5 Steps to a Successful Short sales & Foreclosures
Buy a short sale can be a very exciting thing when you are someone who is price conscience because you feel you are getting a deal, but WAIT. Buying a Charleston, SC short sale or anywhere is not an easy process and you must be patient and be prepared to deal with a lot of annoying bumps in the road. When buying a distressed real estate property in Charleston, SC or wherever in the United States buyers must beware that it isn’t a simple and quick process and many times the bank will make you sit and wait for months or years. The reason why is because they are trying to see how many offers they can get before they are forced to decide on one. Once they are convinced they have gotten all the available offers in, will they decide on them. In most short sales there is a standard disclosure from the seller’s bank that says essentially, “we don’t care about what you want, you buy the house on our terms, and we owe you nothing.” You think I am kidding, but I am serious. They do things on their terms, and their time frame, and you either play by their rules or don’t buy the house. Key #1:The listing agent must know the proper step-by-step process for shorting various types of loans, as the process for shorting an FHA loan is different than the process for shorting a VA or Conventional loan.Key #2:The listing agent must know what documentation is required to make up a complete short sale package for the lender they are working with and how to submit that package in a format that will get the lender’s attention, satisfy their requirements, and get an approval. There are many many more disclosures that are required when entering into a short sale transaction, but considering that this has become so common place most attorney’s and agents are aware of them. Verses a few years ago when transactions like these were “new” to most of us.Key #3:The listing real estate agent must know how the lenders calculate what they have to “net” in the short sale transaction, so that they can then effectively price the property in MLS to generate an offer that will be relatively quick, but sufficient to meet the lender’s requirements, as well as cover all of the seller’s closing costs and the broker commissions. Often times most banks have a negotiator that will help them see the benefits of the deal and be the middle man between the loss mitigation dept for the seller’s bank and the buyer’s.Key #4:The listing agent must know what terms the lender (sellers bank) will and will not approve in a buyer’s purchase offer. There is really no way of knowing this until you begin down the road of negotiations, and be prepared for the seller’s lender not to negotiate. Many times, you have to come with your best offer the first time, because if the property is priced low there will likely be a bidding war.Key #5:The listing agent must know how to establish his/her credibility and an effective rapport with the loss mitigation rep who ultimately holds the key to the short sale getting approved and closed.
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