Short Sales: 5 Hints To Stack The Deck In Your Favor
Short sales are a royal pain in the butt. If you don’t know the first thing about them, please read this first.
After doing a little research, if you decide to go ahead, there are a few things you can do to keep your sanity and maybe even get a good deal.
1. First and foremost: Get a Realtor who knows about them. Just saying they do short sales is not enough! You can waste an incredible amount to time when they really don’t know the ropes. It would be best if they had a professional designation in short sales. The CDPE (Certified Distressed Property Expert) is the best and most comprehensive. It would be better if, in addition to their designation, they had a number of successful short sales under their belt. Grill them a little on this – you’ll thank me later.
2. Know market values. How can you know a good deal if you don’t know what market value is for that type of house? Do some looking. I recommend a “marathon”. You will be amazed at what you can learn in a single day if you see a dozen houses in a narrow price range.
3. Know market numbers. In Bellingham, houses sell for between 92-98% of list price on average. Don’t kid yourself on this, you will not be buying a house for 50% below list. If you want a crack house in inner city Chicago, maybe.
4. Be ready and able. Get your ducks in a row. Get pre-approved – not just pre-qualified. Financing is tricky, get all your paperwork together. Don’t violate any of the credit rules while you’re waiting for bank approval of the short sale.
5. Be patient. If you are under some time constraints, it’s still possible, but you have to look for a “pre-approved” short sale. That means there was a deal on it, it got approved by the bank and for whatever reason the buyer went away. You can step in and close fast. Otherwise, allow up to 6 months to close.