It’s a great time for patient and prepared consumers to enter the market and seek out short sale properties, and there are several things people can do to better understand the process and be competitive.
New York, NY (Vocus) October 1, 2010
Astute home buyers can find good values on short sale properties in today’s market. These homes often draw multiple buyers, all competing for the winning bid.
Short sales differ from typical home sales. A short sale occurs when a property is sold by homeowners whose mortgage balance is more than the home’s value and who demonstrate a financial hardship. As with a traditional home sale, the homeowner is responsible for accepting or declining a purchase offer, but they must work with their bank to ensure it will accept a fair market value offer. This means a short sale can take longer than a traditional sale.
According to Matt Vernon of Bank of America Home Loans, “It’s a great time for patient and prepared consumers to enter the market and seek out short sale properties, and there are several things people can do to better understand the process and be competitive.” He offers these tips:
- Keep an eye on new property listings and stay in real estate agents who know when short sales come on the market.
- Move quickly when you find a home you want and be the first to submit a market value offer.
- Be patient. Paperwork-intensive short sales can take 30 to 90 days or more to finalize due to the need for additional documentation and approvals from third parties that have a financial interest in the loan. Other buyers may not want to wait and instead move on to the next deal, leaving you with the winning bid.
- Be prepared to bid based on the going market rate of the house. Lenders look for offers to be reasonable and equal to market value. Be ready to bid in upward increments if this is the house for you.
- Submit a simple offer at market value that is also free of as many contingencies as possible to make your offer the most attractive. Also, anticipate an escrow period longer than 30 days and be prepared to extend that if necessary.
- Have your financial ducks in a row. Visit a lender and take the first steps necessary to finance a home. Short sale buyers must meet normal credit requirements, have money for a down payment and have the income needed to repay the loan. Ensure that your credit history is accurate and up to date, that you have savings put away and that you understand how much you can comfortably afford to spend on a home. You can learn more about the many aspects of the home loan process at myhome.bankofamerica.com.
Lastly, Vernon recommends working with a real estate agent who is experienced with short sales. Your agent can help you quickly identify properties that fit your price point and personal preferences. Experienced agents can also guide you through a process that frequently requires patience and tenacity. With the right preparation and the right professionals at your side, soon you’ll be in a home of your own.