We have another happy buyer...and another seller has avoided foreclosure through a Jacksonville short sale. FHA Short Sales are some of the most predictable short sales you can participate in. This type of short sale happens if the seller has an FHA loan on the property.
HUD has laid out specific guidelines on this type of short sale transaction. We know these guidelines and can help short sales be successful through the application of this knowledge.
Our buyer got a big surprise in this one! When she picked out this great townhome off of CR 210 in St Johns county the price was a good price. This unit was more upgraded than the others, and she chose it over a foreclosure that was priced considerably less.
FHA short sales require the lender to review the sales contract (if all of the required initial steps have been taken and completed) within five working days. As we've seen in the past, it did take longer than this. We're not sure if it's due to lender backlog, or lack of understanding of the rules. In any case, we had prepared the buyer for a potentially lengthy process, detailing out all of the pitfalls and problems that are common, so she was ready for anything.
Several days before closing, we got news that knocked the wind out of the transaction. The lenders appraisal company (yes--lenders are allowed to own appraisal companies, not sure why...) had appraised the home. It had come back almost 20% below the contract price. The buyer did not have the money to make up the difference between appraised value and purchase price.
Because of our knowledge of the applicable rules, we were able to appeal for the lienholder to reduce the purchase price in line with the appraisal.
It was quite a wait (around 5 weeks from that point) but well worth it. Two weeks ago the seller's lienholder agreed to accept the price that was 20% lower than the prior contract price.. The buyer's original lender was not going to be able to complete the buyer's FHA loan in time since we were told that the seller's lienholder was insisting on closing within two weeks. The buyer switched to a fabulous mortgage broker who was able to complete the loan within two weeks.
From start to finish, this FHA Jacksonville short sale took a little over two months from contract to close.
Not only did we help the buyer save roughly $20,000 more after the contract became effective due to the low appraisal, but we also saved the buyer other fees that the listing side tried to impose on her after the date of contract because of our knowledge of FHA short sale guidelines. In addition we were able to recognize the artificial deadlines that the listing side tried to impose on us that were inconsistent with the contract and with HUD PFS guidelines.
Success!!!
Comments