You are in the market to buy your future dream home and the one you have set your eyes on is a short sale! But you want “this one” and no other despite all the nightmare stories you heard about this kind of transaction, you are willing to try.
To make sure that you have all the odds in your favor to get to the closing table, there are key questions you need to ask your agent or the listing agent before jumping in:
1- How many liens are on the property?
The more liens on the property, the difficult is going to be to get approval from all the lien holder since each and every one of them have to give their approval for the short sale to go trough.
2- Have done a preliminary title search?
A preliminary title search will help to determine liens that are sometime unknown(?) by the seller or the seller’s agent such as mechanic liens, tax (income tax), child Support etc…
3- How do plan to satisfy the junior lien(s) holder?
2nd mortgage holder, Equity line of Credit servicers are key elements of a short sale success. If the listing agent doesn’t have a plan to satisfy them, you are probably wasting your time and the deal will not make it to the closing table.
4- Who is the Lender(s) or servicer of the loan(s)?
Knowing who you have to deal with as lender will help you determine approximately how long you have to wait for the lender approbation of the sale. While some Lenders/Servicers are quick to answer, others are pain in the neck to deal with.
5- How is the listing agent going to present the offer to the Lender?
You need to know if all offers will be forwarded to the lender regardless of if the offer makes sense or not. First, you don’t want your offer to land on the Lender’s table without the seller signature and second, how many chance do you think you have if you offer is the 8th on the same property with a Lender having thousand of short sale offer to review?
6- How far is the seller in the pre-foreclosure proceedings?
If the property is already schedule for the auction sale on court steeps, your chances to get the short sale approved are slim unless the auction sale is put on hold. Ask to see the document saying that the foreclosure is on hold before writing an offer, making inspection and appraisal.
7- Who is going to do the negotiation with the Lender (s)?
Is it the listing agent? A 3rd party negotiator or an attorney? You may want to know because depending on the negotiator experience is you short sale completion success.
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