Top 5 Things To Consider When Buying A Short Sale

By
Real Estate Broker/Owner with Suzanne Martin, Broker 01876662
https://activerain.com/droplet/cVq

Considering Buying a Short Sale?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.

 

Search ALL Homes On The MLS

 

Happy House Hunting!

Suzanne Martin, Associate Broker,  Accredited Buyer's Agent, CRS, CHP --Short Sale Specialist

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Re-Blogged 7 times:

Re-Blogged By Re-Blogged At
  1. Corinne Hale 06/24/2011 12:22 PM
  2. Ellie McIntire 06/25/2011 02:12 PM
  3. Virginia Dean 06/25/2011 02:46 PM
  4. Leah Henderson 06/26/2011 02:01 AM
  5. Tamara Inzunza 06/26/2011 04:03 AM
  6. Dan Edward Phillips 06/27/2011 02:29 AM
  7. Delores Campbell 06/27/2011 07:11 AM
Topic:
Home Buying
Location:
California San Luis Obispo County
Tags:
short sale
short sale help
buying short sales
buying a short sale
writing a short sale offer
hafa short sale
help on short sales

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Rainer
329,276
Donald Reich
Prudential Centennial - New Rochelle, NY

Thanks for all the tips Suzanne. Buying a short sale is NOT a simple process, and buyers must think long and hard before they get wrapped up in this process

Jun 25, 2011 03:38 PM #15
Rainmaker
837,744
Mel Ahrens, MBA, Kelly Right Real Estate
Kelly Right Real Estate - Hood River, OR
Customized Choices for your Real Estate Needs

I think a lot of buyers are confused about what a short sale really means, so your checklist should come in very handy to many.

Gretchen

Jun 25, 2011 04:27 PM #16
Rainmaker
1,080,479
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

Short sales aren't for everyone, but they can offer a lot more home for the money if the buyer is willing and able to consider your tips.

Sharon

Jun 25, 2011 05:00 PM #17
Rainmaker
1,378,659
Cheryl Ritchie
RE/MAX Leading Edge www.GoldenResults.com - Huntingtown, MD
Southern Maryland 301-980-7566
That is a good five points and a very good choice for a reblog, too.
Jun 25, 2011 06:57 PM #18
Rainmaker
157,008
George Bennett
Inactive - Port Orford, OR
Inactive Principal Broker, GRI

Good summary Suzanne. Thanks for posting.

Jun 25, 2011 07:26 PM #19
Rainmaker
86,450
Gina Nugent
Donohue RE - Palm Beach, FL
Real Estate Agent - Palm Beach, FL

Great post and reminder!

Jun 25, 2011 11:38 PM #20
Rainmaker
136,152
Sherri Berry
Reliant Realty, Murfreesboro - Murfreesboro, TN
Murfreesboro TN Homes & Real Estate

Excellent post!  Short sales definitely require a lot of patience and work.

Jun 25, 2011 11:53 PM #21
Rainer
400,311
Keith Lawrence
Christie's International - Mahwah, NJ
ABR, CDPE, SFR, 203K Specialist

Good post. Investors are starting to have a difficult time getting short sales right now due to a small minority of them doing A to B transaction (Double Closers)

I just had an appraisal done where they informed me that the banks are looking for primary home owners for the property.

If it is not one thing with the banks it is another.

Jun 26, 2011 02:14 AM #22
Rainmaker
2,190,677
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

Good points but 2 exceptions I note.  Bank of America may very well be the BEST, OK, right next to Wachovia. Wachovia is the best. But Bank of America is second best, and I close a lot of short sales in California. Bank of America has its act together and is the short sale pioneer with Equator. It originally had a bad reputation, but B of A has come around. I heard numbers the other day that in 2008 B of A had 150 negotiators and today has 3,000.

I would rather list a Bank of America short sale in Sacramento over any other lender except Wachovia.

2nd, nine times out of 10 a bank will pay the buyer's closing costs or some portion of them. At least that has been my odds. You stand a very good chance of getting it if you ask for it.

Jun 26, 2011 02:34 AM #23
Rainer
211,341
Jack O'Neal
HomeSmart Elite Group - Gilbert, AZ

Does the listing agent know how to work short sales? This is so important, Make them tell you their plan, to complete  the short sale, history with the bank, who does the negotiating.

Jun 26, 2011 03:46 AM #24
Rainmaker
320,205
Tamara Inzunza
RE/MAX Executives - Alexandria, VA
Close-In Alexandria and Arlington Living

Very timely indeed!  I just created a brochure on this topic to hand out to new buyers for our initial appointment.

Jun 26, 2011 04:01 AM #26
Ambassador
1,214,786
Ralph Gorgoglione
Maui Life Homes / Metro Life Homes - Kihei, HI
Hawaii and California Real Estate (310) 497-9407

Very good advice here.

Especially regarding the as-is.

The banks do not want any liability, so your offer price should reflect buying the home in as-is condition.

Jun 26, 2011 04:09 AM #27
Rainmaker
850,938
David Popoff
DMK Real Estate - Darien, CT
Realtor®,SRS, Green ~ Fairfield County, Ct

Great points for buyers who think shortsales are easy, thanks for putting this together for us.

Jun 26, 2011 04:30 AM #28
Rainmaker
1,767,970
John Novak
Keller Williams Realty The Marketplace - Las Vegas, NV
Henderson, Las Vegas and Summerlin Real Estate

Hi Suzanne - You've outlined some great tips for writing a strong short sale offer, but I wouldn't completely throw out items like closing costs, repairs and warranties. If the bottom line works, many of these can be included -- it's just a numbers game.

Jun 26, 2011 07:48 AM #29
Rainer
36,929
Debby Singleton
Springer Realty Group - Limerick, PA
Top Producer since 1993

Suzanne, You make a lot of great points and I love the feedback.   I agree w/John #31 - I've closed several short sales where the bank paid buyer's costs, commission and both sides of the transfer tax.   Not all banks have their heads in the sand.   Many do what it takes to get the job done and done quickly.    If only there were more!

Jun 26, 2011 09:27 AM #30
Rainer
57,325
Suzanne Martin
Suzanne Martin, Broker - Laguna Niguel, CA
Your South Orange County/North San Diego Broker

Thank you all for such great feedback and for the tips on your short sale experiences!  I am very proud to have so many great Realtors to network with here on ActiveRain!

Jun 26, 2011 09:37 AM #31
Ambassador
2,011,027
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Suzanne - It's important that a buyer understand what he's getting into before offering on a short sale.

Jun 26, 2011 10:04 AM #32
Rainer
218,050
Kimberley Kelly, SFR, HAFA, GREEN
HK Lane, Christie's International Affiliate, 760-285-3578 - La Quinta, CA
I do Real Estate like I played polo-to WIN!

The Short Sale List Agent is the Magician in the entire process.  Proof them BEFORE you list your home with them, and Agents..proof them BEFORE you put your Buyer's through it!

Jun 26, 2011 02:06 PM #33
Rainmaker
589,983
Phil Leng
Retired - Kirkland, WA
Phil Leng - Retired

Hi Suzanne,

You delineated the pitfalls of buying a short sale in a factual and dispassionate manner.

I hate them, but am dragged into them on a routine basis. My write up would have been much more negative!

Thanks

Phil

Jun 27, 2011 02:44 AM #34
Rainer
59,858
Delores Campbell
Keller Williams Realty - Chesterfield - Wildwood, MO
Your St. Louis Real Estate Resource

Hi Suzanne.  Thank you for the great information here.  Buyers must be educated on the short sale process.  They only hear what the new's is saying about short sales that they are really good deals.

Jun 27, 2011 06:35 AM #35
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Rainer
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Suzanne Martin

Your South Orange County/North San Diego Broker
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