If you are looking at a short sale, my advice is to talk to a Real Estate Agent who not only is a Buyer's Agent, but is a Seller's Agent also and has completed short sales. They will know the process better than someone who has never worked through the process on the seller's side. Understand that when you make the offer, it could get accepted, rejected, or countered, just like a typical offer on a regular sale but the mortgage company/investor has the right of refusal. You can get a great deal, but you have to do your homework. It is also important that the listing company has done their due diligence with comps to make sure the offer won't get refused and the sale doesn't go through, which can happen. They need to be working with the mortgage company and doing BPOs themselves.
The houses are typically sold "As-Is" meaning they will not make repairs to the house so if you have a VA loan, the house will need to appraise for the offer if you are doing a no money down deal. All of the pieces need to come together to make it hapen smoothly so be sure you do your homework and your agent does their homework. Some mortgage companies are easier to work with than others and it can even vary from negotiator to negotiator within the mortgage company but ultimately, it's all in the hands of the investors.
Just be willing to wait several months for an answer and don't be in a hurry to move on a short sale, unless it is a cash offer at the list price. It can be done, but it just takes time.
The Palmetto Real Estate Group of SC
many short sales are still being list for MORE then what the property is worth.
and that does not mean the bank / mortgage company or loan service company will suggest to the loan investor too accept the lower price.
The loan investor wants their money or the tax break the foreclosure provides.
Mortgage companies are finding that helping the owner REFINANCE the underwater mortgage to be more profitable than allowing a short sale or foreclosure.
IMO the biggest pitfall of a short sale for the buyer, is missing out on OTHER normal great Real Estate for sale.
Best of Luck
That bad one was Ocwen Bank - terrible...they outsourced to India, no specific person to speak to...
Pitfalls - no hardship for the seller (won't be approved), bpo comes higher than the offer (the agent is not knowledgable of the area), the buyer walks tired of waiting...the property falls apart becoming impossible to finance (only cash would work in this situation, but the bank does not want to come down price-wise)...negotiators who loose documentation or interest (not following through)...2nd or 3rd liens (mortgages) not willing to negotiate.
1) Find out who the lender(s), other liens holders are
2) Find out if there is true hardship in seller's situation
3) Submit the seller's package (financial documents, hardship letter etc. as per specific bank requirements)
4) BPO (broker price opinion) or appraisal is done, negotiation of best terms for the seller (in some cases moving expenses) - waiver of deficiency - very important.
5) Bank approves the short sale
6) Buyers prepares for closing/closing
CDPE â€“ Certified Distressed Property Expert
Beachfront Realty, Inc.