So many consumers are very confused with purchasing a Short Sale property, that it can be very frustrating for buyers and most agents do not want to bother showing the home.
When you find a short sale property that peaks your interest, unfortunately the home and price is probably too good to be true. Before you get too excited call your real estate agent (Heldoorn Team 817-491-3030) to research the property and enlighten you with more details of the situation of the seller.
In most real estate markets, fewer than 1 in 10 short sales actually close escrow. Just because the home is listed does NOT mean it is really for sale (because it is subject to the banks approval), nor does it mean that it will sale for advertised price. Here are 6 things a buyers should know ...
1. Research Comparable Sales Prior to Viewing the Home
Short Sales are priced below comparable sales and most are ridiculously low. So low that the sellers, bank will never accept them. These homes will receive multiple offers and buyers need to be prepared to make offers at the market price...NOT THE LIST PRICE. If you're not prepared to pay above superficial price on a lowball short sale listing, THEN PASS.
2. Ask your agent to research the bank and number of loans on the property.
The more loans and lenders, the more difficult the transaction. Not to mention, the closing process will take longer.
Some lenders, deserving or not, get bad reputations for being difficult to work with. If you have an experienced short sale agent, like Kellee Heldoorn, they should know which banks are easier to work with than others.
3. Find out if the Listing Agent has sold a short sale before.
A listing agent that has never sold a short sale before can be a very risky proposition for you. Thats because its up to the listing agent to submit the short sale package and negotiate with the bank. The short sale package, alone, is a complete nightmare. If one page is missing from the 200 page package, the bank will reject the offer (that has probably been sitting on the banks desk for 3 months) and the process has to start from the beginning....ugh. Ask yourself, do you want to risk rejection of your short sale purchase because the listing agent has no experience?
4. Is the SELLER cooperating with the bank?
Some sellers do not want to cooperate and are slow to return required documents. The seller thinks that they can stay in the property longer and they are proving to the bank that they are "trying" to sale the home. Some sellers dont even allow buyers to view inside the property. This is called a "Drive By Only".
5. How many offers has the short sale property received?
Short sales will receive multiple offers if priced under the market value. An agent is not required to disclose the terms of the offers, but you will want to know how many offers you are up against. You want to make an offer that will beat the competition yet still be below market, or don't waste your time.
6. Realize that now all agents are REALTORS.
This means that the listing agent may decide to submit only the first offer to the bank, regardless of price or terms. Also realize that even if your offer is submitted to the bank, because this process could be months before a short sale approval, another buyer could outbid you.
I have listed an sold several short sales, so I personally know that it CAN be accomplished. But, its like finding a needle in the haystack and all stars have to be aligned before the close of escrow actually occurs. Some words of advise are...be patient, dont fall in love with a short sale property because the odds are not in your favor of owning the home and KEEP LOOKING!
