SHORTSALES

SHORT-SALES ARE NOT FOR EVERYONE. Short-sales have been around as long as mortgages have existed. The situation is born from a homeowners inability to payoff an existing mortgage lien from the proceeds of a sale. Lenders are faced with the difficult choice of accepting less than the amount owed or be forced to foreclose on the home. Foreclosure is expensive, time consuming and often involves litigation in multiple courts in order for a lender to ultimately take possession. This same situation may add up to some considerable savings to a potential and patient Buyer. However, the savings come with considerable risks - BUYERS BEWARE! Shortsales require the approval of the Seller's lender. The biggest problem is that the transactions take weeks, more often months, to obtain final approval. In the meantime, the Buyer must navigate a flurry of obstacles such as multiple appraisals, rate locks, time extentions, damages, repairs, and perhaps unexpected tenants.

The present economic and legal climate surrounding short-sales may either facilitate or compound this murky transaction.  Recent news surrounding 'robo-signers' and questionable foreclosure practices by major lenders and servicers have yet to leave a footprint on short-sales.  In other words, we may experience added delay in having these transactions approved or some much needed relief.  What we know for certain is that foreclosure is ultimately the last resort for lenders who are faced with a borrower in default.  The legal climate threatens to compound these efforts and perhaps significantly add to the already expensive remedy.  

The key to success in these matters, for buyers and sellers, will rest with a carefully crafted strategy, a well drafted purchase and sales agreement and exceptional experienced professionals involved. For more information: http://www.bankrate.com/finance/money-guides/10-crucial-steps-to-short-sale-buying-1.aspx