Many Buyers in today's market pursue short sales hoping to get a good
deal. They often ask "What is a short sale? Can I get a better deal?
What should I expect?"
When you see a home
listed for a price that is well below market in a given neighborhood, it
may be because of a short sale. A short sale is when the seller's
lender is accepting a discounted payoff to release an existing mortgage.
Just because that property is listed as a short sale does not mean the
lender will accept an offer, even if the seller accepts it. Lenders are
more apt to approve a short sale when the home is worth the short-sale
price, which means market value. For a seller to get an offer accepted
on their short sale property in a timely manner, the asking price needs
to be close to market value. Otherwise, you may encounter a delay or
Let me explain the steps a buyer will take when considering the purchase of a short sale. Here is a simplified example:
your housing needs with your agent. Do you have the time to wait on the
short sale process? Very few can close in 30 days or less. Most short
sales take up to 4 or 5 months to close. You will need to be flexible
Have your agent determine, through a Comparable Market Analysis
(CMA), the current value of the home. Have them submit the CMA along
with your offer.
In preparing the offer, make sure to have your agent include your
right to cancel. Short sales are sold 'as is.' However, you will have
the right to inspect the property. With the right contract language, you
can make sure the property has no defects that would be costly to
repair before you are committed to moving forward.
If paying cash, you will need to provide your proof funds to close.
This will need to be submitted with the contract and a copy of your
binder deposit. If you will be getting a mortgage, you will need a
letter from your lender showing they have preapproved you for the
purchase. You should also provide the lender with everything they need.
This way, once the lender gives their approval you will be ready to move
forward with the loan process. Short sale lenders normally want to
close within 30 days of providing their approval letter.
Hire a good real estate attorney experienced in short sales to
represent you. They will negotiate on your behalf and make sure title is
clear and the property is free and clear of all encumbrances.
Once the seller has accepted your offer, it will be sent to the
seller's lender(s) for approval. You do not have an accepted contract
until the lender accepts and sends you their approval letter, which will
include the terms of their acceptance.
Remember ... Bank negotiators will not process a file if the
sellers' short sale package is incomplete. That file will go to the
bottom of the pile if it's missing required paperwork. Your agent or
attorney should check with the list agent or the seller's representative
negotiating the short sale to find out if everything has been provided
so there are no delays.
Remember the key to a short sale is ... you need to be patient if you truly want the home.
are dedicated to providing you with expert guidance. Call or email us
to schedule a free, confidential consultation to discuss the options
available to you.
Look for our next blog where we will discuss the benefits of a short sale for all parties involved.
WHY CAMERON & CAMERON
... We have made a personal commitment to serve the real estate needs
of our community - one family and one home at a time! We pride ourselves
on providing superior customer service and creating satisfied
customers. With our 66 years of combined real estate, construction and
mortgage industry experience, we are dedicated to providing you with
Whether you're looking to buy or sell,
we can get your home sold, or find you the home you've been dreaming
of. Either way, our goal is to make your experience comfortable, fast,
and efficient. Cameron's...Make it Happen!