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Answers (11)
- Linda Strasberg, "L Strasberg"
- Contributions:2315
The #1 reason that some agents deter folks from putting in offers on short sales is because they take longer to close...that is a poor reason to not look at and or make offers on short sales.
Short sales can be a great deal for a buyer and can help the seller avoid a full forelosure on their credit history.
The bank will order a BPO to determine the properties current fair market value...the offer they will accept must be submitted within a percentage of their bpo or they will foreclose on the property. The current fair market value and the price that short sales are listed at are generally off by quite a few dollars as they are designed to grab the attention of agents and buyers. The real advantage of buying a short sale property is that they are often well maintained homes requiring little improvements vs foreclosures that have been vacant for many months with neglected lawns and trees that may require complete uprooting, or that may have had all of the appliances removed...which may have occurred prior or during the foreclosure process.
That's why it may appear that "bank owned' properties are a better value than a "short sale" Another reality...if you are a bank with troubled assets on the books, which ones would you focus on eliminating from the books as quickly as possible?
Let me ask you...if you can wait and don't need to put in $10-20K in improvements on a short sale vs a foreclosure and you are requiring financing...which one would be a better option for YOU to purchase?
Short sales can be a great deal for a buyer and can help the seller avoid a full forelosure on their credit history.
The bank will order a BPO to determine the properties current fair market value...the offer they will accept must be submitted within a percentage of their bpo or they will foreclose on the property. The current fair market value and the price that short sales are listed at are generally off by quite a few dollars as they are designed to grab the attention of agents and buyers. The real advantage of buying a short sale property is that they are often well maintained homes requiring little improvements vs foreclosures that have been vacant for many months with neglected lawns and trees that may require complete uprooting, or that may have had all of the appliances removed...which may have occurred prior or during the foreclosure process.
That's why it may appear that "bank owned' properties are a better value than a "short sale" Another reality...if you are a bank with troubled assets on the books, which ones would you focus on eliminating from the books as quickly as possible?
Let me ask you...if you can wait and don't need to put in $10-20K in improvements on a short sale vs a foreclosure and you are requiring financing...which one would be a better option for YOU to purchase?
- Bob Georgiou, "Bob2Sell"
- Contributions:97
These is a great quetions and great answers. All I will add is that the questions are the right questions to be asking your agent. Find someone you trust and ask them a lot of hard questions to determine their skill. Once you are convinced of their ability, ask these questions.
Good Luck.
Good Luck.
- Brandon Thompson, "brandonrthompson"
- Contributions:55
First let's answer them one by one.
1. Zillow is a great tool, but NOT to be trusted on true values. Some homes may be up to 30% over OR under valued as many different aspects come into pricing. On a short sale, what really matters is HOW MANY LOANS are there, and HOW MUCH IS OWED to the bank(s). This should determine your offer.
2. You can look at other homes UNTIL your offer is accepted by the bank, in writing, delivered to your agent, (email, fax, etc) up until then you are a free agent and can make an offer and cancel the short sale any time, as you will see with a lot of short sales, they go on and off the market because people find a quicker or better deal on a home that is a traditional sale, OR foreclosure.
3. DO NOT APPROACH THE SELLER. Also, you are better off to get your own agent to contact and work on your behalf, we work for YOU and get paid when you close, so it never hurts. If you would like a great agent in your area that is familiar with SS's and REO's feel free to contact me and I can connect you with on!
4. As far as considerations, and what to think about, be prepared for frustration, a lot of time, and possibly NOT being accepted. The bottom line is that the bank has to decide to lose money, they are usually better off foreclosing and selling the property for tax purposes, and will try to do so unless the price is right. IF there are multiple loans, I would say DON'T WASTE YOUR TIME, as you have to wait for 2-3 + banks to all decide to lose money, and if the amount bid is not enough to cover, then the 2nd and 3rd have to agree to take ZERO! Call or email me with any questions I'd be happy to help and discuss how SS's can be a blessing and a curse, and find you an agent that is qualified and ready to help in your city/area!
Brandon Thompson
Long Realty
Tucson, AZ
1. Zillow is a great tool, but NOT to be trusted on true values. Some homes may be up to 30% over OR under valued as many different aspects come into pricing. On a short sale, what really matters is HOW MANY LOANS are there, and HOW MUCH IS OWED to the bank(s). This should determine your offer.
2. You can look at other homes UNTIL your offer is accepted by the bank, in writing, delivered to your agent, (email, fax, etc) up until then you are a free agent and can make an offer and cancel the short sale any time, as you will see with a lot of short sales, they go on and off the market because people find a quicker or better deal on a home that is a traditional sale, OR foreclosure.
3. DO NOT APPROACH THE SELLER. Also, you are better off to get your own agent to contact and work on your behalf, we work for YOU and get paid when you close, so it never hurts. If you would like a great agent in your area that is familiar with SS's and REO's feel free to contact me and I can connect you with on!
4. As far as considerations, and what to think about, be prepared for frustration, a lot of time, and possibly NOT being accepted. The bottom line is that the bank has to decide to lose money, they are usually better off foreclosing and selling the property for tax purposes, and will try to do so unless the price is right. IF there are multiple loans, I would say DON'T WASTE YOUR TIME, as you have to wait for 2-3 + banks to all decide to lose money, and if the amount bid is not enough to cover, then the 2nd and 3rd have to agree to take ZERO! Call or email me with any questions I'd be happy to help and discuss how SS's can be a blessing and a curse, and find you an agent that is qualified and ready to help in your city/area!
Brandon Thompson
Long Realty
Tucson, AZ
- Erica Starkey, "Ericajs"
- Contributions:8
Short sales can be tricky so it is important to work with someone who has experience particularly as a first time buyer. The number one reasons short sales fall apart is lack of experience of the agents. You are asking good questions and are smart to seek help from a professional. I would be happy to talk in more detail about the process offline or you can look at some articles I've written about the process on my website.
Best,
Erica Starkey
Best,
Erica Starkey
- Jeff Konstant, "jkonstant"
- Contributions:1970
The biggest key to a succeful short sale is the listing agent. As Spec tater noted, ideally the listing agent has a good record of succesfully pulling them off. This means they are not simply taking a listing and hoping for the best. It means they know what they are doing and have priced it to be sold rather than to just collect offers. They will have determined real value as opposed to listing so low that the bank will not give it any consideration. Know this, the bank would rather foreclose and sell it later if it means they will lose less money selling it now.
And Mack is right, if you decide to keep looking (and you should) will your agent continue showing you houses or vanish.
And Mack is right, if you decide to keep looking (and you should) will your agent continue showing you houses or vanish.
- Mack McCoy
- Contributions:1118
How many of these things have you done, and are you still going to show me houses while we wait for an answer?
- Nathan Wolf, "natewolf"
- Contributions:1825
Make sure your Realtor has dealt with Short Sales before.
1. Ask the listing agent for the bank what the bank is expecting. The bank's asset manager often has a ratio they need to make. Short sales also may involve negotiations on homeowner association dues, second mortgages, and other vendors.... make sure you know who ALL expects to get paid, it's not always just the first mortgage company. Some Short Sales list prices are "Pre-Negotiated Approved Prices" that the mortgage company has ALREADY agreed to sell for. If this is the case, offer full price. By example, I listed a Short Sale last week. There were 15 showings over the weekend and two offers ABOVE LIST PRICE by Monday. It was listed at 70-percent of Fair Market Value. This is a typical ratio for the banks. By starting at this point, agents were encouraged to offer Above List Price, thereby improving the chances the bank will approve the Short Sale, and speed up the wait time.
2. You can continue to look until you are under escrow and the offer is accepted.
3. You or Your Agent should DEFINITELY approach the seller /seller's agent.
4. Consider that the bank must approve the sale. Making it easier for them to say "yes" is the best way to approach your offer. Get the seller to sign your offer, then all other offers will be "Backup Offers." The bank must consider your offer FIRST in this case.
- Sherry Ferfes, "Sherry ferfes"
- Contributions:27
The most important thing I would do is interview your Realtor and make sure they are experienced in short sales. Remember that the price listed is not guaranteed, it is subject to the Bank. Have your realtor ask the listing agent about their experience as well and what stage the short sale is. Is it just starting?
Please ask your Realtor to do a comparable market value on the property of what has been sold in the last 30 days.
Hope this helps,
Sherry Ferfes
Lic. 1837842
Please ask your Realtor to do a comparable market value on the property of what has been sold in the last 30 days.
Hope this helps,
Sherry Ferfes
Lic. 1837842
- Tristan Celayeta, "Tristan Celayeta"
- Contributions:400
Dear first-time-homebuyer,
Here is a directory about home buying, part of an excellent real estate reference - bookmark it for ongoing use. It will answer your questions and questions you have yet to formulate. Read, don't "trust me".
Zillow aggregates those listings it can, it is not the MLS. This Public Listings Search will get you to public faces of MLSs around the county, I think you're looking for BayEast.
Don't forget the beautiful North Bay.
Here is a directory about home buying, part of an excellent real estate reference - bookmark it for ongoing use. It will answer your questions and questions you have yet to formulate. Read, don't "trust me".
Zillow aggregates those listings it can, it is not the MLS. This Public Listings Search will get you to public faces of MLSs around the county, I think you're looking for BayEast.
Don't forget the beautiful North Bay.
- Sharyn & Victoria Crown, "crownandcrown"
- Contributions:24
1. Be patient.
2. Ask how many lenders and how much is owed.
3. Has the short sale package been submitted to the lender or lenders?
4. How long is the estimated time for closing? Does the lender or lenders tend to close in weeks or months?
5. Write a clean offer. Ignore Zillow and Trulia values. They are not scientific enough. Write an offer that makes sense based on closed comparable sales. If the lender or lenders don't like you offering price, they will definitely tell you because they won't approve your price or terms.
6. Try not to have your timeframes for inspections begin until you have short sale approval. Once your timeframes start you will be paying for an appraisal and home inspection.
7. Have a good agent get all these answers for you.
2. Ask how many lenders and how much is owed.
3. Has the short sale package been submitted to the lender or lenders?
4. How long is the estimated time for closing? Does the lender or lenders tend to close in weeks or months?
5. Write a clean offer. Ignore Zillow and Trulia values. They are not scientific enough. Write an offer that makes sense based on closed comparable sales. If the lender or lenders don't like you offering price, they will definitely tell you because they won't approve your price or terms.
6. Try not to have your timeframes for inspections begin until you have short sale approval. Once your timeframes start you will be paying for an appraisal and home inspection.
7. Have a good agent get all these answers for you.
- Michael Emery, "MikeEmery"
- Contributions:7298
Here's an article from the WSJ from last Ocotober. However the info is still relevant. It gives you a snapshot on distressed homes (short sale, bank owned).
wsj.com
wsj.com
What questions should i ask my realtor (or selller/seller's agent) when buying a short sale property
Few questions on my mind :
1. How much should i offer? This short sale is listed for $560K and comparables on zillow are quoted higher?
2. Until what point, in the short sale process, can i continue to look at other homes and place offer on other homes?
3. Is it a good idea to approach seller's agent OR seller to determine any nuances with the home & to determine the lowest price which will be an acceptable bid?
4. What should one consider (i.e. what to consider and what to avoid) when placing an offer on a short sale property?
I appreciate other questions and suggestions for buying a short sale property.
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