Short Sales – Increase Your Chances
The Folsom real estate market is heavy with short sales. Only 8% of them are selling in any one month, How can you increase your chances of snagging one of those short sell deals? Here are my suggestions.
Know how many loans are on the house: One and you have a decent chance, if everything else looks good. Two it is harder, if it is the same lender a bit better, than if it was two different lenders. If there are three loans (I have seen it), look for a different home.
Know if there are any missed payments and if a Notice of Default and/or a Notice of Trustee Sale has been filed: Banks tend to get more serious the closer they are to foreclosing on the property. They will start to look at their bottom line, determining what their net loss will be in both circumstances. That being said, I just lost out on a short sale (I represented the buyer) because the bank foreclosed on the property. We had a good offer in for about 4 months. The bank had the “delay foreclosure” paperwork on the manager’s desk. The listing agent was told by the bank that if the manager had time to sign the paperwork he would, if no time he wouldn’t! Which leads me to my next recommendation…
Know who the lenders are: Things change from week to week, but some lenders are notorious for not accepting short sales.
Know how the listing agent is conducting the short sale process: Currently the best method is to take the highest and best offer to submit to bank. Then take other offers as backups. The bank works on the one offer. When more than one gets submitted it fouls up the bank process and typically will delay even longer the possible acceptance.
Know the seller’s circumstances: Learn as much as possible about why the home is being offered as a short sale. Years ago, short sales were approved for financial hardships. Divorce, death, loss of significant income. The banks are still looking at the reason why. They are more understanding and have approved short sells due to lower income, can’t afford the reset interest rate, etc. But if the seller is wanting out because now their house is not worth what they paid for it, you should probably find another house.
Has short sell been approved, but buyer walked: This can be a great opportunity. The length of time it takes for a short sell to get approved usually means that by the time it is approved, the buyer has found something else, and any of the backups. Most of the time when you find one of these, the long process has been completed. The listing agent will know what the bank will accept. If that number comps out, you could slip in and buy the short sell. Someone else has already done the hard work!
The Folsom short sale market can be trying at times, but if you shop smart(always my motto) you might get yourself the house you wanted at a good price.
I will post updates when there is more short sale info to let you know about. If you are considering buying a home I would love to help you navigate through this market.