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Created on Monday, 06 February 2012 05:56

The Buyer’s Responsibility in a Short Sale

Short sale offers sellers the opportunity to raise enough money to be able to pay their lenders the rest of the amount owed on their mortgage.

Delinquent homeowners who find themselves unable to secure any program to help them avoid foreclosure may choose to use short sale to limit the adverse effect mortgage delinquency pose to them.

But short sale is a method that is not always accepted by lenders. This is because in the short sale deal, the lender is mostly required to accept the proceeds from the sale of the home as the full payment for what the homeowner owes on the home loan.

Most often, homes put up for short sale go for far less than what they would have gone for if they were not in a state of distress.

This means that the homeowner gets to walk away from the loan while the lender loses out on any money that is left to be paid. This makes short sale a very viable alternative for homeowners who are likely to face foreclosure. In spite of this, lenders should remember that through short sale they have an opportunity to recoup at least part of their initial investment in the home loan.

Short sales also help buyers to get value for money. Most buyers are able to acquire valuable homes at very affordable price. For this reason, it is in the interest of both the seller and the buyer to ensure that the short sale process receives the approval of the mortgage lender.

It has become necessary to stick to the correct procedure for short sales because foreclosures have put a large number of homes up for sale which has slowed down the rate at which distressed property attract buyers.

The buyer has a part to play in helping the seller to convince the lender to accept the decision of the homeowner to short sell the home. Homeowners looking to get their lenders to agree to short sale must make sure that documentation for the process are in place and in order.

But the buyer must not leave the entire process on the seller because an agreement between the seller and the buyer is not all that is required for a short sale process to be completed. Until the lender has acknowledged it, the sale cannot take effect.

So, for buyers who know that they are getting an unbeatable offer through short sale, leaving the process to the seller to battle with would be a very bad idea. Lenders are more likely to accept short sale when they know that there is a committed buyer who is ready to take over the property.

People who wish to buy homes through short sale must be on the watch out to avoid having to spend more on a distress property. Most times, without careful inspection, one may be tempted to think that short sale is offering a better deal when in reality it is not.

Buyers should consult with professional real estate agents who have a history of completing short sales to ensure that the property is of good condition.

Do not be misled into purchasing a home that is in a bad shape since the cost of refurbishment may eventually put the cost of the property on the high side.