In the current economic climate and distressed housing market, real estate shorts sales have become increasingly common. The primary short sale strategy gives the seller an exit strategy to get out from under a mortgage he can’t afford. Nonetheless, the lender and the buyer can also benefit. The lender gets rid of a bad loan and the possible added expense of foreclosure action and the buyer gets a home at a reduced price.
One caveat, whether you are the seller or the buyer in a short sale deal, choose your real estate agent carefully. Be sure the realtor has experience with short sales and understands all aspects of the strategy. While time is of the essence in most short sale situations, a good real estate agent will take the time to conduct a market analysis, explain the short sale process, prepare the paperwork the lender requires, conduct negotiations and follow through with you and the lender.
For the seller, the realtor’s research is crucial to gather accurate information and prepare a preliminary HUD statement to use as a tool to negotiate with the lender. And, for the buyer, thorough market research will help you and your realtor assess home prices and arrive at a fair offer that the lender is likely to accept and that factors in the repairs and improvements the home will need.
An effective short sale realtor can prepare the Seller’s hardship letter, preliminary HUD statement and documentation and purchase contract to assure the lender that he will get paid. With an accurate preliminary HUD statement in hand, the realtor is in a better position to convince the lender to accept a discount on the money the seller owes on his mortgage and ensure that the seller doesn’t end up owing money at the closing.
A knowledgeable realtor who works closely with you and the lender to keep the sale process on track and makes sure the deal goes through is the key to successful short sales.