Lehigh Valley Short Sales – Top 5 Buyer Offer Tips and maybe a few more
So, you want to make an offer on a Short Sale? Please consider these Top 5 Tips when considering to make an offer on a Lehigh Valley Short Sale property.
1) You need to give the seller’s lender at least 90 days to get written short sale approval. This is the average time it takes an experienced short sale negotiator to get written short sale approval.
2) Understand that the seller’s lender WILL NOT approve a short sale at anything less then $5000.00 under current market value in as is condition. So, be prepared to get a counter offer from the seller’s lender if your offer is NOT at current market value in as is condition. More information will be coming soon on “How do you know the current market value of a short sale?”
3) If you are interested in getting inspections – which you certainly should if you are a home buyer and not an investor – You need to do the inspections within the first 15 days after the seller signing your offer – What more information check out this video I made last year.
4) Need Seller’s Assist? Fine but do not expect to get any more then 3% seller’s assist approved by the seller’s lender. If the seller has an FHA loan that is going through a short sale only 1% is approved if the buyer is getting an FHA loan to purchase the property otherwise you will need to wait another 30 days to get 3% seller’s assist approved through what is called a variance with FHA.
5) Other conditions no allowed in a short sale buyer offer:
- You can not have a home to sell first – No home sale conditions
- Cash purchases do not allow any seller’s assist.
- If the buyer agent and the seller’s agent is the same person the lender will automatically cut the commissions by 1 to 2% so 4 to 5% commission is the max that will be paid as real estate agent commission.
- The settlement date should say “within 30 days of written short sale approval” if the Buyer is getting a Mortgage and If a cash transaction – settlement should be within 2 weeks of written short sale approval.
- If there is a ReSale inspection/CO inspection required where the property is located – This is negotiable in the state of PA but typically the seller pays for the inspection and the buyer is responsible for all repairs after settlement. (The property inspection will catch any of these items)
- Yes as a buyer you can get any type of loan for a short sale – This includes FHA, FHA 203K which is a rehab loan, USDA or Conventional.
- You should make sure you write in the condition in your PA Agreement of Sale that you will not be ordering your appraisal until 2 days from written short sale approval or you will be in default of your agreement in 8 days from the seller execution date – If you do not pay for and order your appraisal.
- The short sale agreement of sale and short sale addendum plus all other documents should be wet signed before sending it to the seller’s lender – one of the main reasons short sales take so long is because of the paperwork being sent in without being full executed. They prefer wet signatures not Esignatures.
So, as you can see short sales should be left up to those Real Estate Agents that have experience on both the listing side and the buying side.