So, you're ready to buy your new home! Congratulations! What's the next step? In this market, I would always go with an experienced Realtor who knows how to sell in today's market place. You really don't want to "go it" alone. Sure, you can search all of the houses on the market on the Internet, but that's just the frosting. The cake choice is where your options become a little less....sweet. I'm sure you've heard of REO --Real Estate Owned--properties. These are bank owned foreclosures. Today, let's cover the other 1/3 of the market, and that is our favorite topic----The Short Sale.
Let's cover some key points to consider when buying a short sale:
- Do you have time to wait for approval of the short sale?
Did you know that it may take anywhere from two months to 6 months or more to find out if you even have a deal to work with? If you need a home to live in over the next few months, this may not be for you. Once your offer has been submitted to the bank(s) (yes, there could be two loans), we may not hear anything for weeks. Buying a short sale is not for those who are needing a home in a few months. It's more suitable for those who are investors or those who have lots of time and don't mind living where they are living now ---it may be a long time before closing.
- Does the listing agent know how to work short sales?
Just because a house is on the market, doesn't mean that the listing agent knows anything about working on short sales. This is where YOUR Realtor comes in again. Your Realtor will find out how much the listing agent knows about short sales, how many loans on the property, who the lenders are and if they are Freddie Mac or Fannie Mae properties. Yes.....all of this matters. You can email me or call me if you'd like to hear more about any of this because writing it down will take a few pages. I also have an E-Book for you to download if you like: Go to : http://www.calshortsalehelp.com and look on the right hand side.
- Who are the banks involved?
We would hope that it doesn't matter, but it does. Bank of America is probably the worst bank to work with along with Wells Fargo and Chase. Some of the smaller ones do a better job.
- Tips on writing up a short sale offer:
Banks will not consider any concessions like a monetary amount for closing costs, home warranties, etc. If you plan on writing an offer and want a successful and somewhat smooth transaction, don't ask for anything except for a lower purchase price. Even that sometimes won't get you anywhere if it's a pre-negotiated List Price. If it is, the listing agent will specify it on the MLS listing under the agent remarks, and then basically, you have to put in a full price, clean, straight forward offer. However, you are almost certain to close on it within 2 or so months.
- Can you handle buying a home in "as is" condition?
Similar to REO's, a short sale is sold in "as is" condition. You cannot ask he seller or the bank for any repairs. You may still do your inspections as usual, but you cannot ask for anything to be done. Sometimes depending on the type of loan you are trying to get, you may not be able to ge a FHA or USDA loan. Your Realtor, again, will help you figure that out.
I hope this information helps. I represent buyers for short sales, REO's or regular sales in San Luis Obispo County, Paso Robles, Atascadero, Templeton --- anywhere in Slo you need to go, I'll be there watching over your best interests.
Happy House Hunting!
Suzanne Martin, Associate Broker, Accredited Buyer's Agent, CRS, CHP --Short Sale Specialist