When you are excited about buying a new home, the last thing you are looking for is a long, drawn-out process that leaves you with lots of questions and few answers. However, good things do come to those who wait…especially if you and your family have the patience to wait for a bank’s decision in a short sale.
By definition, a short sale occurs when a bank agrees to allow the property to be sold for “short” of what is actually owed by the mortgagee. Recent economic events have caused short sales to be a go-to solution when a homeowner is upside down on the mortgage and is unable to continue to pay the monthly debt. A short sale can be good for both the seller and buyer, but whether or not a short sale can actually take place is in the hands of the lender.
That’s where the delays come in. In fact, there are many stories of interminable delays and deals that fall through when the bank won’t accept a short sale offer from a buyer who is looking to get “a good deal.” It’s not unusual for realtors to attempt to steer buyers clear of short sales, especially when time is of the essence and there may be good deals to have in the current buyer’s market anyway.
Most often, there are two main reasons short sales can take a long time – too long – to complete.
- Banks & Red Tape: That should almost say it all! Since the bank or other lending institution has to approve the offer and accept less than is owed on the property, it may be slow is signing on the dotted line. Lenders want to make sure that, in fact, the seller is truly unable to keep its promise to repay based on the mortgage terms. Also, the bank will want to be sure the buyer has the money and credit to complete the sale. Finally, the bank has very little motivation for moving so fast. After all, it is likely losing money on the short sale. No reason to rush into that deal.
- Paperwork…and lots of it! While buying a house is all about “location,” the real estate transaction is about “documentation.” There are plenty of pages to read and sign. If anything is out of place, it delays the process even further. Plus, a short sale usually involves more than just a mortgage loan; there is often a line of equity that needs to be dealt with as well as other lenders who have to sign off on the deal. Again, repeating the obvious, since the bank is losing money, they are not likely to put their “A Team” on getting your deal done fast.
A Buyer’s Best Bet? Talk to an experienced short sale attorney who will put your interests first. A lawyer with extensive knowledge of the rules and regulations surrounding short sales can increase your chances of getting the process expedited because you can be assured that the paperwork will be in place and filed correctly and on time.
If you are considering a short sale in South Jersey, talk to the knowledgeable real estate attorneys at Rothamel Law. We’ll protect your rights and interests every step of the way.