Honolulu Condos and Distressed PropertiesPosted by Douglas Fischer on Thursday, November 18th, 2010 at 9:58am.
Honolulu Condos and Distressed Properties
Today, many buyers are interested in bargains and some focus on distressed properties that may be a short sale, in foreclosure or is bank owned. Many are confused by these different terms and situations so I thought I would take a moment and define three common situations and terms.
Today, let's take a look at short sale properties:
Short Sale Properties - Short sale is the process a homeowner attempts to go through to prevent foreclosure. They ask the lender to forgive the debt since they are selling the property for less than what is owed. This is also known as a short pay. The sale is contingent upon approval by the lender. There is no guarantee that the bank will accept a short sale even if the buyer offers the full list price. Most short pay approvals from the lender will require that the homeowner be able to prove some sort of financial hardship. It is also not uncommon for most lenders to require that the homeowner be in default (behind in mortgage payments) before considering a short pay.
In these situations, the seller still owns the property. When purchasing a short sale, you normally have to accept the property in ‘As Is' condition. You are still allowed to ask for a home inspection period, termite inspection, and survey like a normal transaction.