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How to Buy a Short Sale, Part 2

posted by MatthewDickason @ 8:24 PM
Sunday, June 9, 2013

The short sale package includes a letter of hardship, bank statements, tax returns, pay stubs, etc, which are meant to disclose a bona fide financial hardship. The ball is now in the lender’s court. The lender will review all these documents for accuracy and eventually order a Broker Price Opinion (BPO) from an independent real estate agent. This price opinion is based on the condition of the home, as well as other comparable homes in the neighborhood. It would seem that a favorable BPO would be the near the end of our process, and this is sometimes the case. However, the lender can take up to 3 months to approve or disprove the short sale package even with a favorable BPO. The lender will also require the documents submitted to be up to date. Depending on the length of the process, the seller may submit the same documents multiple times (to be reviewed by the lender) which further adds to the length of the process.
While the short sale process can be lengthy, having patience and knowing what to expect can save a lot of headaches. In sum, here are a few things to keep in mind that will make the process easier to take:
• Hire a realtor that is familiar with the short sale process and/or is a Certified Distress Property Expert.
• Be prepared for a long process and waiting periods.
• When making offers on a short sale include a Short Sale Addendum which allows the you to back out prior to and after a lender has sent written approval for the short sale.
• Make escrow start after the lender has approved the short sale so that your earnest money isn’t tied up for the entire process.
• Get an appraisal and inspection after the lender has approved the short sale so that you don’t pay for these before it is approved.

Buying a short sale can be a long and arduous process, but also a profitable one. Having patience and understanding the process can alleviate any undue stress and can be a great way to own a profitable investment property or an affordable new home.

MatthewDickason

Matthew A. Dickason is the firm’s founder and Managing Attorney. In 2003, he received his J.D. from The Walter F. George Law School at Mercer University in Macon, GA. A member of the Georgia Bar, he created Matthew A. Dickason, P.C in 2007 to focus on residential, commercial and small business loan closings. As Chief Financial Officer of the U.S. Screen Company, a family manufacturing company based in Sullivan, Ohio, Matt draws on his experience to advise small to medium sized companies in all facets of business and corporate law. In his spare time, Matt enjoys being a Dad and serving as legal counsel and board member for The Hospitality Education Foundation, a non-profit organization that bridges the gap between Georgia’s high schools and hospitality industry.

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