The thought of being a short sale buyer and getting a great deal on a nice piece of property is very appealing. However, it’s important to understand that the process of purchasing a short sale property differs from buying property the traditional way. There are additional steps involved in buying a short sale, and the seller’s lender plays an integral role in the acceptance of your purchase offer. Additionally, the process can be lengthy and frustrating. If you have a good idea of what to expect going into this type of transaction, you will greatly increase your chances of success.
The asking price for a piece of property listed as a short sale is not always determined by the lender. In fact, a lender is usually completely unaware of the asking price. In most cases, sellers, together with their agents, determine the asking price, and they usually price it low in hopes of receiving several purchase offers. After an offer is made, it is sent to the seller’s lender for approval. If the seller is not ultimately approved for a short sale, or if the offer is deemed too low, it will be rejected by the lender. Therefore, buyers often think they can purchase a home for a much lower price than what will ultimately be accepted by the lender, which can cause a potential short sale purchase to fail.
Focus on “approved” short sale properties. If a short sale offer was previously made on a property and the lender approved the purchase price but the sale ultimately fell through for a different reason, it can be assumed that a future offer on the same property for the same price will be approved by the lender. While approved short sale prices are not guaranteed, there is a good chance that if the price was approved once, it will be approved again.
Buying a short sale home that has more than one mortgage can be complicated. As a short sale buyer, it is important to keep in mind that purchasing a home that has only one mortgage simplifies the process. If you do wish to purchase a short sale home that has more than one mortgage, keep in mind that the purchase will likely take a while to complete.
If the price for a short sale home seems extremely low, it may be too good to be true. When a home is priced very low in order to draw in a short sale buyer and an extremely low offer is submitted to the lender, a response from the lender is likely to take a long time. In general, the lower the offer, the slower the response. Lowball offers are oftentimes rejected outright.
If the asking price for the home is significantly lower than the market comps, the offer is likely to be rejected. Most lenders are not willing to lose more than a certain dollar amount on each property they approve for a short sale. If you are a short sale buyer who wants to buy a home for less than market value, supporting documentation about the neighborhood and/or market comps should be submitted to the lender with the purchase offer.
Short sales can take a long time. Anyone who wants to buy a short sale property must be patient. There are many reasons the sale might not be approved, so you’ll need to be prepared to hang in there for the long haul.
A short sale buyer usually wants to get a good deal on a piece of property. While buying a home for a low price is certainly a benefit, the short sale process can be lengthy and complicated. The Wise Listing team can help you find short sales that meet your requirements, and we will help you make the best and most reasonable purchase offers possible. We know what lenders are looking for, and we will help you make your short sale purchase successful. Call Doug James at The Wise Listing Team today at 303-814-3684. We will help you get started today!
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