As a SFR (Short Sale Foreclosure) designee I wouldn’t say to run away from short sales but you need to know what you are getting into. Most agents are afraid because they hear bad things but don’t have first-hand knowledge.
Step 1 – if you want to get into distressed properties then find an agent with a Certified Distressed Property Designation, Short Sale Foreclosure Designation, or has listed and closed multiple short sale properties.
Step 2 – Have your agent ask how many liens are on the property and is there a short sale pre-approval in place?
Step 3 – know the following:
• At this point in time you will not qualify for the tax credit
• Minimize contingencies
• Expect 30 days for response to offer
• Expect 90-120+ days to close
• Because lender and seller will not do repairs, buyer must have their own money to do repairs
• An executed offer is required to submit to the lender for an approval
• The option period is the same as traditional purchase; the short sale is simply a contingency
• If this is an investment flip, the buyers should do additional due diligence as they may not be able to flip the house
• Buyers must sign a short sale contingency disclaimer
• The inspection is to determine what the buyer is actually buying but the property is as-is, whereas
• The option period is as usual, days are based from effective date
Step 4 – BE PATIENT!
Let us know what you think or add to our blog by writing a comment.
Step 1 – if you want to get into distressed properties then find an agent with a Certified Distressed Property Designation, Short Sale Foreclosure Designation, or has listed and closed multiple short sale properties.
Step 2 – Have your agent ask how many liens are on the property and is there a short sale pre-approval in place?
Step 3 – know the following:
• At this point in time you will not qualify for the tax credit
• Minimize contingencies
• Expect 30 days for response to offer
• Expect 90-120+ days to close
• Because lender and seller will not do repairs, buyer must have their own money to do repairs
• An executed offer is required to submit to the lender for an approval
• The option period is the same as traditional purchase; the short sale is simply a contingency
• If this is an investment flip, the buyers should do additional due diligence as they may not be able to flip the house
• Buyers must sign a short sale contingency disclaimer
• The inspection is to determine what the buyer is actually buying but the property is as-is, whereas
• The option period is as usual, days are based from effective date
Step 4 – BE PATIENT!
Let us know what you think or add to our blog by writing a comment.
Blog post written by the Dowell Taggart Team of RE/MAX Best Associates
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