Short Sale Buyer Questions

QUESTIONS A SHORT SALE BUYER IN MIAMI MAY HAVE.

Q)     What exactly is a short sale?

A)     A short sale is a type of real estate transaction that occurs when the home owner owes more to his lender/s than the current market value of the home. Although the home is sold by its owner, the purchase offer has to be approved by the bank or investor who holds the loan because the lender ‘forgives’ a portion of the homeowner’s loan.

Q)     I’ve heard it takes a long time to complete a short sale, is this true?

A)     Yes, buying and selling a home offered as a short sale generally does take much longer than a non-short sale purchase. The actual time depends on a number of variables.

Some banks respond to a buyer’s offer in as little as 3-4 weeks. However, the majority of the lenders are taking 3-4 months just to respond to a purchase offer.  Patience is a big virtue when buying or selling a short sale.

Q)     Will the home seller make repairs to the home if I find out there are problems?

A)     This varies on every transaction. In general, the home buyer will be asked to sign an “AS IS” addendum as part of the purchase contract. The “AS IS” addendum puts the home buyer on notice that the home is being offered in the condition you see it and no repairs will be made.

There are requirements under the purchase contract and the AS IS addendum for some items to be in working order. A phone call about this subject is needed to go over the various possibilities.

Q)     If the home owner accepts my offer does the lender have to as well?

A)     This is probably one of the most confusing parts of buying a short sale home. Normally a buyer negotiates the purchase price with the home owner and you are done. However, with a short sale it’s a different story. Here is what we see on most short sales.

The home seller’s agent will list the home. He or she will try to get a few people to submit offers and present them to the home seller. The seller’s agent then submits the best offer to the lender/bank for approval. The bank will compare the appraised value of the home to your offer. If they like what they see they may accept it . The lender can also deny the offer and/or send a counter offer. For the mast part, offers are usually accepted if they are in line with market value and the owner has been able to prove a ‘hardhip’ meaning they can’t afford to pay their current mortgage.

Short sales have a lot of variables so there is no cut and dry answer to this question.

Please reach out if you have any more questions,

– Lindsey Brown

Lindsey Brown P.A
EWM Realty International
305.494.3398

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