Home Buying in Fullerton>Question Details

Oddvision, Home Buyer in

Short sale backup offer

Asked by Oddvision, Tue May 7, 2013

A short sale we are interested in is already pending & a new agent we just started working with suggested that we put a backup offer even tho it already has several backup offers. We can't see the place & there are no pictures of the inside. I know that if the offer is accepted we'd have the inspection, but the agent said its not in good shape tho he thinks its mainly cosmetic. Is it crazy to make an offer on a place we haven't seen inside?!

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It is not crazy. If the buyer's agent utilizes the appropriate contingency clauses and forms, buyer's funds would not be at risk until the short sale was assured. However, there are questions you should ask yourself:
1. Is this home worth the extra trouble? Although you cannot see or inspect, is the area and potential purchase price worth pursuing this transaction?
2. Is this seller serious? Unfortunately, some sellers still use the short sale process as a means of delaying foreclosure without seriously intending to complete a short sale. Sometimes, a complete lack of interest in permitting showings or other impediments to the sales process are hints that the seller is not serious.
3. Is another short sale or other properly priced property a better option? This is already pending and has multiple back-up offers. Even if it was not a pending transaction, short sales are not guaranteed. Many short sales are listed at prices which are no where near what the lender(s) will accept. Inventory is rising in many areas, so other properties should be considered before counting on a back-up offer on a short sale transaction.
4. Do title records indicate this is a likely success for a short sale? Your agent can research title records to see the amount and number of liens that need to be negotiated for a short sale to be accomplished. One first trust deed might make for a likely success for a short sale. A property that has a first trust deed, a second trust deed, a home equity line of credit, a judgment lien, and HOA liens, without equity to even cover the first, is less likely to produce a successful short sale.
0 votes Thank Flag Link Thu Jul 17, 2014
not a big deal, you'll have (or should have) a contingency to inspect at a later date.
0 votes Thank Flag Link Tue May 7, 2013
The key words here are "Short Sale" for often even though an offer has been accepted by the Seller from a Buyer many Buyers walk away due to finding another home where their offer was accepted or they became impatient. And as to not having seen the property....all you need to do is to insert a clause within your purchase contract which reads similar to this: "Offer contingent upon Buyer previewing the interior of the subject property." So as Joe had already mentioned it is important for Buyers in today's market place to be creative, aggressive and always seeking opportunities.
0 votes Thank Flag Link Tue May 7, 2013
It's not crazy and it's becoming more of a common scenario in today's market. It's a matter of whether or not you would be comfortable doing it. Buyers have to try a lot of strategies in today's market to get into escrow. It may also be a moot point considering it's already in escrow with several backup offers. Good luck with your house hunt!
0 votes Thank Flag Link Tue May 7, 2013
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