Short Sales | Fort Lauderdale - Real Estate
Short Sale lists updated July 2, 2008
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There is much talk about Short Sales in the real estate community, many properties are offered for sale thru a short sale and not everyone fully understands what a Short Sale actually is.
A "Short Sale" is when the owner of a property is no longer in a financial position to continue to make the monthly payments to the lender, negotiates with the lender for approval to sell the property to a new buyer for less than what is owed on the loan. It is often referred to as a pre-foreclosure.
In a normal scenario, the owner would simply put the house or condo on the market for sale, pay off the loan and that would be it. Unfortunately, with the soft real estate market, a stressed economy and the sub-prime mortgage debacle, instead of appreciating, properties have declined in value to the point that they are no longer worth the price originally paid for the property.
Selling a Short Sale Property
If you are a seller considering Selling a property thru a Short Sale, you should first consult an accountant and a real estate attorney to see if this is the best course of action for you and to learn the possible ramifications involved in selling thru a short sale. You will need to contact your lender to see if you will qualify to sell your property thru a short sale. Finally, select a Realtor experienced in marketing and selling short sales.
Plan ahead as most lenders will require the following documents:
- Most Recent (2) years tax returns
- Letter of explanation and the nature of your hardship
- Most recent (2) pay stubs
- Most recent (2) bank statements
- Letter of Authorization (if using a third party to acess information)
- Estimated HUD-1 (Settlement Statement)
- Copy of Listing Agreement
- Copy of Contract and/ or Offers to Purchase
Buying a Short Sale Property
If you are considering Buying a Short Sale property, you should also seek legal advice, select a Realtor and Closing Agent experienced with Short Sales and expect the process to take up to 2 months or longer. Although you will execute a sales contract with the seller, it is the lender(s) who make(s) the final decision. There is no guarantee that your offer will be accepted by the lender(s). You will want to have your financing already in place and provide an approval letter with your offer.
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