What is a short sale and should I make an offer on one in New Hampshire, Short sale pros and cons.

25 Jan 2012 Leave a Comment

by Don Goudreau in New Hampshire Real Estate

What is a short sale and should I make an offer on one in New Hampshire, Short sale pros and cons.
From a buyer’s perspective what do I need to know about short sales?
First off a short sale is a home for sale and the seller is underwater on the loan.
Meaning the market value of the home is less than what they own the bank.
When you enter into a sales agreement on a short sale the key is to be extremely patient.
There is a huge backlog on short sales at all banks at this time.
The other thing to remember is since the sellers are underwater already then they usually don’t have the funds available to do repairs after home inspections.
The process is once the offer is made a ton of paperwork has to be inputted by the listing agent or the 3rd party negotiator.
Very often there is a 2nd lender involved and both lenders will have to agree to take a short fall on what is owed to them.
The key is to have patience as it will often seem like nothing is happening at times but things are happening as there are a lot of people that have to touch the file.
It is kind of like conducting an orchestra and there are many components to getting an acceptance letter and approval for a short sale.
Once the letter comes in the lender who is the ultimate decision maker may accept, modify or counter your offer.
Understand that the lender has to do a Broker Price Opinion independently and they will only accept up to a certain percentage of the BPO and usually cannot bend beyond a certain limit.
So what benefits are there to going for a short sale property?
Usually the home is being lived in and is in good working order. Sellers are easy to work with and seller concessions are usually allowed if the buyer needs assistance with closing costs.
The government has been encouraging banks throughout New Hampshire to work with buyers and to streamline the short sale process.
So be aware of the pros and cons and if you have the flexibility of being patient for 2 or 3 months you could potentially get a Smokin Hot Deal!