2. If someone is buying the property as primary residents seems to go smoother if its an investor (KNOWS SYSTEM) the lender seems to give them more problems
3. Commission is not that much lower so don't see an agent causing the problem but if your agent doesn't want to work it for you there is allot that will.
Your Realtor is probably telling you the truth, but I wouldn't call it a bait and switch situation. The listed price in most instances has not been approved by the bank, it is a price that the listing agent feel is fair and will sell for. If the bank feels that the price is too low then they will not accept the offer and/or counter with a higher price. This will be out of the control of the listing agent. I work a lot of short sales and foreclosures and I have seen cases where the bank automatically counters, even if the offering is above asking price and is a very good one for the market.
Although a good listing agent should know enough about the market to list it at a price the bank will accept. There might (or might not) be some agents that just put a very low price as a bite, but I don't know a lot of those.
Depending on how diligent the Realtor is, and the stage where the short sale is at the time you place an offer a response can take anywere from 2 weeks to over 3 months. Around 2 months seems to be typical.
Realtors should not be steering away any clients. Our job is to provide the data then you make the decision. In terms on commission it should not make a difference since the client will most probably stay within the same price range. In terms of labor it does not make much difference to the agent representing the buyer, as most of the work of dealing with the banks is being handled by the seller's agent.
I specialize on Short sales and foreclosures and have sold many of those. When I am representing a buyer I also think that foreclosures are a better option. Prices on foreclosures can sometimes be lower than short sales and you get an answer in 1 to 5 days rather than months.
But that is just my opinion. I like to present that data and let the client decide. Your Realtor seems to be honest with you and he should be able to provide you with more details.
It's hit and miss, but the majority of short sales takes a long time. Often the asking prices are not backed up by anything other than the sellers agent setting the price really low to attract a lot of buyers. In terms of getting an answer fast it all depends on how far along in the process the sellers are, what bank you are dealing with, if there are more than one lien holder, how aggressive the sellers agent is and a whole lot of luck. Answers can be anywhere from 1 week to 6 months, with the vast majority you are looking at a 3-6 week time line to get an answer.
2. Not by someone that knows the "system", but by buyers seeing the extremely low price and is willing to pay closer to market price, which stands a good chance of getting accepted.
3. I know some agents do avoid them due to lots of work and small commission. I do not shy them for that reason, but I advice my buyers to avoid them unless you have serious patience. I have had several buyers giving up half way through and it is nothing but frustration to them. If you have extreme patience and is willing to wait a long time then it may be for you. But don't expect a whole lot of communication, usually there is very little. Put in an offer and wait, wait, wait. If that is not for you, then don't look at short sales.
Other advice..... short sales are not the best deals out there, bank owned homes are. Priced better, easier to deal with and much more of a sure thing.
If you want to get a "good" deal you should look more toward the REO/Foreclosure market. Banks typically are motivated and price them very aggressively to sell and many of these homes end up with multiple offers.
I looks like these agents answered quite well!
There is a lot of time spent on a short sale both on the contract and constant follow up with the bank.
As a professional agent I like to work hard to work for a sale to go through. There are so many factors in the process.
It can take 3-6 mos to get an answer! A good agent representing a client would like to present an offer and work hard to to help the buyer work out the details. Every time we add another offer it only complicates the process and adds more time before we recieve an answer.
It also helps for the buyers agent to build a consistant communication with the listing agent! This way any problems can be resolved early.
The frustration with short sales you usually only get a verbal reply from the bank months down the road ! They are over whelmed ,short of staff and have so many homes to settle on.
If you want to purchase a home in a short period of time there are some great prices in resale and new build spec homes.
Feel free to contact me if you have any more questions!
The fact of the matter is many real estate agents will not have anything to do with short sales is much more complicated than you give it credit. 90% of all short sales contracts written do not close.....would you go to work if you only stood a 10% chance of getting paid anything.
Additionally, our buyers in many cases are taken advantage of with lack of information from banks, excessively long waiting periods, and disappointment......so yes, agents for all of these reasons buyers are told to wait until it goes into "foreclosure" because many of the problems that contribute to waiting and frustration have been resolved.
Michelle, general advice for short sales.........skip them and look at foreclosures.
The underlying bank that has the mortgage for the property you would consider is a very big contributor for how long it will take, and whether it's possible to even get an approved short sale. To give an example of one bank's time line, Countrywide has in it's guidelines, 15 business days from appraisal (after the appraisal has been completed and is available at Countrywide) to simply assign a negotiator. Once assigned, that person has 15 business days to consider the entire package, and if approved, submit the package to the underlying investor, for approval. The investor then is allowed up to 6 weeks to approve the deal. That's 12 weeks. Believe me, it isn't fun for anyone involved.
Other banks are faster, in fact, nearly every bank is faster. However, I once needed 45 days, just to get my first phone call back from ING Direct.
As to the listing price and how it might be considered bait and switch, if you are considering a buyer's agent, for the purpose of buying a short sale, be sure you find one that is personally experienced in short sale transactions. Your agent needs to know how to do a short sale comparative market analysis, to be sure you aren't being "used".
Are the houses sold to someone that knows the system? A house you make an offer on, may get sold to someone else, if your agent doesn't do everything she can to protect your offer, and ensure your offer is always the only offer the bank is considering. There are tactics and techniques for doing that, and the agent you use better know a thing or three about how to protect you and your offer.
Do REALTORs streer people away from short sales? This depends. If there is an easier transaction, for a similar property, I will always have the discussion with my client about what a short sale entails and then let them decide. Most of my clients right now are owner occupying the home, and can't dream of waiting at least 3 months to find out if their offer is accepted. An investor will likely wait. Is a short sale worth the hassle to the agent? I'll be honest and share with you that my commission is always an issue with the bank for a short sale transaction. That means that I'm unlikely to earn the same commission if you close on a short sale (at the same price), as if you close on a non-short sale. I fight hard for my commission, but it is indeed always an issue, and frankly, something that is frustrating to have to fight for.
My advice to you, is that if you are searching for a home that has foreclosure inventory available in the same area, that you'll probably get just about as good a deal buying a foreclosure as you would a short sale. Condition might be a tad worse, but with enough work, you'll probably get close, and when you make an offer on a foreclosure, you'll probably get an answer back within a few days. Then you can expect to close in 30 days or so. Basically, it's a standard length of time. If there isn't any foreclosure inventory (which is the case in many highly desirable areas), a short sale purchase is indeed the best way to purchase a home at the best price, so it's worth the effort. Just make sure you the right buyer's agent on your side that knows how to protect you and your offer/transaction.
FYI, just in case you might be looking in Anthem, I'm listing 3 short sales in Anthem right now. I also know an absolutely killer deal on a short sale in the Biltmore area...just to name a couple of choices.
Short sales are not necessarily "bait & switch," but you must understand the the price you see listed is never a guaranteed price that you would be allowed to buy it, even if the description says "short sale approved." They usually do take quite a long time, up to 6 months to close, but some can be done quicker because it all depends on how good the listing agent is & the offer that you submit. Typically, it will take 45-60 days to maybe get an answer on your offer, all the while, multiple other offers are also being submitted for consideration. Short sale properties, as with any other property for sale, will be sold to the best offer and a higher price is not always the best offer. You must also consider all the terms & conditions and any concessions you will be asking of the seller. With 85-90% of short sales never end up working out for the buyer, most agents will not show short sales because of their high failure rate. You will be much better off buying a home directly from a private seller who is not in foreclosure or directly from the bank.
I welcome you to visit my site for more specific information about short sales & general buyer's advice.
Buyer's Agent REALTOR
HomeSmart Real Estate
Check if you qualify for a mortgage. Try http http://:www.whywaitbuytoday.com
Are you able to wait for a long time to close or even taking the chance not to close at all?
I have been in that situation, and is not fun! I wanted to buy a short sale property and after I wasted almost 3 months of my time, at the end the bank did not want to move forward with my offer, and they decided to foreclose. I was very disappointed, because I really liked that house.
Let me know if I can help you find the perfect home for you.
Real Estate Professional / Prestige Realty
Bianca Bennett / 602-570-7898
CFS Mortgage assists homeowners who have recently been through a foreclosure, short sale or have recently emerged from bankruptcy.
Short sales are not meant to be "bait & switch". The short-sales I have represented buyers on this year were all purchased for less than the listing price. Yes there have been times where multiple offers on a 'low' priced home has driven up the price but we moved on to the next property but with each client we found an even better home at a better price.
The bank that is reviewing the offer does not know who "knows the system" they are only looking at which offer is most likely to close at the highest price. That is their only concern.
The Realtor you are working with has an ethical obligation to represent your best interests. If an agent steers you away from a home for a higher commision one, that is not in your best interest.
The time and intensive part of a short sale lies with the listing agent not the buyers agent.
Let me know if you have any further questions.
It is also good to know that I can submit multiple offers for short sales and forget about them. Provided I can do this without commitment to buy and provided it isn't excessive paperwork for my real estate agent this may be a good way to go - while still keeping open to the possibility of moving quickly on short-notice foreclosures.