You hear the term “short sale” all of the time but do you actually know what it means? Before we...
Top Tips for Working With Buyers of Short Sales
It’s true that working with buyers in equity sales is fairly similar to working with those same buyers on short sales. Nevertheless, there are several things that home buyers interested in short sales may want to know before writing up an offer. Here are the top tips for working with buyers of short sales.
- Make sure the buyer understands the short sale process. The most important thing for a homebuyer of a short sale news to know is that it may take several months to get short sale approval and close the transaction. It’s possible that it could be less time, but the buyer needs to be mentally prepared to the road ahead. To that end, make sure that you have high confidence in the person doing the short sale negotiation because your closing and your income is tied to the negotiator’s success.
- Confirm that the buyer’s income and qualification will not change. Sure, the buyer is qualified for $500K now, but will the same buyer be qualified for $500K in 4 months? And, how would you feel if you waited 4 months for the approval and got it–only to learn that the buyer now does not qualify for a loan? To that end, if the buyer is getting a loan, be extremely sure of your buyer’s qualifications before moving forward.
- Have a look at the preliminary title search yourself early in the process. Sometimes sellers have one or two mortgages and other times there are lots and lots of liens. Have a look at the preliminary title report and see what sorts of liens are attached to the property and also to the seller’s social security numbers and double check that all of those will be negotiated. If there are lots of liens, it can be very difficult to get them removed or negotiate them all. If that is the case, it would be very better to know now than to wait months and months only to have the deal fall through.
- Discuss potential pitfalls with buyers. One of the biggest pitfalls aside from the long escrow period is the fact that the bank may not approve the offer price, and you might not learn that for months. Be sure your buyers understand that and either have wiggle room in their price or a backup plan, if this transaction does not work out.
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