| Buying Short Sales
More and more homeowners are facing foreclosure. The fastest growing and more common solution for these homeowners is to sell their home on a short sale. As a Realtor who has dealt in both sides of the Short Sale Transaction, there are a few things that one should remember before Buying a Short Sale.
1. You are the Key. The most important part of the negotiation of a short sale is the offer. Without an Offer, banks will not even talk to the sellers or their Realtor.
2. Price, Price, Price. The biggest mistake a Buyer will make is mis pricing their offer. Every transaction will involve offer, counter offer and possibly go from there. You must be prepared for this! A rule of thumb is that for every 2 dollars that you come up in price, the bank will come down one dollar. This is not always true, but more often that not, I find that this is true after calculating the difference between the original offer vs the Banks idea of the home is worth, and then figuring in the final sale price.
3. Patience. This is a virtue to live by in any transaction with a bank, even more so in a short sale. The bank must go through their regular routine to calculate value, costs, etc. The real kicker in the short sale process is the multiple offers and counter offers that usually take place. My average deal is 3 to 4 offers with an equivalent number of counters. I do believe this is necessary to get the best possible price.
4. The sellers have little decision power. In a short sale, the seller's have very little decision making power after listing the home. They can accept any offer that comes in because it is contingent on the banks approval of the net price. Quite honestly, the seller's have basically nothing to lose. In most cases, the only thing on the line is their credit and the chance of a Deficiency judgment. With that in mind, Be courteous and respectful. The home is still theirs and this can be the most embarrassing time of their lives.
5. Most importantly, its all about the Net Figure! This is the only thing the bank worries about, what they get out of it. When structuring the offer, the cleaner the better. An offer without closing costs and prepaids stands a much better chance of being taken. It is easy for the bank to see through the offer to the bottom line.
If you have any other questions about buying or selling on a short sale, please email me here or via my website http://www.dansundberg.com
Copyright 2007. Daniel Sundberg, Five Star Real Estate All Rights Reserved.
