Short sales take place when properties are sold for much less than is owed, leaving negative balances or sale proceeds. Such sales are conducted like most other real estate sales, but the lenders of the sellers are highly involved in the whole closing procedure. Following is the proper process of closing a short sale deal in Atlanta.
Approvals of Short Sale
In order to close a short sale real estate deal, the lenders of the sellers must provide approval for the sale and this process can take months. Usually, the lenders approve the short sales simply by giving an approval letter which has complete instructions for the closing for the buyers of the properties. After the short sales of the sellers get approval from the lenders, the buyers are required to follow the complete guideline of the lenders. It must also be remembered that the lenders wish for a quick closure of the short sale after giving their approval.
Instructions of the Approval Letter
The approval letters from the lenders of the buyers contain precise instructions which must be followed by the buyers to close the purchases. These instructions usually include the lender’s net due amount and the dates of all purchase funds. If these instructions are not properly followed, a short sale deal can be cancelled.
Short Sale Closings
The settlement agents or title companies usually conduct the short sale closings. All the paperwork for specific short sale closings is usually done in the same manner as in the case of conventional sales. The mere difference is that the net sales amount on the forms clearly reflects the losses for lenders and lenders’ sellers. The lenders tend to minimize the losses in short sales and demand a solution if their net sales proceeds are not up to the mark. In case of short sales, the buyers and sellers keep a close check on the HUD-1 settlement form of the closing.
The Last Minute Issues
There are many issues which can arise right at the time of a short sale closing. It’s important to tackle these issues with care and expertise.
The lenders of the short sale can abruptly change the total amounts on the fees which they are paying, or the commissions of the real estate agents. The sellers and the buyers might get to know at the last minute of the closing that the lenders have rejected a closing cost contribution which had been previously agreed between them. Also, the mistakes of the settlement agents on HUD-1 settlement forms can make the lenders withhold the sale until those mistakes are corrected. The closings of the short sale are highly detail-oriented and critical as compared to the closings of standard real estate sale.
Thus the complete process of the closing of a shot term sale needs to be well-understood by the real estate agents of Atlanta so that they can work on such sales with great expertise.
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