Home Buying in Naples>Question Details

Trulia, Other/Just Looking in San Francisco, CA

What's the typical process when buying a short sale?

Asked by Trulia, San Francisco, CA Mon Mar 5, 2012

How long does it take? What are some pitfalls?

Help the community by answering this question:

Answers

10
Here are couple articles you may want to read.

Short Sale Timeline Estimates By Lender
http://www.trulia.com/blog/alekov/2012/03/short_sale_timelin…

and

Everything you need to know about a short sale
http://www.trulia.com/blog/alekov/2012/03/everything_you_nee…
4 votes Thank Flag Link Mon Mar 5, 2012
A person who is upside down with their mortgage has 4 options.
(1) Foreclosure: This is a Court Judgement against you and will follow you for life, plus a big hit on your credit and you could be responsible for the balance of the bank sale of your property.
(2) Walk away: You walk away and let the bank chase you. Big hit on your credit and a Court Judgement against you.
(3) Deed in lieu: You give the bank the keys to the property, you could be responsible for the balance of the sale and a hit to your credit.
(4) Short Sale: You have to find a qualified negotiator who can talk to your lender. This is no cost to you. If they ask for money up front, do not walk but RUN from them. This is a FREE service. I get paid by the Bank to close your property on a Short Sale.
#4 Is the best option. Your property gets a bank approve sale value, once sold your credit report shows that the property was paid off. ( the credit companies do not know who paid the property, just that it was paid off. Your credit score start to go up. You are free and clear
3 votes Thank Flag Link Mon Mar 5, 2012
you need to submit an offer and wait for the banks response. once you have an accepted offer you then do inspection. i will make my clients sign a wavier if they do not use a real estate attorney to close as there are alot of people out there trying to pull quick ones.
depending on the lender or lenders if there is a 2nd on the pproperty responses can be fairly quick to fairly long for the response.
i tell my buyers if they are in a hurry not to do them as they just get frustrated.
i am a certified short sale specialist.
if i can be of more help please feel free to contact me.
all the best,
leann anderson
premiere plus realty
leannnaples@aol.com
direct-239-777-1823
1 vote Thank Flag Link Mon Mar 5, 2012
You do need an experienced agent- I am Platinum certified by Equator and have done many short sales. The data regarding the short sale is important to know first, and how close the seller may be to foreclosure since they are handled by different departments.
The short sale is essentially still a sale between the seller and buyer, only it needs approval by the lender who will receive less than what is owed on the morgage. They usually waive the deficit, it is always wise for the seller to work with an attorney.
The process can be long, since the insurance co., audit dept, investors, etc. all need to review the sale prior to acceptance. The buyer needs to be patient, but is cautioned that there is no guarantee until closing that the sale will go through. The lender usually orders a BPO or appraisal to determine market value in reference to the offer. This is just a snapshot of the process I hope that you find it helpful.

Mary Horesco, Downing-Frye Realty, Inc.
239-293-9434
http://www.Marysells4U.listingbook.com
Web Reference: http://www.maryhoresco.com
1 vote Thank Flag Link Mon Mar 5, 2012
First find yourself an agent that knows their way around short sales and can make sure the deal has a chance to close. You want to quiz the listing agent to make sure they know what they are doing and have the proper team in place, a real hardship and also a valid offer to put into the bank. The time range can be from 1 week to 1+years, depends on who the bank is, how many mortgages, hoa or condo assocations involved, etc... That is why you need a good buyer's agent who will make sure the deal has a chance before you make an offer on the property.


Scott Riddle PA, ABR, SFR
Realtor
Realty Direct|
Cell: (239) 289-1849
e-Fax: (239) 390-0027
1 vote Thank Flag Link Mon Mar 5, 2012
You have good answers below, but I'll outline:
Find a property
Make an offer
Wait, wait, wait.....
Wait, wait, wait.....
Wait, wait, wait....
Be sure to have a date in the offer so you can cancel it if you have not had a response by a time certain and you want to buy something else. Banks move at their pace, not yours. There may be competing offers, too!
Work with someone who does short sale often.
KathyBC
Web Reference: http://AroundNaples.com
0 votes Thank Flag Link Tue Mar 6, 2012
The "typical" process is that the process is un-typical!

There are three parties involved in a short sale, the seller, the buyer and the seller's bank. The seller's bank is the entity that will be short. At some time in the past, they loaned the owner/seller money to buy the property and now they will not get all their money back.

With this knowledge, you will understand that the first part of the transaction process is straight forward. The buyer makes an offer (with contingencies) and the seller accepts.

Then the short sale process starts, because the bank has to approve the sale. This can be a lenghtly process - or not..... I have closed short sales in a couple of months and also had one that took 11 months! You just never know, although there are indications for an experienced agent as to how long it will take. There are some circumstances that we have no contol over.

In order to ensure the best protection for you, the customer, I work with an attorney (usually at no cost to you) to ensure that you do not receive any unpleasant surprises, such as tax consequences that you were not aware of.

Legal counselling is a requirement for transparency in a short sale transaction.

Make sure that you interview the real estate agent you use to ensure that they are truly experienced in short sales. Some agents prefer not to deal with them. Others, like myself, enjoy the challenge and the satisfaction of bringing the transaction to a positive close.

This is not something to be ventured without professonal guidance.

Jeannine de Alwis, GRI, SFR
Realtor
(SFR-Short Sales & Foreclosure Resource)
Premiere Plus Realty
Naples, Florida
239 298 6034 - Direct tel.
0 votes Thank Flag Link Mon Mar 5, 2012
You will need a thorough inspection of the property. ( I am a licensed GC in Fl.) You will also need a strong, skilled negotiator to advocate for you with the bank or mortage company. A take charge attidude is needed and you must understand the process to maximize your value. Great deals are available if you work with the right person. I can help you. jackspringer1606@aol.com
0 votes Thank Flag Link Mon Mar 5, 2012
We advise our buyer clients to avoid short sales (pre-foreclosure), and the lengthy buying process is only one reason. Buyers negotiation leverage is reduced in these transactions and we would rather see our clients look at bank owned properties (post-foreclosure).
0 votes Thank Flag Link Mon Mar 5, 2012
Buying a short sale is mostly the same as a traditional sale on the buyer side. Often, additional forms insuring no relationship with the seller are required and proof of funds or financing to close are required with the offer. The biggest issue is that closing date is dependent upon time for approval from the sellers lender.

A good Realtor will research the situation with the listing agent to determine viability of the sale. Qualified agents are getting short sales closed.
Web Reference: http://www.Ken-Lowe.com
0 votes Thank Flag Link Mon Mar 5, 2012
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer