Score A Deal!

By
Real Estate Agent with Keller Williams Realty Portland Premiere

Before recently most people had never even heard of a short sale, now buyers are out looking for them to make sure they are getting a deal. 

A short sale is when the bank agrees to discount the loan balance for a seller who owes more on his mortgage than the home is currently worth.  And since nowadays these are everywhere, you are going to find one on your house hunting trip whether you want to or not. 

So there is a down side to these things, you have to work for them.  There is the extra step of getting approval from the bank and this one step can add months and months to the process.  Especially now because they are so backed up with all the short sales being processed. 

First of all, you want to be aware of what your are getting into, patience and persistence are going to be key.  Do not think your transaction will be different and be easy and short, because it won't.  So do not plan on a particular move in date, have a place to stay till it is all finalized. 

Second, you definitely need a realtor who has done these before.  You need someone advising you properly and calling the lender daily on your behalf. 

Thirdly, try to avoid short sales with extra liens on them.  The more banks you include the longer it will take.  If you can help it, you also want to avoid homes that already have other offers.  This too will extend the process and decrease your chances of getting the home.

Fourthly, you want to price right so have your agent research the comparables, do not just go off the list price.  The bank may be low-balling to attract multiple offers.  You will also want to get pre-approved or the bank my not even look at your offer.

Fifthly, try to get the lender to pick up the closing costs.  You also want to let them know that you won't be paying for appraisals and inspections until you have an approved offer.  No reason to be throwing money away on every house you MAY get.  While you are at it, try not to put in earnest money over 3K in case you want to pursue more than one home at a time.

Finally, be willing to be annoying.  You should be calling your agent at least once a week so that you know they are calling the lender constantly.  The processor dealing with your loan will not be putting your off because they want the phone calls to stop.  But if you are willing to put in the effort, you can score a major deal!

http://money.cnn.com/2009/01/27/real_estate/short_sale.moneymag/index.htm?postversion=2009012806

PLEASE CHECK OUT OUR NEW PODCAST ON THE HOMEPAGE OF OUR WEBSITE http//:www.TonyandLibby.com & OUR NEW PORTLAND METRO BLOG AT http//:www.TonyandLibby.blogspot.com (make sure you leave comments)

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Anonymous #6
Anonymous
Anonymous

I despise short sales with a passion.  But i can't exclude them from client's list.  Anytime I put offers on short sales i make sure I compensate for 2-3 months of depreciation.

March 10, 2009 06:49 PM
Rainer
108,440
Aaron Poling
Long & Foster

I agree short sales can lead to a fantastic deal but be prepared to work for it

March 10, 2009 07:26 PM
Rainmaker
169,323
Heather Fitzgerald
REALTOR Greenwood Indiana Real Estate
REALTY WORLD-Harbert Company, Inc.

These buyers must require patience when buying a short sale, and they can get tricky for sure.

March 10, 2009 07:27 PM
Rainmaker
126,555
Tony and Libby Kelly
CRS, ABR, ePro, SRES, CLHMS, CDPE
Keller Williams Realty Portland Premiere

Thanks for all the comments and for reading our post.  We really appreciate the discussion.

March 10, 2009 07:31 PM
Rainer
116,572
Bo Hussung
Bell Title /Triserv LLC

....and of course last but not least exercise patience, b/c they will take 3 months to a year to negotiate.

Just sayin

Bo

March 10, 2009 08:40 PM
Rainmaker
296,332
Dan and Amy Schuman
Luxury Home Specialists
Howard Hanna Real Estate Services

Great article, and you got your gold star after all:-)

March 10, 2009 09:05 PM
Rainmaker
76,224
Bridget Cella
e-Pro, Realtor
Re/Max Connection

Short sales, short sales, short sales - you either love 'em or you hate 'em.  Patience is an understatement.  It's almost difficult to get away from them these days.  I have seen them done in 30 days but also a year!

Congrats on the feature!

March 10, 2009 09:33 PM
Rainmaker
74,822
Jason Neumann
Realtor - www.KelownaRealEstateNews.com
Century 21 Assurance Realty Ltd.

Tony and Libby,

I can honestly tell you I didn't really understand the whole short sale process until this post.  Very well written and deserving of the feature.  Take care and happy blogging!

March 10, 2009 09:57 PM
Rainmaker
312,018
Michael Russell
Overland Park Kansas Real Estate
Keller Williams Realty Partners, Inc.

I would inquire about the LA's short sale experience before getting under contract.

March 10, 2009 10:09 PM
Rainmaker
558,659
Chris Olsen
Broker Owner Cleveland Ohio Real Estate
Olsen Ziegler Realty

Good advice Tony and Libby -- Especially about not paying for things until it's approved.

March 10, 2009 10:35 PM
Rainmaker
213,632
Margaret Oscilia
Home Stager, Salem Oregon
Creative Concepts-Home Staging and Contracting, Salem Oregon

I purchased a short sale a couple of years ago, and it was the most bizarre purchase ever -- working with the bank was frustrating and they never met any of the deadlines.  Six weeks after we gave up I got a call from the realtor who said the bank was now ready to sell if we could close within 5 days . . . which we did -- gotta be flexible and persistant to get the really great deals is all I can say!

March 10, 2009 10:54 PM
Rainer
51,006
Omega Omega
Omega

Tony & Libby - great info!!!

Several years ago I joined an organization and this staff person who was wayyyyyyyyyyyyy over her head took on 27 short sales from a "friend."  You guessed it - they died on the vine.  I told her......"as good as these deals sound - what in the h@#@#@#$@# are you taking on business - you know nothing about."  So many would rather shake/bake then buckle down and get the product knowledge.

Keep up the solid info.

Cheers

March 10, 2009 11:10 PM
Anonymous #18
Anonymous
Patrick Schutte

Thanks for posting!

I've found that asking these 10 questions of the short sales agent really helps to cut to chase.

:) PS

 

March 10, 2009 11:16 PM
Rainer
30,772
Doug Aaserude
Broker
Inactive until May. 2009

See a day after mentioning that you were not getting any love you now have a featured post. Hope you are feeking better now that you all got some love. :0)

March 11, 2009 02:14 AM
Rainer
227,568
Diane Rice
SFR, SRES, CNC
Diane Rice, Rice Prprty Mgmnt & Rlty, LLC, South Holland, IL

Just came on to congratulate you again for getting featured!  Good article also!  Keep it up!!

March 12, 2009 10:03 PM
Rainmaker
412,187
Mesa, Arizona Real Estate Mesa Arizona Realtor
Teri Ellis at Homes Arizona Real Estate LLC

Short Sales are definitely NOT for the faint of heart. Your post brings to light a great many of the downsides of a short sale. Using an agent who is qualified and knowledgeable is absolutely necessary. ;-)

Pepper

March 12, 2009 11:12 PM
Anonymous #22
Anonymous
katie (www.mportlandhomes.com)

I too was not entirely clear on the situation of the short sale....thank you for writing a clear and concise explanation! I especially like that you advise the buyer to not be afraid to be annoying...after all, it is their money.

 

Will be back for more great posts!

March 13, 2009 06:05 PM
Rainmaker
634,595
Cindy Bryant
"Houston Home Staging Pro's"
Redesign Etc. Home Staging

Just when you post a blog you got featured...Congrats!

March 13, 2009 10:52 PM
Rainer
6,675
Amy Seaholt
REALTOR, Portland Oregon
RE/MAX Equity Group

Thanks for posting this. Good information. One thing though. Most of the short sales that I've worked with, the bank won't accept calls from the buyer's agent, but will only deal with the listing agent and seller.

~Amy

March 16, 2009 12:18 PM
Rainer
92,853
Zane Coffin
(Geneva Ohio Real Estate Agent)
Century-21 Homestar

Hey guys great post and congratulationon the feature....I bought my home from a short sale if you are buying a home that is need of repair send a letter and photos with the work that needs to be done to the bank ...my home needed lots of work I broke it down to the last cent with labor and material.....I started with a low offer...which they excepted and close within 30 days...so the little extra time I spent preparing the letter and photos payed me back big time I saved $47,000....I also helped a client out the same way and the bank droppedthere price around $27,000.. If the banks are only going off a CMA most of the time they have no clue what they are tring to sell...Like they say a photo is worth 1000 words or in this case $10,000 dollars...peace zane

March 18, 2009 06:24 AM
Anonymous
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Rainmaker
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Tony and Libby Kelly

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