Tips for Dealing with Real Estate Short Sales

Short sales – distressed properties that sell, by mutual agreement between the buyer, owner, and lender, for less than what is owed on the property – are a great way to obtain a prime real estate investment for interested real estate purchasers. They can be tricky to find and obtain, but are worth the work.

Here are ten tips for short selling in today’s real estate market.

1. The price is set by the lender/bank

The final price for a short sale is determined by the lender, not you or the buyer. Many buyers have learned this the hard way because they submitted an offer that did not come anywhere close to the bank’s asking price. This doesn’t mean you have to lock yourself into the asking price, but you do have to start from there and work your way down. Doing this will increase your odds of the bank accepting your bid.

2. Be wary of going too low

Another tip is to avoid going too low when you submit your first offer. A bank has to balance the benefit of having a buyer take the property off of its hands without having to go through foreclosure and spend more money versus accepting far too little for the property and missing out on a lot of money. If your offer is too low – something akin to 50-70% off of the ask price, in most cases – you are risking a resounding “No!”.

3. Have everything ready to go as soon as possible

This should go without saying, but be sure to have your paperwork in order and ready to go when it comes time to negotiate and close. Speed is of the essence; banks can be fickle, especially if other buyers emerge.

4. Have your agent check comparable homes

This is a big one. You can gain a more accurate gauge of how you should price your offer by checking comparable homes in the area. Do this before putting a dollar sign on your bid; it will make it more realistic and thereby more likely to succeed.

5. Demonstrate your solid financial background

Have great credit? Have you invested previously to great success with other banks and have a track record of successful payments and ownership? If so, showcase it – especially if you are depending on the lender to finance the property with you after you buy it.

6. Try to finance the purchase with only one loan

Having multiple loans as a way to pay for the property is messy and could complicate things – and also make it less likely that you’ll be approved. Seek one loan from a lender to finance your short sale purchase.

7. Seek approval from the owner first

All things considered, you want to talk to the owner and come to an understanding with him or her before you go to the bank. This will save you time and effort and potentially money by having a solid understanding of the home. Plus, if you walk in with a deal pretty much tied up with a bow for the lenders to review, they are more likely to accept than a proposal that doesn’t have the homeowner’s agreement.

8. Home needs repairs? Prepare to pay

Understand this: A bank will try to put the cost of paying repairs to a home on the buyer , i.e. you. Expect to have that come up in the negotiations if your home needs anything other than very minor touches.

9. Understand the other players in the game

There are other players in the game, including other agents and buyers looking for the same deals. They are willing to fight for a great property, so if you have one, understand that the bank may be entertaining offers from other players at the same time.

10. Keep the faith!

Short sales take time. Have patience and keep the faith. If the bank rejects your initial offer – which is common – address their concerns and tender a second offer. Many properties that were purchased would not have been bought if the buyers did not stay the course and stick it out.

Comments

Name (required)

Mail (will not be published) (required)

Website

Sponsored Links:

Related Posts:

• Short Sales Are Becoming More Attractive Alternatives for Investors, Homebuyers
• Sell Your Foreclosed Homes ASAP
• How to Qualify for a Short Sale
• Buying Government Foreclosures – Tips and Advice
• Tips to Get That Short Sale Done