Avoiding Short Sales? There are many articles written for homeowners considering a short sale and not nearly as much advice for buyers purchasing a short sale home. Here are a few things you should consider:
Who’s Involved
In a more traditional sale there are only two parties involved: the buyer and the seller. In a short sale three parties are involved: the buyer, seller, and lender. First the buyer negotiates with the seller. Then the seller submits the offer to the lender requesting that the bank approve a short pay-off of the loan (because they owe the bank more than the current market value of the home).
Plan to Wait
Once your offer has been accepted by the seller and submitted to the bank, you will then have to wait. Banks are notorious for their slow response times - sometimes up to a couple months before you hear anything! Though the banks are claiming to have streamlined the process in the past year expect their response time to be up to 8 weeks.
Experience Matters
Both agents involved play a huge role as the middle-man to this process and can ultimately affect the success of it. Make sure the agent representing you has experience with short sales. Don’t be afraid to ask them how many short sales they have dealt within the last year and how many of them have closed. Your buyers’ agent needs to be willing and able to dig for more information about the home, the loan(s), and whether a notice of default has been filed or trustee sale date set.
Know the Market Value
In some regions short sale homes may be purchased at a great bargain. That is rarely that case in the Bay Area. The banks are very aware of the high demand for homes in the valley, and they want to get as close to full market value for the home as they can.
Don’t be scared. Be educated. Contact me today for more information.