How To Buy A Short Sale
If you've fallen in love with a house that is being sold as a short sale, be prepared to be very patient. Short sales are anything but short. The entire process, from purchase agreement submittal to the seller to the close of escrow, can take 120 days — and sometimes more. The short sale, a process where the seller seeks permission from her lender to sell the house for less than her loan payoff amount, has many more requirements than a standard home sale. Many times, even though the house is located in California, the lender may be located on the other side of the country, further adding to the time it will take to close the sale.
Employ the services of a California-licensed real estate agent. These services cost you, the buyer, nothing as the agents are paid by the seller or, in this case, the lender. A good real estate agent can handle all of the contract paperwork and refer you to a qualified lender.
Apply for a mortgage loan. Shop around to find the best rates and terms.
Make the offer on the home. Your agent, or the seller's agent, will present you with the California Association of Realtors Form SSA, Short Sale Addendum. This form indicates your acknowledgment that the house is being sold as a short sale. By default, the form allows the lender 45 days to consent to the sale, but there is a space for you to enter your own time period for this event. Consult with your agent as to what time period she feels is appropriate in the current market. This will also depend upon how badly you want the home. Remember, this time period is only for the lender to communicate consent to sell. There are still other contract items, such as the appraisal, that will additionally lengthen the process.
Wait for the seller's lender to appraise the home and for the loss mitigation department to go over the seller's short sale packet.
Perform your due diligence inspections during the time specified in the purchase agreement. Be sure to use the services of a California-licensed contractor for all home inspections. Your real estate agent can refer you to a reliable service provider.
I have been in the real estate services business in the California real estate markets for many successful years and will be here for many more. I started my career in Real Estate in 2005. I started m....