What to expect when making an offer on a short sale
For most of us, a home is the single biggest purchase in our lives. The enormity of the financial transaction aside, finding the right home to fit our particular needs and wants is no easy undertaking. Just as you wouldn’t buy a car, computer or camcorder without doing some research into various models and prices, you shouldn’t consider purchasing a home without some expert advice and guidance. Though some people may think of using the services of a REALTOR® only when selling their homes, a REALTOR® can be invaluable when buying one as well. You will want to make sure your Realtor is familiar with making an offer on a short sales or foreclosure.
This is what to expect when making an offer on a distressed property:
- Make sure you have a pre-qualification letter. No bank will accept an offer without one.
- Have your Realtor ask the listing agent how many loans need to be approved for the short sale process. Also find out what banks need to approve. If your Realtor is seasoned, they will know which banks are the easiest to get approved. Some banks approve faster than others. Also it is good to know if the loan is backed by a government entity. Those can take longer as well.
- Find out if the seller has already submitted their short sale documentation into their lenders. If not, the process will take longer.
- Prepare to wait at least 1-3 months for approval from the bank.
- During the short sale approval process, the lender will be first approving the seller to do the short sale. Once the seller is approved, then the bank will determine if your offer price is within their net they will accept to approve the short sale.
- Be prepared for a counter offer from the bank in case your offer is not within their guidelines. Have your Realtor do comps to make sure that this price is within line of other sales in the neighborhood. If so, if this price is worth it to you, then go ahead and accept the banks counter offer. It is always a good idea to not make an offer on a home that is right at your limit. Always reserve some room in case you do get a counter offer.
- Expect to close within 30 days of short sale approval. Cooperate with you lender during the process to make sure they have all the documentation they need to approve you.