For Home Buyers

The Sarasota real estate market is rife with short sales. A short sale occurs when a property is sold for less than the loan value. Several conditions must be met before the sale can occur, this is why some short sales fail and become foreclosures. First, the lender must approve the sale price and release the lien. Second, the lender should relieve the seller of most or all of the potential deficiency judgement, that is the difference between the sales proceeds and the loan amount. Sometimes, especially when there are 2 or more lenders, latent demands may be made upon the seller. These may include a cash settlement at closing or the delivery of an unsecured note from seller to lender. If these demands are onerous and neither the buyer or seller are willing to pay, then the deal is off and it heads to eventual foreclosure. It is important to prepare all parties for a fight against the banks. It helps to have a buyer and/or seller that will commit to some payment of lender demands. It also helps to provide the lender with comparable sales info and inspection reports. Lenders will rarely accept offers that are over 10% less than market value. If you are patient and perseverant a successful short sale can be a win-win for both buyer and seller.