The designation of “Short Sale” in the MLS indicates that if a full price offer is brought to the Seller, there will not be enough proceed at closing to payoff the Sellers mortgage(s). It will be short of a full payoff. It is notice to all potential Buyers that this will be a contract contingent…
- Tag: Short Sale listings
What Agents Say
I have already written about the buyer getting the home inspection done earlier instead of later.
The absolute best way to handle the home inspection for a short sale, however, is for the Seller
to get a pre-inspection before putting it on the market…or at least before there is an offer. If the
Seller does not get a pre-inspection then that task is left to the Buyer.
The problem is that even though it makes sense on so many different levels for the buyer to get
the home inspection early (see Blog #4), they still want to wait until the short sale is approved
before paying for an inspection. It is more than annoying to work for several months to get a short
sale approved only to see the buyer walk after they find something in the home inspection that
they don’t like (usually fairly minor). The buyer, seller, both agents and the attorney(s) are all in
exponentially worse positions time and money-wise than they would be had the inspection been
performed earlier and the defect detected. The Seller may even have lost his/her only opportunity
for a short sale and will now face foreclosure….all for $350. Other benefits of a pre-inspection are:
1) The Seller will probably get an offer sooner.
2) The offer may be higher.
3) The Buyer will probably stick around longer and close.
Why? Less anxiety. A short sale has a certain level of anxiety built it because we don’t know if the
lienholder will approve the offer. If the Buyer waits until after the short sale is approved to get the
home inspection, that adds a completely separate source of anxiety….what is the condition of the
house. Why not eliminate that particular piece of anxiety and unknown with a pre-inspection?
I know… the seller does not have any money. Wrong. After hundreds of short sales I can tell you
that this is not usually true, regardless of the price of the house. With the new guidelines of some
banks requiring the Seller to be at least 1 – 3 months late on their loan payments, this argument
holds even less water. This $350 may be the difference between getting a short sale and watching
the house go to the courthouse steps.