|
Are Short Sales A Good OpportunityFor Home Buyers? Finding good pre-foreclosure properties as investments or as primary residences can be a difficult, but rewarding, process. What you need are patience and a basic understanding of the process. We can provide the “understanding” but you will have to bring the “patience”. Remember, the Seller is facing a hardship circumstance and trying to avoid getting a Foreclosure on their credit history. But don’t worry, the Banks are all prepared to handle this, and even have entire departments dedicated to managing the process. Having a knowledgeable Realtor® will go a long way to making the process smooth. Here are some basic things to keep in mind… -
Banks LOVE clean contracts. In other words, don’t expect Seller concessions. Yes, it may be a Buyer’s market, but with Short Sales, it is clearly a Seller’s market because of the aggressive price in which most homes are sold.
Sellers may be able to contribute to Buyer closing costs, but it should be at an amount ABOVE the asking price (or above a competitive offer).
Don’t even THINK of asking the Seller to perform any repairs. Plan to include an AS-IS Addendum with your offer. This does not remove your right to conduct an inspection of the home or even cancel during the inspection period because of the condition of the property. You just won’t get the Seller to address the repairs.
While it is customary for Home Sellers to pay for a Home Warranty Plan, most Banks do not permit this. So if you want one, plan on paying for it.
In most cases, your Close of Escrow date will be 30 days AFTER a Banks written approval of a Short Sale. Be prepared to have that date change a few times during the process to accommodate all parties involved (lenders, banks, title & escrow, etc.).
While the sale will take place between the Buyer and the Seller, the PRICE must be approved by the Bank. Just because you and the Seller have agreed to a price, this may not be the final price. In many cases, the price needs to be adjusted to meet the investor guidelines. You should be prepared to amend the offer price in order to make the deal work. Don’t lose sight of the fact that you are getting a GOOD DEAL. Know your comps for other properties and don’t get greedy. Many times the first position Buyer falls out because they think the Bank is playing games. In reality, they are trying to make the numbers work according to their internal policies. Don’t lose the deal over a few thousand dollars when you are buying it well below market. If you walk away there is always someone else ready to snatch up your good deal.
Properties come and go each and every day. Don’t miss out! Sign up to receive regular Short Sale property updates via email.
|
For Buyers