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 are under the impression that they can pick up “steals” by purchasing either foreclosed or short sale properties may be unpleasantly surprised. Banks don’t take huge losses if those losses can be avoided. If a property is in good condition, and in a good neighborhood, it is reasonable to expect that it will be priced in line with other properties in the area.
It pays to be aware that there are lenders out there that will purposely price a home under market value in order to incite a “bidding war” on a piece of real estate that is exceptionally nice or in a very desirable location.
This does not necessarily imply that there are NO great deals out there, but rather that you could very well require the aid of a knowledgeable real estate broker to correctly 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 is your most valuable ally while you are in negotiations with the bank. An in-depth understanding and familiarity with bank required paperwork in order to get your offer moving through the process is certainly to be expected. However, your agent’s value doesn’t stop there. For instance, they can find out if your offer is competing against multiple offers, even while not knowing how your offer stacks up against the competition. Also, 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 ask 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. Be wary of paying upfront fees if your intention is to shop for financing options.
Legal questions can and will arise during a short sale property transaction, and real estate professionals are aware of this fact. Most agents will recommend that you direct legal questions to attorneys and tax questions to certified public accountants.
Pfeif and Associates is an experienced real estate agency specializing in short sales, foreclosures and bank owned REO properties in Fresno, CA and the surrounding area. With a reputation for client satisfaction, they are affiliated with Guarantee Real Estate, one of the top producing real estate companies in Central California. Powered by SEO 2.0 Services
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