Manolo, Home Buyer in Whittier, CA

what are the chances on getting a house when is a short sale. we don't understand how that works fully. we have enough money to put a 20% down.

Asked by Manolo, Whittier, CA Tue Oct 20, 2009

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Manolo: Being a conventional buyer with 20% down will greatly improve your chances.

When a homeowner is behind on their payments they may choose to put their home on the market for a price that is less than they own. This is where the term "short sale" comes in.

When placing offers on short sales make sure that you are in first position meaning that your offer is selected by the seller/owner to be submitted to the bank. The owner has to submit an offer to the bank with their documentation to get the short sale approved.

Being in back up position on a short sale means that there is already an offer that has been submitted to the bank and you will only get a chance if the first offer rescinds.

This can be a long process but well worth the wait due to the fact that prices are lower than they have been in years.

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0 votes Thank Flag Link Thu Feb 4, 2010
Hi Manolo, You have a great chance of purchasing a Short Sale or any thing else with 20% down. Manolo, you do need an agreesive agent. Buyers with 20% down and good fico are what banks prefer. Please call me if I can help you in anyway. You still have a chance to take advantage of the BUYER TAX CREDIT.
0 votes Thank Flag Link Thu Feb 4, 2010
Both of the answers given are good, however I disagree with avg short sales taking 6mos. They can but most banks have set up better short sale departments to work on the tremendous volume they're receiving. On my short sale listings (so long as the 1st buyer sticks with me) they take about 22-40 days to get approved.

It's difficult for me to tell you how to weed out listing agents that know what they're doing, I just know how I interview them when working with a buyer. Working with the wrong listing agent can make or break your short sale deal. I have my own method when interviewing listing agents to Make sure they know what they're doing when negotiating a good price with the bank.

Having to offer current market value is questionable. My opinion is that the deepest discounts can be had with short sales vs. REO properties.

Let me know if I can help you.

emilyknell1@yahoo.com
0 votes Thank Flag Link Tue Oct 20, 2009
With a short sale house, you are dealing with the seller first. You negotiate an offer just like you would with any other non distressed home. The house is usually listed at market value (price that other homes in similar condition, size and location are selling for). The seller owes more to the bank than what the current market value of the home is. Once a seller accepts the offer they go to their mortgage holder and negotiate with them to accept this offer and forgive the difference that is owed on the house.

The banks are looking for the highest and best offers. Once a seller presents the bank with an accepted offer (one the home owner has accepted) the bank can then approve the short sale, counter the offer or reject the offer. The bank should be dealing with one accepted offer at a time, but every situation is different and banks seem to not be playing by the rules lately.

The process can take awhile to get an answer back from the bank. If your offer was countered by the bank you would still be in the running. If the offer is rejected, then there may very well be another offer on the table by someone else. You would have to check with the listing agent to see if they are working with another offer at that time. If they are, then you would have to wait to see how that offer plays out. If not then you can resubmit a new offer. This is part of the reason why the process takes a long time. Another reason is that the banks don't have enough people to process short sales so you have to be patient.

The best thing to do is make your offer the best you can right from the start. A short sale is a bit different to pursue than a regular transaction. Just because the seller accepts your offer doesn't mean that you have a deal. The bank has the final approval. What may look good to the seller may not look good to the bank. If you are in a hurry or pressed for time, a short sale may not be the way to go. If you have time, it could be worth the wait. Best of luck.
0 votes Thank Flag Link Tue Oct 20, 2009
Well, it depends on alot of factors, but If the listing agent is experienced in short sales, depending on which bank holds the title, if your offer is market value and is the first one submitted to the bank, and you qualify for the loan, you should get it. Be prepared to wait though, most short sales (depending on which bank & the listing agent) are averaging 6 months to get approved by the bank that holds the title.
0 votes Thank Flag Link Tue Oct 20, 2009
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