When you start looking at short sale listings you need to understand that you are gettiing involved with more than a real estate transaction. The normal real estate transaction takes place but then the situation with the seller becomes a big inflence on if the the deal will be approved.
Questions that may effect the banks decision:
How many loans need to be addressed.
What is the hard shape
Does the seller have other assets
Will the lender go after a deficiency
What is the mortgage companies appraisal to confirm value (would the bank do better by going to foreclosure and reselling property)
How quickily does the negotiator at the bank react
Will the other lenders cooperate
Is the seller cooperative in the process
First Weber Group
Certified Distressed Property Expert
Who is the lien holder?
Every lender has different requirements and process to handle short sales. For Example : Bank of America has 3 phases in which each phase , the negotiator has 30-45 days to complete their tasks. Then you have other Banks such as Wachovia, who only takes a week!!!
How many loans ?
It is importan to ask this question because if you find a short sale that you LOVE and they tell you that Wachovia is the first lien Holder but there is a second with Bank of America, then you should expect it to take at least three monthsto obtain an approval.
How motivated is the seller?
As a buyer you may think that a seller facing hardship would be motivated to sell and save their credit from FORECLOSURE. I've got news for you... some sellers are not motivated enough to provide the necessary documents for the lender to process the short sale which could delay the process even more.
Are there any Home Equity line of Credits?
Lender may require more funds to settle the debt.
I disagree with Vince because you should not put an offer and continue to look for other properties after the seller has accepted your offer. I've been seeing this practice a lot lately and I can assure you that this will cause many Foreclosures. This will waste everybody's time and will put the seller in a really bad situation. Many of these sellers are close to getting a foreclosure date and once a seller accept your offer, it gets submitted to lender along with many documents from the seller. If you cancel after your offer gets processed then the process has to start from scratch and you just wasted the seller and the listing agent's time for 3-6 months. If you decide to go for a ShortbSale... just be patient, call your agent and ask for updates at least every other week, be persistent, it will pay off.
Here is a list of Banks that I've found to be more efficient in their Short Sale Negotiations (in my Experience)
You have to have patience to buy a shortsale. If you are... the reward can be significant. If you have an experienced agent, this will definately speed the process up. I work many shortsales and understanding the process and steps helps anticipate what is going to be needed up front, next, etc. so an experienced agent can already have a lot of the work prepared in advance. To place a time frame... this is a rough estimate, however, from the time of acceptance of the offer between the buyer and seller and it gets submitted to the lender, The quickest I have ever personally seen was 6 weeks to the approval. And then a 30 day escrow. This only happened once... on average, my shortsale transactions have taken about 4 months from time of submission to the lender to closing of escrow. I hope this helps. Dont let what others say as being too long or hard, etc. affect your decision to preview shortsale properties.
There are some great shortsale properties out there. Also, the seller looking to sell through shortsale often keeps the property in much better condition that other types of distressed sales like foreclosures. I would say to do yourself a favor and look at it as an opportunity, not a potential problem.
I am always happy to assist.
Richard "RJ" Kas (SFR, SRES)
"Representing the finest properties from Los Angeles worldwide"
KAS Properties - Coldwell Banker Previews International - Beverly Hills East
9388 Santa Monica Blvd, Beverly Hills, CA 90210
310.859-5334 office - 310.488.9826 mobile - 310-273-0670 fax ATT: RJ
RichardKas@gmail.com - http://www.RJforLA.com - DRE: 01352771
Sellers Buyers Investors Leasing Consulting
The length of time it takes to close a short sale depends. It depends on you, your agent, the sellers agent, the lien holder, and the asset manager.
Since a short sale depends on so many different people it is easy to see why some short sales take longer than others.
Some banks are better at handling them than others for various reasons. If you have your eye on a house and know the lender a local agent give you an estimate.
The process is rigorous because the banks do not want to go through the process again, therefore, they require a lot of documentation.
If the seller, who is in financial distress, and the property are approved by the lender.
It is always good to have an agent who understands short sales, that will submit a complete package in timely manor and follow up with loss mitigation department.
As a buyer, ask a lot of questions to understand the situation and the process.
Best of luck,
Real Estate and Mortgage Services
Direct: (310) 489-5608
eFax (310) 919-0303
The process on a short sale, for the buyer, is no more rigorous than a retail sale or an REO/ Foreclosure. You get to inspect the home, have loan and appraisal contingencies, etc. What is more difficult is that you must wait for the seller's lender/ investor approval of your offer prior to proceeding with your escrow. This can be a short or long wait, depending on the caliber of the listing agent, the willingness of the seller to provide the necessary documentation to the lender/ investor, and the speed at which the lender makes decisions. I had one this year with Wells Fargo that was fully approved in 19 days, and one with BofA that took 3 months.
If you have interest in purchasing via short sale, there are several important things to do that can be the difference between getting the home, or not. They are:
1. Get a buyer agent to represent you exclusively (not the listing agent). They should have one or more of the following designations: Certified Distressed Property Expert (CDPE) Certified Short Sale Professional (CSP) or Short Sale Foreclosure Resource (SFR) in addition to being an Accredited Buyer Representative (ABR) and a member of REBAC (Real Estate Buyer's Agent Council). This way you can be confident that the Realtor you choose is representing your interests and is an expert in the field of short sale purchases.
2. Have your agent ask a series of questions of the listing agent to be sure that they know how to handle a short sale, have a compliant seller, and have experience closing short sales. I have created a list of questions that I ask in order to ascertain the likelihood that the short sale will close. If not, I advise my buyers that this may not be the property for them.
3. Make sure you have the temperament, willingness, and time line to purchase a short sale. I created a video of a young couple who successfully purchased a short sale, telling potential buyers about the good, the bad, and the ugly of short sales, and what to reasonably expect. You can watch it at http://www.youtube.com/watch?v=WACxMut0fWQ
Short sales can be a great way to take advantage of getting a bargain, but you must set yourself up for success in advance, or, as many have found, they can be very frustrating.
ABR, CDPE, SFR, CSP, REBAC
DRE LIC #00588885
Blogging at http//:thebremnergroup/news
You can call me direct and we can go over the process from start to finish. Many home buyers find that as long as they are informed of the process they stick it out just long enough to get that dream home. Often times as well buyers feel they are getting the deal of the century with short sales, it is not always the case. Most short sales are bought just at market value or slighly below.
I look forward to hearing from you.
Deborah London, CDPE, GRI
Let me know if you'd like to talk about it further, feel free to email me ANY & all questions that concern you about the process. What if this? What if that? etc.