I'm sure you've been inundated with ongoing news about the state of Real Estate. Not much of it has been good. In fact, CNN reports that this year, foreclosures across the United States will peak. The experts go on to predict that interest rates will stay steady for the first part of the year then start to creep up into the 5.5% range or higher.
So, when a foreclosed home or short sale comes to your attention, you may automatically think "DEAL". Especially in the first few months of 2011 while the rates are still low.
The "Short Sale" may seem like a simple transaction. It's not. The owners owe more on the home than it is worth. Often times 25-30% more. They're looking for a way out. The lienholder(s) are looking for their money...Then you enter as the "Eager Buyer". It can get pretty sticky.
Here are some things I've noticed and experienced as a Realtor doing short sales.
- The Price listed by the "listing agent" is often not the price the bank will accept, but one that the realtor will put in order to get an offer to submit to the bank so they can see where the bank falls. The rule of thumb
- The property may be listed for sale, yet already have an offer at the bank...which puts your offer behind (in back up) to the one submitted. All too often my clients get really jazzed about a property only to find that an offer was submitted to the bank months ago.
- I've heard of short sales taking 8-10 months to complete (although the one I'm working on now should only take 5 months...fingers crossed). It can take exponentially longer than the standard sale.
- If your offer is approved, there is a good chance you will get the property "AS IS". In other words, the bank or current title holders will not make any repairs. This often frustrates buyers as they feel they are entitled to the same courtesies normally extended to a standard sales transaction. The difference is twofold:
The title holders (owners) owe more than the property is worth and are taking a hit on their credit and most likely in in their pocketbook in order to get out of the property. They, in their own minds, have already walked away from the property and don't want to do anything more.
The bank (lienholder) is not in the business of losing money. They have not written the property off and want to keep the "bleeding" to as little as possible.
- Realtors that list short sales and are not educated in the process get frustrated quickly, making the process more difficult and time consuming to complete
Yes, a short sale can be a great buy! But be prepared to walk a windy road as statistically, most short sales do not close. And, before you start identifying short sale properties, be sure to quiz your Realtor as to their knowledge about short sales:
- Have they ever done a short sale?
- How many have they done?
- What is the process?
- Will there be a nogotiator involved?
- How do they investigate a short sale? What types of questions do they ask the listing agent?
- Typically, how long, in their experience, will it take to close a short sale
There is always opportunity in Real Estate...Have your Realtor map out the best strategies for you to achieve your goals.
---Dave HarbisonLong Beach REALTOR®Main Street Realtors (562) 618-9770---Long Beach Realtor® / Real Estate AgentLong Beach Homes for Sale, Condos and Investment PropertiesLong Beach Relocation Expert---
Labels: Belmont Heights, Belmont Shore, Long Beach, Naples, Park Estates, Real Estate, Sales, Short Sale
# posted by
Dave Harbison @ 7:24 AM
