In these difficult financial times, more and more sellers are finding they need to sell their homes for less than they owe on their mortgages, known as a "short sale." This can be a good deal for you as a buyer, as long as you're aware of the extra time required to make it happen.

Properties sold as a short sale are due to some financial hardship, including job loss, job relocation, illness, divorce, aggressive borrowing against the home in the days of easy credit, and declining home values in a slower real estate market. A seller does not need to be in default - to have stopped making mortgage payments - before a lender considers the property a short sale.

Since the short sale process can be long, many agents and lenders talk buyers out of looking at or pursuing a short sale property. This is a disservice to you if you are not under strict time constraints and are flexible. It’s a rewarding and a win-win-win situation for you the buyer to get a good deal on a good house, the seller to sell without foreclosure, and the bank to get the loan off their books. Everyone profits!

What to Expect when Buying a Short Sale

How long it takes to buy a home
Be prepared to be very patient. The entire process, from purchase agreement submittal to the seller to the closing, can take 90 days - and sometimes more.

Statistics show that only about 40% of the transactions actually sell and close. The reason is not necessarily because of the bank, but the buyer gets impatient and wants a home they can move into in a shorter period of time.

Making an offer on an “approved short sale” opposed to a “potential short sale” property can be a quicker process. An “approved short sale” has a price that has already been given the green light by the bank. This could due to the fact that another interested buyer had made an offer that was approved, but didn’t end up buying the property. This type of short sale is the most desirable.

If you find your dream home amongst the short sale inventory, be patient. It will be well worth your efforts.

Providing creditable evidence that you can purchase a property is absolutely necessary. This is important whether you are purchasing a short sale or other type of listing. Pre-approval will make your offer to purchase stronger and gets higher priority than others who are submitting offers without pre-approval.

Lenders like cash offers. But even if you can’t pay all cash for a short sale property, it’s important to show you are well qualified and your financing is set.

The types of loans you can use are the same as for a standard real estate transaction. If, however, the property is not in good condition, you may not be able to use a VA loan or a FHA loan as the property may come back with conditions from the appraisal process requiring repairs and most sellers in a short sale situation do not have the funds to make the requested repairs.

“Communication” is where most of the agents fail in a short sale. If there is no proper communication between the buyer’s agent and the seller’s agent as well as with the bank, closing attorney, homeowner’s association, if any, and any other lien holder, then deals can fall apart, even if you start everything perfectly in the beginning.

A qualified real estate professional that you hire will be able to identify short sale homes from the special notations on the MLS database listings and certain phrases to watch for, help negotiate the purchase when you find the property you want to buy, and communicate smoothly with the seller’s agent, the lender and all other parties.

The services of a qualified real estate agent will cost you, the buyer, nothing as the agent is paid by the lender.

If you’re serious about purchasing a short sale property, it’s important to have expert assistance. Sellect Realty, LLC is experienced in the short sale arena and can help expedite your transaction and protect your interests. Sellect Realty can increase your chance of purchasing  your dream home.

Writing an Offer
Check comparables before submitting an offer. Your agent must be sure to check recent home sales in the area to give you a better knowledge of the selling price of homes in the neighborhood and make you a more informed buyer. Your agent will also research who is on the title, how much is owed to the lender(s) and other information to determine how much to offer.

You can expect short sale properties in most cases to be priced extremely well but they are not at a fire-sale price.

The listing price is set by the agent and seller, not the bank. The bank is normally unaware of the asking price but it has final say in what an acceptable offer will be.

Lenders want to minimize their losses as much as possible. If you make an offer that is ridiculously lower than the fair market value of the home, chances are that your offer will be rejected.

Write a good offer based on the market value. If you really like the house then write your best offer so that you can have a higher chance of getting that house. The lender may accept, reject or counter back to you with their price based on their own appraisal price.

Terms & Condition
All short sale listings are sold “as is” because the owners selling their homes by short sale are suffering a personal or financial hardship and typically has no funds for repairs. Lenders will not pay either since they are already taking a loss on the property.

This does not mean that you have to buy a house without any inspections. It is highly encouraged that you have a “due diligence period” specified in the purchase agreement and hire a home inspector to inspect the property to determine if there are any hidden, but discoverable defects. Should the inspector find any deal breaking defects, you can be released from the contract.

After Approval
After getting the approval letter from the lender, your agent should stay on top of things so that you can close on time and move into your home.

Sellect Realty
Sellect Realty loves helping buyers with short sale properties. A successful purchase of a short sale needs an experienced short sale real estate agent. Start by contacting us and we will find your perfect short sale home.

Call 770.509.0265 or Email: sellectrealty@gmail.com