Short Sale Buyer Tips
Short Sale Buyer Tips
Buying a short sale property can be a long, drawn out process if your Realtor isn't experienced with this sort of transaction. When looking for a short sale, please consider some of these tips before you begin your search!
1. Be patient. Short sales can take 60+ days for approval, but it can be much longer if there are 2 or 3 mortgages on the property.
2. Have your finances in order. This needs to be done before you even look at your first house! Writing an offer on a short sale, new construction or regular sale home requires loan approval prior to offer submission.
3. No contingencies. If you have a house to sell and won't buy the short sale home unless your home sells, you aren't a short sale type of buyer. Banks WILL NOT accept these types of contingencies on short sales or foreclosed properties...EVER!
4. Full time negotiators and/or attorneys. I have both on my team, especially since they can increase the success rate of having the contract accepted by the bank from 40% to 95%.
5. Title opinion. Having a title company assess the liens on the property can help us determine if the bank will accept our offer or reject it because of all of the attached liens.
6. Offer rejection. You have to be prepared to move on and begin looking for something else if we can't reach agreement with the bank and/or the seller. Remember that the seller still has to accept the offer, too!
7. Bad terms. You don't want to be liable for the outstanding liens and debt associated with the seller! Walk away if the bank asks you to assume their bad debt! Having these liens removed is essential when purchasing a short sale...make sure your Realtor is familiar with this type of transaction!
8. AS-IS. Short sales and foreclosures are always sold as-is and come with no guarantees. Budgeting for the unforeseen is always recommended.
9. Home inspection. Always, always, always get a home inspection. It's simply too important not to have one done, especially when you are shopping for a short sale or foreclosed property.
10. Don't get emotional. We all typically "fall in love" with a house on the buy side but turn into astute business people and only think about the money on the sale side of transactions. I propose that we treat the purchase in the same manner as when we sale. Buying a house is a business decision...no way around it. If the financing terms are bad; if the deal is bad for you but great for the bank; if the house needs lots of work; if there are too many "unknowns" regarding the condition of the property, aren't those business decisions which can affect your household finances? Yes...they sure are!