Repairs in a Short Sale? YIKES!
The escrow process is both an exciting and nervous time for the buyer and seller in a transaction. One of the more nervous times of the escrow process is when it is discovered that repair work needs to be done.
This is a nervous time of the transaction as both the seller and buyer may not have the money to make the repairs. When this happens, what happens?
At this point in the transaction the buyer needs to submit a request for repairs through their agent. The buyer's agent will then send it to the seller's agent. The selling (or listing agent) will then send it to the lender in hopes of getting some assistance.
Typically in a short sale the lender and/or investor will not make the requested repairs. This is because the investor is already taking a loss on the property and doesn't want to lose any more money. Also, short sales are 'As-Is' transactions. This means that the property is purchased in its current condition.
While the 'typical' situation above is true, I am seeing first hand that the 'typical' is becoming unusual. With two of my active short sales we have not only requested assistance from the lender for repair work to be done, but had the request approved. Keep in mind that each short sale is unique and the lender and/or investor is not responsible in any way for making repairs. However, banks are starting to approve the repairs so they can get rid of the property quickly.
For more details, please give me a call or send me an email.
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Posted at 11:24AM Jun 08, 2011 by Lara Boyko in General | Comments[0]