20% Rebate for Buyers
$3,500 Flat Fee for Sellers
2% Full Service for Sellers

How to Buy a Short Sale

A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property's loan.

Keep in mind Foreclosures are different than Short Sales. A Foreclosure means the bank owns the property. Banks are responding to offers on Foreclosures within 1 week, and many times they will accept a price less than current market value.

The first thing I look at when a client contacts me about buying a Short Sale is the days on market. If it is a new listing, perhaps within 30 days on market, then we probably have time to get your offer in and be among the first offers. If it is 50 days or more on the market, they most likely have multiple offers already, and they are waiting for approval from the seller’s lender.

Then I contact the listing agent so see how many offers they have. If they do have offers how long has the 1st offer been at the bank? Also, are they still allowing showings and looking for more offers?

Multiple Offers

We found that any time there are multiple offers; you need to be 2% to 5% over asking price to have a chance of buying the property. This sometimes holds true even if you are the 1st offer, because they might take 6 additional offers, and any offer that is higher than yours will be put in 1st position.

When submitting your offer you must have a pre-approval, and if you have a large cash down payment, you should include proof of cash too.

Could take up to 3 months

Many Short Sales still take 2-3 months for the bank to respond and let you know if your offer is accepted. However, there are some that have already done their BPO (Broker’s Price Opinion), and if you offer the price they are asking, they can approve the sale fast, perhaps within 7 to 14 days.

In addition, some banks are getting it together and approving Short Sales in less than 4 weeks.

Because it might take a long time, never stop looking for other opportunities, even after you have placed your offer. You can cancel your offer at anytime, even after it has been approved by the bank, so you are free to keep looking at other properties to keep your options open.

If there are two lenders that need to be paid off after the sale, then it will probably take longer for a response, as they argue between themselves as to who should get paid what.

Keep in mind each bank is different and has different policies, and even big banks like Bank of America are adjusting their procedures weekly.

Summary

So Short Sales can be more difficult to buy vs. traditional sales or even Foreclosures, but that should not stop you from making offers on them. We have closed many Short Sales and can help make sure you are the winning offer for a Short Sale purchase.