First, before writing an offer on a short sale, understand that you may not have a response from the bank for several weeks or more than a month. So much depends on how far along conversations between the sellers and the bank has proceeded. If a negotiator at the bank has not been identified yet, it’s very early on. Your offer will need to account for that long timeframe so don’t write in a close date three weeks down the road. Also, be willing to work on this for months—many buyers get frustrated with the waiting game and move on to another property that can be wrapped up more quickly.
Also, understand that you are buying this home as-is. There are some occasions when a homeowner will be able to repair minor items but usually the seller is not in a financial position to do this and the bank will not entertain that idea.
Once the bank does respond they will negotiate much like any other real estate deal. However, for every counter-offer, a new pay-off and settlement statement needs to be generated. This is because once a final sales price is reached; they will generate a short sales letter that will specify exactly what they are willing to take. If the settlement statement generated does not include every single penny, then someone will have to cough up the difference.
Once under contract you can still have the home inspected and walk away from the deal if you see anything you don’t like but remember, you are buying the property as-is.
Make no mistake, it’s a slow and often frustrating process but the outcome can truly be a win-win. The seller avoids foreclosure and the buyer gets a great deal.
If you are facing the prospect of a short sale and need advice or help, contact us.
Tags: Foreclosures, Short Sales
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