www.REOInspector.com - The Official Website

SHORT-SALES

Michael Leavitt The Northern Utah real estate market has changed dramatically in the past few months. Short sales, Foreclosures, and REO Bank-Owned properties have flooded the marketplace, and each brings with them the heightened need for home inspections, stucco inspection, deck inspections, water entry inspections, termite inspections, and crystal meth inspections, just to name a few.

SHORT-SALE INSPECTIONS
SHORT-SALE ADVICE
SELF-INSPECTION FORM

SHORT SALE INSPECTIONS

Short-Sales attract buyers looking to save money on a good home that the current owner is unable to meet their financial obligations. Sometimes they are advertised as “Short-Sale” and other times the asking price is just considerably less than similar homes in the area.

Historically, short sale transactions have never been a quick deal. Buyers need to realize that even if the seller accepts your offer, it may be refused by the lender who is agreeing to take less than is owed on the home. It remains to be seen if the process will be sped up now that there are so many homes in the marketplace that are either short sale or foreclosure, but rarely do they close in less than 30 days and sometimes take 3 to 6 months as the lenders decide if they want to proceed with the prospective buyer’s offer.

I found a great article online that shares reasons why buyers might not want to buy on short sale. I will list the 11 headings and allow you to further research the explanations on each by visiting... “Short-Sales Are No Bargain”

Here are 11 Reasons Why Buyers Might Not Want to Buy a Short-Sale:

1) Sellers Paid Too Much.
2) Sellers Borrowed Too Much.
3) Stringent Qualifications - WARNING: The bank may not have agreed to accept short-sale offers yet.
4) Homes Sell at Market Value.
5) Homes Sell "As Is".
6) Length of Time to Close. Depending on when the Notice of Default was filed, the lender's back-log of foreclosures and how much paperwork the seller has already submitted, it could take anywhere from two weeks to two months to get a response on a purchase offer from a lender. In addition, if two lenders are involved because there are two loans secured to the property, it could take longer to satisfy the demands of the second lender.
7) Lenders Can Change Conditions at the Last Minute.
8) Lenders Discount Commission.
9) Higher Buyer Closing Costs.
10) Lose Control of Transaction.
11) Little Seller Motivation (I did not know this. Michael Leavitt). When the seller discovers that the short sale effect on credit is identical to that of a foreclosure, there is little incentive for a seller to cooperate with a short sale. There is no benefit to a seller to consider a short sale and move out before the foreclosure is concluded, except for peace of mind that the nightmare is over.

SHORT-SALES VS. QUICK SALES - Some homeowners are not upside down on their mortgage, and due to their equity and circumstances they just need to make a quick sale. This should not be confused with owners who owe more than they can currently get for the property. Quick sales can also be great bargains and they do not have the long list of transaction issues associated with Short-Sales.

SHORT-SALE INSPECTIONS ADVICE

Buyers should NOT be advised to forego their inspection contingency to make their offer look better to the lender.


Because short sales are always subject to lender approval, patience is required!

The home is being sold “As-Is” and that should raise every red flag out there that you need to know as much about this property as possible before signing on the bottom line.

GET AN AGENT - Don’t hire just any agent. Instead, do some research and get an agent who specializes in foreclosures, short sales, and REO Bank-Owned properties. They will be worth, and earn, every penny of their commission as they help you navigate the hurdles that they have overcome many times before. Their experience is very valuable and can help prevent a lot of frustrations.

BEFORE OR AFTER??? - Whether the inspections are performed before or after the offer is accepted is not a hard set rule when dealing with “Short-Sale” inspections. Sometimes it is better to inspect before the offer to see if it is worth getting involved with the offer process on the home. In other cases the listing agent has paved the road and done all of the preliminary work that will allow for easier acceptance or denial of your offer.

PAYING FOR INSPECTIONS - The only sure thing is that the prospective buyer will be paying for all inspections out of their own pockets, as the information solely benefits them in the purchase process. The seller is getting nothing out of the deal except bad credit. The lender is losing money on their loan. The agents are agreeing to severely discounted “Short Sale” commissions. We recommend that you budget anywhere from $400 to $2,000 for any and all needed types of inspections to get you the information you need to make an informed purchase. Here are a few of the inspections you might need:

SELF-INSPECTION DOWNLOAD FORM

I have created a self inspection form for prospective buyers to use when looking at foreclosure, short sale, and REO Bank-Owned properties. The form is designed to allow you to inventory issues and help you think of many issues that you might not have been considering. Once you find your jewel in the rough, then you can call upon our firm to perform the needed inspections.

CLICK THE IMAGE OF THE FORM BELOW TO DOWNLOAD

OTHER REOINSPECTOR.COM INFORMATION

Michael Leavitt

Michael Leavitt & Co Inspections, Inc.
1145 N. Main Street
Orem, Utah 84057
801-636-681

Webmaster