One of my agents relayed a story to me yesterday that I felt would make for a great post on the Tallahassee Real Estate Blog. He told me that he is helping a buyer buy a short sale in Tallahassee, and he shared with me the conversation he had with the listing agent.
The listing agent told him something like “get an offer in and I’ll make sure it is first in line, every other offer will be a backup.” This comment sent all my alarms to the full scream mode, and I sat down with my agent and had a long discussion about the process of buying a short sale.
Most Real Estate Agents Don’t Understand The Short Sale Process
The first thing I told him was the agent in question probably had limited experience with short sales. If you truly understand how banks work a short sale (this process is outlined in following paragraphs), then you would never “buy” the statement made by the listing agent.
If you are going to buy a short sale, take the time to hire the right real estate company with a seasoned real estate short sale specialist. As I will explain in the coming paragraphs, it will make all the difference in world.
You Cannot Be In A Hurry To Buy A Short Sale
If you are working on a time-table of less than three months, you are not a good candidate for buying a short sale. The process of buying a short sale can take from three to six months, and nobody who knows what they are doing is going to guarantee you a closing date.
Every detail and action that becomes part of the home buying experience is affected by a home seller who has to sell short. Loan lock-ins cannot be relied upon because of the nature of the bank-approval process. Home inspections are a gamble, because if you get one early before you decide to buy, you might not be “allowed” to buy that house. If you wait until the lender approves you, then finding a lot of broken systems at the last second is a shock you will not enjoy.
So what I am saying is there is a process experienced short sale agents will take you through to ensure that you get a great buy without taking unnecessary risks. Most real estate agents do fewer than 2 short sales in their entire career, and they typically are not up to speed on what is really going to happen.
The Banks Are Not Happy To Sell A Short Sale
I have never met an individual or an institution that planned on receiving less money than they invested in any transaction. Yes it happens, but that does not mean they will be happy about it.
And banks are not filled to the brim with stupid people either! They will do what they can to minimize their losses, so it is important that you understand the short sale process so you can best position yourself to succeed when buying one.
The Banks Are Not Staffed To Process The Short Sales In Progress
Think about this. Let’s just say that the stories of loans in default in the United States are true, and this number could be as high as 25% of all existing home loans. Additionally, we hear that 20% of all homes are “upside down” on the mortgage, meaning that more is owed on the home than can be gained by selling the home. So, what does this all mean?
- Banks are getting less money than they were a few years ago (read that to mean that banks are failing right now, or at the very least they are losing money).
- Loan defaults are up (read that to mean that they have more work to do so more employees are needed than a few years ago, but no money to increase staff).
- So, unlike most businesses, when business picks up, so do earnings, resulting in more revenue to utilize in “up-staffing” to handle the workload.
- But with Banks right now, it’s the other-way around. Work is up, revenue is down, so they cannot staff themselves accordingly to handle the additional work load. If somebody is trying to sell a house through a short sale, you can be assured that the bank employee(s) handling that file are grossly over-worked and seriously ill-equiped to get things done in a timely manner.
So when you hire a real estate agent specializing in short sales, listen to her advice! She knows who and what she is dealing with and is prepared to help you succeed because she best understands the short sale process.
 |
Please Click Here to tweet this to your friends! |
Comments(6)