How to Buy a Short Sale
Over the past few years the real estate market has seen a multitude of properties selling as a short sale. While many markets are finally seeing a reduction in these distressed properties, they are still around and affect the homeowner as well as the potential buyers.
Simply stated, a short sale means that the lien holder on a property accepts payment that is less than is owed….in other words, it’s “short.” The lien holder would be the lender or lenders. If home has a first and second loan, then both lenders (lien holders) would have to accept the terms.
The process is relatively simple:
• The listing agent notifies the lien holder(s) of the intention to sell as a short sale
• A buyer’s offer is accepted by the seller
• The seller completes a full short sale package and submits to the lien holder(s)
o Buyer’s offer
o Seller statements of financial distress/hardship
o Seller’s complete financial statements
• The lien holder(s) order a Broker Price Opinion (BPO) which is an approved real estate broker’s opinion of the market value of the property.
• Once approved by current lien holders, then the sale concludes as normal. (Buyer obtains loan, appraisal, inspections, etc.).
Buying or selling a short sale property takes a little longer, but there are benefits and it is a far less difficult than it used to be and if the property is right, nothing to run from