Some great deals can be found in short sales, but a buyer needs to enter this kind of purchase knowing what to expect. Here’s some expert tips on buying a short sale home.
Who Sets the Price on a Short Sale Home?
Who sets the price varies. Many times a real estate agent and the seller will set the price. The bank may not know what the price is, but the bank has to approve the price. Sometimes the bank approves the deal and sometimes it’s rejected.
Expect to negotiate the price. Any list of short sale tips should include this advice.
It’s always easier to deal with one person than two. You’ll have an easier time negotiating if one bank or mortgage company holds the loan instead of two such businesses. If the loan is owned by two companies, you have to deal with both and that takes even more time and requires both to approve the price.
What to Keep in Mind When Making an Offer on a Short Sale Home
You can offer less than the short sale asking price, but it’s probably going to be rejected. Banks are already looking at a loss and are not going to take less than the asking price. Banks may try to negotiate the price up. Go in with your maximum offer in mind.
You can bet real estate agents know the prices of similar homes in the area. You need to know this so your offer can be reasonable. Knowing the market is a must for short sales as well as regular real estate deals. One resource for researching real estate is Zillow.
How Long Will Approval Take When Buying a Short Sale Home?
A short sale means the bank is going to take a pay off for less than what is owed. It does not mean the purchase is going to go fast. The bank is going to do its own research on the property, the surrounding area and the buyer. It will also be looking at other offers at the same time. Bankers understand short sale tips are aimed at saving a buyer money so they try to minimize their loss by maximizing the sale price of the home.
Sometimes a bank will pre-approve a short sale price. If this happens, you walk into the deal knowing what offer. This kind of sale will move faster than a negotiated short sale. Finding this kind of offer takes work, but it is one of the strongest short sale tips I can offer you.
Can I Buy a Short Sale Home If I Have Bad Credit?
The lender is already looking at a loss on the property. It’s not interested in making another loan and losing more money. People with marginal credit are not going to buy a short sale home.
The more down payment you can bring to the table, the more likely the bank is to agree to the sale. Short sale tips experts say offering more than an approved price helps speed the deal.
Who Is Responsible For Repairs in a Short Sale? The Buyer or Seller?
In regular real estate deals, a home disclosure is presented to the buyer. This tells the buyer about any problems with the house. Most of the time the seller has to make needed repairs before the deal is closed. In a short sale, the buyer can expect to get this list, but the seller is not responsible for any needed repairs. Your offer on the home may need to reflect the cost of needed repairs. Short sale tips experts like me also suggest you examine the home personally if you can before making an offer.
Final Tip: Close on Time
Banks want to get the home off their books. Have all the paperwork done as soon as possible. If you can, get the loan paperwork complete a few days before closing. Banks will sometimes grant an extension, but they don’t like doing this.
Need to know more bargain real estate? I offer a series of instructional videos which discuss tax defaulted auctions and how to avoid risk. In these must see videos I’ll reveal the inside secrets of how people are doing exactly what you want to do. Enroll for your FREE Wealth Without Risk Masterclass Today!