Lenders might allow homebuyers to pay less than the mortgage is worth. Although this sounds appealing, it is important to be cautious about short sales.

Your agent should be contacted before you rush to buy a short-sale house. You should consult your agent before making any offers on a short-sale property.

Short sales are closing in less than 10% of the markets. It does not mean that a property is for sale if it has been listed as short-sold. The lender must approve the sale. The house might not sell at the price listed. You should know six things before you buy a short sale property.

Comparable Sales for a Short-Sale House

My Brooklyn shorts are priced at comparable sales, but priced according to pending sale. Why? Because short sales can take up four months to close. Closed Sales will turn into comparable Sales.

Sometimes short sales can prove very costly. Some short sales have a low price that the bank won’t buy them. These listings may be eligible for multiple deals.

However, it is not all doom. Acceptance will be granted if your offer is less than the market price. A short-sale listing should not be more expensive than the market.

Lenders, Loan Amounts & Loan Numbers

Ask your agent to provide information about the homeowner’s owes as well as which loans are being recorded. The second or third mortgage lender will, however, receive much less than senior lenders.

Not all lenders are worth it. You will need to work with an experienced Short Sale Agent to help you find the right lender and solve any issues.

You won’t be accepted if your offer is less than 20% to 30% of the mortgage amount.

The track record for the short-sale agent

A listing agent who hasn’t closed a short-sale is at risk of being advertised. The listing agent must submit a package and negotiate with lenders. The buyer’s agent cannot speak with the bank.

Listing agents often hire outside companies to help them. These negotiations can get very complicated. Think about whether you are ready or unable, to accept rejection of your short-sale purchase by inexperienced agents.

Selling Short Sales Qualifications

Ask the agent if the seller sent a complete packet. A complete short-sale pack includes at least the following items:

  • Sellers’ hardship letter
  • Tax Returns
  • W-2s
  • Payroll stubs
  • Financial statement
  • Statements from banks

Some sellers are slow and reluctant to give documents back. Some sellers are reluctant to cooperate with their agents and have not been advised by them that they must return documents. It is important not to delay your short-sale transaction simply because the agent doesn’t have the required documents.

The number and quality of short-term offers

Multiple offers will be made for homes below market value. While you do not have to disclose these terms to agents, it is worth taking a look at how many offers have already been made.

Here’s how it works for most cases:

  • Homes that are short-sold often sell at a significantly lower price than listed.
  • This second option is also available at a price list.
  • The third offer can be slightly more expensive at minimum $1,000 or $2,000
  • The fourth offer will have significantly more.

Are you trying to offer a better price than the rest while still being below the market? Don’t waste any time.

Listing Agent’s Short Selling Procedures

The Realtor code demands that all agents are treated fairly by realtors. 2 A short-sale realtor may choose to make one offer and then withhold any additional offers.

If the other offers are declined, the fiduciary relation between the listing agent (and seller’s agent) could be breached. The seller can always receive the best and highest price.

Although you have submitted your offer, it is not final. You will need to wait until the short sale approval. It is possible that you could be outbidding by another buyer. You can offer to increase the price if you wish.