Buying Short Sales:  What You Need to Know

Good buying opportunities are available, but patience and flexibility play a vital role

If you are looking to buy a home, you may have heard that short sales are among the fastest growing property transactions in today’s market. According to the U.S. Treasury Department, short sale transactions more than doubled in 2011 compared to 2008, and short sales are expected to increase further. You may be wondering: What is a short sale?  Is a short sale right for me? And, how do I buy a short sale?  

What is a short sale?

A short sale can happen when the current seller owes more on the loan than the property is worth and cannot pay the difference to the lender at closing. With these transactions, the homeowner sells the home and the lender agrees to accept the sale price as payment on the loan. 

What does this mean for everyone involved?

·         For delinquent borrowers and for lenders, short sales offer a way to avoid many of the costly impacts of foreclosure. 

·         For buyers, short sales can provide favorable buying opportunities as they are usually priced at or below market value to sell quickly.

Short sale transactions are more complicated and can take much more time than a regular home purchase because a short sale involves negotiations among the current owner, lender (or lenders if there are multiple mortgages secured by the home), and buyer. Consequently, the first two steps in buying a short sale are to closely evaluate whether or not you are a good candidate to buy one and to find a real estate professional with experience in short sale transactions.

A short sale can present you with a good deal – but you need to have time, patience, and diligence for a successful outcome. 

Am I a good candidate for a short sale?                                                    

This is one of the most important questions you will need to ask yourself before considering buying a short sale property. Generally, you are in a good position, if:   

·         You have a lot of patience. Purchasing a short sale requires all of the different parties to approve the deal which typically takes two to six months – sometimes up to a year.

·         Your financing is arranged. It is extremely important that you are pre-approved for secure financing once you begin looking at short sale properties. 

·         You are flexible. If you are flexible with your move dates and do not have to sell a home or break an expensive lease to qualify for financing, you may be a good candidate. 

What is the buying process for short sales?

If you believe that you are prepared to purchase a short sale property, contact Joshua Nieves at Residential Mortgage Services 702-580-5069 today so we can help you:

1. Get pre-approved.  This is a critical step in any real estate transaction – helping you determine how much home you can afford and showing sellers that you’re a serious buyer. Because short sales can take a lot of time, it is important to note that your pre-approval can expire throughout the process. You’ll want to make sure it is always current and that you are financially prepared if the offer is accepted. 
2. Contact Shanta Patton to begin house hunting! You’ll need a qualified real estate professional who has a proven track record in short sale transactions
3. Make an offer.  I can work with you to determine a price that you believe is fair.  Generally, the most successful offer is one that aligns with comparables in the neighborhood. Keep in mind: you can get a good deal when buying a short sale, but you need to be realistic in the offer you submit to seller.  

Don’t forget the home inspection!  Short sales are typically sold “as-is.” You should always have a home inspection to ensure you are financially prepared for any maintenance costs.

4. Obtain seller approval. Typically, this is a quick process and takes one to two days.
5. Wait for lender approval. Now is when you will need to demonstrate patience. It may take a long time before you hear from anyone, and this is to be expected. Your real estate professional will keep you informed as new information is made available.  
6. Move forward with closing. If the lender accepts the offer, you will move forward just as you would with any real estate transaction and should be able to close within 30 days.

A short sale can present you with a good buying opportunity, but because it is such a long process, a “special” buyer with patience and flexibility is required. If you have these characteristics, and are financially secure, contact me and get started today!

Shanta Patton- Patton Team, 702-302-2760, www.SellingLasVegasToday.com ,www.ShortSaleLasVegasToday.com , Shanta@SellingLasVegasToday.com,

Wynn Realty Group