Many buyers and sellers of homes in real estate transactions hire agents to represent them. Buyer?s agents represent potential buyers? interests. Selling agents look out for sellers? interests. Though buyers and settlers are not required to use the services of real estate agents, it is highly recommended. Short sales have become an increasing important category in many recent real estate transactions. The main participants include banks, sellers, potential owners and respective agent representatives. All have important parts to play to ensure for the transaction to succeed.
The potential buyers are bargain hunters. Short sales are real estate transactions between distressed sellers of homes and potential owners. Approval from the owners mortgage lender is required. The balance due on the mortgaged amount of a loan is higher than the money the homeowner can sell the home for.
The potential buyers working with their respective real estate agents make an appointment to see the property of interest. If a short sale status exists this must be disclosed to the buyer by homeowner. If interested, the buyer?s agent advises the client of a range of offer prices to consider making, based on the recent sales price of similar properties in the local area. The final offer price is the decision of the potential purchaser.
An offer, made in writing is sent to the agent representing the owner. After presenting all offers to the seller, a decision is made to accept, reject or counter the offer. If agreement is reached between the two parties, both buyer and seller sign the offer to form a contract. The contract is then forwarded to the seller?s loan provider for review and a decision. Lender approval must be gained.
The third party?s method of receipt and response time is crucial. Some financial institutions have streamlined the process allowing agents to send documentation electronically. This speeds up the process. Within a couple of days, a bank representative formally acknowledges contract receipt.
Financial institutions have loss mitigation departments responsible for processing short sale offers. Real estate contracts received are initially handled by the documentation department. They ensure all documents received are in compliance with the institutions standards. The negotiating department assigns a negotiator to look over the documents and propose any changes. A report is complied by an appraiser to provide the negotiator with a fair market sales price. This report is mostly based on recent sales of similar types of dwellings. The final reviewer is called an underwriter. Approval is then sought from the investor who provided the sellers mortgage loan.
All parties to the transaction are then informed of the lender?s decision and given the conditions under which the sale can proceed. The buyer must complete financing arrangements and the seller must make plans to vacate the property no later than the date of settlement. A neutral arbiter, normally a legal entity, is hired by the buyer to ensure a smooth transfer of ownership and arrange to receive funds to complete the purchase from the buyers? financial institution.
Many short sales do not succeed for a variety of reasons. Included are the lender?s level of responsiveness and efficiency. The loss mitigation department?s competence level, the willingness of the owner?s investor and resolve of the seller and buyer are also critical. All interested parties must work together in order for the short sales process to work satisfactorily.
For more short sale information from Jasper Brinks don?t forget to check out his Nibley UT Homes website where you can search all Nibley Real Estate.
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