Short Sale are not ordinary real estate transaction with too many moving parts that can make any sane person go crazy. It helps to understand the risk associated with a Short Sale purchase since not all Short Sales will get approved by the lenders before the home is sent to a foreclosures auction.
What that in mind we wanted to document the right questions to ask before buying a San Jose Short Sale:
1) Foreclosure Auction: Most buyers agents and buyers do’t bother to ask if the a Foreclosure Sale, Auction Date or Notice of Trustee Sale Date has been posted on the property. These notices are also recorded in County records, but that could take weeks for it to appear. So, it’s a big mistake to ignore this question since it might be impossible to stop the foreclosure and you have wasted valuable time focusing on the wrong property.
2) Notice of Default (NOD): Ask if a notice of Default or an NOD has been filed on the San Jose Short Sale you are interested in buying. Each lender’s policy is different, but if an NOD shows up on the public records for the Short Sale home you are buying, then you are dealing with a time bomb.
3) Financial Hardship: Ask about the nature of the homeowners hardship since it will have a direct impact on the approval of the Short Sale. If a home’s value has declined that’s not justification enough to get your San Jose Short Sale approved.
4) Number of Loans: Ask about the number of loans secured by this San Jose Short Sale. Ideally we recommend writing offers on Short Sales with only ONE loan involved in the negotiations. But if there are more than one and both are subject to the Short Sale negotiations, then you need to assume it will take more than 60 days for approval. And if there is a Foreclosure Sale date posted say 30 days, then you are dealing with a case that the home could be auctioned before the approval of the Short Sale! So, Walk away.
5) Pubic Records: Research the public records and find out the Status of the property to see if it matches the information from the Listing Agent. We have lost count on how many times when we shocked the Short Sale Listing agent with the information that their Short Sale Listing has already been foreclosed and assigned to us as an REO!
Finally, Short Sales are require skills in corporate negotiations to determine how much debt they are willing to forgive. So, Contact Us if you have questions on buying Short Sales.