Short sales. Everyone’s talking about them. Everyone knows they’re going to pull the housing market back. Even Washington has come around.
But does anyone really know how to do a short sale? Sure you could run to a professional short sale agent, but how would you even know what to look for?
To really get the most out of your short sale deal, you need to be as informed as you can be. So check out my list of the top 7 things you need to keep in mind.
Armed with this information you’ll be up there with the pros finding the best deals with the least hassle. Just keep these tips in mind while entering your negotiations and you’ll do fine.
Tip #1: The price is set by the agent and seller, not the bank.
Never forget that one. Sure, the bank will need to approve the sale, but they may not have all the info on current market values. So make sure the seller understands how reasonable your offer is. If you’re the seller, don’t be afraid to ask for your home’s real value.
Tip #2: Loans owned by 1 bank are better than those owned by 2.
You’ll need to convince 2 lenders instead of 1 to go along with your bid for the property. So make sure you keep that in mind when you look for a new prospect.
Tip #3: Lowball offers get slow responses.
Banks may reject an offer without even considering it if it looks too low. So don’t expect them to get back to you quickly since they’ve got lots of lowball offers to wade through. Instead, cut through the pack and make your offer stand out. Move a drop higher and you’ll save yourself lots of time.
Tip #4: Buyers should look at multiple properties.
Well all know the “short” sale process can sometimes take a “long” time. So keep your options open. Look at a few possibilities at a time and you’ll increase your odds of closing.
Tip #5: Sellers with assets may need to pay back the difference.
This might weigh in on the seller’s decision to opt for a short sale, so keep that in mind when making your offer. Thoroughly research the seller and make sure he’s really committed to the process.
Tip #6: “Approved” prices by the bank move quickly.
If you know a previous offer was already approved, make your move and bid for the property at the same price. The process will move pretty swiftly since the bank already knows the amount is reasonable. You’ll still get a great deal, you’ll jump ahead of the pack, and you’ll save yourself a lot of aggravation.
Tip #7: Banks vary in what they want: highest price, most cash up front, all cash, etc.
The bank is eager to get the property off its hands, but it still wants its loan back. So gauge what would make your offer most attractive. If you know they want all cash, make your offer lower but sweeten the deal for them. If they want the most they can get for it, arrange your financing accordingly.
These tips are really just the tip of the iceberg. There is a lot more to know so keep learning and watching these articles. You’ll become a short sale pro in no time.
