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Short Sale Questions - 4 Things You Need to Ask

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By : Vicki Hat    99 or more times read
When you are on the quest to find your dream house, there may be an instance that you could encounter short sale homes in the market. With so many people facing problems in settling their mortgage, it is possible that they would opt for short sale to settle their debts. This lead to the availability of either good or poor quality homes at a very affordable price.

When you land a short sale, you may easily be drawn to buy the property; simply because the price is fairly low. However, you need to qualify the kind of short sales you buy. Qualifying helps you avoid situations that could lead to delays in purchase. Hence, you can get out of the agreement and move on with other homes for sale that meets your demands.

So how do you qualify the property? You do it simply by asking questions. Here are some of the things that you should be asking before searching and buying a short sale property:

1. What is the reason for selling the property?

Short sale is not for every kind of seller. Only those who are undergoing hardships will be qualified to do this. The kind of hardship should not merely be a temporary loss of money due to overspending. It should be events in life that lead to financial difficulties like long-term hospitalization, divorce, death of a loved one, loss of jobs and other kinds of financial hardships. If the reason for short sale is not anything like a qualified hardship, the tendency is the short sale offer would be denied.

Therefore, there is a need for the buyer to evaluate the reason for short sale to determine the likelihood of getting their offers accepted by the lenders.

2. Who are the lenders involved in approval?

You need to know the people involved in the approval of short sale. You need to know their loss mitigation department and call them up to follow up for approval. You may want to investigate, whether the note was sold to third party or not. Because if it does, it might take a little longer for the short sale to be approved (since they will have the final say).

You also need to know the bank itself because different institutions have different rate for acceptance of short sale. The days for acceptance will vary. Some are faster while others are very slow in approval. You should also know if the lenders have handled short sale before.

3. Is your real estate agent competent enough to handle short sale?

Short sale may look like just any other kind of home sale. However, for you to be able to buy short sale successful, people helping you should have the necessary skills to handle this kind of sale. Hence, your real estate agent should have experience in handling this kind of sale or else you won't be able to make a good decision when you are caught up in a crisis.

4. How many offers have been submitted for the short sale?

It’s difficult to apply for something when you have competition. When there are multiple offers, it gets harder for the lender to process the short sale because there will be too much work on their part.
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