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Answer: A short sales is where the seller’s lender is accepting a discounted payoff to release an existing mortgage on the property subject to short sales. All mortgage lien holders must agree to short sales. These will include second mortgage and tax liens.
Question: Who approves the price on short sales?
Answer: The lender determines the price for the property and the terms of payment. Even if the seller accepts your offer of price the lender will have to approve it.
Question: What are the factors that the lender considers in approving a short sale?
Answer: Generally, the lender will consider the market value of the property in determining the price. The seller need not be late in mortgage payment. The important consideration is that there is a hardship on the part of the seller in paying the mortgage and the loan amount is significantly higher than the value of the property.
Question: What should I know about the property?
Answer: You should check the public records of the property before making an offer of purchase. Your realtor can find for you who is in the title, whether foreclosure notice has been filed, how much is owed to the lenders and what are the liens and encumbrances on the property. This information will help you determine how much to offer for the property. Remember that if there is a second mortgage and a tax lien on the property, they will have to be negotiated and satisfied.
Question: Do I have to hire a realtor to assist me in buying short sale property?
Answer: It is recommended that you seek the assistance of a realtor in buying short sale property.
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