Liens, title clouds, utilities, and closing attorneys are all critical to close a Short Sale

Short Sales are a fairly straight forward process.  There are several items that must happen in order for the Short Sale to take place.  The most common of them are: various judgments that have attached to the property, clouds on title, an inexperienced closing attorney, and disconnected utilities.

As with any property, during the contract-to-closing time period, the Closing Attorney will run a title search to determine if there are any outstanding judgments against the Seller that have attached to the property and that will have to be negotiated and settled prior to closing.  These may be local, state, or federal tax leins, mechanics liens, or judgements from court cases.  It is very important that your closing attorney run the title search as soon as possible so that you can determine if the Seller needs to negotiate or take care of amy of these judgments,  Know that most judgments can be negotiated down with a few phone calls to the right people.

The Short Sale lender has no preference as to which attorney you use. But you should.  It is very, very, important that you choose a closing attorney that is very experienced In closing Short Sales.  These transactions are unique and the bank is very particular about how the HUD-1 Settlement Statement is calculated and reflected.  The closing attorney will need to work closely with the Loss Mitigation Rep to produce closing documents that satisfy all the requirements of the Short Sale lender.  The Short Sale lender will nit-pick every item on the Seller’s side of the HUD-1 and the bottom line on the Seller’s side of the HUD-1 must always net to Zero!  In other words, the Seller brings no cash to closing and takes no cash from closing and the closing attorney will have to juggle the rest of the costs so as to meet all the Short Sale lender’s requirements.

When you Short Sale comes under contract, the Buyer will likely order an inspection and the utilities will need to be on for this.   It is imperative that the homeowner know the importance of keeping their utilities turned on.  If the utilities get disconnected they will have to be reconnected for the Buyer’s inspection, which can very costly.  Also, given that the time period allotted by the bank is ticking away, it is possible to lose a potential Buyer because they could not do their inspection due to the utilities being disconnected.  If this happens, you may not find another Buyer before the expiration of the pre-foreclosure period.

If you are considering a Short Sale to avoid foreclosure, dont’ delay.  Visit www.AvoidBankForeclosureNow.com or call Bonnie Mullinax at 770.606.0054 to get started. 

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