Guideline to a Short Sale Process
At present it is quite difficult to find your dream home, since the number of listings is constrained and the prices are high. However, according to experts, if you are patient enough to wait for a Short Sale, the opportunities are aplenty. Usually, short sales occur when the owner is unable to pay the mortgage. As a result, foreclosure takes place, with less than the original mortgage payment for the house. Below we discuss a step-by-step guideline to a short sales process.
1. Hire a realtor who is an expert on the short sales process.
The short sales process could be a tricky one. So you should seek expert help, perhaps, from a trusted real estate agent. The short sales process expert will help you find out every ins and outs of the deal you are going to go through. Also, the agent will take care of hectic paperwork.
2. Set a bar on your expectations.
When it comes to your intentions and expectations, you must be crystal clear. Otherwise, your short sales process expert will fail to live up to your expectations.
3. Keep financing and deadlines in order.
To make your offer seem serious enough, you should get a preapproval for mortgage (unless you pay in cash directly).
Never ever make a hefty spending on something before buying the home. Besides, avoid applying for additional credit in between the whole closing and application process. Otherwise, you may lose the qualification to apply for a loan.
4. Don’t wait to submit the best offer later.
Are you feeling ready to purchase the property and offer a price not so far away from that is on the listing? Then, take the shot. Even at a higher price you are likely to get a deal; you may even get a discount in between 10-15%.
5. The seller or lender is unlikely to negotiate.
You always hold the right to inspection, and, when it happens, you should be present there. However, it would be unwise to expect repairs from an owner who is short selling. After all, how can he or she pay for repairs when they can’t even pay the mortgage?
However, the inspection will help you get an estimate on necessary repairs and other obligatory developments to be done in the first place. Thus, you will be able to submit a quick bid to the bank, based on your assessment.
6. Keep an escape clause open.
If it seems like that the cost of repair and other necessary renovation is more than what you can handle, you should simply leave it. There should always remain a contingency plan, in order to avoid losing any money in the form of appraisal fees and loans.
7. Always be patient during the short sales process.
If you have time constraint, that means you want to lose the current property in the soonest and get into the new one as fast as possible, then you must avoid short sales listings.
The whole idea of short sales process is a rough journey, and you can’t be assured whether your proposal will be OKAYED even after a long period of waiting. Hence, there is no guarantee at all!
So, be flexible and while going through the short sales process. Otherwise you may lose more than what you get. Remember, it’s not any regular property you are dealing with.
8. Keep in mind the matter of additional costs.
Sellers only pay the realtor commission when a deal is finalized. Generally, the fee is 6% of the total selling price; and it is split between the agents from both parties – buyers and sellers.
The problem is the lender may decide to pay a small fee, only. So, the buyer should be aware of that and be ready to take care of other additional fees as well.