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First let us refresh our knowledge of what a Short Sale is.
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A Short Sale is when a property is being offered for sale for less than what is currently owed to satisfy the mortgage agreement between the seller and their lender.
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When a buyer submits their offer to purchase, it is first reviewed by the seller who has the options of accepting it, counter offer it or rejecting it. Assuming the offer is accepted by the seller then the offer is next submitted to the seller's lender for approval. At this point the lender has basically the same options of accepting, counter offering or rejecting it. Note: A Short Sale transaction requires two approvals before it can move forward to closing. The seller and their lender must both agree and submit their signed approval.
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It is important to note that there is no set timetable or specific time period to receive final approval. It can take weeks, months, or in the most extreme cases years to get approval and bring to closing. This is due to many factors that are out of our control and are usually due to a variety of reasons affecting the decision process.
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Purchasing a Short Sale comes with a higher degree of risk for the buyer. In most cases a Short Sale property is being sold in As-Is condition because the seller does not have any additional funds for repairs. By the same token the lender is already losing money on the loan and is not in any position to pay for repairs. So the burden of cost for repairs usually falls on the buyer.
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It is important to note that the buyer does retain the option of cancelling their offer if problems are found during the inspection process that the buyer is not willing to pay for. This is providing no additional addendums or changes have been agreed to that would change this provision in the purchase offer contract.
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I have dealt with many Short Sale transactions and have experienced first hand all the frustrations involved in trying to negotiate and bring one to closing. These types of transactions are not for the faint of heart. They require a great deal of patients and stamina. You must be honest with yourself before entering into one of these transactions. Ask yourself if you are willing to wait for how-ever long it takes to get approval and get to closing. If your answer is no then you are better off not pursuing this type of transaction.
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Now that I have given you all the negative aspects of a Short Sale there are deals to be had out there. It is more than possible to find and purchase your perfect property at a great value, as long as you are willing to be patient.
Should you decide to move forward in the purchase of one of these properties, you can rest
assured that I will be with you every step of the way in helping you find, negotiate, and
purchase your new home.
Your friend in the business and working for you everyday!
Russ Belle
REALTOR®
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