.
  • Make sure you have a seasoned agent represent your interests.
  • The short sale guidelines differ somewhat from traditional contracts and it is imperative that the buyers interest be protected with certain clauses and criteria.
  • In the state of California, an investor who is purchasing a property NOT for their personal use but for income property and the property is owner occupied cannot legally be represented by a Realtor. The Home Equity Act addresses this. This law is being revisited for modification ,however, at this time a bond must be posted for a Realtor to represent an investor seeking to purchase homes that are owner occupied and no such bonds exist in the state of California. In other words a Realtor cannot advise any investor buyer and/or write up a purchase contract for any investor/buyer where the home is owner occupied and the investor buyer is purchasing for investment use only, not personal use. The investor buyer must use an attorney in that situation.
  • Please check out for futher info.

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