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7 Things to Know Before You Buy That Short Sale House

The Wrong Short Sale House Might Not Ever Close

Qualify the listing agent and the seller before writing an offer on that short sale house.
When you spot a Short Sale house that interests you, take your hand off the mouse and step away from the computer. Before you get all excited over the prospect of buying that short sale house, pick up the phone and call your real estate agent. Your agent needs to research that short sale listing first.
In some real estate markets, fewer than 50% of short sales close. Just because that home is listed as a short sale doesn't mean it's really for sale (because it's subject to lender approval), nor does it mean it will sell at the advertised price. Here are 6 things you need to know before trying to buy that short sale.

1.COMPARABLE SALES FOR THAT SHORT SALE HOUSE

Most short sales are all priced below comparable sales. Some short sales are priced ridiculously low. So low that the sellers' bank will never accept the offer. These types of listings receive multiple offers. But all is not lost. To get your offer accepted, it will need to be priced near market value. (How the offer is structured is very important!!) If you're not prepared to pay above a superficial price on a low ball short sale listing, then pass.

2.MORTGAGE AMOUNTS & NUMBER OF liens

Ask your agent to research how much is owed against the home and find out the number of loans that are recorded. A second or third mortgage lender will receive peanuts as compared to the amount a senior lender in first position will get.

Moreover, some lenders, deserving or not, get a reputation for being difficult to work with. If your agent is an experienced short sale agent, he or she will know who these lenders are and can advise you of the difficulty you may encounter.

If your offer is well below of the mortgaged amount, it is unlikely that your offer will see the light of day on the negotiator's desk.

3. SHORT SALE LISTING AGENT'S TRACK RECORD
A listing agent who is advertising a short sale but has never closed a short sale is a risky proposition for you. That's because it's up to the listing agent to submit the short sale package to the lender and negotiate. Your buyer's agent can't talk to the bank.

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