How To Buy A Short Sale

If you haven’t noticed the incredible amount of short sales on the market, I would venture to guess that you have not been looking for a new home. Since the begining of 2009, I have noticed more and more short sales hitting the market.  It boils down to a few different contributing factors:

1.  Unemployment
2.  Loss of assets (Stocks, 401 plans, retirement savings)
3.  Investors that over levered and are willing to “give” up.
4.  Simply; a homeowner is underwater and their home is worth less than what they paid for it.

Short sales by definition are “A property sale negotiated with a mortgage company in which a lender takes less than the total amount due”.  This is an opportunity for both the bank and the owner to avoid foreclosure.  What I am suggesting is to embrace these sales.  It is an chance of a lifetime to get an unbelievable deal on the purchase of your home or condo.  Short sales can represent discounts of up to 35-%40!  The caveat is evaluating the property and doing the initial research to make sure you buying a short sale that fits the category of success.  Or put a little more simply, the home that gives you the best chance to close.

The advice I would give you would be to understand ahead of time what type of short sale it is.  The most important ways to evaluate the property is by asking the listing agent these exact questions:

1.  Do you have bank approval for the price that you are currently listed at today?
2.  Does the owner have more than one lien that needs to be removed?
3.  Have you received any other offers?
4.  Do you have a negotiator that will be handling the file?
5.  Who is responsible for paying the short sale negotiator?

Sometime in the future I will explain the importance of these questions in greater detail.   If you have any questions or need further assistance, please feel free to contact us at info@urbanimg.com

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