Answers - Real Estate

Recently there has been a resurgence of short sales in the real estate market. If you are a listing agent and you have determined your seller is upside down in his mortgage, you may

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

want to suggest the seller contact his lender and request a short sale package. As an agent it is your responsibility to supply the lender with the comparative market analysis on the

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

roperty.

Short sales in 2007 are different than the 1990's. Property values are not plummeting and interest rates are still viable. The lender will want to see the property listed

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

or fair market value and will obtain their own appraisal to insure it is correct. The lender will want an explanation of the circumstances which created the need for the short pay-of

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

f transaction.

Common explanations include: Divorce, medical problems, death, loss of job or job transfer creating need for a move. The purpose of the lender's financial package is

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

To make sure the reason for the default was unavoidable, involuntary or beyond seller's control. To verify seller has experienced financial hardship. To make sure seller does not

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

arn enough money to pay the deficiency in installments over time, and to make sure seller does not have money to pay some or all of the deficiency in a lump sum.

To verify the financ

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

ial condition of the seller/borrower, the lender will require: Financial statements showing the seller's assets, liabilities, income and expenses, seller's tax returns for previous 2

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

years, paycheck stubs for the most recent pay periods. If a buyer has made an offer, the lender may also request copy of purchase contract, pre-approval of buyer's lender, copy of ce

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

tified escrow instructions and preliminary title report. An estimated net/closing statement certified by an escrow officer must also be sent to the lender. Lender will then approve

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

r disapprove all fees set forth on the net sheet.

Many of today's lenders weren't in business 15 years ago and are not familiar with short sales. They may take longer in the review

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

process. A short sale transaction must be disclosed as such to any potential buyer. Buyers must be aware the sale is subject to lender's approval of the short sale and the process m

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

y take longer. In California, the California Association of Realtors has a Purchase Agreement Addendum which spells out the terms and conditions involved in the short sale. This add

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

ndum should be used in all short sale transactions since the verbiage covers all parties in the event the lender does not approve the short sale.

Escrow may be opened without obtaini

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

ng the lender's approval letter as long as the process has been started. Escrow officers need to be made aware of pending short sales upon opening of escrow so they can quickly gathe

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

information for the estimated net sheet for the lender. Closing dates may need to be extended. It is important for all parties to be flexible.

Sellers may negotiate upon requestin

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

a short sale regarding their adverse credit consequences. Lenders may seek a deficiency judgment against the seller for the loss. It is in the lender's best interest to accept a sh

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

ort sale in order to avoid a foreclosure. There are additional charges and attorney's fees in a foreclosure and the lender will more than likely end up with much less for the propert

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

.

Lenders may ask agents to reduce their commissions as well as asking service providers to reduce their fees. Keep in mind in 2007, every short sale has its own set of circumstance

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

and each lender has their own set of regulations. These types of transactions are on a case by case basis. Always ask questions as you never know what answer you will get from them

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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