THE SCOOP ABOUT SHORT SALES

Seven Facts Every Buyer Needs to Know about Short Sales

You have heard the phrase “there is nothing short about short sales”. Recently, [I] received an inquiry from a buyer who was interested in pursuing short sale opportunities that went something like this

“I am interested in short sale properties. I am a serious investor looking for a home for my wife and myself. If I like the property, I’d offer 30% less than asking price….”

With all the information and misinformation that people are reading in the media, I understand that this buyer is looking for a good buying opportunity.

Short sales can provide these opportunities but only if they fit the situation and are right for that particular buyer.

It is important that buyers know what to expect and to develop a buying strategy that allows them to reach their goals.

I suggested a consultation to evaluate this buyer’s situation including his needs and preferences and to discuss the ins and outs of buying short sale properties.

Seven Facts Every Buyer Needs to Know about Short Sales

1. Properties offered as short sales are typically priced to sell and offered at a price below market value.

2. Low-ball offers don’t get buyers “in the door”.   Most likely, the seller will reject the offer.

3. Make your offer based on previous sales of similar properties in the area.

a. Seller will accept or negotiate your offer.
b. Seller’s lender will review and has to approve the contract. In this
process, the lender will obtain appraisals and price opinions based
on previous sales comparables.The lender will present these
findings to their investors for approval.
c. Seller’s lender has the final word and is not obligated
to approve.

4. Proof of funds (if cash) or mortgage approval are required with offer.

5. Show seller and seller’s lender that you are serious by making an above average “good faith” deposit and demonstrate commitment by getting inspections completed.

6. Short sales take time.  Be prepared for additional negotiations with the seller’s lender.
The entire short sale process could easily last from 2-6 months.

7. There is no guarantee for the successful outcome of a short sale offer even if seller and buyer agree on all terms.

Because of the substantial time commitment and involvement by buyer, seller, agents, title companies, attorneys, and lenders, contracts submitted for consideration need to be such that they have a reasonable chance of success.

Anything else will not be a productive use of your time and resources.

Thanks to Silvia Dukes of Tropic Shores Realty, Spring Hill, FL for the great post.