7 Steps to Buying a Short Sale

Today’s real estate market is yielding great opportunities for home buyers, such as short sales. Short sales, however, can be a complicated and often frustrating process for both buyers and sellers. From home inspection company Pillar To Post (www.pillartopost.com), here are some important tips for pulling off a successful short-sale transaction:

1. Finding Short Sale Properties
Most short sales are listed by real estate agents on local websites and in MLS feeds. Because some lenders complain that identifying a property as a short sale enables buyers to lower their bids, agents will slip in terms that more subtly identify the listing as a short sale, such as:

“Subject to bank approval”
“Pre-foreclosure”
“Notice of Default”
“Preapproved by bank”
“Headed for auction”
2. Choosing a Real Estate Professional
Make sure the real estate agent you choose to work with has experience and/or certification in short sales. The buying process is often far more complex and far longer than a typical home sale, so a trained ally on your side can make your experience successful.

3. Investigate the Mortgage and Liens on the Property
Your agent must be able to: uncover how much the mortgage is worth; find out how much the current owners paid and when; find out how many liens are on the property; find out which lender is the primary lien holder; research comparable sales in the area.

4. Have a Home Inspection
Since many short sales are sold “as is,” with no contingencies allowed, having a home inspection is imperative. If extensive repairs are needed, the home may not be a bargain after all.

5. Write a Complete Offer
Remember, the lender—not the owner selling the property—decides whether your offer will be accepted, rejected or countered, so helping the lender will help support your bid. Be sure to include the following materials with any short-sale offer:

Cover letter
Signed owner/borrower short-sale purchase agreement
Seller hardship letter
Seller payroll stubs
Two years of seller tax returns
Market comparables
HUD-1 closing net sheet
Repair cost estimate
Pictures of property
6. Negotiate
If the lender rejects or counters your written offer, you’ll have to negotiate with the lender by making a higher offer. Be prepared to offer more money to close the deal, or to walk away if it doesn’t make financial sense.

7. Be Patient
In today’s market, short sales are overloading many lenders. Processing and decision-making times for some lenders can be quite long—up to a year or more. So make sure you’re prepared to hang in there.
As a Member of the Top 5 in Real Estate Network®, I have a wealth of real estate and homeownership information that may be of help to you. Feel free to contact me any time to learn more about this important information, and be sure to forward this article on to any friends or family that may be interested as well.

Source: Top 5 in Real Estate

About maureeningelsby

Realtor with Keller Williams Real Estate .
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