PATIENCE      PATIENCE      PATIENCE  

      BUYER BEWARE- when purchasing a:  

Short Sale/Pre-foreclosure Property 

·         Your purchase offer will be less than the balance owed on the mortgage and therefore is subject to approval by the owner's lender. The Lender reviews and can accept or deny the request, in which case a short sale will not be possible. Banks can take 30 days or longer to make a decision.  Be prepared for some lenders to take longer, 9 weeks or more. 

·         The lender can also reject the listing price and ask for more before accepting a short sale, or reject your offer and feel the property will sell for more after the foreclosure redemption period. Be prepared for rejection.

·         The property is to be sold in "as is" condition. For more information you can request a copy of an "as is" addendum under "Free Buyer Reports and Documents".  You are permitted to conduct a home inspection but most likely the seller will not make any repairs.

·         A Seller's Disclosure Alternatives will be provided in lieu of a Seller's Disclosure. It is up to you to discover any potential problems associated with the property.

·         No offers contingent upon the sale of another property will be considered.

·         The property listing is to remain in “Active” status until received written acceptance of your offer has been received from the Lender(s). Seller(s) can submit the offer to the lender without their signature(s), in which case the seller(s) will continue to market the listing and accept additional offers until the seller(s) lender responds to an offer to the lender. Ask your agent to request the seller(s) to sign the offer before submitting it to the lender for acceptance so the seller(s) is legally obligated to accept and submit only your offer.

·         You have to be flexible with the date you want to close.

·         Due to the somewhat complicated nature of the sale, seller(s) reserves the right to name the title company.

·         Short sales are not for every buyer. Due to the nature of a short sale such as the "waiting game", the possibility of getting your offer rejected and purchasing in "as is" condition your agent may discourage you from considering a short sale. Especially if you have a specific closing date you need to meet.

·         Be sure to purchase an “Owner’s Policy” of title insurance to cover any liens that show up against the property after your purchase.   

REO/Lender Owned Property

Many lenders and listing agents require the buyer to submit an offer on their customized purchase agreement or include their addendum.  THE LENDER AND LISTING AGENT CALL THE SHOTS!!! Also be prepared for the Lender and Agent to require the following:

·         Offers must be non-contingent.

·         Seller chooses the Title Company and you close with seller's designated Closer.

·         Earnest money of $1000 or 2-3% of sale price, whichever is higher. Earnest money may be required in the form of a cashier's check.

·         After the expiration of the property inspection period the earnest money is not refundable.

·         The seller will retain the earnest money is the buyer cannot close due to not qualifying for a mortgage.

·         No offers contingent upon the sale of another property will be considered.

·         Personal property is not included in the sale.  If there are appliances in the property the seller does not intend to move them.

·         Seller will only consider financing terms noted in the MLS listing.

·         Your pre-approval letter may be required to state the following:

1. Loan Officer has reviewed the Buyers’ credit report, bank statements for fund verification and most recent pay stubs for YTD income verification

2. State the maximum loan qualification based on monthly income to debt ratios

3. If the down payment is a gift, gift funds must be verified and include gift letter

4. Buyer qualifies for terms offered by Seller

5. THE LOAN IS NOT SUBJECT TO THE SALE OR CLOSING OF ANY OTHER REAL ESTATE 

6. “Lender understands property is sold as-is and will not require any work order”

CASH Offers: Verification of Funds must accompany the Offer.  Submit the most recent bank statement or letter from Bank stating Buyer has sufficient funds on deposit to close.

• ***Boarded/Condemned properties-lender needs to state: "lender understands property is boarded, condemned and not habitable.  Also, no lender work order will be required prior to closing."***
• Title to this property will be conveyed by means of a: Limited or Special Warranty Deed 

·         The property is to be sold in "as is" condition. For more information you can request a copy of an "as is" addendum under "Free Buyer Reports and Documents". 

• A Seller's Disclosure Alternatives will be provided in lieu of a  Seller's Disclosure. It is up to you to discover any potential problems associated with the property.
• Buyer is responsible for the costs of de-winterizing and re-winterizing at the time of the inspection and/or closing unless otherwise agreed in writing. 
• The buyer and/or buyers agent is not allowed to turn on the water and or dewinterize the property without the expressed written consent of the seller or sellers agent.  The buyer and buyers agent will be held liable for any damages resulting from not following these instructions.
• The buyer cannot require any repairs to be made even if they are required by the lender. It is possible in some circumstances to obtain a rehabilitation loan.  This type of loan usually requires at least 10% down and the interest rate is higher. 
• Garage door openers, keys for mailbox, shed, pool, etc., may not be available and if so will not be provided by the seller. You will need to immediately re-key the lock or change it out.
• The buyer is entitled to a property inspection but may be required to pay the fees to turn the utilities on. If the buyer is not satisfied with the inspection and wants to cancel the purchase agreement the fees may be deducted from the refundable earnest money.
• Acceptance of offer may be subject to review and approval of written offer by applicable governmental agency, investor, mortgage insurance company, right of first refusal or other resale control. This could take several days or weeks.
• The Seller may charge a per diem fee for each day the closing is delayed due to the buyer's fault.
• The Seller has the right to extend the closing date and doesn't always meet the closing date and will not be liable for any costs the buyer incurs due to the delay including interest rate locks, re-scheduled movers, a place for you to stay, etc.
• If the property is a condominium or PUD the buyer is required at buyer's expense for obtaining the required documents to review, unless otherwise required by law.
• The seller shall have the right to terminate the agreement  for several reasons including an insufficient price to pay the expenses to sell the property. The buyer's earnest money would be refunded in that situation.