THE ABC’S OF BUYING A LUXURY SHORT SALE PROPERTY
There is no doubt, some of the best buys in the market can be found through short sales. But they are not for everyone. If you need to relocate immediately or for some other reason have a set deadline within which you need to find, buy and close on the home, then you need to avoid short sales at all costs.
However, if you have the time – and patience – you can find some incredible buys through short sales because technically this is a distress – or pre-foreclosure sale – therefore the home will most likely be purchased significantly under market value. Most importantly, you need to be working with a real estate agent who understands the short sale process and can keep the process moving.
- Make a reasonable offer the first time. Listen to your Realtor. Banks will often ignore ridiculously low offers and remember, the seller can keep sending in new offers on the home even while yours is being considered. So make a serious offer right out of the gate.
- Keep your offer simple and clean with no contingencies (no home to sell), don’t ask for seller’s contributions etc. Come in with as much cash as possible. Make it an attractive offer, one the bank will have a hard time finding a problem with.
- Be prepared to accept the home “as-is.” Sellers in this situation are usually not in a position to make home repairs and the bank certainly is not going to. You can still do a home inspection, but any needed repairs will most likely come out of your pocket.
- Plan on a 30 day close of escrow date once the bank has approved the short sale. This is a classic case of “hurry up and wait.” The banks want to take their time to approve the short sale, but once they do, they want you to close ASAP.
Remember that regardless of the listed asking price of the home, the final price must be approved by the bank and in some cases, they will want more than the list price. This is because when sellers list the home for sale, they don’t know what the bank will accept, the list price is simply their best guess. So even if you put in a full price offer, don’t be surprised if the bank counters your offer asking for more money. This goes doubly so if the home has more than one offer.
