Home Buying in 48150>Question Details

Jeff, Other/Just Looking in Livonia, MI

How can I purchase a short-sale home successfully?

Asked by Jeff, Livonia, MI Sun Mar 29, 2009

I have heard some horror stories lately about buyers trying to purchase short-sale houses. One in particular was that a family of 5 put an offer on a home under a short sale, and it was accepted, and at the last minute, the bank decided not to close. In the meantime, the family had already sold their home that they had been living in, and had to be out within a week or two. So now the family is, in essence, homeless.

Also, a few other questions:

1) What can be done to speed up the short-sale process?

2) What questions do I ask a realtor to ensure that they truly know what they are doing when it comes to negotiating short sales?

3) Are there ever any short-sale homes that are in ill-repair or with few, if any, updates? Because that's exactly what I'm looking for. One wouldn't think that a homeowner would spend money to fix up the house if he can't afford to pay his mortgage.

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Answers

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If I remember correctly, this is the same Jeff that was asking us about Open Houses --

Jeff, I would encourage you to put this much effort into openly communicating with your agent that you're currently under contract with.

It sounds like you're rather informed about what you want, but have you told this to your agent?
While we don't mind answering your questions (I am making an assumption on other agents on here) we'd all really encourage that the core of your comments be first directed to your agent. If you need further clarity, then we're here to support your agent you're currently under contract with.

If not, I am sure He/She would greatly appreciate the insight.
0 votes Thank Flag Link Sun Mar 29, 2009
Jeff,

That helps, thank you. You seem to be in the, "cat-bird," seat here! I was out this afternoon with someone in very much the same situation as you.

I will revert back to my previous post and encourage that you comb through some websites and devise a short-list of agents to interview. From there, arrange interviews (I would recommend at least 2, and not more than 4 agents) of those agents you pre-screened.

Please review my website at http://www.DoorToDreams.com, and again, I would appreciate the opportunity to interview with you.


Professionally yours,

Derek Bauer, Associate Broker / Realtor
Real Estate One
734.678.4745 - cell
Derek@DoorToDreams.com
Web Reference: http://www.DoorToDreams.com
0 votes Thank Flag Link Sun Mar 29, 2009
Jeff,

Our short sale department also assists home buyer's and can assist you in selling your current home. They will do the same things outlined below, except you would not have to qualify with your current lender.
Web Reference: http://mi-living.com
0 votes Thank Flag Link Sun Mar 29, 2009
Sorry to confuse any of you! I'm selling my house outright. I'm not in any financial distress. In fact, the house is free and clear of any mortgages or liens. I'm just looking to move to a different subdivision, one in which most homes have attached garages. After I sell my house, I want to buy another house with an attached garage, but I'm looking for one that's in ill-repair with few, if any, updates. I'm a handyman, and can make repairs myself. I just don't want to pay top-dollar for a house that's already updated and in top condition. If I buy one that needs a lot of work, then I will be able to fix it up to my personal tastes.
0 votes Thank Flag Link Sun Mar 29, 2009
Jeff,

Great questions!

Short sales are unique animals, for sure. Their make-up is based largely on the policies and cooperation of the individual lenders. I have represented Buyers on numerous short sale purchases, and am actually now specializing in representing Seller's on the short-sale of their properties. Using an in-house, short sale negotiator with the experience, know-how, and relationships necessary, we are streamling the process.

In answer to your questions:

1. Ultimately the speed rests with the bank, but on the other end it is imperative to be prepared, prepared, prepared. Our short sale negotiator works closely with the Seller to prepare all documentation and then presents it to the bank in a professional manner.

2. In the interview process, it should be obvious if that individual has experience in dealing with short sales and foreclosure avoidance. You should ask them what their pricing strategy is, how will they best work with the timelines you are facing, what is their success rate, how do they handle the property after an offer is at the bank, and on, and on.

3. I am a bit confused on this question, as your profile refers to you as a Seller, and you are asking about purchasing a short sale? Yes, there are certainly short sale opportunities in ALL conditions.

I would appreciate the opportunity to interview with you for the job in representing you in a purchase, and/or sale. Please visit us at http://www.DoorToDreams.com, or contact me through my Trulia profile or phone me at 734.678.4745.

Thank you, and I hope to hear from you, Jeff.


Professionally yours,

Derek Bauer, Associate Broker / Realtor
Real Estate One
Derek@DoorToDreams.com
http://www.DoorToDreams.com
Web Reference: http://www.DoorToDreams.com
0 votes Thank Flag Link Sun Mar 29, 2009
Jeff,

Much of this will depend upon why you are selling your home. If there is the potential for foreclosure in the near future, I suggest looking at these two websites.

http://makinghomeaffordable.gov/index.html to see if you may qualify for loan modification or refinancing.

http://www.michigan.gov/mshda/0,1607,7-141-45866_47905-177801--… which provides information from the State of Michigan about saving your home.

IF after visiting these sites, you still need (not necesarrily want) to sell your home then these are my answers to your questions.


1. What can be done to speed up the process? In most cases, working with a company with a "short sale" or distressed property department. They will take the time to interview sellers to determine if they may qualify for a short sale in the first place. They will assist you in competitively pricing your home to get a first offer which is when the lender actually will start the process. (Some lenders require more than one offer) We have a short sale department that works exclusively with sellers who qualify for a short sale. This department, and others in the company are Certified Distressed Property Experts. If you feel you qualify for a short sale, there are forms provided by your lender, then I can put you in touch with our short sale department.

2. Great Question! You should definately ask about the agent(s) experience. Their track record, and their certifications. I also suggest asking them to carefully review the entire process, any additional costs (or potential costs), and any special concerns you may have. I suggest waiting to sign any paperwork until you are comfortable with the agent(s) and their experience.

3. Jeff, when our team comes to review your information and work on marketing material for your home, they may make low cost cosmetic suggestions. If you qualify, they will help you "sell your home's condition" to the lender to get them to agree to a lower market price. Any home can be marketed in "as is" condition. Would you consider spending a few dollars or put a few hours sweat equity into those items on your home that would decrease the time it takes to sell?

Jeff, I really hope that the first two websites help you keep your home. If that is not possible. The website below allows you to contact me. I will confidentially pass your information on to our Short Sale Department so they can schedule an interview.

Jeff, keep in mind, things will get better. I wish you luck.
0 votes Thank Flag Link Sun Mar 29, 2009
Jeff,

I'm glad you are here! Andy touched on some great points for you. I just wanted to add one thing to his wisdom. There is a new designation that a Realtor can earn it called a Certified Distressed Property Expert (CDPE).

In order for an agent to earn this special CDPE designation they must attend classes. If an agent has earned this designation it shows that they took the time to learn the right skills and tools to help serve you better in transactions like short sales.

I feel that this may be good qualification to look for when interviewing agents. I have not earned the designation myself, however I am working on it and I cannot wait until I can say that I am CDPE. I do know a few great agents who are CDPE if you are interested in working with someone with these great skills. Just drop me a line, you can find my contact info via website or my profile.

Best Wishes,

Jeremy Sulak
0 votes Thank Flag Link Sun Mar 29, 2009
1. Banks need to increase sales staff to help bring down volume and turn times to help improve the time we have during these.

2. Ask an agent to see some examples that they've done. I do that for my short sale listing appointments -- listing a short sale has special challenges and requires someone (in my opinion) that has the time and the staff to help facilitate these sales, as they require a lot of time and patience.

3. Yes, there are plenty. I'd advise not to assume anything about what the previous tenant/owner is/was doing/thinking as financial times are different for each of us.

The only way to know for sure is to work.with.your.realtor. closely and communicate what you want to them.
0 votes Thank Flag Link Sun Mar 29, 2009
Dear Jeff,

Short sales can be tough. The best way to ensure you can get a good deal is to pay all cash. Keep your money in escrow so that if the deal falls through you will get all of it back. Escrow is a unbiased party, but you show the lender that you are serious by putting some money in escrow.

Remember that a family is currently living in the house and they might be angry that the lender let's say allows the house to see for $200k under their loan amount vs. working out a loan modification or something with them directly.

Some investors I know actually wait until after the property is foreclosed and purchase REO because it's cheaper and the time restraint isn't so difficult to time correctly.

However, here are the few tips that will better your odds of a short sale.

If there is only one loan on the property
If the loan was a purchase loan
If there is no PMI (Mortgage Insurance) on the property
If the current homeowner is going through a job loss, divorce or death in the family

Good luck!
0 votes Thank Flag Link Sun Mar 29, 2009
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