How To Buy a Short Sale
Things you will need
A Licensed Realtor
A Short Sale Listing
Find a Realtor
Choose a licensed realtor that preferably has worked with short sale property and holds a "Certified Distressed Property Expert" designation.
Find the property
With your realtor, find a property for your residence or investment that is being short sold by the seller. Properties may be advertised this way or not, but the longer a property has been on the market, the more price reductions it may have and will have a greater chance at being short sold by the seller. Wording in the listing that all offers will have to meet seller' s bank approval is a tip off that it is a short sale.
Negotiate the price
Make an offer. Here is where it gets tricky! You may have a house you want listed at $295,000. The owners may have paid $350,000 for the property and were forced to sell for whatever reason. Now, owners and their realtor may know the appraised value (let's say $300,000) and what the bank is already willing to take but are not obligated to tell you. Your offer will need to be as close to the appraised value of the property as possible. First understand that the owner's lending bank will be the deciding factor whether or not your offer will be accepted. But also know that the owner has the right to reject your offer if they feel it is too low as well. If you make an offer for $250,000 they can ask the bank to approve your offer, but if the home is appraising at $300,000, the bank is likely to reject it.
It takes patience
What to do if your offer gets rejected
Keep trying if your offer is rejected, you can make another higher offer. Do not waste time making offers of $1000 increase more each time. This will waste time, and you may lose the sale. Make a fair market offer.
Remember: Homes are appraising for MUCH LESS than what most owners have paid for the homes. Owners are "Upside Down" in their loans and this forces them to Short Sell. A Fair Market Offer still means you are getting a FANTASTIC Deal and saving HUGE amounts of money! If the home is appraising at $300,000, the bank will likely take close to that, so offer within roughly $25,000 of what property appraised. Once your offer is accepted by the bank as well, you should be able to close on the home within 30 days if your finances are in order.
Call Mary Palma, CDPE "Certified Distressed Property Expert" for the purchase of your short sale.
