Just like a traditional or equity real estate transaction, a West Linn real estate buyer will make an offer to the seller. And as it is in a traditional sale, the seller may not entertain an offer unless it is written, has earnest monies and pre approval letters included. The seller then accepts, counters or rejects the offer.
Once the buyer and seller finish the negotiations on the terms of the agreement, the home is under contract also known as pending. In a short sale situation, once the seller has accepted the offer it is then sent to the lien holder (bank). The seller can accept an offer, only to be rejected or counter offered by the bank.
Since lenders want good quality buyers, many will require the buyer to be pre approved by them. The buyer does not have to make loan application with that institution (by law they cannot require this), but this is a safety net for them to know the buyer is qualified. Should your other financing fall through you would still be qualified with them and they can move forward to close the transaction.
Many offers will come back to the buyer in the form of a counter offer. The bank may have approved the price, but their boiler plate verbiage is different than most purchase sale agreements. The counter offer must be read very carefully, as it will override the original offer.
The transaction timeline starts when the lien holder (bank) has accepted the offer. Once your offer is accepted, the clock starts ticking your closing date can come quickly. Escrow can close in less than 30 days. The bank has made a determination using that closing date as part of the criteria to move it off their books. The penalty to extend the closing date can be expensive.
The seller and lien holder must provide clear title to the property at closing. Since financially distressed sellers do not always realize the extent of their obligations, they may not understand the process and that they most convey clear title. The seller may have back child support, alimony, tax liens, or other attachments to the property, they all must be paid off to give clear title.
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Rich Peralta is a real estate professional in the Portland Metro Area, including Lake Oswego, Tualatin and West Linn Real Estate.
He can be reached at 503.961.2181 or by e-mail at rich.peralta@exprealty.com
Contact him for more information on Portland, Lake Oswego or West Linn Real Estate!
Also posted on Lake Oswego Real Estate.
