The process on a short sale, for the buyer, is no more rigorous than a retail sale or an REO/ Foreclosure. You get to inspect the home, have loan and appraisal contingencies, etc. What is more difficult is that you must wait for the seller's lender/ investor approval of your offer prior to proceeding with your escrow. This can be a short or long wait, depending on the caliber of the listing agent, the willingness of the seller to provide the necessary documentation to the lender/ investor, and the speed at which the lender makes decisions. I had one this year with Wells Fargo that was fully approved in 19 days, and one with BofA that took 3 months.
If you have interest in purchasing via short sale, there are several important things to do that can be the difference between getting the home, or not. They are:
1. Get a buyer agent to represent you exclusively (not the listing agent). They should have one or more of the following designations: Certified Distressed Property Expert (CDPE) Certified Short Sale Professional (CSP) or Short Sale Foreclosure Resource (SFR) in addition to being an Accredited Buyer Representative (ABR) and a member of REBAC (Real Estate Buyer's Agent Council). This way you can be confident that the Realtor you choose is representing your interests and is an expert in the field of short sale purchases.
2. Have your agent ask a series of questions of the listing agent to be sure that they know how to handle a short sale, have a compliant seller, and have experience closing short sales. I have created a list of questions that I ask in order to ascertain the likelihood that the short sale will close. If not, I advise my buyers that this may not be the property for them.
3. Make sure you have the temperament, willingness, and time line to purchase a short sale. I created a video of a young couple who successfully purchased a short sale, telling potential buyers about the good, the bad, and the ugly of short sales, and what to reasonably expect. You can watch it at http://www.youtube.com/watch?v=WACxMut0fWQ
Short sales can be a great way to take advantage of getting a bargain, but you must set yourself up for success in advance, or, as many have found, they can be very frustrating.
ABR, CDPE, SFR, CSP, REBAC
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