If you are buying a home and want the best dealin the purchase of New Hampshire Real Estate a short sale may be your best option. Buying a NH short sale is a difficult and most often a frustrating process. To have success, hire experienced professionals that understand all aspects of the transaction. Utilize the services of Realtors, attorneys, accountants, mortgage lenders and home inspectors as they all provide expert advice.

A Short Sale Defined

Homeowners in financial distress often consider various options, including a short sale, prior to foreclosure. This process may be a preferable option to preserve their credit and limit their debt exposure. NH law often presents the lender with incentives to offer the homeowner other alternatives. The lender understands the market and the expense involved in foreclosing on property. In April of 2010, the government enacted legislation under the HAFA (Home Affordable Alternatives Program) which provided homeowners and lenders with new guidelines and incentives to consider short sales.

The first step in the process is to negotiate a contract with the homeowner that must be approved by the lender. In order to prevent foreclosure, the Seller is under a timeline to sell short and must have an offer that meets guidelines for lender approval. The following tips will increase your chances of negotiating a successful short sale transaction:

Are You a Qualified Buyer?

Providing creditable evidence that you qualify to purchase the property is absolutely necessary. The Seller is unable to accept your offer without a valid credit approval as the lender will reject the contract. Get pre-approved from a reputable lender or if a cash buyer provide proof of funds. The approval must not contain conditions such as selling an existing property.

Pre-Qualify the Listing

Sellers selling short typically have a time-line they must meet to avoid foreclosure. If they have not communicated with their lender(s) and started the process, it may not be possible to close before foreclosure. Visit New Hampshire homes for sale to view available short sale and foreclosure listings available through the NH MLS. As your real estate agent, I can identify properties that you may consider. Information I will obtain includes:

  • Has the homeowner compiled the necessary documents for the lender approval package?
  • How many liens are on the property? If more than one, what are they?
  • Is there a plan to obtain releases from all the lien-holders?

If you pursue a property that is not short sale ready you may be restricted from buying other properties of interest.

 

Offer and Acceptance by the Seller

 

The first step is to have your offer accepted by the Seller and you will be competing against other contracts. Real estate agents often list the property at a low value to encourage multiple offers. Others price the property at the bottom of fair market value. Price, terms and your qualifications will be the deciding factors for Seller acceptance. Sellers and lenders prefer offers with fewer contingencies.

  • Your Deposit. Sellers may be hesitant to accept your offer with a low deposit. A buyer that has little to lose can easily pursue another property and walk away.Offering the Seller a strong deposit indicates that you are serious about buying the property.
  • Home Inspection. It is customary to conduct the home inspection prior to submitting to the lender. A seller can’t take the risk of conducting the inspection after lender approval. The buyer can easily walk from the home inspection and lenders normally will not approve them.
  • Flexible Closing Date. Lenders often approve short sales with quick closings. You must be prepared to meet their conditions if you want to consummate the sale.
  • Subsequent Offers.The listing agent must submit all offers to the Seller. A contract with better terms and conditions may have a better chance at being approved by the lender. The lender will give the Seller direction as to submitting additional offers. In addition, arrange for your lender to lock your interest rate for your mortgage so that you qualify whenever the closing is required.

Lender Approval

Lenders will do their due diligence to substantiate the value of the property and have no set formula to determine an acceptable price for the property. However, Freddie Mac (one of the largest secondary market lenders) has a target sales price of 88% of one or more broker price opinions (BOP). Have realistic expectations of the time-frame for approval as it may take between 30-180 days and property values can change. If the lender and the Seller are participating in the HAFA program, these timelines will be streamlined for a quicker response.

Virtual Homes Real Estate agents can assist you with short sales, foreclosures and MLS listings currently on the market.


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