Before You Buy A Short Sale

You have found the perfect home, and you are so excited. Before you rush out to put earnest money on it, there are many things you should know.

Just because the property is listed for sale as a short sale it doesn't mean it is a short sale. The bank still has to approve the sale because it is for less than the amount that is owed. This property may not sell for the listed price, the bank could counter higher and in many instances they do. In some real estate markets, fewer than 10 short sales will actually close.

Before you make a bid on the house, have your agent check out these things. Check out comparable sales and listings in the subdivision. Because of the length of time it takes to close a short sale, 2-5 months, the sales that are pending right now will be the closing comparables when your closes. In order to get your offer accepted, it will need to be around market value.

Have your agent check to see how many offers are on the property. If it was listed at a low, low introductory price, it may attract multiple offers. If you are not willing to pay above list, don't bother to make the offer. The more offers a property has, the higher the price will be.

Have your agent research what is owed on the home and the number of loans on it. Short Sales that have more than one loan are often more difficult and take more time. Second and third loans have to settle for peanuts because they are junior liens, and most of the money will go to the first. If your offer is 20-30% of the amount owed, you probably won't make it to the loss mitagator's desk. The offer has to be near market value.

Find out what the listing agent's track record is. The listing agent will submit the package and negotiate with the bank. If they have no experience you are dead in the water. No one else but the listing agent talks to the bank. Some will have an outside agency do their short sales. This is sketchy at best. Find out what their closing rate is. The Pat Yoest team has an 81% close rate.

See if the listing agent has received a full package from the seller. Some sellers are slow in getting the documents to the listing agent, and some sellers are never told what documents the bank requires.
This is something that keeps coming up. There are title issues that need to be resolved such as junior liens. The seller could owe garbage removal services, taxes, or HOA fees. Before offering on the property , you should know these things so you can have your agent clarify who pays for what in the contract. In Las Vegas, our title companies can tell us what junior liens are on the properrty before we go to the listing appointment. If the listing agent can't tell you then ask the title company.

Buying a shortsale doesn't have to be a nighmare. It could be the home of your dreams. Just pay attention to the details above and be patient. A short sale is not an overnite transaction.



Our website has other articles on short sales, please feel free to browse. Please call me with
any questions you may have. I want to be your Realtor for life .

Pat Yoest

702-521-1442

pyoestc21@aol.com