Jul 3, 2014

Tip 22-2014: Short Sales & Inspection Contingencies

The current VAR Short Sale Addendum allows the Purchaser to start the home inspection and apply for the loan either once there is a ratified contract or after short sale lender approval. While the Purchaser may not want to incur any expenses (home inspection, appraisal, etc.) until the short sale lender has approved the short sale, the best approach for a potential short sale approval is to complete the inspection as early as possible. 

One advantage to this strategy is that there is an inspection available to help convince the lender to approve the short sale (assuming there are significant unrepaired items). Also, if the short sale lender obtains an unreasonably high BPO, an appraisal can be used to contest the short sale price. 

Lastly, this strategy will prevent all parties from being involved in a lengthy short sale approval process only to have the Purchaser terminate the transaction due to an inspection issue. 

Remember that short sales are a team effort, and using this strategy will help ensure success for the entire team!
Contact me at 434-951-0858 or Tucker@TGBLaw.com if you have questions

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville & Lake Monticello

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