Buyers Avoid Dissappointment when dealing with Short Sales
First the bad news!! Short sales take time. I may be 90-120 days before you receive a response to your offer, sometimes more. You must be able to wait several months before receiving a response from the seller/bank regarding your offer.
The good news!! Short Sales can realize a potential savings of 3-10% or even more on the price of the property.
So to avoid disappointment when it comes to short sales, here is a list of some tips:
- Make sure you have time to wait. There is nothing you can do to speed up a response from the bank.
- Understand offer process of the listing agent. Every agent handles it differently. You do not want to get in a situation where your offer is just hanging out there and can be trumped by subsequent offers.
- Work with an agent that understands the process and the pitfaills of submitting a short sale offer.
- Find out who the bank(s) are that involved... is it one loans or two loans? is one of them a HELOC? All of this makes a difference in the potential success of a short sale purchase. Some banks wont even do short sales while others are notorious for taking forever. Two loans can be more difficult than one and a HELOC can be more difficult than a second mortgage.
- Make your offer reasonable. A 30% discount off of a very marketable home is not reasonable. There are formulas that banks use in determining what price they will accept. They will be willing to give up about 19% of fair market value. Realize that 19% will also include real estate fees, closing costs and attorneys fees.... hence a 3-10% savings to the buyer.
- Put your financing in place early the bank will want you to close with-in 20-30 days of acceptance of a short sale.
- Prepare to be dissapointed... don't hang your hat on that one property.
- Be patient!!
The buyer with the waiting power usually wins!! Even if there are higher offers or offers ahead of you buyers do drop off. It is the patient buyer who ends up purchasing a property.