By Kandy Klee
1. Ask your agent if the listing agent is experienced in short sales. The listing agent has many duties, including submitting the correct paperwork in a timely manner. If documents are not submitted as lenders request, the short sale will be declined.
2. Is the home a short sale or an approved short sale? An approved short sale means that the lender has approved this home for a certain period of time to be sold at a certain price. Lenders may still accept less than the approved price, but that would need to be negotiated.
3. Short sales often have deferred maintenance or may have been vacant for some time. Always get a home inspection. It is a good idea to meet your inspector at the home during the inspection. Tell him repair items you may have noticed and ask his opinion on age of air conditioner, roof, etc.
4. Remember to keep in mind the repair budget when making your offer. If you are buying the home $30,000 under market, but it needs $45,000 worth of repairs, it may not be a good deal after all.
5. Ask your agent how to check if renovations and additions were permitted and if they weren’t what you can do. Keep in mind items such as: extra bathroom in the garage, garage space converted to studio or addition to the back of the home. You may need to have it inspected.
6. And the most important item to keep in mind when considering making an offer on a short sale is the length of time you will need to purchase. If you sell your current home quickly, have a plan of where to live while you wait on the short sale. And keep in mind, you may wait four months and then the lender declines the sale. To prepare you for the time involved in a short sale:
- Decide how often you and your agent will speak about the status–weekly/biweekly?
- Ask your agent how many liens are on the home. A home with three lenders involved will most likely take longer than one lender.
- Decide how long you will wait. If the lender is not moving the file forward, you may want to move on.
With patience and due diligence, short sales can be a good buy. They are a great idea for investors, too.
Happy bargain hunting!