The Short Sale Process From A Buyers Point Of View
For the homebuyer the short sale process can be very confusing and feel like it is never ending. There is not a fixed way that local Realtors and local/national banks handle each short sale transaction. As mentioned above the seller needs to have a financial hardship and a short sale package needs to be given to their lender/mortgage holder. Once a buyer places an offer on a short sale home that offer is submitted along with an estimated closing statement to the bank. The bank then assigns a negotiator, orders a BPO (brokers price opinion), which is similar to an appraisal, and makes a decision to either accept the offer, or counter back at a higher price. This process can take as short as just a few weeks, but typically will take several months. Typically the listing agent and seller will accept several offers, submitting the highest offer to the bank for approval and keeping the additional buyers on hold in a backup position. Because the entire process can take a long time many buyers will have offers on several properties all at the same time. It is actually beneficial to both buyer and seller to have multiple offers! From a sellers point of view having more than buyer means that if the first buyer walks away during the short sale process they already have someone waiting in the wings! Having an offer on several properties sounds crazy to many buyers, but in reality it broadens the buyers scope of homebuying potential.
As an example: here at Robert Maes and Associates we recently had a short sale listing for sale where we had 4 offers on the property. The bank took a very long time to go through their approval process and by the time we received the first counter offer buyers number one and number two had already moved on to other properties. We actually closed escrow with buyer number four!
Another example: We recently represented a buyer who was the number six offer on a home. This buyer had offers on over ten short sales at the time. Once his offer was accepted on this particular property he moved forward and closed escrow! We then let the other agents and sellers know that he was withdrawing his offer on the other homes.
Buying a REO / Bank Foreclosure
In today's market we are seeing REO properties everywhere, in every price range and every neighborhood. A REO (real estate owned) can very often be a great buy! Several banks or investor companies will offer these homes at a lower price. This however will often generate several offers, which can be very frustrating to the buyers!
Things to know about writing an offer on a REO:
1. You are buying the home as-is
2. Typically there will be no termite clearance or home warranty provided
3. Contingency time periods for inspections, appraisals and loan approval are shorter (on average 10 days vs standard 17 days)
4. No disclosures will be made regarding the history of the home as the current owner has never occupied the home
Call us today for more information on purchasing a short sale home or a REO.
Robert Maes 858-735-0750
Linda Lederer-Bernstein 619-884-8379
Jenniffer Taylor 619-892-6773
Dennis Whan 858-342-5163
Amy McKibben 619-977-5200