How to Buy a Short Sale Home - Simplified
Here is what I recommend to buyers not in tune with what a short sale might entail. A good buyer's agent can walk their client through the process with this as a thumbnail sketch.
1. Get pre-qualified / pre-approved.
2. Set realistic search parameters based on what you can afford and what you need.
3. Interview agents. Get good help. Commit to one agent.
4. The house hunt. See as many as it takes to make a wise, swift decision; bring a clipboard/checklist for notes.
5. House found. Have your agent call the listing agent for info. Many good agents will be free flowing with info, some will not. Ask listing agent for their protocol - many are different in their approach to a short sale, unfortunately.
6. The offer. Run the comps (recent comparable sales). Be realistic in your offer, look at it from your perspective and the short sale bank's as well. "Too low = No Go, Too High = Bye-Bye". Cheap rhyme, couldn't cut it as a rapper Emcee Emdee. While everything is negotiable, know that the short sale bank might not approve all requests (repairs, credit for closing costs, home warranty, etc.). SALE PRICE, TERMS & CONDITIONS ARE SUBJECT TO LIEN HOLDER APPROVAL.
7. Wait. Listing agent will submit entire short sale package. If you're in it to win it, HANG IN THERE!
8. Check in with the listing agent. Ask for updates. Refrain from being the 9-year old asking "are we there yet?" every 10 seconds.
9. There are tons of short sales on the market, not all are successful. Be ready to write more than one offer on different houses. Go back to #4.
10. Preliminary approval. Expect the bank to resist a little, if the seller hasn't already. Hint: a good listing agent knows what banks will give/take and will not advise their seller to give the house away. Listing agent will then notify you of Bank's proposal. Agents reading this - don't cry if your commission is cut a little, your client is buying the house of their dreams. Be happy for them.
11. Written Approval - Hallelujah! Make sure it matches what was negotiated in the preliminary approval. If not, don't bail out; everything is still negotiable.
12. If it's all good, open escrow (start the normal transaction).
13. Close escrow. Here are your keys.
Note: If you (or your agent) are in a time crunch or have an aversion to short sales, look the other way - although, normal sales (not short sale or bank owned) are a needle in the haystack in SoCal. They really are not difficult, just time consuming. Go get lucky...
Too simple? Go back to #3.
Peace,
MC Md
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