If you are a buyer writing offers on short sales, be prepared. A short sale is not a foreclosure, but it is a “distressed sale” with a distressed seller. In order to start the short sale process, the seller must write a hardship letter to the bank explaining how their situation has changed since they bought the house and signed loan documents. Whether it explains how they lost their job or went through a divorce, the bottom line is always the same: they don’t have any money!
This may affect the condition of the house at close of escrow. With a traditional sale (not a short sale or foreclosure) you can expect a house to be in the same condition it was in when you wrote your offer. With a short sale, however, you have to be prepared that the home will be in much worse condition. Per the purchase contract everything that is attached to the property conveys in the sale including window coverings, ceiling fans, fixtures, built in speakers, etc. These items are not guaranteed to be left by the seller when purchasing a short sale.
Also, the seller may turn off all utilities to the property prior to closing. As a result the landscape may be dead and you may be required to turn on utilities in your name to complete the required appraisal for your loan.
In the end most short sales can be bought at a great price, but be prepared to do some work before it becomes the original house you fell in love with months before.
Thu, Dec 17, 2009
Education