First of all, you need to make sure that you have enough time. It takes anywhere from 30 days to 6 months or even more to get an answer on a short sale. It really depends on many factors. It requires a proof of funds letter if paying cash or a pre-approval letter from a lender if obtaining a mortgage. The seller must approve the purchase offer before it gets submitted to the bank. The bank may come back with a counteroffer or reject your offer completely. In some instances you may not even hear back from the bank at all.
Short sales take a long time because the bank has to review it and they are back logged with many short sales and don't have enough coverage to complete them in a timely manner. The bank typically is willing to work with the seller and buyer on short sales to help avoid foreclosure. The bank can ask the buyer to pay some of the liens or HOA fees. Some lenders will only pay up to a certain dollar amount and ask the buyer to pay the remainder or there is no deal.
One of the benefits of buying a short sale is that the bank is typically willing to accept less money for the property because of the time and risk involved. So you generally are getting the home at below market value.
If you have the time to wait, a short sale is a good way to go. One thing to be sure to ask when purchasing a short sale is, "who is handling it?" Is the Realtor an experienced short sale expert? Or is the listing agent using a Short Sale company that strictly focuses on short sales? By having someone with knowledge and expertise in short sales, it will make the process go much smoother and faster.
No, this happens all the time.
Unless the Seller signs your offer you cannot attempt to buy a Short Sale. If the Seller has already agreed that a fee for "negotiation" (or the seller's attorney fees), then if you chose not to pay that extra fee, the seller will wait until a buyer agrees to pay it. The Seller will probably have to pay that fee if a buyer is unwilling to pay it so that's why they will just wait until a buyer agrees to pay it.
Also the asking price on any Short Sale is ficticious (unless approved by all lienholders/lenders) so don't think you'll be able to buy a property for a significant discount. In fact I've seen properties that have PMI that have gotten counteroffers back "above" current market prices.
Most importantly, do not give any deposit until/if you get an approval letter in your hands for a short sale. And... you need to assure your contract is cancellable without any penalty because you need to continue "shopping" and writing offers on Short Sale up to the day you actually get the a sale approval letter in your hands. You can expect to "shop" for months on end. My guess is eventually you will buy a bank owned or traditional sale.
Hope this helps.
It is "fairly" new; but, as with all the costs, they are negotiable and should be stipulated in the contract.
Your real estate agent should contact the listing agent and/or the negotiator to see who's paying for all the closing costs associated with the details. With that information you and your agent can determine what your offer should be. For example, if you were looking to offer $100,000.00 for a home and you ascertain that the negotiator fee is $500.00, you can offer $99.5k.
Rotunda West is a large and desirable community in a close proximity to Englewood and Venice beaches so your interest in the area is justified.
The short sale process is initially between the buyer and seller...once they have reached agreement the process is between the buyer and the bank. With these transactions, the lenders will often try to negotiate the price upward to minimize losses.
Our recommendation when dealing with these types of sales is to "wordsmith" your offer to protect yourself from this as much as possible...requesting that the lender pay a portion of the closing costs as well as the total fee for professional services. This may not endear you to them but you will have made your point...and it they really want to sell the property....they'll come around!
Area "foreclosures" may be a better route to go: easier, faster, often cheaper, and definitely less stress and worry.
We would be happy to provide you with additional information on other local opportunities. Best of luck with your search.
Michael Saunders & Company