Almost every buyer starts their search seeking a great deal. Buzz words around great deals in real estate, are of course, short sale and foreclosure. But after a few weeks of searching and perhaps making offers on short sales and foreclosures buyers are frustrated when the buying of these great deals turns sour. So to avoid the further frustrations of hoping and waiting with no win in sight, let's go over what it takes to buy a foreclosure or short sale so that you can strengthen your buying strategy.
The Patience To Keep Living While Waiting For an Answer
Patience is required in this process because banks are overwhelmed. Both foreclosures and short sales require many bank workers and many processes to review, approve and finalize any contract or proposal. The further the offer is from what the bank has posted that they want for the property, the longer the process for review, approval and finalization takes. So months can pass with not even a peep from the bank about where you are in the process.
So, the number one trait of a successful short sale or foreclosure buyer is the willingness to be patient to capture the great deal that they are hoping for. The process can take up to 6 months to complete so you must be willing to keep living in the meantime.
The Willingness to Spend Money Even if the Bank Says "No"
The banks expect the buyer to be ready, willing and able to purchase. Ready meaning, the only thing that is stopping the sale from happening within a few days of their approval and finalization signatures at the bank is the very last steps of the buyer getting their money together. When a bank says OK - they expect you to close almost immediately. This is not the time to be seeking financing. This is the time to close. Banks give short deadlines for action to happen before they close their file and move on. Deadlines range from 10 days to 25 days. They say jump and they mean NOW.
Willing means that the only thing that is stopping the buyer from buying the home is going to closing. That means that everything about the property is acceptable to you and you have done all of the due diligence that you need.
And of course able means that you are able to go to closing with no barriers or contingencies.
All of the processes above require money being laid out before an approval or even a hint of approval from the bank. Inspections, appraisals, loan processing fees if you are getting a loan, earnest money and miscellaneous fees.
If you have questions about how short sale offers should be written, visit www.SSRules.com where we have posted the guidelines that we have seen work with lenders to getting a quicker approval. AND please do yourself a favor and hire an agent that is not only versed in showing short sales and foreclosures to buyers, but an agent that actually works with lenders for sellers as the listing agent. That is where the real knowledgeable advantage is for the buyer.
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