Chapter 1: Are Short Sale Worth Buying?
 Many potential buyers these days look for REO homes because they are a lot cheaper than regular listings. But in reality, short sale properties can actually be cheaper than REO homes by up to 10%-15%.
Why do banks accept these homes for even cheaper? By doing a short sale, the bank relieves itself of a lot of expenses, time and effort, money that is then reflected onto the selling price. Trouble is many buyers do not wish to pursue short sales as they take months to approve and the probability of failing escrow is a great deal higher.
Through my experience dealing with short sales, it takes a competent real estate agent for both buying and selling. Since it takes so much time to complete a short sale, there is a higher chance of mishaps happening in the process.
Listing agents tend to prefer finding their own buyers because it’s easier to communicate between two parties. Buying agents tend to not like showing clients other short sales because of the high chance of the short sale not even being approved due to unseasoned listing agents. Thus, there are a high percentage of agents that favor being both agents to insure maximum success. If done right, short sales can save both parties a huge amount of money.
You may look into Short Sales if:
- You are an Investor. Short sale homes are usually in better condition than REO homes, requiring less refurbishing/ maintenance and sometimes even at a lower price.
- You already own a home or are not in a hurry to move. Short sales are great if you do not need to settle into a home immediately, so if you already have a home and are in no hurry to move, you should take advantage of the lower pricing.
My suggestions for a victorious short sale:
- Choose the most experienced agent possible to represent you.
- Make sure your agent can check that the selling agent is competent
- Your offer has to be perfectly in-between a price the bank will approve and where you get the most out of the deal.
- Make multiple offers on multiple homes so that if one falls out, you still have many more to fall back on.
- Earlier you can make an offer the better, as the first person to make an offer gets first pick once the bank approves of the short sale.
- Wait time is at least 2 months from listing date, may even extend to more than 6 months, so patience is key.
Chapter 2: Preparing Yourself to Buy a Short Sale |
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