find a good realtor who is used to working short sales
see if good realtor does them, themselves, or do they use a company that specializes in doing short sales to assist (esp imp if they are representing the seller). If they do themselves, how much experience do they have?
work up the comps on the property and determine what you are willing to offer with realtors assist
ENSURE - that the lender you are working with understands that you are putting an offer on a short sale, since some loans will not work with short sales and a preapproval letter for a regular sale is NOT what you need
See if the area the home is in requires an occupancy inspection in order to get an occupancy permit before you move in. NOTE - sellers are selling as is, if an inspection is required, you will have to pay for it, cord to ensure utilities are on and then take care of anything that is found that the municipality requires be fixed before you can move in - in many cases, your lender may not lend you the money to purchase the home unless you can get an occupancy permit prior to closing. NOTE - some sellers will allow you to fix up the home prior to closing, BUT, you run the risk that their lender will put the home in foreclosure throughout the short sale process, so if you have for example replaced the hot water heater in order to meet the municipal code, then the bank forecloses on the home, you are out the cost of the water heater and the installation cost and permit cost, etc. Check out 203 K rehab loans as a backup
Be patient, my last 3 short sales took 8 months to get the sellers lender's permission to close, after we got a contract from the buyer. then another month to close - some will close in a month, however with the majority, you will not even have an answer back from the bank by then
NOTE - the price you negotiate with the seller is subject to approval by the bank, they OFTEN, come back and renegotiate the price point, after you have been waiting for months for them to acknowledge that they have even received your contract offer
Do not be surprised if after the price is negotiated, when the final closing docs are done and approved, the bank comes back and states that they have to get XX amount of money regardless of contracted price and they don't care if the buyer, seller or whomever brings it to the table (this is typically due to the amount of taxes, etc that are prorated on the final closing docs
Some of the short sales are in great shape, others are not - they are sold AS IS - get a good inspector and inspect everything. Note that the seller has no money for preventive maintenance or minor repairs so you will probably be taking care of a lot of small items when you first move in
Ensure you use a good title company who will thoroughly research any liens against the property and ensure that they are cleared before closing
be patient, have somewhere to live where if you have to keep extending your stay it's ok, or if you need to move out without a month's notice it's ok
Pitfalls: Many thing can happen after doing many short sales here are some I have experienced.
Short Sale Dept does not inform the Foreclosure Department and the house gets foreclosed on.
Sellers can decide to give up and let it go to foreclosure.
4 to 6 months after making an offer the bank can say NO or Yes but we will only do it if we get 10k more than what this current offer nets us.
There are good deals to be had if you are patient.
Call me if you have any questions and I wil be happy to answer them for you!
Travis Noe RE/MAX INNOVATIONS Cell: 816-564-3822