How to Buy a Manchester New Hampshire Short Sale
As a home buyer looking for value in the purchase of real estate you may consider a "short sale" as a viable option. Buying a Manchester NH short sale is a difficult and most often a frustrating process. To achieve your goal, you must work with qualified professionals and understand the process. Expert advice can be provided by real estate agents, attorneys, mortgage brokers or bankers and home inspectors. Visit Manchester NH real estate as resource to obtain city information about schools, demographics, home buying and selling guides as well as a virtual tour of the city.
What is a Short Sale?
Homeowners in financial distress often consider various options, including a short sale, prior to foreclosure. Their goal is to negotiate future financial liabilities and preserve their credit. In New Hampshire, the laws governing foreclosures provide incentives for lenders to work with homeowners that can no longer afford their homes. The lender understands the market and the expense involved in foreclosing on property. Under the Home Affordable Alternatives Program (HAFA) offered in 2010 by the Treasury Department, lenders and homeowners have additional incentives to consider a short sale.
The first step to a successful transaction requires the negotiation of an acceptable contract with the Seller subject to lender approval with no guarantees that your offer will be approved. If the contract is not acceptable to the lender then the Seller may not have sufficient time to sell to another party and avoid foreclosure. The following tips will increase your chances of negotiating a successful short sale transaction:
You Must be Credit Approved
Providing creditable evidence that you qualify to purchase the property is absolutely necessary. The Seller is unable to accept your offer without a valid credit approval as the lender will not grant approval Obtain a credit approval from a reputable lender or if a cash buyer provide proof of funds. The approval must not contain conditions such as selling an existing property.
Finding Listings That Qualify
Sellers selling short typically have a time-line they must meet to avoid foreclosure. If they have not connected with their lender(s) and started the process, there may not be sufficient time to affect a sale. As your Realtor, I can pre-qualify a listing on your behalf. Preview listings at Manchester NH homes for sale. Information I will obtain includes:
Has the homeowner compiled the necessary documents for the lender approval package?
How many liens are on the property? If more than one, what are they?
Is there a plan to obtain releases from all the lien-holders?
Don't take yourself out of the market for a property that has no chance of closing.
Negotiating the Offer
The first step is to have your offer accepted by the Seller and you will be competing against other contracts. Real estate agents often list the property at a low value to encourage multiple offers. Others price the property at the low end of fair market value. The terms and conditions of your offer can be as important as the offered price. Sellers and lenders prefer offers with fewer contingencies.
Your Deposit - Sellers may be hesitant to accept your offer with a low deposit. Buyers can easily "walk away" from a contract with low deposits.Offering the Seller a strong deposit indicates that you are serious about buying the property.
Home Inspection - It is customary to conduct the home inspection prior to submitting to the lender. A seller can't take the risk of allowing the inspection after lender approval. If they do, they risk losing the buyer on the inspection issues and will not have time to sell the property prior to foreclosure.
Flexible Closing Date - Lenders often approve short sales with quick closings. You must be prepared to meet their conditions if you want to consummate the sale.
Subsequent Offers -As a rule, real estate agents must present all offers. A contract with better terms and conditions may have a better chance at being approved by the lender. The lender will give the Seller direction as to submitting additional offers. Also, be prepared to lock your interest rate thru closing so that your mortgage commitment will be valid.
Lenders will do their "due diligence" to substantiate the value of the property and have no set formula to determine an acceptable price for the property. However, Freddie Mac (one of the largest secondary market lenders) has a value range of 88% of one or more broker price opinions (BOP). Have realistic expectations of the approval process as it may take between 30-180 days and property values can change. If the lender and the Seller are participating in the HAFA program, these timelines will be streamlined for a quicker response.
If you are interested in pursuing a short sale or other listings currently on the market, please contact Virtual Homes Real Estate at 800-856-2479.