Due to the current economic climate, short sale properties are plentiful. Many home buyers are viewing this situation as an opportunity to get a great deal. If you are a buyer looking to cash in on this market, utilizing a real estate agent accustomed to working with banks on short sale purchases can be much to your advantage.
Property that is being sold for less than what the property owner owes the lender is termed as a “short sale.” While these properties will be found on MLS (Multiple Listing Services) because the sale is being managed by a real estate office, the lender is in control of this transaction. The bank will decide on the sales price and either accept or reject offers received from prospective buyers.
Buyers who are sure that purchasing foreclosed or short sale properties will result in a “steal” of a deal could very well be disappointed. Banks are not in the business of taking huge losses if those losses can be avoided. If a property is in reasonably good condition, and in a nice neighborhood, it will probably 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 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 point of view, negotiating with a bank can be a very long and frustrating process. Patience is a major asset when you are in this market. While your offer could possibly be accepted right away, you should be prepared to wait weeks, or sometimes even months, to get your offer accepted and your purchase closed. Lenders hold a power position in this process, so banks often choose to wait for multiple offers before accepting one.
Your best ally during negotiations with the bank is your real estate agent. A thorough understanding and familiarity with bank required paperwork in order to get your offer moving through the process is, naturally, to be expected. However, your agent offers even more value, as they are able to find out if your offer is competing against multiple offers (though they probably won’t know how your offer stacks up against the competition). Furthermore, having established relationships with bank personnel can never hurt in short sale offers.
In cases of properties that are not in the best condition nor the best location, lenders may be somewhat willing to loosen their lending guidelines in order to attract more offers. For most properties, however, almost all lenders will follow conventional lending guidelines to finance a purchase – even a purchase of a short sale property.
It is not uncommon for lenders to require that a buyer submit a loan application to the lender directly to make certain 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 any fees up front if you intend to shop around for financing options.
As legal questions can and will arise during a short sale property transaction, real estate professionals will typically advise you to direct legal questions to attorneys and tax questions to certified public accountants.
Pfeif and Associates is an experienced Fresno, CA real estate agency with a reputation for client satisfaction. They specialize in short sales, foreclosures and bank owned REO properties. Affiliated with Guarantee Real Estate, one of the top producing real estate companies in Central California. Powered by SEO 2.0 Services
