Jeremy, Home Buyer in South Windsor, CT

Short Sales - 2 questions

Asked by Jeremy, South Windsor, CT Wed Jun 4, 2008

1) How do I find a realtor who is experienced in short sales? When I spoke to the listing agent on the phone, she said she could be my realtor as well as the sellers. Assuming she has experience, is this not a conflict of interests?

2) Since banks know the fair market value of their property and obviously are not looking to make a loss, how do I find out the fair market value? The Preliminary Oct 2007 assessment shows an amount a lot less than what the current sales price is as well as less than what the owners purchase it for back in 2004 (according to TotalValuationServices.com)

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4
Dan Ross, Agent, Southington, CT
Wed Jun 4, 2008
Hi Jeremy,
Ben's answer below is acurate. I work for Century 21 in Southington, and have represented both buyers and sellers in short sale transactions. If you would like to contact me to discuss the pros and cons of buying a short sale property, I would be happy to help.
One of the biggest differences will be timing. When buying a short sale property, you are at the mercy of a lender. You can wait for 4-8 weeks just to get your contract approved. Depending on your circumstances and your method of financing, this could introduce complications to the process.
Whoever you decide to use, make sure they have been through the process before.
Web Reference:  http://www.danrossre.com
1 vote
Ben Mills, Agent, Virginia Beach, VA
Wed Jun 4, 2008
Since short sales typically come with alot of emotions on the sellers part, I would recommend that you obtain the services of a local real estate professional to represent your interest. I would talk to the broker of one of the larger reputable companies and be clear that you want an agent experienced in short sales.

Keep in mind that most agents are attending seminars on short sales to bring them up to speed. Also keep in mind that some smaller mortgage companies do not have loss mitigation departments and therefore are learning the ropes themselves. The mortgage companies were simply not staffed to handle customer issues like we are seeing now.

For fair market value for contract writing purposes, an experienced real estate professional is invaluable. There is not one online service that can provide a professional opinion on price that I would trust myself. There is more to real estate market analysis than just numbers.

Another option is an appraisal. Some appraisals are offering pre-sale appraisals at a discount. Ask your local real estate professional for references.
1 vote
Joanna Martin, , 06437
Wed Jun 4, 2008
To answer your first question....Step 1 is to simply ask the agent how long he/she has been in the business and how many short sales he/she have done. This is not the first market we have had where short sales have occured. I personally did several almost 20 years ago when we had a severe downturn in the market. As far as an agent representing both the buyer and seller, it can be done with full disclosure to both parties, but if you prefer that not be the case, you can request that in your listng contract. However, in today's market, I do not think it is in the best interest of the seller to exclude a buyer your listing agent might have.
To answer your second question...It is difficult to predict what a bank's response will be to a short sale. They are handling an inventory of homes and it may depend on factors quite outside those associated with one particular property. The best way to deal with it, though, is to have a market analysis using very recent sales of homes very similar to the subject property to present to the bank with your offer. The bank will then hire either an appraiser or a real estate broker to do their own comps. It can take several months before a bank decides to approve a short sale and often times a buyer may not have the ability to wait that long. If the property is in reasonably good shape and in a desireable area, the banks are not giving them away. They bank will also need to see from the seller that they cannot afford to pay the difference between the offer and the amount owed. They will review the assets and income of the sellers and that will also play a part in determining if they will accept the short sale. As youc an see, there are a lot of variable at work here, but patience is key in getting through it.
0 votes
Mary Thomas, , Wallingford, CT
Wed Jun 4, 2008
1.) It may be a conflict of interest, but legal if both parties agree to it. As to whether an agent is experienced in short sales, you need to interview. Sellers ususally interview 2-3 agents before listing, so should sellers. It is very important to have an experienced agent, but also have a good rapport with him or her. It is important you trust your agent in order to have the best representation.
2.) Once you have procured an agent, have him or her do a market analysis of the property. Although a property may be in a short sale/forcloser state, it does not mean the banks will give it away. Once it is determined what reasonable price you are willing to pay for the property, it is then up to your agent to negotiate the deal. In my experience in dealing with banks, there is no set answer. It depends on each banks policy and the person representing the bank. I have had easy sales, and some have fallen apart. If you want to go this route, you must be patient and flexible.
0 votes
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