Distressed Property Resources for Purchasers
Just as a short sale is not an ideal situation for an owner of a Distressed property or a lender who is cooperating with the transaction, neither is it an ideal situation for a buyer. Like all things in life, there are trade offs and in exchange for the uncertainty of the transaction, the benefit to the buyer of a short sale would normally include:
1. Ability to purchase a home they would like to purchase thru the only available option, a short sale approval process due to the lien structure and the current owner’s requirements to be able to provide marketable title free of all liens and encumbrances at the time of the sale.
2. Opportunity to obtain beneficial terms in exchange for the uncertainty of the transaction.
3. Pricing based on the current market conditions, which can result in changes in value by the time the transaction works it’s way thru the approval process. In an up market, the value of the property may have increased during the approval process or it may have gone down also.
4. The ability to re-evaluate the transaction and cancel at any time until written lien holder approval has been delivered from the lien holder of all liens requiring approval.
excerpt from the Honolulu Board of REALTORS short sale addendum:#6 ~ “BUYER’S Rights: Buyer may search for another property and elect to terminate this Purchase Contract subject to Paragraph O-2 at any time prior to seller’s written notification to Buyer of approval of the short sale by all lien holders.”
5. Once lien holder approval is received, if there is an inspection period in the purchase agreement, that would normally be an addition contingency available to the purchaser after they have approval, have re evaluated the property, price, condition and current market conditions before electing to proceed while still having the contractual option to cancel the offer based upon the Inspection clause of the Purchase Agreement.
With the exception of time and energy invested, depending upon the terms of your offer and how it was presented, negotiated and accepted, in most cases, a short sale purchase agreement resembles an “option to buy” almost as a purchase agreement until the lien holder’s written approval is obtained and delivered. The combination of the above with a definite plan in place can create some purchasing opportunities in a short sale that are not available in a Traditional transaction.
If you would like to see the currently available short sales and Bank Owned properties in our market, here is a link you could follow:Oahu Active Short Sales & Bank Owned Properties
Take a look and let me know if you see something you find interesting or if you would like a targeted search for exactly the parameters you are hoping to find, drop me a line and I’ll set you up with your own search without the clutter of properties you aren’t interested in .
Michael H. Hege’R,PB
Beach Villa Realty, LLC