short sales FAQ for new investors or anyone in general.
Q: If the property is In pre-foreclosure is it a short sale?(Agent & Investor)
A: Not necessarily in order for a short sale, seller needs to owe more than the property is worth and HAVE A FINANCIAL HARDSHIP.
Q:Do I need an agent?(investor)
A:Yes!
Q:Does the seller get any money?(Agent & Investor)
A:The lender will give the seller what is called a relocation incentive amounts vary depending on loan. A short sale is an arms length transaction. Meaning no agreements that are not disclosed to the lender should take place all parties are required to sign Means no rent backs or cash under the table.(only way to get relocation assistance is if the property is owner occupied if its vacant they won't get anything)
Q:Should I pull Title before listing the property?(agents)
A: Yes,The reason for this is you want to send the bank every lien the property might have so you can negotiate pay offs and there is no surprises at the end and have to start all over gain.
Q:How long does a short sale take?(investor)
A:3-6 months depending on the agent.
Q:what kind of offer should I make?(investor)
A:VA loans want to net 88% of appraised value,Conventional will accept as low as 80% and reverse mortgage will accept 95% if the property is vacant if its occupied they will rarely accept anything under 5k of appraised value.
Q:The owner is not the borrower can we do a short sale.(Agent & investor)
A:You need the Primary borrower if he's dead a death certificate and an heir the transaction is quicker.
Some lenders will have deed restrictions so you may not be able to sell the property right away usually 30-90 days. if you're buy and hold investor it doesn't matter.
Short sales can be a great opportunity for deals. The bank is actually not the issue most of the times is the owners.
These are just some basic questions, I noticed on the forum I am not sure if they have been answered