Short Sale Strategy For Buyers

In a Short Sale, the seller owes more on the mortgage than the property is currently worth. The sale of the property involves an approval process with the seller and lender. Initially an offer is presented to the seller for review. If accepted, it is then passed on to the lender for review and approval. The lender needs to determine whether or not they’re willing to accept a loan payoff for less than what is owed on the loan note.
This situation gets more involved if the seller has multiple loans on the property. The junior lien-holder has to be willing to accept a loan payoff amount from the senior lien-holder within a certain amount of time. If the junior lien-holder doesn’t respond in a timely manner, the loan may be sold or the senior lien-holder offer may expire.
Needless to say, there are lots of working parts that need to cooperate for a short sale transaction to be successful.
To stack the odds in your favor, here are a few tips to assist you before and during your negotiations:
• Work with a Realtor. Preferably someone who has experience in successful short sale transactions from the buying side. Tap into your Realtor’s knowledge, experience and expertise to set your expectations, goals, time-lines and follow up.
• Do Your Homework. Be sure you’re prepared for homeownership. Understand your financial obligations and be accountable.
Review archived articles on buying short sale properties. Log onto the California Association of Realtors (CAR) website ( www.car.org ) and the National Association of Realtors (NAR )website
( www.realtor.org ) for such articles.
• Make Your Offer Easy To Accept. Since the lender has the ultimate responsibility to accept your offer, demonstrate from the get-go why you should be considered. Come in with a good price, include a pre-qualification letter, a higher good faith deposit, pay for the Natural Hazard disclosure/ Home Warranty and consider other terms that will favor the lender. Remember, you’re getting a great deal on the property. Paying for reports and services that are normally paid for by the seller is a small price to pay to get your dream primary residence or vacation home.
• In Real Estate, Timing Is Everything. Communicate with your Realtor and understand the timing aspect of a short sale transaction. Lien-holders are swamped with short sale requests. Before they can agree to anything, lien-holders need to do their own due diligence and review the seller’s financial position, get additional Broker Pricing Opinions (BPOs) to confirm value, review offer terms and more. Once approved, the pace quickens because the short sale approval usually expires within a few weeks and as a buyer, you have to be prepared to respond.
• Obtain a Conditional Pre-Approval. If you’re committed to the property, don’t just wait for the lien-holder to approve your offer. Negotiate with your lender to get a conditional pre-approval, without the up-front fees, and cut down the amount of time and tasks necessary to carry out your buyer financial obligations. You can also order a Credit Report and Home Inspection.
• Keep Sight Of Your Goal. Planning, patience and communication with your Realtor will go a long way toward the successful completion of your short sale purchase.
Please share your thoughts by leaving a comment or call me at the office: 760-934-5088.

For information on Mammoth Lakes real estate
(including short sales and REO’s) please log onto my real estate website at www.easternsierraproperties.com

Good Luck!!