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Saturday, April 14, 2012

Selling Your Home as a Short Sale - Even a short sale must still pass the inspection (usually)

Short sales can be a challenge whether you are the buyer or seller.  Most short sales are sold "as is" which means no repairs will be made by the seller in the event problems arise before closing (more on this later!).

Sometimes short sales seemingly take forever to get an approval from the lender.  But when the approval does arrive sellers should expect the buyers to have a property inspection done before proceeding.

And after the inspection, if the buyer is getting a loan, there will be an appraisal.   If it is an FHA appraisal there will be checks on major systems - sort of a mini inspection.  The FHA appraisal (as with all appraisals) are in place to protect the borrower (and lender).

Now back to the "as is" contract, short sales and inspections....

If the inspection reveals issues with major systems like air conditioning not functioning or a leaking roof, or leaky pipe the seller should expect to resolve the issue one way or another in order for the appraisal to pass.   Exactly how the remedy is reached is between the parties involved in the transaction.

Even if the appraisal reveals no issues the selling price (loan amount)  must still be supported by comparable sales.

Above where I stated "Most short sales are sold "as is" which means no repairs will be made by the seller"  there may be some wiggle room.  Sellers may still make repairs (especially if they are inexpensive) in order to get the short sale done.   The "as is" in a foreclosure contract is much more firm.

After all, if the hardship that caused the short sale will be relieved by a little repair,  then why not?

If you are facing a hardship and a short sale may be a consideration, please give me a call or send me an email.

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