Short sales are all the buzz in the real estate world these days, for two reasons. One, there are lots of them, with more coming on the market every day. And two, buyers seem to have a keen interest in buying them as they perceive that they represent a good deal. Not necessarily so, but perception is so often heeded rather than reality.
Agents AND buyers - do you know what hurdles you have to clear in a short sale?
There are lots of hurdles to overcome in the short sale market, or hoops you will have to jump through – this article is about those hurdles so you will understand what you are up against, not to deter you from considering them.
But awareness and education in the real estate biz for consumers AND agents is critical in order to make the right decision. What I have to share with you may vary in your particular market, but there seem to be a fair number of similarities no matter when you go.
GAINING ACCESS – sometimes easy, sometimes not. Sometimes locks on doors get changed without notice; combo boxes are on doors but no codes are listed in the MLS; agents do not return calls, keys don’t work; keys are removed from the lockbox but no one is told; home may have tenants who will not cooperate with showings. Just because you are working with an agent does NOT mean it will be any easier – we have our own frustrations with these types of sales
PRICING – list prices suggest a great deal but in reality the bank will likely only accept much more based on an appraisal; the low price is to encourage interest and multiple offers. Are you REALLY getting a great deal? Unlikely. Your agent will be a valuable reource, but even the best information may not satisfy the bank.
COMPETITION – everyone wants a deal and many short sales because of their pricing get multiple offers – 5, 10 or more. What chance is there that YOUR offer will be the best, or even get reviewed by the bank? Some banks will only review offers one by one, rather than reviewing ALL offers. And they don’t always counter-offer other than at the full price they want. Your agent can inquire about the status of the listing, the progress so far, and any other details that may help you make the right decision.
LACK OF COMMUNICATION – buyer agents often can’t get in touch with the listing agent; the banks often are non-communicative for days or weeks and the listing agent can’t find out what is going on; buyers can’t find out from their agents the status of the offer because status is not known. As an agent dealing with this sort of deal you may need to be particularly persistent.
BUYING THE HOME "AS IS" – in many cases the short sale home is being sold as is – are you ready to do that? Some homes are in bad shape, have been trashed, are missing appliances and fixtures, and worse. A home inspection as part of your due diligence is essential, but the bank will likely NOT be willing to do any repairs.
EMOTIONAL STUFF – how patient ARE you? What is your frustration level? How long can you wait to get an answer about your offer? Are you ready to deal with the reality that you may NEVER get a response? Agent s - you will find your patiences tested as well.
TIMING – how quickly do you NEED or WANT to move? Can you really want for several months or do you need to move soon because of a transfer, your rental coming to an end, etc.
Read also: Buying a Short Sale
If you need additional information or have questions about the housing market in general, please contact me by phone or text message at (760) 840-1360 or email me at JDowler@remax.net.
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