What Bradenton Buyers Must Know About Short Sales
There is a lot of attention on short sales in our Bradenton - Sarasota market right now. This series of posts is intended to help sellers, buyers, and Realtors understand the short sale process. Everyone involved in a short sale transaction needs to know what to expect.
Buyers of short sale properties need to understand what they are getting into. Some buyer’s believe that they are going to be able to “steal” a property and make a killing by reselling it. They have heard the stories that investors tell and think it’s a piece of cake to buy a property fifty cents on the dollar.
While that may be the case in some instances it is not the norm and should not be expected. Remember, the lender wants to sell the property as close to market value as possible. In fact, most lenders have pretty rigid guidelines as to how far below market value they will sell for. Beyond that point, they will take the house back in foreclosure. Today’s lender is expecting about 83% of the market value of the property.
For the seller, the best buyer is what I call the “end-user” buyer. That is, a buyer who is actually going to live in the property. If you sign a contract with an investor who is looking to offer only 50% of market value, it is unlikely that the sale will be approved. Plus, you will lose valuable time looking for a new buyer.
So, what do “end-user” buyers need to know?
• Buyer’s need to know that short sales require patience. It may take 2-4 months to complete the transaction.
• They should be pre-approved before submitting an offer. The borrower’s lender is going to require proof of funds if it’s a cash deal or a commitment letter if there is financing involved.
• A buyer offering to close quickly with a substantial down payment is more attractive than one seeking 95% financing.
• Buyers may not want to spend money on a home inspection or appraisal until after the short sale is approved.
• Buyers should expect to buy the home in it’s as is condition. The seller doesn’t have any money to make repairs and the lender is going to require an as-is offer.
• Buyers should only work with Realtor’s who are knowledgeable about the short sale process. Inexperienced agents may hinder the transaction.
(Copyright © 2007 By Dan Forbes, All Rights Reserved. This material is excerpted from Everything You Need to Know About Short Sales, by Dan Forbes)
==================
Please give me a call if you have questions abour our Bradenton real estate market. You can reach me, Dan Forbes, at 941-746-0505 or toll free 877-646-8326. Also visit my web site at BradentonFloridaRealEstate.Com and my blog at The Real Estate ZOO.
