If you are you considering purchasing a home for sale in which is a Newport Beach short sale? If you are, then you will need to be prepared for some obstacles that may arise along during the course of the transaction. A short sale is defined as the sale of real estate in which the amount of money yielded from the sale of the property is short of the balance owed on a loan secured by the property which will be sold. That means is that the lienholder(s) agree to discount the balance of the loan to sell the property or sell it short of what is owed against it. Banks will agree to this in lieu of foreclosure.
There are times when Newport Beach home buyers will think that a Newport Beach short sale will be a better “deal” than a standard or equity sale. Newport Beach Short sales can be better deals at times, however banks or the lien holders want fair market value. And they go through many steps to ensure that fair market value has been established. Banks will do what is called BPO – Broker Price Opinions, and obtain independent appraisals to establish value. The lien holder may decide to foreclose on the property because it is in their financial best interest.
A Residential Purchase Agreement is submitted along with a Short Sale Addendum. Typically, the listing agent will only submit one offer to the bank, but will often times take back up offers. So, if you are first in line, your offer may be what is submitted to the bank. The back ups are kept in the event the first buyer does not perform.
Once (and if) the lender or lien holder approves the short sale (there can be multiple lien holders), there is a typically specific time frame that the due diligence be completed. What that means is that your loan will have to be approved, home inspection completed, termite inspection and repairs completed within a specific time frame. And the bank may not pay for additional items – such as home repairs. Short Sale purchases are typically as is.
If I can answer any questions about short sales in Newport Beach, please contact me.
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