One of the questions I am most often asked is about the short sale process and whether my buyer clients should pursue them . Short sales continue to possess a very negative connotation but they remain very opportunistic. Here are a few points to consider when consider a short sale:
· Can you wait the 3-6 months for lender(s) approval? What will happen if you’re at square one if the deal doesn’t go through?
· Is the seller motivated or just trying to delay the foreclosure to have a place to live for free? An unmotivated seller will spell doom for any transaction.
· Is the seller contemplating a bankruptcy? A bankruptcy filing is also a death nail for a transaction.
· Is the listing agent experienced and/or knowledgeable about short sale process? Don’t be fooled by a CDPE or other certification (Certified Distressed Property Expert). This certification does not mean the agent has ever closed a single short sale.
· Is your buyer’s agent committed to the transaction? Many agents don’t want to deal with short sales because of the uncertainty?
· Who’s negotiating the sale with the lender(s)? The agent or third party?
· Is the property an investment property or primary resident of the seller? Banks are generally more lenient on a primary residence.
· Does the seller have any funds to contribute towards any outstanding HOA/Condo fees?
· Has a title search been completed? You don’t want to find out after the lender approves the terms of your offer that there’s another outstanding lien (tax,mechanic,judgement).
· Will the seller maintain the property during the process or will the property be deteriorating?
Don’t be scared off of a short sale. They do take time and aren’t right for every buyer. If you’re up against a hard deadline to be in a place, buy a foreclosure or a regular resale. If you can find a motivated seller that has equity, you can occasionally get even a better deal. If you’re renting, buying as an investment or otherwise have the flexibility, go for it.
Craig S. Rosenfeld
Remax Realty Group