What is the process of a short sale? We don't want to move for a year so that may be something to consider?. Also I'm a cash buyer

Asked by Lauren, Sat Jul 14, 2012

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19
Maria FORSBE…, Agent, FORT LEE, NJ
Sun Dec 2, 2012
Well in my opinion you should wait a little longer, even if the shortsale process is long. Once you get the approval they usually only give you 30-45 days to close deal, sometimes they allow for an extension. But I think you should start looking 3 months before you are ready to buy. Good luck!
Web Reference:  http://www.viprealtorsnj.com
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Linda S. Cef…, Agent, Franklin, WI
Sun Dec 2, 2012
I've read through all of the responses and if I missed it, I apologize, but I haven't seen anyone mention an SSO. If you are concerned about putting out funds such as inspection etc., you should write it in the offer to make all dates and deadlines to run from the acceptance by the bank, not the seller.

In Wisconsin we have a form SSO that outlines this. Not sure what you have available in your area.
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Mary Petti, Agent, Edison, NJ
Sun Dec 2, 2012
Lauren,

I have listed and sold several short sales, as well as being SFR (short sale and foreclosure resource) certified. I can CERTAINLY help you if this is something you want to consider. But before you read the blog below, just keep in mind that although you are a cash buyer (a good thing because banks don't like contingencies if they can avoid them) short sales are typically sold close to current fair market value based on independent appraisals, so they are not a "bargain" as such.

The process can be read in detail by going to this link:

http://www.trulia.com/blog/mary_petti/2011/04/short_sale_basics

If I can be of any help, please feel free to contact me, and I can answer any questions you have :)
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Laquita Baez, , New Jersey
Thu Nov 29, 2012
Hi Lauren, I just tried to contact you.
Im an experienced short sale agent and would like to discuss your situation further
to see how I can help.

Laquita Baez
Licensed Realtor in NJ and GA
Weichert Realtors
973.687.7095
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allan erps,A…, Agent, Pearl River, NY
Thu Nov 29, 2012
A Short Sale cash buyer will not take all that long. If it were me I would wait until the spring market shakes out next year before beginning as better prices to purchase may arise in this are after September(after school starts). Best of Luck, Allan
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Harriet Lewis, Agent, closter, NJ
Mon Jul 30, 2012
Hello Lauren:

The process of buying a short sale is initially similar to that of a regular sale. If you are a cash Buyer you will need to show a proof of funds with your offer. An experienced real estate agent, such as myself, will be able to screen properties for short sale or foreclosure and send you listings. Once you have seen and liked a property the property, an offer is written up and presented. On a short sale, If the owner signs the offer, then it needs to go to the bank for an approval which can take some time.On foreclosures, the time frame may be much quicker. For more details, I would be happy to discuss the process with you and help you with any short sale, foreclosure or sale of any type. Please contact me at any time.

Thanks.

Harriet Lewis-Trulia Top Recommended Agent-(201)467-5738
and(201)707-5640(Cell)
hrlconsult@yahoo.com
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Laquita Baez, , New Jersey
Mon Jul 16, 2012
Pair with a Realtor experienced in short sales
Find a home you feel desired to put an offer on
You must have a proof of funds document stating you have the amount of funds to cover your asking
price for the property
Expect to wait anywhere between 60-120 days for a response form the bank regarding your offer
Be sure to do whatever home inspections/ title searches you feel necessary
Paying cash you may be able to close within 3 weeks of the banks acceptance of your offer.

That is the quick condensed answer to your question. You will need patience when dealing with a short sale because of the time involved and negotiations with the bank. Some short sales take either longer or shorter periods than others. Though a hassle, you may be able to get a good deal on a home by purchasing via short sale. Hire an experienced Realtor to assist you step by step.
Feel free to contact me directly should you like to discuss short sales more thoroughly.
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Paula Clark, Agent, Hillsdale, NJ
Sun Jul 15, 2012
Hi Lauren

It all depends. Yes you have time on your hands but here is something to think about.
You will have to incur cost for all of the inspections, and your attorney.
After almost a year, when you're ready the bank COULD come back and tell you they are not accepting your offer. You will need to do your homework to see if the home is worth the wait, and the details of how much is owed, and how many mortgages need to be paid off.
Not as simple as it sounds.
Feel free to call me with any additional questions. I would be happy to help.
I have listed and sold many short sale properties.
All the best
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Pacita Dimac…, Agent, Oakland, CA
Sun Jul 15, 2012
If you don't want to move for a year....then you obviously have time to wait.

If you think that short sales can be good values because they may be priced below market value, you're probably right. From the time your offer is accepted by the seller, it could be another 3 months or longer before the short sale lender(s) grant(s) short sale approval. And from that point, there may only be 30 days to close escrow.

Just remember that in short sales, there are NO guarantees that the short sale would even be approved. So some folks could be waiting for naught.

If you are interested in short sales, make sure your agent researches details: how many lenders, how much is owed. what phase (notice of default? notice of trustee sale?), market value, seller's willingness to cooperate (when will seller vacate?)

Some sellers refuse to vacate before close of escrow and may even demand cash for keys. If the place is already vacant, so much the better.

But don't limit yourself to short sales...some regular properties may be better deals especially if the property is well-cared for, versus distressed properties where sellers may simply don't care to maintain the property.

Good luck.
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Linda S. Cef…, Agent, Franklin, WI
Sun Jul 15, 2012
Mia makes the best point. You can wait for a very long time or not, but once the bank has said move, you'll have a difficult time getting everything done in time to close when the bank wants to close. The best fit for the purchase of a short sale is someone who does not have any dates or deadlines that need to be met. A good example of this would be if you are still living at home or if you rent on a month-to-month. If you are currently renting, you may want to see if your landlord gives you the ability of changing from a long-term lease to a month-to-month. There may be a small extra charge for this.
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Mary Petti, Agent, Edison, NJ
Sun Jul 15, 2012
Lauren,

Here's a blog I wrote on the process for a short sale :

http://www.prudentialnewjersey.com/mary.petti/Blog/Short_Sal…

I don't necessarily agreee that 70% don't close, but a lot never do because the bank won't approve the short sale, the bank counter-offers at a higher price the buyer won't pay, the buyer gets fed up with the situation and cancels the contract etc.

A short sale can be long, tedious and downright aggravating at times, but the key to helping it move to closing is to use an SFR designated realtor (short sale and foreclosure resource) who knows the process and how to follow up on the progress.

However, even an SFR, as your buyers agent, will have limited abilities if the SELLERS agent isn't aware of how the process works or is not diligent in following up with the bank involved. Only the sellers agent and/or the sellers attorney, are allowed to contact the bank about the status of the short sale approval, so it's imperative YOUR agent knows when and what to ask of them to keep you informed.

Every once in a while, you will find a listing that says "short sale approved at "X" so you know if you pay "X", the short sale is already approved. These listings usually will close, as long as the sellers financial situation doesn't change, or in some instances, the house doesn't go to true foreclosure first.

If you are a first time buyer, the process can leave a very bad taste in your mouth as far as real estate transactions are concerned.

I suggest when you are truly ready, you contact a local agent and discuss all your options, not just short sales.
0 votes
Annette Law…, Agent, Palm Harbor, FL
Sun Jul 15, 2012
Lauren,
That is an option many buyers want to pursue. There are several important elements you must consider. You will NOT be able to do a proper assessment using information from an aggregate web site. You will need to consult with a professional and gather information regarding the following:
-
1. What is the number of active short sales in your area. (example 200)
2. What is the number of sold short sales per month that close (example 60)
3. 70% of short sales do not close as short sales. Are you willing to play on the team that loses 70% of the time?
4. You must have NO time or timing issues. (must sell existing home to close simultaneously on short sale)
5. Have no emotional attachment to the home (you lose 70% of the time)
6. Can walk away and suffer no lose
7. Have incredible patience.
8. Willing to be the least significant, frequently abused participate in the process.
9. You are not shopping at the top of your price point
10. There are no rules...just the illusion of such.

If you would like a overview of the short sale process, just send a request. It is important to understand the process from the seller perceptive AND from the buyer position. Your very best option is to contact a real estate professional who works in the River Edge area and make an appointment to review the list above, if you are a serious buyer.
No, don't click that 'contact' link.
No, don't use an email link.
If you are serious...you will CALL.

Best of success in finding your new home,
Annette Lawrence, Broker/Assiciate
Remax Realtec Group, Palm Harbor, FL
727.420.4041 -
http://www.RealEstateMadeEZ.us
0 votes
Marsha Bowen…, Agent, Livingston, NJ
Sat Jul 14, 2012
Hi Lauren,

It really depends on seller's situation. If the seller is in pre-foreclosure with an active court case, then the clock is ticking and you might not have a year to purchase the property. If at all possible, it's best to see if this is the case.

In the case of that the seller is not in foreclosure, a cash buyer short sale could be approved as quickly as one month depending on the lender.


Best of luck to you,
0 votes
Sonia Roberts, Agent, Round Rock, TX
Sat Jul 14, 2012
Hello Lauren,
This can still be a really time consuming option-which would work for you. The time element relies heavily on the lender that is holding the property-I have seen some go through a really quick negotiation then close period and then there are the ones that won't respond for 45 days just to request a different amount and you are looking at a closing several months out. As previously stated the listing is with the owners but the lender has to agree to the sale since they are accepting less than they are owed on the particular property. A cash offer is king as long as the numbers are right, just need to have proof of funds and the closing can occur quickly.
Since you do have the time you can afford to be picky with the house you select. Just be diligent about watching what comes across because there are a lot of investors out there also looking for a deal, many times forcing a multiple bidding scenario.
If you want to receive the listings, I would like the opportunity to send those to you, just let me know.

Sonia Roberts, Realtor®
Canady Realty
Sonia@CanadyRealty.com
512.709.1811
"A satisfied customer is the best business strategy of all."

Michael LeBoeuf
0 votes
allan erps,A…, Agent, Pearl River, NY
Sat Jul 14, 2012
Double edge sword. Cash Buyer is great but probably would speed up the process of a Short Sale. You may wish to consider starting the process in the wintertime(less competition & timing issues would be resolved). This is especially true if you wish to renovate before moving in. Best of Luck!!
0 votes
Paula Clark, Agent, Hillsdale, NJ
Sat Jul 14, 2012
Hi Lauren

It all depends. Yes you have time on your hands but here is something to think about.
You will have to incur cost for all of the inspections, and your attorney.
After almost a year, when you're ready the bank COULD come back and tell you they are not accepting your offer. You will need to do your homework to see if the home is worth the wait, and the details of how much is owed, and how many mortgages need to be paid off.
Not as simple as it sounds.
Feel free to call me with any additional questions. I would be happy to help.
I have listed and sold many short sale properties.
0 votes
Chris Gubb, Agent, Ridgewood, NJ
Sat Jul 14, 2012
Hi Lauren,
You're a great candidate for a short sale. No time constraints and you have cash.
Good Luck!
Chris Gubb
0 votes
Peter J Roge…, Agent, Mahwah, NJ
Sat Jul 14, 2012
As you probably know a short sale occurs when a house has to be sold and the probable selling price is less than the amount owing. Banks will not automatically agree to a short sale but assuming they agree on a particular case then the home owner is a liberty to list the house and try to sell it for the best price. Not an easy task as the fact that it is ashort sale must be disclosed on the listing so potential buyers will naturally try to low ball any offer.
Since the bank has the final say on what price is acceptable to them many offers are rejected.
Sometimes the Bank will give the listing agent a price or range of prices that they are willing to consider which makes it easier for a potential buyer to gauge the correct level to offer.
Bear in mind the bank would like to get this off their hands and in that respect they are likely to look favorably on offers that are clean and have a better than average chance of going through.
Therefore if you propose a deal with all cash and a quick closing you will usually find your self at the front of the line but that does not mean they will give the place away.
The banks have certainly gotten their act together and process times are far less than they used to be but it is still uncertain when they will put it through - another reason for people to drop out.
So if you are in no hurry, Have cash and are ready to move when the bank says go then you are going to be in a pretty strong position.
Casfh is not king but a pretty strong persuader!
Good luck and if you would like any more information drop me a line
0 votes
Maria FORSBE…, Agent, FORT LEE, NJ
Sat Jul 14, 2012
Well the short sale may take a long time. But once it is approved u need to close quickly! So it depends on the bank.
0 votes
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