Because of the economic climate, savvy home buyers are looking for great deals on short sale properties. If you are a buyer looking to cash in on this market, it is highly recommended that you work with a real estate agent with considerable experience working with banks on short sales purchases.
A “short sale” is property that is being sold for less than what the property owner owes the lender. While short sale properties will be found on MLS (Multiple Listing Services) because the sale is being handled by a real estate office, the lender is actually in control of this transaction. The bank will determine the sales price, and will either accept or reject offers received from prospective buyers.
Buyers who think they will pick up “steals” by purchasing either foreclosed or short sale properties could be in for a surprise. Banks are not in the business of taking huge losses if those losses can be avoided. If a property is in good condition, and in a good neighborhood, odds are it will be priced in line with other properties in the area.
You should be aware that there are lenders out there that will deliberately price a home below market value in order to attract a “bidding war” on a piece of property that is especially nice or in a very desirable location.
This does not mean that there are NO great deals out there, but rather that you might require the assistance of an experienced real estate broker to help you determine which of those listings are the great buys.
From the buyer’s perspective, negotiating with a bank can be a very lengthy and frustrating process. Patience is a requirement when you are in this market. While it is always possible that your offer might be accepted right away, be prepared to wait weeks, and sometimes months to get your offer accepted and your purchase closed. Because lenders hold a power position in this process, it is not unusual for a bank to wait for multiple offers before accepting one.
Your real estate agent becomes your best ally during the negotiation process with the bank. A thorough understanding and familiarity with bank required paperwork in order to get your offer moving through the process is of course something you should expect. However, your agent offers even more value in being able to find out if your offer is competing against multiple offers, even while not knowing how your offer stacks up against the competition. Established relationships with bank personnel can never hurt in short sale offers.
There will be properties that are not in the best condition nor the best location. Lenders may be willing to loosen their lending guidelines in order to attract offers for these houses. However, for most properties, most lenders will follow conventional lending guidelines to finance a purchase, even a purchase of a short sale property.
Most lenders will require that a buyer submit a loan application to the lender directly to ensure that the prospective buyer qualifies for the purchase. However, lenders cannot require you to finance the house through their bank, so be wary of paying upfront fees, if your intention is to shop for financing options.
Real estate professionals are aware that legal questions can and will arise during a short sale property transaction. Most agents will advise you to direct legal questions to attorneys and tax questions to certified public accountants.
Author Resource:
http://www.billpfeif.com/ Pfeif and Associates is a real estate agency with a reputation for client satisfaction, specializing in short sales, foreclosures and bank owned REO properties in Fresno, CA and the surrounding area. Powered by http://seo-search-engine-optimization.netbiz.com/
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