Considering a short sale property? You’ll need an agent who knows the process, and lots of patience.
Short sales can be a way to get into real estate, but the process is long and complicated.
With more properties on the market, interest rates still reasonable and home affordability at its peak, potential homebuyers are considering short sales as a way of getting into the real estate market. Short sales are transactions in which the homeowner’s lending institution is willing to accept less than the balance due on the loan.
A buyer is dealing with two entities—the home seller and the mortgage lender. Considering this, as a buyer you need to be aware of the complexities involved in a short sale. And, you need two crucial aids—a real estate agent who is certified in short sales, and lots of patience.
Here’s some advice that will help you navigate a short sale.
Get pre-approved. Even though the lender may not move quickly, the process will be accelerated if you come in with financing in order.
Don’t expect a response to a lowball offer. The price is set by the owner and agent, but the bank has the final say to accept or reject your offer, depending on the amount of money the bank is willing to lose on the sale. While you can land a real bargain in the short sale market, this really isn’t the time submit an aggressively low offer. You’ll just prolong the process, if it even moves ahead at all.
Your agent will check comparables. To make you a more informed buyer, comparables give you an idea how other properties are priced. This will affect your offer.
Some short sales prices are approved. While short sales aren’t speedy, you may be able to shorten the time by looking out for an approved short sale home. In this case, the lending institution gives the go-ahead for a price. This is your most desirable situation.
Don’t count on negotiating for repairs. Short sales generally are offered as is. In some cases a credit may be offered, but the buyer must assume all responsibility for repairs.
Still shop around. Because of the extended period of time it takes to negotiate a short sale, continue looking around, just in case things don’t work out on your first property.
Choosing a short sale can be a great way to purchase property at a reasonable price, but to get there, remember—arm yourself with lots and lots of patience get a talented realtor who knows the ins and outs of the short sale market.