Home Buying in San Fernando>Question Details

Stephanie, Home Buyer in Reseda, CA

I am a first time home buyer. I live in California where the prices are still very high even though they have

Asked by Stephanie, Reseda, CA Fri Jun 13, 2008

dropped. I have a realtor who showed us a short sale that we liked and would like to make an offer on. She has very little experience with short sales. The only one she has done is falling through. Is this something I should even tackle as a first time home buyer. How does one find a really good agent? What questions should I be asking?

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Stephanie:

The reality of short sales is that their success or failure depends primarily on the listing agent, not the buyer's agent. So, the fact that your agent does not have a lot of experience in short sales is less critical, although not altogether irrelevant.

Let me first speak to "how you find a really good agent". Referrals from friends and family rank very high. Their personal experience with the agent will give them a feel for the persons style, negotiating skills, and effectiveness. "What questions should I be asking?" There are all sorts of buyer's sites on the internet that will list 10 or 20 questions you MUST ask every realtor. Google "questions to ask a realtor" and you will get more information than you want. THE REALITY IS, the best agent for you is the one that makes you feel comfortable and confident about the home buying process.

Especially when purchasing a home in a short sale situation, this is a long drawn out process that can take 60 to 120 days. You want a realtor who will let you know what is going on, helps you deal with the anxiety of 1st time homebuying, works with a great team of real estate professionals. has a list of lenders who specialize in 1st Time Homebuyers and knows about the programs available to help you get into your new home (down payment assistance, both government and non-profit; MCC; Section 203(k) rehab programs that ride on FHA loans, etc). I would be happy to give you more information. Just contact me through my profile.

Short sales and REO's (real estate that has gone through the foreclosure process and is now owned by the lender) can be great buys. Your realtor needs to know how to walk you through the process. One of the key points in being successful in purchasing Short Sale / REO properties is keep your offer simple. Don't ask for credits, repairs, long contigency periods, etc. Do be pre-approved for your loan, not just prequalified. Do be prepared to be patient and persistent. Do be prepared to move quickly once your offer is accepted. Don't be put off by the process, let your realtor handle that. Do buy a home you can be comfortable in for the next 2 - 5 years and Dare to Dream.

Shel-lee Davis
Real Estate Consultant
RE/MAX Palos Verdes Realty
1 vote Thank Flag Link Fri Jun 13, 2008
Stephanie
You ask a very good question. You also have some excellent answers.
You need to put yourself in the shoes of the lenders. In most cases they are overwhelmed and are losing thousands if not millions of dollars, so they do not work in the best environment.

However, if you have time and patience, it may be worth it. Bear in mind that we are seeing depreciation problems. A buyer makes an offer, the offer is finally accepted, then the process seems to stop. There was one transaction where the sale was approved in March, they are still waiting for a manager to be assigned to the property. That is six months...and it's not either agents' fault.

The listing agent's ability to work with the lender is key. In most short sales I am aware of there are multiple offers and the listing agent hopes that at least one buyer is left when they close. And they are closing. In most offices a newer agent can ask questions of the most senior agent or broker, so don't let her inexperience stop you.

Enthusiasm, energy, and a passion to serve will overcome experience.
0 votes Thank Flag Link Tue Jul 29, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
Stephanie, you could be in for a long ride. I would not even consider making an offer on a short sale property because I like to get things done and not wait 3-4 months only to find out the deal will not go through. Other posters have pointed out the fact that many properties are offered as short sales well below market price just so that the bank can have some offers in-hand when renegotiating terms of existing agreements. In other words, many properties offered as 'short sales' are not really available any time soon if ever.
0 votes Thank Flag Link Tue Jul 29, 2008
I've been doing this since 1988. Check out my resume on my website.... I'm also a state licensed appraiser so can advise you the true value out there......


David Krecker, BSBA, SRA, MRA
Centuryside Real Estate Inc.
David Krecker
Broker/Owner/State License Appraiser
Office 562-690-6987
Fax: 562-690-7337
Serving the areas of Orange County, Los Angeles County, San Bernardino, and Riverside.

Email: dave@centuryside.com
Website: http://www.centuryside.com
Web Reference: http://www.centuryside.com
0 votes Thank Flag Link Tue Jul 29, 2008
Stephanie,
Franklin Farinas who responded is correct. Patience. An experienced Real Estate Agent can do a short sale weather they have done one or not. The information you read about people being "experienced" at short sales is just to get you to call them. All Calif Realtors have had enough meetings at their broker offices about short sales.
Stephanie, you know what a short sale is. Don't make it difficult. They are simple. your broker writes a purchase contract, submits it to listing broker and that broker submits it to the bank. DONE. NOW WAIT PATIENTLY. You can wait up to 6 months for a reply from that lender. And your reply will most likely come with a counter offer at a higher price. Or the home may be sold off at the trustee sale before you get a reply. Once the notice of default is filed a WHOLE NEW WORLD of laws kick in. There are contracts a purchaser signed and once the notice of trustee sale is filed the ball MUST roll according to the law. This means the home is going to be sold at the trustee sale, county court. The lender will most likely take the property back then put it on the market. You are probably better off watching the property then because it is easier to buy and no legal mumbo jumbo on a short sale. Property owners have all kinds of rights to keep claim to their properties and you do not want to get caught in the middle.
Another thing to consider is this...you write an offer on a short sale. you wait about 4 months, you get a counter offer that is ridiculous (yes the lenders want a bail out from a stupid buyer.) Now 4 months went buy, other homes you may have liked are sold off, interest rates went up one half point and now you are screwed with a higher interest rate and there went your savings. OH speaking of savings how much are you truly saving? There is a thing called TODAYS MARKET PRICE. How much are you saving over comparables? When REO go on the market they go at market price and maybe a little lower. If there is any home to be SAVED upon trust me there are a thousand other buyers in line competing with you and that drives the price right up. So unless the REO or short sale is in an area that is undesirable they will sit unsold. If you are writing an offer in a neighborhood that is plagued with short sales then a good idea is to stay out of that area and let all those short sales get foreclosed upon and watch them go back on market via the mls at a REO price.
0 votes Thank Flag Link Mon Jun 16, 2008
Hi Stephanie,

Every Real Estate transaction is different! I learn something NEW every transaction. I think Shel-lee gave a very complete answer. Short Sales are difficult & if your agent is a good agent, she will represent you well on this transaction. Yes, there are separate forms for a short sale than on a traditional sale, but winforms are very easy to navigate & our board introduces new forms 2 times/year as a minimum.

There is so much inventory today, isn't there anything that you love that is not a short sale?

As Shel-lee mentioned, are you comfortable with your agent? If not, find someone else recommended by someone you trust . You many want to interview three.

Best of luck,

Karen Miller
0 votes Thank Flag Link Sun Jun 15, 2008
Hello Stephanie. I, unfortunately, disagree with the other posts. I truly believe that the buyer's agent should have experience behind them when it comes to short sales. I only deal with short sales and REO and I think all agents should be educated and knowledgeable in their field. You need someone who is going to know what forms need to be filled out and properly at that. You should surely look for someone that has that experience. You are a first-time buyer; the last thing you should be stressed about is whether your agent is doing her job. I wrote an article in the Press-Telegram in regards to foreclosures, please e-mail me at dyannaavila@hotmail.com and I will send it to you. At lease this way if your agent is not knowledgeable, at least you are!! And by the way, short sales have been around for at least 1 year, minimum, there should be no reason someone is not experienced in short sales, at least more than 1.

Good Luck!
Dyanna
0 votes Thank Flag Link Fri Jun 13, 2008
I agree with everyone.

Patience is the key. There are many factors that the bank will consider before making a final decision one of which is to let the property go into foreclosure.

Unfortunately, banks are corporations bound by policies and procedures rather than common sense.

Look at all properties available in your market area and price range. There might be one you really like that is less problematic.

All the best,
0 votes Thank Flag Link Fri Jun 13, 2008
Right on Jim !! There are many short sales out there. Patience is the key. For the buyer, If you like the houseyou have to put in your best offer with a good down payment . The bank needs to feel you are his best buyer. After the offer is made it is a waiting game. It will go to the highest bidder and strongest buyer.
Good luck
0 votes Thank Flag Link Fri Jun 13, 2008
If your current agent has one short sale behind her, that's likely all the experience needed. There's nothing particularly complicated about them, and they fall through for experienced agents all the time. Just look through the short sale posts on this forum to see what can happen. If you like her and she is working hard for you, stay with her. If you have a buyer's representation agreement with her, you will need to obtain a release from the broker or request that the broker assign another agent.

Short sales are however a crap shoot, and require a lot of patience on the part of a buyer. They also require that you understand that there is no negotiation. In addition to that, they are offered initially (listed) for rock-bottom dollar, and are generally in better condition that foreclosed properties. Hence, you will likely need to offer something over the list price if the property is in good shape. Your agent should be able to do a CMA to give you an idea of the value, and you can submit your offer (read, bid) accordingly. Conversely, you can offer at or below list for a rough property, but expect a lot of disappointments--and be patient.

As for whether you should be looking at short sales, you should not exclude them if you have the time and patience, but you can likely make as good or better a deal on many another resale. Don't focus exclusively on short sales. Have your agent search for properties that are offering buyer incentives--pay closing costs, offering to buy down the rate etc.
0 votes Thank Flag Link Fri Jun 13, 2008
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