Short Sale Pitfalls

Reblogger Mott Kornicki
Real Estate Broker/Owner with • Waterway Realty, Realtors® • Broker • South East Florida • Broker BK0252335

SHORT SALES, THE LONG END OF WHAT COULD BE A SHORT CUT.

"Almost like taking a long walk on a short pier"

Real Estate In Miami // 786-229-7999

Original content by Marguerite Wherry

I have just closed a Short Sale and it was anything but Short. I would like to offer some Short Sale Advise

1. Make sure you obtain a current prelim on the property: The Seller may tell you they only have 2 mortgages but in reality there could be more.

2. Make sure when you get the title report that you read it: It will tell you if there are delinquent property taxes, how many mortgages and any other misc. liens that have been placed against the property.

3. Make sure when you ask your Escrow Officer to rep the HUD that you have a good idea of what repairs or expenses or credits a Buyer may require: If you are going to submit for termite to be paid by Seller (Bank) you need to know what the cost is going to be.

4. Make sure if there is an HOA you know how delinquent the dues are and if there are any pending special assessments that need to be paid in full at close by Seller.

5. Be aware that quite a few banks will send back their approval to you less an approval for termite or home warranties to be paid by Seller/Bank: You need to warn perspective Buyer's that if that happens termite or a home warranty will have to be paid for by the Buyer or deleted from the transaction.

6. Be aware that some Bank's send their approval and won't allow retrofit, 9a, or Prop ID to be paid for by Seller/Bank. They also may slash the escrow fee.

7. The approval date for closing on the approval letter is not the drop dead date. You actually MUST close 1 day prior to that date. On or before verbiage can close that same day but title prefers 1 day cushion. The Title Company will NOT allow you to close on the date per the letter. They will require you to close at least 1 day prior to that date.

8. BANK APPROVAL letter must state it will issue a release somewhere in the body of the letter or title will not accept the letter.

9. PAYOFF letters. Payout amounts to 2nd lien holder must match in the approval letters from 1st and 2nd lien holder. The 1st can not state 2nd can get $3000 and 2nd states they get $5000. Title will reject the approvals.

10. If someone (ie Seller or Agent is bringing in $ to make up the difference to cover how much the 2nd requires vs. what the 1st agreed to, the 1st has to agree to that in their approval letter or title will not accept it.

11. If closing is going to be delayed for whatever reason beyond the date in the approval letter you will HAVE to get a new approval letter or some kind of document in writing from the bank agreeing to extend the short sale approval.

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Mott Kornicki

Waterway Realtors, Notary Public
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