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Short Sale
Helpful hints on buying a short sale
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It's a perfect time to buy a great deal in the
real estate market. Some sellers are forced to sell their homes
without profit. During a "short sale", the home is being sold less
than the cost the owners owe for the loan on their home. Here is how
to go about negotiating the best price on a short sold home.
Step 1
Get your finances in order. If you're
a cash buyer, go to step 2. If financing, make sure you have down
payment in the bank for the last 60 days. Have your income
statements ready for your lender. Get pre-approved and have your
loan approval certificate in-hand before you proceed to step 2.
Get pre-approved first.
We can help. Start your loan and we
can provide you with your approval certificate.
Step 2
Find a good realtor. Choose a licensed
realtor that preferably has worked with short sale property before.
Step 3
Find a desirable property being sold with your
realtor, find a property for your residence, second hone, or
investment that is being short sold by the seller. Properties may be
advertised this way or not, but the longer a property has been on
the market, the more price reductions it may have and will have a
greater chance at being short sold by the seller. Wording in the
listing that all offers will have to meet seller' s bank approval is
a tip off that it is a short sale.
Step 4
Negotiate the price to the fair market value
and make an offer. Here is where it gets tricky! You may have a
house you want listed at $295,000. The owners may have paid $350,000
for the property and were forced to sell for whatever reason. Now,
owners and their realtor may know the appraised value (let's say
$300,000) and what the bank is already willing to take but are not
obligated to tell you. Your offer will need to be as close to the
appraised value of the property as possible. First understand that
the owner's lending bank will be the deciding factor whether or not
your offer will be accepted. But also know that the owner has the
right to reject your offer if they feel it is too low. If you make
an offer for $250,000 they can ask the bank to approve your offer,
but if the home is appraising at $300,000, the bank is likely to
reject it.
Step 5
Keep trying if your offer is rejected, you
can make another higher offer. Do not waste time making offers of
$1000 increase more each time. This will waste time, and you may
lose the sale. Make a fair market offer. Remember: Homes are
appraising for MUCH LESS than what most owners have paid for the
homes. Many owners could be "Upside Down" in their loans and this
forces them to Short Sell.
A Fair Market Offer still means you are getting a FANTASTIC Deal and
saving HUGE amounts of money! If the home is appraising at $300,000,
the bank will likely take close to that. Once your offer is accepted
by the bank, you should be able to close on the home within 30 days
if your finances are in order.
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