In the $150,000 price range, most buyers are first time homebuyers looking for the best deal. They are all excited and cannot wait to get moving, painting, planting flowers in their yard. What shocked most first time buyers is that they have a home loan but cannot get into a house in 30 days or less. Try explaining to anyone that they need to wait four to six months for a home. The following information will offer five very important questions when considering to purchase a short sale home.
What are the comparable sales for this short sale neighborhood?
We are looking for the best deal in an area that we want to call home. If you come across a short sale home that is priced ridiculously low, what should you do? For example, if a home is listed at $90,000 in a $150,000 neighborhood. That sounds really good to you. But it might be priced too low for the short sale bank to accept. Let me explain. A very low asking price generally will attract multiple offers. Why? Homebuyers and investors will bid on that listing. A listing that receives multiple offers is similar to an auction item that receives multiple biddings at a public auction. In a public auction the auctioneer is looking to accept one highest bid out of dozen of bids. All is not lost, as you still have a chance to submit a competitive offer. Your experienced realtor will check comparable sales and review the information with you. Next, you need to decide what to offer. You should also decide whether you want to participate in the bidding war if the property is worth the trouble, or look at another property that is priced right and avoid the stressful bidding war.
How many loans/liens are recorded against this property?
Ask your experienced realtor to research how much is owed on that property. How many loans are recorded? Are there any other liens on that property such as homeowners association lien, trash lien, sewer lien, personal IRS lien, etc? Every lien that is recorded against a property means simply one thing: the primary lienholder will have to pay or settle these liens before you can take title.
What is the short sale listing agent track record?
When you are applying for a job, you were asked if you have skills and experience for the job, right? The same logic applies here. An experienced short sale realtor has a track record of closing short sales. A listing agent who is marketing the short sale but has never closed a short sale can pose as a risk for you to work with. Why? That is because the listing agent is the only one who will submit your offer to the short sale bank. Your buyer’s agent cannot talk to the short sale bank directly. Ask yourself, do you want to risk rejection of your short sale purchase because the listing agent has limited experience?
Question Four: What are the short sale sellers qualifications?
Ask if the listing agent has received a completed short sale package from the seller or lien holder. Ask about the contents of that package. Some seller-homeowners are not cooperative and are slow to return these documents. Others have never been told by their listing agent these documents are mandatory. You don’t want your short sale purchase delayed because the listing agent doesn’t have the required documents.
What number of short sale offers have been received?
In a multiple offer situation, an agent is not required to disclose the terms of those offers. You can ask if only one accepted offer will be sent to the short sale bank, or if all reasonable offers will be sent.
Keep all five questions in mind and happy house hunting.
Annie Christian is a real estate broker and owner of The Annie Christian Real Estate Group. She helps with everything from buying and selling to foreclosure and short sale. To submit a question, call 351-5117. Her website is www.anniechristian.com.