What Is A Short Sale?

For those unfamiliar, a short sale is when a homeowner intends to sell their home for less than what they owe on their mortgage. As such, these transactions can sometimes be stressful for both parties as the seller is highly motivated to get out of the house while the buyer is highly motivated to make the most of the transaction. To ease some of that tension, we’ve compiled the following list of tips for both parties to ensure a smooth deal.

For Buyers

1. Consider making an EMD (Earnest Money Deposit): Making an EMD of anywhere from 1-5% of the sales price can make you stand out to the seller, and shows that you are serious about the property.

2. Check comparable sales: Knowing exactly what to offer on a short sale transaction can be tricky. Reviewing recently sold similar homes in the area can help you get a better grasp of the property’s actual value, allowing you to contextualize your offer.

3. Be wary of asking for repairs: Any requested repairs will hurt the lender’s bottom line. Since you must have your short sale offer approved by not only the seller but their lender, it is important to not be excessive in your renovation requests.

4. Preapproval letter: As with any real estate transaction, a preapproval letter gives any buyer a strong advantage: you are displaying to the seller that you are financially capable of completing the transaction, and this also furthers their impression of you being serious about their property.

5. Patience is key: Being patient not only with the seller but with their financial institution is key. Short sales are not simple clerically, and showing the seller that you are patient is sure to win you some kudos as they will likely be under stress to complete the sale.

For Sellers

1. Agents, agents, agents: Having a real estate agent experienced in short sale transactions will certainly work in your favor. Your agent can help you understand how much your property is worth, how to navigate negotiations, understanding contracts, and all around making the most out of your short sale.

2. Understand the ramifications: It is important that you understand how the short sale of your home will affect you financially, short term and long term. The best way to do this is by following tip #! and having an agent with you every step of the way to ensure your comprehension.

3. Don’t be afraid to negotiate: While some sellers are afraid short sales put them at a disadvantage, you still have room to negotiate specific terms with your lender.

4. Consider hiring an attorney: While agents can be a fantastic help in ensuring your short sale transaction goes smoothly, hiring an attorney to review all documentation can not hurt since they are sometimes better equipped to protect you when it comes to legalese.

5. Keep up with HOA payments: Delinquent HOA dues at closing can turn off potential buyers. Paying your dues on time when possible can avoid a headache when it comes time to sign.

If you have more questions or concerns about short sales, feel free to contact 54 Realty at 813-435-5411 or [email protected].