These are tough times for buyers, especially buyers of short sales in North San Diego County, Carlsbad, Encinitas, Oceanside and beyond. Buyers are frequently frustrated by the short sale process, and have trouble getting into the property that they really want. In this post, I'm going to address a few of the common buyer frustrations when purchasing a short sale.

One frustration is getting your offer recognized or getting a response to your offer. Many local Carlsbad and Encinitas buyers of short sales are having trouble drawing attention to their purchase offers. The purchase offer falls into a stack with 5-10 others, and is never dealt with appropriately.

If you are buyer and you are serious about purchasing the property and getting into the "first position", then you should insist upon opening escrow. The California Association of Realtors® Short Sale Addendum allows for escrow to be opened prior to receiving approval from the lien holder(s). The benefit to opening escrow is that the buyer is now in first position. Only one escrow is permissible at a time. So, if you are "in escrow", than nobody else can be in escrow for the same property. Additionally, the Short Sale Addendum (in paragraph E) addresses the manner in which an offer (or offers) are sent to the bank. When a buyer's agent uses this Addendum properly, it could assure that your offer is the only one that is presented to the seller's lender(s).

The second common frustration is with the seller's side of the transaction. While this is not always the case, there are many listing agents who do not have a great deal of experience with short sale transactions. They do not have contacts at the lending institutions, and they have not mastered the subtle nuances of a short sale transaction. When you write an offer on a property, you need to feel confident that if you are going to wait 4 months for an approval, you will get that approval. Knowing that the listing agent is experienced in dealing with the lender would give you that peace of mind in the waiting period. Have the buyer's agent "interview" the listing agent to learn more about his/her approach to short sales. Once you learn more about that conversation, you may feel more comfortable moving forward.

If you do not feel comfortable that this listing agent is experienced with short sales and you really want the property, one option would be for the buyer to offer the services of a third-party negotiator (like myself). The buyer could write this into the contract and offer to pay the third-party negotiator at close of escrow. This would ensure that all parties are getting high-quality services and the benefits of someone with significant experience negotiating and processing short sales.

In 2008, our office obtained over 300 approval letters. This year I'm fairly certain that we will have obtained nearly 500 approval letters by Christmas. If you are looking for a third party to negotiate, check their credentials, ask about their success rates, and inquire about their close ratios.

Like I said, if you are going to wait for a property for 3-4 months, you want to be sure that it is worth the wait!