Simple rules that make real estate transactions smoother!

Portland Short Sales offers these tips for short sales:

1. On the earnest money agreement I often see unclear fax copies. The bottom line is: If you can’t read it, neither can we…or the appraiser…or the underwriter…or the closing department…or the title company. At least the first copy of the real estate sales contract should be easily legible. PDF e-scanners are a great way to keep things clear.

2. As usual, communication is vital. As Realtors representing home buyers & sellers; we need to have full contact info for all parties involved; this should include name, address, phone & fax numbers for the Title Company.

3. If doing an FHA loan, find out if the property has been purchased within 90 days. If so, is your offer within 20% of that original sales price? If not, call your Realtor and your loan officer right away. We may be able to make it work but need to know this from the outset.

4. Seller contributions are also a complicating factor. So do your homework and make sure you have not exceeded allowable percentages:

a. FHA home loans- 6% still allowed (will change to 3% sometime early summer)

b. VA home loans- 4% + non-allowables (typically run around $2000)

c. USDA home loans- All reasonable and customary cost

d. Conventional financing- Typically, the seller is allowed to pay closing costs and prepaids as follows :

i. *If the home buyer puts 0-9% down, seller can contribute up to 3% toward closing costs and prepaids.

ii. *If the buyer puts 10% down or more, the seller can contribute up to 6% toward closing and prepaids.

5. Please make certain that the Realtors and the buyer’s loan officer have a copy of the property sales contract as quickly as possible (even if not fully executed yet) This will help ensure that we meet the closing date and be sure to forward all sales contract addenda to the loan officer and Title Company promptly.

6. Be realistic about the closing date. In general, 30 days is reasonable but you may want to give yourself a bit of extra time. And, while loan officers can “rush” a file, that really depends on the transaction details.

7. If you are buying a house to be owner-occupied; tell your loan officer if any existing tenants will stay in the property beyond 30 days after the sale.

8. Make sure the sales contract includes all of the Listing and Selling Agent’s complete information as well as the addresses of the buyer. It’s a waste of time to go play detective to get this info later on. A simple cover sheet with all of the pertinent info is a simple way to accomplish this.

9. Most repairs on homes for sale can no longer be escrowed at closing (unless a HUD home or your buyer is using the FHA 203K program). Most repairs will have to be fixed prior to closing.