Buyers pursue Evanston shortsales to get a good deal. So when you see a price listed for a home that
you think is too low for the neighborhood, before you jump on that price like
hot fudge on a sundae, ask your Thomas Team agent to call the listing
agent to find out if the home is a short sale.
Because you might want to think
twice about making an offer on a pre-foreclosure, short sale home. It's not as
simple as you may believe, and very few can close in 30 days or less.
Many of our Evanston home buyers
have waited 4 to 6 months to close on a short sale, sometimes longer.
What
is a Short Sale?
A short sale means the seller's
lender is accepting a discounted payoff to release an existing mortgage. Just
because a property is listed with short sale terms does not mean the lender
will accept your offer, even if the seller accepts it.
Be aware that the seller need not be
in default -- to have stopped making mortgage payments -- before a lender will
consider a short sale. A lender may consider a short sale if the seller is
current but the value has fallen. The seller may have over-encumbered, owe more
than the home is worth, so a discounted price might bring the price in line
with market value, not below it.
Check
the Public Records
Do your research before making an
offer to purchase. Your Thomas Team agent can find out who is in title,
whether a foreclosure notice has been filed and how much is owed to the
lender(s). This is important because it will help you to determine how much to
offer.
If there are two loans, you could
have a problem. The first mortgage lender's position is protected by the second
lender, unless the second lender does not want to foreclose. If a seller owes
$160,000 on the first and $40,000 on the second, offering $160,000 leaves
nothing for the second. The first will need to give something to the
second to gain its cooperation.
Hire
an Evanston Real Estate Agent with Short Sale Experience
It's one strike against you if the
listing agent has never handled a short sale, but it's even worse if the agent
has no experience in that arena. You need an experienced short sale agent, that’s
where the Thomas Team can help you.
The Thomas Team agents have experience in short sales and can help to expedite
your transaction and protect your interests. You don't want to miss any
important detail due to inexperience or find out your transaction is not going
to close on time because no one has followed up in a timely manner.
Qualifying
the Property and Seller for a Short Sale
A lender is unlikely to agree to a
short sale unless the seller has no equity and is unable to repay the
difference between your sales price and the existing loans. Sellers need to
provide a hardship letter to the lender. Sellers may also owe taxes on the
amount of debt that is forgiven.
A seller we know once demanded that
the buyer slip the seller $1,000 to be given the right to purchase the seller's
property. We said no. This is fraud. The lender legally pursued that seller. Do
not be lured by sellers who suggest this practice. In a short sale, the seller
receives no money because the lender is losing money.
Submit
Documentation and Purchase Offer to Lender
Once the seller has accepted your
offer, it gets sent to the lender for approval. You do not have a deal until
the lender accepts. Also, send the lender a copy of your earnest money deposit.
Do not be astonished if the lender asks you to increase it.
In addition, the lender will want to
see that you have your own loan available and you are pre-approved. Send a
pre-approval letter to the lender. It will help if your real estate agent
sends a list of comparable sales that support the price you are offering to pay
for the home.
Give
the Short Sale Lender Time to Respond
You and your real estate agent
should make your offer contingent upon the lender's acceptance. Give the lender
a time frame in which to respond, after which, you will be free to cancel.
Some lenders submit short sales to
committee, but most can make a decision within two to three months. Get a name
and phone number for the appropriate contact at the lender. The Thomas Team won’t
send an offer blindly to a department.
Reserve
the Right to Conduct Inspections
Generally, the lender will not pay
for customary items that a seller would pay. These include home protection
plans for the buyer, buyer credits of any kind and pest / termite inspections.
A buyer will be asked to purchase the property "as is," which means
no repairs. It is extremely important
that a buyer obtain a home inspection. The Thomas Team can help with
this.
If you have any questions about buying an Evanston short sale, please let us know. We're here to help in any way we can and would enjoy the opportunity to help you make Evanston your new home.
The Thomas Team
@ Properties
@ Properties
Chicago's #1 Real Estate Brokerage
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