- Lowball offers get slow or no response: Whether it is an REO or a short sale, most properties in desirable areas in New Jersey do eventually sell when priced at or just below market value. If you are involved in a short sale, remember that the bank is typically unaware of the pricing during a short sale. When lowball offers stream into the bank they are often scoffed at and rejected, giving the prospected buyers little or no feedback. Surprisingly, it may also take painstakingly long to hear back even on good offers due to the high volume of transactions lenders are inundated with these days. If it is an REO, the same may hold true if it has been on the market for less than 90 days. An appraisal has been done on the property, as well as a realtor's market analysis and the bank is looking to get as close to that number as market conditions will allow. If it has been on the market for more than 90 days, the bank may be more open to your offer.
- Don't expect a quick closing: Short sales aren't necessarily "short." It can sometimes be a very long process. Don't get your hopes up for just one property, keep your options open and continue to actively look at multiple properties. Buyers must remain optimistic, the right property will come along.
- Repairs are seldom done, credit is more frequent: If there are improvements that need to be made on a home, even if they are necessary to get a loan, it is unlikely that they will be done. Typically there is some sort of credit issued and the buyer must take the responsibility of fixing anything that is broken.
- Loans owned by one just bank can sometimes be better than if there are two or more banks involved: If the seller has loans owned by two different banks it is much more difficult to approve the short sale. This is something the agent or the buyer cannot control; it simply depends on the willingness of the bank or banks involved. While the reasons are beyond the scope of this guide, buyers should know that when the seller only has loan(s) with one bank, the short sale often becomes more buyer-friendly. A savvy Realtor can let you know this type of information. If there is a second lien holder on an REO, such as a PMI company, they too may make an offer to the bank, after your offer is presented.
- Purchasing an REO or a property that requires the bank's approval of a short sale is not for someone that is in a hurry to close. It is for the savvy buyer that has time, money and has vendors that will be able to do the repairs that may be required to close on the purchase.
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