Some Preliminary Aspects Of A Short Sale For Sellers And Buyers To Consider

Checking The Pulse Of The Kansas City Real Estate Market

If you’ve been following along, you know that Short Sales can be a great alternative to foreclosure for homeowners who are upside down on their homes. But Short Sales aren’t easy and if you’re thinking of buying or selling a home in a Short Sale, there are a few things to consider before starting the process. For starters, sellers will have to accept giving up information to their listing agent that they’d be able to keep confidential in a typical resale transaction.

When dealing with Short Sales, the listing agent will need to be in direct contact with the seller’s lender and will need honest, accurate information from the seller if there’s any chance of achieving a successful Short Sale. Sellers should also consider they likely won’t be able to buy a home in the next 12 to 24 months. For buyers, Short Sale listings are often in better condition than foreclosure listings. That could mean saving thousands of dollars. Generally speaking, the condition of a Short Sale property will be some where in between a typical resale property and a foreclosure property. Same goes for the typical sales prices on Short Sales.

I don’t recommend a buyer or seller attempt selling in a Short Sale if they don’t have a lot of patience. It’s not an easy process. It might be 10 times harder than a typical real estate transaction. It can take 60, 90, 120… days to get word from the seller’s lender on whether they’ll accept a Short Sale. If you’re a buyer who needs a home that can close in a predictable time frame, just go ahead and eliminate all Short Sale listings off your list.

Also consider that the lender is going to rely almost exclusively on a Broker Price Opinion (BPO) that it will order from a third-party real estate agent. If the value indicated in that BPO or appraisal is too high, the bank is likely to say no to the Short Sale and foreclose on the property (believing they’ll net more that way than by accepting the Short Sale). Don’t forget that the seller’s lender is under absolutely no obligation to accept a Short Sale – and thus a loss – on the home.

Another critical aspect of the Short Sale process is the listing agent involved. The listing agent is certainly the most important person in the transaction. Without a solid listing agent, a good buyer’s agent will be spinning their wheels. The listing agent is the only one who can contact the seller’s lender, so it’s worth checking with a listing agent before you make an offer to be sure the agent has a clue of how the process works.