Short Sale Buying Process

A realtor with experience in short sales provides guidance through the process.

A short sale allows the seller to avoid foreclosure by selling the home for less than the amount of the home loan. Since the lender takes a loss on the sale, the sale must be approved by both the seller and lender. You can speed up the short sale buying process by working with an agent skilled in handling short sales.

Hire Experience

The professionals you hire to help with the short sale play a large role in your success. Start with an experienced real estate agent who has dealt with short sale properties in the past. Before choosing an agent, discuss her past experience with short sales and how many offers were accepted on this type of property. Past success indicates the real estate agent is knowledgeable about putting together offers that are more likely to be accepted. Realtor Mag suggests hiring a real estate attorney with short sale experience to handle the details of the contract.

Arrange Financing

A strong offer for a short sale includes a financing plan that is in order. The bank is already losing money on the deal, therefore they want a buyer who is able to go through with the sale. Realtor Mag recommends that you offer a large down payment along with preapproval for a loan if you aren't paying in cash. Flexibility on the closing date also makes your offer more appealing.

Select Carefully

Your experienced real estate agent is able to identify short sale properties for you to view. When searching on your own, check the MLS listings for indicators that the home is a short sale; a statement to that effect is usually included. Other listings may use wording that indicates the lender must approve the offer. A short sale home may have damage or require updating, points to consider when making your offer.

Research Liens

Before making an offer on a short sale, research all loans and liens on the property. A title company officer can handle the search for you. Multiple liens on the property make a short sale deal more difficult to achieve; all lien holders must agree to the deal for the short sale to work.

Submit Offer

When you find property you want to purchase, put together an offer with the help of your real estate agent and a real estate attorney. The seller must approve the offer before you submit the proposal to the lender. Your offer should be based on the value of the home. If your offer comes in too low, the lender is likely to reject it. The lender may take a long time to respond, therefore presenting a strong initial offer can work to your benefit.

References

• Bankrate: 10 Steps to "Short Sale" Buying; Bobbi Dempsey
• Realtor Mag: Making an Offer on a Short Sale? What You Need to Know