Shortsale & REOs
What is a short sale?
When a property is sold for less than the outstanding loan balance and the lender is willing to accept the proceeds, in satisfaction of the mortgage.
Sellers:
If you are considering selling your home as a short sale, you've come to the right place. Team Wilson has extensive experience in negotiating with banks and helping sellers navigate through the short sale process. Prior to committing to the short sale process, we recommend that all our sellers meet with a real estate attorney and an accountant to discuss the possible legal and tax ramifications of selling a home as a short sale. Please also refer to the Arizona Association of Realtors Short Sale Seller Advisory for more information.
In order to qualify for a short sale, a seller must re-apply to be released from their current loan. The banks typically want the seller's packet to include the following items:
- Hardship Letter - explains why the seller can no longer make his/her payments and can not keep the home
- Monthly Budget - list of income & expenses
- Tax Returns - last 2 years
- Paystubs - 2 most recent
- Bank Statements - 2 most recent
Once there is an offer on the home we will submit the offer along with the seller short sale packet to the bank for review. Each bank has their own timeline, however a typical short sale takes anywhere from 6-12 weeks to receive approval from the bank once an offer is submitted. The banks have to review the seller's packet, order a BPO to determine their value of the house, and then assign the file to a negotiator. Depending on whether the lender is servicing the loan or not, they will have to submit the file to the investor for final approval.
As your representation it is our job to follow-up with the bank to ensure they are progressing through the appropriate steps in a timely manner. We will keep you informed every step of the way and do everything in our power to help you obtain a full release and approval from your lender.
Foreclosures:
Buying a foreclosure or a bank owned home can be a very different experience from purchasing a home from a "regular" seller. However, you can get a great deal (especially on a distressed property that needs a little TLC) if you are willing to accept and play by the bank's rules. Here are some tips to help you through the process of buying a foreclosure property.
- You are purchasing the home in "As-Is" condition. This means the seller will not make any repairs to the home if something is not working. You will still have an inspection period which is typically 7-10 days after contract acceptance. This is your opportunity to have your home inspection, review the report, and make sure you are 100% comfortable with the condition of the house.
- Everything in real estate must be in writing; however you will often get a verbal acceptance on a foreclosure property and not have an executed contract with both buyer and seller signatures for 1-2 weeks. This can often be a little nerve-racking for buyers, but in our experience once you've received verbal acceptance on a bank owned property you're well on your way to homeownership.
- You will not receive a Seller's Property Disclosure (SPDS) or a CLUE report. (Yes, there are a lot of acronyms in real estate!) Because the seller never occupied the property they can not offer any information about the house or any information about previous insurance claims on the house. As a buyer, please be prepared to do your own research on your future home or ask your agent for assistance.
- You must use the seller's chosen title company instead of being able to choose your own title company. The job of the title company is to act as the neutral third party. They read and execute the purchase contract. When purchasing a foreclosure, the seller has their title company pull a preliminary title report when they initially take back the property. This helps to ensure there are no liens against the property.
- The seller can charge you a daily fee if you don't close on time due to buyer or lender delay. Buyers take note: it is imperative you choose a reputable lender whom you trust. They can not only make or break your home buying experience, but can also cost you money if they don't perform.
